Florida Power & Light Co. and the Vero Beach municipal utility have passed a major checkpoint in their campaign to close their $185 million merger.
The board of directors and executive committee of the Florida Municipal Power Agency, or FMPA, on March 21 approved Vero Beach's exit from their organization, a move necessary to allow FPL to purchase the city's utility and absorb its customers. In February, all 19 of the agency's member cities consented to the deal.
Vero Beach's desired departure from the FMPA had been a significant point of disagreement between the agency, the city and FPL. FMPA member cities refused to pay more for power if Vero Beach left, and the impasse had stalled past efforts to seal a deal.
After decades of failed negotiations, Vero Beach and the FMPA both saw leadership changes in 2016, which helped facilitate a more friendly and productive relationship between the parties. They reached an agreement in 2017.
The Federal Energy Regulatory Commission in January approved updated terms of the transaction. Another remaining body to greenlight the merger is the Florida Public Service Commission, which has a tentative filing deadline of April 30 to resolve two dockets established for the deal.
Vero Beach Councilmember Laura Moss, who previously served as mayor, told S&P Global Market Intelligence that FPL will present a status update to the City Council at its April 17 meeting.
"I do not anticipate any roadblocks" slowing down the transaction, Moss said. But she acknowledged that "it's a lot of details; there's still work to be done." For instance, the parties are still turning over every Vero Beach customer to FPL on an individual basis. The city has 17,000 residents, but 60% of the utility's ratepayers live outside city limits in surrounding Indian River County.
Under the terms of the deal, FPL will pay $36.6 million directly to Vero Beach, $20.4 million toward electric utility bonds, and $108 million and $20 million to terminate Vero Beach's respective agreements with the Florida Municipal Power Agency and the Orlando municipal utility.
A spokeswoman for the Orlando utility did not return request for comment in time for publication on whether that organization has approved the deal or received its payment from FPL.
FPL is a subsidiary of NextEra Energy Inc.