LCEC – Lee County Electric Cooperative

LCEC – Cape Coral Update

LCEC was recently informed by the City manager that the City intends to proceed with its complaint to the Florida Public Service Commission (FPSC), leaving the fate of franchise negotiations in question. While a franchise agreement is not required for delivery of electric services, and many cities/counties choose not to use them, it’s disappointing that the City has decided take this path instead of negotiate a new franchise agreement.

After waiting more than a year to respond to LCEC’s initial franchise framework, the City gave the negotiating expert they hired, Stuart Diamond, a few months to negotiate an electric franchise agreement with the LCEC team. Negotiations had only recently begun, and although no terms had been agreed upon, the foundation for a successful negotiation had been laid. Instead of continuing on a mutually beneficial path, the City has chosen to pursue the complaint at the FPSC that will bring additional costs to taxpayers and LCEC members and put a halt to negotiations.

From the outset, LCEC has been laser-focused on an agreement that is mutually beneficial to the City and LCEC members. While LCEC was prepared to talk with Mr. Diamond about terms typically found in a franchise agreement (length of term, franchise fees, rights-of-way access, etc.), much of the time instead was spent discussing the City’s desire to own and operate streetlights. This was followed by requests suggesting that LCEC abandon a not-for-profit business model, something that the organization adamantly believes is not in the best interest of members.

Many LCEC members, City residents, and business owners are frustrated that the parties cannot finalize what should be a fairly straight-forward agreement. Stakeholders have voiced their opinions about how tired they are of the constant back-and-forth with no solution. It is not good for the customers and tax payers, and it is not good for the overall image of the Parties.The course of work that took place between LCEC CEO Dennie Hamilton and Mr. Diamond demonstrated our goal of negotiating an agreement in good faith.

LCEC has a long history of successfully negotiating with many other government agencies, contractors, vendors, and customers with which we successfully partner. For more than 75 years, LCEC has been open to compromise in order to reach an agreement. As a not-for-profit entity providing an essential service, however, LCEC also has a responsibility to not compromise the principles of sound financial management that allow the organization to provide the best possible electric service at the lowest possible cost.

Over the past year and a half, LCEC addressed many of the desires of the City such as changing reporting policies and Contribution in Aid of Construction practices, enhancing easy access to LCEC information, and offering LED street lighting. LCEC continues to provide safe, reliable electric service, with rates that are among the six lowest of the 56 electric utilities in the state of Florida, and has reduced rates five times in the last three years and has not had a rate increase in eight years.

During negotiations, the City expressed a desire to purchase its own streetlights and attach them to LCEC poles. This is an entirely new concept and instead of simply rejecting the idea LCEC conducted an initial analysis of potential rates. After the City suggested the initial projected rates came in too high, LCEC offered to evaluate a different approach.

These steps were taken by LCEC in a good faith effort to allow continued negotiation. Unfortunately, the City has decided to pursue the complaint before the FPSC which will be costly for both parties. We are now no closer to a franchise agreement than we were eighteen months ago. Expenses continue to escalate and resources that could be better utilized operating a city or delivering electricity will be redirected toward addressing legal matters.

LCEC continues to believe that renewed talk of the city running its own electric utility is a costly endeavor that we strongly believe goes against the best interests of City residents and businesses. LCEC remains hopeful that City leaders will take appropriate steps to continue negotiations, and will seek to truly negotiate terms that are beneficial both to the City and to our members and taxpayers. Until such time, LCEC will focus on providing high-quality, low-cost electric service to our members.