LCEC is a not-for-profit electric distribution cooperative serving 214,000 customers throughout Southwest Florida since 1940.
For more than 75 years, Lee County Electric Cooperative (LCEC) has enjoyed strong relationships with its members, business leaders, and local governments. We have negotiated numerous franchise agreements during that time following brief, cordial, and inexpensive discussions.
Negotiation of a new agreement in Cape Coral began in 2015. LCEC members in the City have been bearing much of the cost since then. I’m as disappointed as anyone is in the lack of progress and would like to provide background on how we have reached this point.
Almost three years ago, the City entered into negotiations with LCEC, while simultaneously exploring a costly government takeover of electric service. LCEC provided a framework franchise agreement, and for a year received no comments. The City halted any chance at negotiation by filing a lawsuit with the Florida Public Service Commission (FPSC).
The City hired a professional negotiator and agreed to postpone the FPSC action temporarily. On-again, off-again negotiations began. The negotiator was repeatedly constrained by City staff, and eventually the City again terminated negotiations by requesting the lawsuit be reinstated.
Late last year, we were approached by former Mayor Joe Mazurkiewicz and Storm Smart CEO Brian Rist on behalf of the Council for Progress, offering to serve as “neutral, third-party” facilitators to help broker a deal. We gladly participated in several discussions but were surprised recently to read a News-Press article that suggested Mr. Mazurkiewicz and Mr. Rist were “negotiating for the city,” rather than serving as neutral facilitators.
We were willing to begin negotiations, but disappointed that the City withdrew its ill-founded, costly complaint just weeks before an expected FPSC ruling. We believe in the merits of our arguments against the complaint.
Once again, after those discussions reached impasse and only months after withdrawing the FPSC complaint, the City is allegedly threatening another costly lawsuit.
LCEC has negotiated in good faith with all of our municipal government partners. We offered the City unprecedented concessions. We continued to take the high road despite years of public comments by City leaders disparaging our utility, our employees, and our commitment to member service. We continued to work in earnest toward a negotiated agreement despite recently learning that the City Manager simply does not want LCEC as the City’s electric provider.
The City states that their desired terms are without cost. On the contrary, implementing these City-desired terms would significantly increase administrative costs, eventually resulting in higher rates for members throughout our service territory. They would never pass muster with the FPSC and would effectively place operational control of the utility in the hands of City staff. One of the “no cost” terms involves future “new technology,” a vague phrase with unpredictable cost implications. We cannot agree to a blank check that LCEC members would be forced to sign.
The City has made no meaningful concessions in this process. Making — and then dropping — uneconomic and burdensome demands to which no responsible utility could ever agree falls far short of conceding. The LCEC Board of Trustees has offered very favorable franchise and letter agreements that contain numerous concessions to the City, including a renewed purchase option and an opportunity to increase franchise fee revenues. In addition, after recently learning that the City viewed other LCEC franchise agreements favorably, those same agreements were also offered to the City so that they had four versions of an agreement to consider.
We hope City leaders decide to move forward with an agreement rather than pursue yet another costly lawsuit. In the meantime, we will continue to provide Cape Coral with reliable electricity and quality service at the lowest reasonably achievable cost as we have always done, with or without a franchise agreement. We are honored to serve our members and proud to begin our 10th year without a rate increase.