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City/LCEC reach draft accord
September 13, 2018

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After nearly three years of on-again, off-again negotiations and contretemps, the city of Cape Coral and its electric services provider, have reached a tentative franchise agreement.

At times, the talks were ugly, with lawyers getting involved to the tune of more than $1.5 million, meaning city residents were not only paying for power, but also for the attorney fees for both sides.

Now there may be light at the end of the tunnel.

During Monday's regular Cape Coral City council meeting, the new agreement will be introduced to the council for its consideration, with a vote scheduled for Sept. 24.

If city council agrees to the proposal, the board of directors at LCEC will decide Thursday whether to accept the new agreement, which will replace the 30-year franchise that expired in 2016.

Mayor Joe Coviello said he and LCEC Executive Vice President & CEO Dennie Hamilton got together and put together what he thinks is a fair and equitable agreement.

"We expressed what we wanted to see in the agreement and had a mutual respect for where we were going with this. I got some give and take and I'm happy with what I was able to put together," said Coviello, who was tapped by council to act as the city's negotiator in the latest talks.

Coviello said the best thing is that it eliminates the expense of attorneys on both sides. Coviello said the city has spent a half-million dollars on lawyers and staff time while LCEC has spent more than $1 million, which the ratepayers and taxpayers (all one in the same) have paid for.

"I hope we can put that to rest and council likes what it sees and gives us its stamp of approval," Coviello said.

Karen Ryan, spokesperson with LCEC, said the last thing the co-op wanted was continued expenditures to be paid by city taxpayers and rate payers.

"It would have been all that time and money for the same result," Ryan said. "We commend city leaders for considering these options and looking for the best interests of the city."

Among the items in the agreement is:

n 20-year term with an automatic 10-year renewal unless either side wishes to amend or terminate the agreement 180 days in advance of the extension.

n The franchise fee to be paid by the utility and passed through to customers will be locked in at 3 percent for five years, after which the city will have the option to raise it to a maximum of 4.5 percent. After the 10th year, the maximum rate would be to 6 percent.

n The city will also have the option to purchase electricity from a third party, provided LCEC is notified in writing. LCEC will have 90 days to match the offer.

n As far as technology, which was a sticking point for both sides, LCEC will "monitor new and emerging technology developments to operate as efficiently and effectively as is financially justified," according to the agreement.

n LCEC will also offer customers with qualified renewable energy systems the opportunity to sell excess energy back to LCEC.

"It's hard to work with technology because much of what happens 10 years down the road we don't know what it is," Coviello said. "I never thought I could put my cellphone on a pad and it would get charged."

Since well before the original agreement expired, the parties couldn't hammer out an agreement, with Hamilton, Cape Coral City Manager John Szerlag, and third parties including Cape Coral Council For Progress members Brian Rist and Joe Mazurkiewicz making varied efforts.

The election-reconfigured council took a different approach and Coviello was able to get LCEC back to the table.

Ryan said if both sides agree to the terms, Hamilton will be given approval to sign the agreement.

Ryan said she is happy they are so close after so much acrimony.

"This is the closest we've been. I am very optimistic about it because it's close to the original agreement," Ryan said. "It got ugly and I can't explain why. We have always been willing to negotiate in good faith and not everyone was agreeable to that."

Ryan said the work Rist and Mazurkiewicz did was immeasurable, even if it didn't result in a deal, as they had the interests of everyone in mind.

"In negotiations, everyone is out for their own interests. As a co-op, our interest is our members' interest," Ryan said. "They sought what would be the best for everybody. They made some ground even though they didn't get an agreement."

LCEC is an not-for-profit electric cooperative that serves Cape Coral, Marco Island, Sanibel and Captiva, North Fort Myers, Immokalee, and parts of Lehigh Acres. With 200,000 members, Cape Coral represent nearly 40 percent.

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