1. CITY OF WINTER PARK’S MUNICIPALIZATION STORY
Randy Knight, City Manager Jerry Warren, Electric Utility Director

2. HISTORY 1913 – City built the original electric system
1927 – City sold to predecessor of Progress Energy
1947 – Held vote to repurchase the system – vote failed and renewed franchise

3. HISTORY 1971 – Early renewal of franchise for 30 years
2001 – Franchise expired – battle begins

4. WHY WAS PROGRESS ENERGY NOT GIVEN ANOTHER FRANCHISE?
Progress Energy took the 800 pound gorilla approach in negotiations
30-year term with no out-clause for poor-performance
Took away city’s right to repurchase
No performance guarantees

5. RELIABILITY PROBLEMS

6. Progress Energy’s discontinued local customer service

7. WHAT DID THE CITY SEE AS THE BENEFIT OF MUNICIPALIZATION?

8. PUBLIC POWER Local control and accountability Reinvest profits locally
Customer first mission

9. OTHER BENEFITS Improved reliability
The business will appreciate in value
Competition of service providers

10. Underground unsightly power lines

11. Employees dedicated exclusively to the City of Winter Park

12. SEVERAL OBSTACLES Had not been done in Florida since 1940’s
Progress Energy sued to stop the process
Very expensive undertaking
Progress Energy’s community involvement
Threatened to quit paying franchise fee
City Commission was split on the issue

13. ARBITRATION Held December 2002 - February 2003
Arbitration Award May 2003
Set price at $42.3 million

14. Arbitrated Cost Land and Easements 10,000,000 Books & Maps 350,000
Equipment $ 8,218,447
Land and Easements 10,000,000
Books & Maps ,000
Going Concern ,000,000
Sep. and Reintegration 1,004,000
Stranded Costs ,737,000
Total $42,309,447

15. Winter Park Taxpayers Against Government Owned Electric
THE CAMPAIGN
Referendum scheduled for September 9, 2003
Progress Energy formed a Political Action Committee (PAC) against purchase entitled:
Winter Park Taxpayers Against Government Owned Electric

16. THE CAMPAIGN - AGAINST
This PAC spent $523,750 on its campaign to defeat the referendum
$523,000 from Progress Energy - $750 from taxpayers
Prime-time TV ads against the purchase
Direct mail pieces

17. THE CAMPAIGN - AGAINST

18. THE CAMPAIGN - AGAINST

19. THE CAMPAIGN - AGAINST

20. THE CAMPAIGN - AGAINST

21. THE CAMPAIGN – IN SUPPORT Winter Park Power Options
PAC formed to support purchase entitled:
Winter Park Power Options
This PAC raised $50,000
City also spent approximately $50,000

22. THE CAMPAIGN – IN SUPPORT
Primarily direct mail pieces

23. THE CAMPAIGN – IN SUPPORT

24. THE CAMPAIGN – IN SUPPORT

25. THE CAMPAIGN – IN SUPPORT

26. THE CAMPAIGN – IN SUPPORT
Held several public forums
Voters spoke:
69% in Favor of Purchase

27. KEY DATES
June 23, 2004
City executed the Bulk Power contract with Progress Energy Florida

28. What made WP Succeed where other cities failed?
Strong City Commission
Good attorneys and consultants
Help from FMEA and other muni’s
Educated community
PEF’s scare tactics backfired

29. Mistakes Made Should have bonded more startup
Should have controlled S&R design
Didn’t challenge stranded cost
Auction Rate Bonds
Needed more focus on early finances

30. Mistakes Made Should have bonded more startup
Should have controlled S&R design
Didn’t challenge stranded cost
Auction Rate Bonds
Needed more focus on early finances

31. Successes Improved reliability Already put 5 feeders under ground
Storm Response
Customer satisfaction
Bond Rating upgraded from A to AA-

32. Winter Park Overview Reliability has significantly improved
SAIDI has gone from over 200 minutes per year down to around 75 minutes
MAIFI has gone down from 22 momentary interruptions per year down to 1.36 per year
Restoration times during outages have improved; CAIDI has gone down from 66 minutes to 55 minutes.
Making Significant progress on our undergrounding:
7 main line feeder projects ~ 7 miles
5 neighborhood undergrounding projects (~1 mile) completed (4 new ones under way)
4 CRA projects (~ ¾ mile)
Finances are now stable
Customer are very satisfied

33. Winter Park Overview (cont’d)
Rates are Competitive
Currently WPE’s Fuel Adjustment is $16.94 per 1,000 kWh > PEF’s. Note WPE fuel costs = PEF’s. WPE tracks/adjust quarterly, PEF = annually. PEF will recover higher cost next yr.
Fuel related charges must be compared over a long timeframe.
Cooperation with other City departments has significantly improved. Examples of increased value:
Public Works streetscape projects installs electric conduit
Public Works Streetlight functions combined with electric department’s evening trouble functions to save $100,000/yr.
CRA – Electric Department coordination, funding underground projects.
Coordination between Forestry Dept and Electric expected to save +$250,000/yr.

34. Would we do it again? YES, value is meeting expectations
Winter Park Summary
.Has Winter Park been successful? YES
Would we do it again? YES, value is meeting expectations
Was it hard? VERY
Has Winter Park had Failures? YES!!!
Key is hiring good people/Consultants early in the process. Be willing to adjust strategies
Operation of an Electric System is not for the faint of heart.