Arbitrators Resolve Contract Disagreement
ORLANDO, Fla., Oct. 12, 2005 – A panel of independent arbitrators has resolved a contract disagreement between the Florida Municipal Power Agency (FMPA) and the city of Vero Beach regarding the amount of compensation FMPA pays the city for its power generation resources.
“We believe that the arbitrators’ award will bring final closure to all outstanding issues raised by Vero Beach about its compensation under this contract,” said FMPA General Manager and CEO Roger Fontes. “We would like to thank the American Arbitration Association for helping us to resolve this important matter amicably.”
“These are challenging times for all municipal electric utilities, as we work to cope with the impact of high fuel prices. We welcome this opportunity to once more work closely with the city of Vero Beach to effectively manage these challenges for the benefit of our ratepayers.”
FMPA is a nonprofit organization that supplies all the wholesale power needs of 15 municipal electric utilities in Florida, including Vero Beach. Owned by the municipal utilities it serves, FMPA provides economies of scale in power generation and related services to support community-owned electric utilities.
Vero Beach and several other FMPA members own and operate power plants, which are utilized by FMPA to meet the wholesale power needs of both their own cities and the other utilities that receive all their power from FMPA. The cities are compensated for the power they provide under the terms of a Capacity and Energy Sales Contract between their city and the other FMPA members.
Vero Beach initiated arbitration to seek more than $7 million in additional compensation for power generated by the city during the 2004 fiscal year. All FMPA members have the contractual right to go through arbitration to test the correctness of the rate-setting process and to resolve disputes among FMPA members.
A majority of the panel of three arbitrators found that Vero Beach is not entitled to any additional compensation. The arbitrators also ordered that approximately $53,000 in arbitration costs be paid entirely by Vero Beach and ordered the city to repay approximately $19,500 of FMPA’s costs associated with the arbitration. The panel’s decision also affirms that FMPA’s members have correctly implemented the Capacity and Energy Sales Contract in the 2004 fiscal year and all other years in which the same process was applied.
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Florida Municipal Power Agency (FMPA) is a wholesale power company owned by 29 municipal electric utilities. FMPA provides economies of scale in power generation and related services to support community-owned electric utilities. The members of FMPA serve approximately 1.8 million Floridians. FMPA’s members include Alachua, Bartow, Bushnell, Chattahoochee, Clewiston, Fort Meade, Fort Pierce, Gainesville, Green Cove Springs, Havana, Homestead, Jacksonville Beach, Key West, Kissimmee, Lake Worth, Lakeland, Leesburg, Moore Haven, Mount Dora, New Smyrna Beach, Newberry, Ocala, Orlando, Quincy, St. Cloud, Starke, Vero Beach, Wauchula and Williston. Additional information is available on the Internet at www.fmpa.com.