Franchise agreement negotiations and the costs associated?

Q. Why is it taking so long to reach an agreement? How much money has been spent on this issue because I am paying for both sides? Vickie A. – Burnt Store

A. Negotiations were initiated two years ago in the hopes that an agreement would be reached prior to the expiration of the existing agreement. The City wanted to explore a dual path – forming their own electric utility or reaching a new agreement. A great deal of time and money was spent on research and information gathering related to forming a utility. Consultants hired by the City estimated the cost to purchase LCEC would be more than $425 million. No formal cost has been established.

In 2015, LCEC proposed a franchise agreement similar to the agreement that was recently reached with Lee County Government. The City hired a professional negotiator to work on reaching agreeable terms. In 2016, the City proposed a counter agreement. At the same time, the City filed a complaint with the Florida Public Service Commission. LCEC did not believe it was beneficial to try to negotiate an agreement while we were expending resources toward litigation. In June, 2017 the City withdrew the complaint and negotiations began again. Although the expenses on both ends have not been calculated, it is estimated that it is well over $1 million.

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