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Cape Coral drops PSC complaint filed against LCEC

By Staff | Jun 6, 2017

The franchise fight between the city of Cape Coral and its electric utilities service provider is heading back to the negotiation table, perhaps for good.

Cape Coral City Council unanimously voted Monday to withdraw its Florida Public Service Commission action against LCEC with prejudice and return to negotiations rather than face the possibility of delaying negotiations indefinitely for a cost of service analysis. “With prejudice” means the complaint cannot be refiled.

The city and the utility will resume bargaining to reach a new franchise agreement, which both sides have attempted to do intermittently since before the 30-year agreement ran out last October.

Denny Hamilton, CEO of LCEC, addressed the council during public comment, in support of the recommendation that the city withdraw the complaint.

“The preference has always been talking rather than litigation. I am optimistic that the withdrawal will result in an acceptable agreement,” Hamilton said.

It didn’t take long for the city council to echo those sentiments.

Marilyn Stout, who voted against the PSC action last year, added however, that the city’s pursuit of its complaint with the PSC only resulted in a waste of time and money.

“This has not been helpful for negotiations or benefitted our citizens. This should have been done a year ago instead of spending $1 million on this,” Stout said. “The only winners in this has been the attorneys.”

The city also looked at purchasing the in-city assets of the utility.

“We made the mistake to tell people we could buy LCEC. Even if we wanted to buy their assets, they would have run it,” Councilmember Rick Williams said. “We need to move forward. It should never have gone this far.”

Williams made the motion to withdraw the complaint, and it was a quick vote to pass.

Had the motion failed, the PSC could have required LCEC to perform a cost of service study as requested by complaint, which likely would have delayed negotiations indefinitely, City Manager John Szerlag said in a memo.

Szerlag scheduled preliminary meetings with Hamilton, as well as Joe Mazurkiewicz and Brian Rist of the Council for Progress, who served as mediators.

Hamilton said he was pleased with the result.

“I’m pleased the Council accepted the city manager’s recommendation. We’ll be able to sit down and work it out to the benefit of both parties,” Hamilton said, adding that he hoped the two sides can get to a fair agreement to suit both sides.

Mazurkiewicz, who attended the meeting with Rist, said the two sides can get to the real issues instead of “talking philosophically” as they have for the last two months.

“I’m excited about the opportunity. Me and Mr. Rist want to get our cows together quickly and get started on this,” Mazurkiewicz said. “The PSC was the only real hurdle to get us into negotiations, and that just disappeared a few minutes ago.”

The city filed a complaint against LCEC in March of last year after unsuccessful attempts to acquire important financial information regarding LCEC.

The complaint asked the PSC to order LCEC to conduct a cost of service analysis for its rate structure and rate design to determine whether it was equitable to Cape Coral’s residents and businesses. The city maintained the ratepayers within the city were subsidizing ratepayers in other areas of LCEC’s service area.

The city put its PSC complaint on hold in June, only to reinstate it in November.