The Shiny Sheet: “FPL offers millions more in discounts toward utility burial costs”

Florida Power & Light has offered the town up to $6 million in additional discounts toward the cost of burying all power lines in town, Town Manager Tom Bradford said this week.

The discounts would be in the form of “credits” offered by FPL against the amount the town must pay the utility company for the equipment necessary for a new town-wide underground power system.

FPL is regulated under tariff by the Florida Public Service Commission. Under PSC regulations, FPL is required to give the town a 25 percent discount toward the cost of the new power system. The discount is required because undergrounded power systems are less costly for FPL to maintain than overhead systems, Bradford has said.

Bradford discussed the discounts at the Underground Utilities Task Force meeting on Tuesday.

FPL has not provided a figure, but the town has estimated it would have to pay FPL $27.1 million, after the 25 percent discount, as part of the town-wide undergrounding plan. The total cost of burying all power, cable television and utility lines is estimated at $98.6 million over nine years.

The town and its engineering consultant Kimley-Horn and Associates, have been talking to FPL, Comcast and AT&T to find ways to drive down costs to $90 million, the town’s original estimate, or less.

If the town does not move forward with undergrounding, FPL has said it plans to replace its overhead poles and lines in the next five to seven years with storm-hardened poles and wires as part of a system-wide initiative to make its system more resistant to storm damage.

In a recent email to Bradford, FPL said it would be willing to provide a full credit to the town, worth $3 million to $5 million, equal to the cost of removing the existing overhead feeder lines. That is because, if the town undergrounds its utilities, FPL would not have to bear the cost of removing those lines (the town would take them down as part of its project).

FPL also said it would be willing to provide a credit of $300,000 to $1 million, equal to the “remaining net book value” of the overhead feeder lines.

“I congratulate you and hope the number keeps going down,” task force member Dennis Bottorff said.

“We don’t stop playing at $98.6 million,” said Kevin Schanen, vice president of town engineering consultant Kimley-Horn and Associates. “We’re still advancing the ball down the field.”

The additional credits are not guaranteed. FPL’s Sophia Eccleston said in an April 10 email to Bradford that the credits would require approval from the Public Service Commission.

Bradford said he doesn’t know how long it would take to get them on the commission’s meeting agenda.

But he said the town’s legal counsel believes FPL does not need the commission’s approval to provide the credits.

“We need more discussion between our special counsel and FPL,” Schanen said.