The invitation came on short notice. The National League of Cities wanted the mayor of the tiny Florida town of Belleair to speak at an annual conference. The topic: What can city officials expect when considering entry into the electric business?
George E. Mariani Jr. was busy at his other job, presiding over the family asphalt business, which pays considerably better than his mayoral salary of $100 a month. But the Belleair mayor gathered his thoughts in the remaining days before the December conference and showed up in Atlanta to impart his wisdom to counterparts from across the country.
Imagine Mariani's surprise when he got to the Big Peach and a familiar face from back home approached the rostrum just before his introduction.
Nancy E. Loehr, a Florida Power Corp. regional manager, wanted to make sure Mariani knew that she was in the house. Mariani casually inquired what Loehr was doing in Atlanta. The mayor recalled that she just as casually replied: "I just came up to hear what you had to say."
"Did you think I was going to say something that was untrue?" asked Mariani, teasing her.
"Well, I know you wouldn't do something like that," said Loehr.
As recently as 10 days before the Dec. 6 event, Mariani himself wasn't certain that he would be at the Georgia World Congress Center. How did Loehr know to jump on a plane to Atlanta?
Loehr smiled and shrugged at the mayor's question. Mariani improvised a new opening for his speech.
"I'm here to tell you the story about David's little brother, the town of Belleair, versus Goliath, Florida Power," the mayor said he started out. "And if any of you think that what I have to say today is untrue or an exaggeration, Nancy Loehr, Florida Power's account representative for our town, is sitting right down there in that row. She's the blonde, right on the end."
Two months later, back in his town office, Mariani savored the memory of Loehr's discomfort. "You could see she was getting a case of the tight jaws right there," said the mayor.
Mariani's prepared text was blistering. Occasionally sarcastic, his tone was testament to how far relations between Belleair officials and their town's electric supplier have sunk.
"Florida Power is backed by mountains of money and, therefore, political muscle," Mariani told the delegates in Atlanta. "Florida Power is conducting war, utilizing the weapons of fear and misinformation."
Mariani, 54, sounds like a prairie populist around the turn of the 20th century, not the mayor of an archetypal Florida seaside playground for affluent pensioners 100 years later. Who would have thought a Belleair leader capable of such fiery rhetoric?
The waves of Clearwater Harbor slap against the windswept shoreline of Belleair. Approximately 4,000 inhabit the Pinellas County town. In the main, they are wealthy retirees with seemingly few cares beyond getting a convenient tee time at one of three 18-hole golf courses sand-wedged into a town that is smaller than 2 square miles.
Nevertheless, Belleair residents face serious matters these days. Their town government is locked in a court battle with Florida Power. At issue is how much to pay for Florida Power's poles, lines and equipment, should Mariani and the town commission decide to call a voter referendum on forming a municipal electric utility in Belleair.
The price could run into millions of dollars.
"There's people in Belleair, I suspect, who could write a check for the system," said Barry J. Moline, executive director of the Florida Municipal Electric Association, a trade group for the 32 cities in the state with their own public power systems.
Moline wasn't joking. "It's a wealthy community," he said. "It's a little town, but it's a sophisticated town."
Sophisticated enough that Belleair residents are generally supportive of their elected officials studying a takeover of Florida Power's physical assets in their town. The 100-plus other municipalities served by Florida Power are watching.
That may be why Florida Power, the St. Petersburg subsidiary of Raleigh, N.C.-based Progress Energy Inc., has embarked on an extraordinary crusade to block Belleair from leaving its fold. Both gentle persuasion and a little underhanded mischief have been employed by Florida Power.
For if Belleair shows the 16 communities with Florida Power franchises expiring over the next five years that it is easy and lucrative to provide your own juice, there could be serious repercussions inside some corporate suites in St. Petersburg and Raleigh.
Belleair's most recent agreement granting Florida Power a franchise to provide electric service to businesses and homes was signed more than 30 years ago.
"In 1971, Florida Power must not have been paying its lawyers by the page, like I think they are doing now," Mariani said. The 1971 franchise agreement is just two pages long. The bottom half of the second page is signature space.
Contained in the spare legalese is a clause permitting the town to buy Florida Power's Belleair distribution system upon expiration of the agreement on Dec. 1, 2001. Such buy-back clauses were mandated in the franchise contracts of Florida municipalities until state lawmakers removed the requirement in 1973.
Nobody in Belleair paid much attention until 1990. While kicking around ideas for enhancing the appearance of their tiny paradise, residents started talking about burying the unsightly power lines that crisscross Belleair. Aesthetics wasn't their only concern.
Storms whirling ashore from the Gulf of Mexico raise havoc with Florida Power's rickety old aboveground assets. Downed lines and electricity outages are frequent results.
Florida Power executives told town officials back then that burying the Belleair lines would cost $4.25-million. "The town of Belleair cannot afford four and a quarter million," said Mariani. "Our total annual operating budget is about three million.
"That commission at that time looked at the contract and said: "Why would we give them $4.25-million when, in 10 years, we might be able to own the system?"
In 1997, Belleair hired Stephen J. Cottrell from Plant City as town manager. Cottrell sized up negative trends in town finances and found another reason for Belleair to consider public power.
Although lacking much of a commercial tax base, Belleair has numerous million-dollar waterfront homes. But tax assessments on those residences trail the market because of a state constitutional cap on valuation hikes. Labor costs, a big chunk of Belleair's budget, are escalating faster than the 3 percent inflation allowed under the cap, said Cottrell.
Belleair has limited appeal to federal and state grant-makers. So, ironically, the rich town has a fairly strapped government that is getting into a fiscal squeeze. "We're starting to run into a problem where our budgets are really maxed out and there's no room to grow," said Mariani.
"We're not like Clearwater and have areas we can annex."
Could a well-run municipal electric utility pump enough excess revenue — which Florida Power would call profit — into the Belleair treasury to stabilize finances and perhaps reduce property taxes?
Town officials decided to take a serious look. They found that Bushnell, a similar-size municipality in Sumter County, operates an electric system with eight employees, cross-trained to also maintain sewer and water lines. The Bushnell electric utility showed a $700,000 surplus at the end of one recent year, and that was after the city had spent several hundred thousand dollars putting overhead power lines in the downtown area underground. The surpluses go into the city's general fund.
A feasibility study indicated that Belleair's annual electricity surpluses would come in somewhere between $500,000 and $1-million, after the city retires the debt taken on to acquire the Florida Power assets.
Municipalities seldom build their own power plants. With impending energy deregulation in Florida, wholesale electric suppliers will be more plentiful.
A similar exercise was underway in neighboring Dunedin. The same feasibility consultant estimated for Dunedin officials that a city electric utility could bury power lines and cut Florida Power's rates by 6 percent while still showing a $3.7-million annual surplus.
"That's not cash flow," said Robert H. Brotherton, Dunedin's director of public works and utilities. "That's profit. The staff feeling at the time was that that money should go back to the local citizens in the form of reduced taxes."
After examining the securities filings of Florida Power's corporate parent, Brotherton reasoned that Dunedin taxpayers should benefit rather than company brass.
Progress Energy Chairman and Chief Executive Officer William Cavanaugh III received $3.8-million in 2000 — and that was just his stock options. A Dunedin electric utility wasn't projected to make that in a single year.
"That's not atypical of the private power industry to take advantage of customers and employees and work things to the advantage of their corporate folks," said Brotherton. "It's very difficult to get these monopolies to give you anything."
By several measures, Florida Power delivers mediocre service while socking customers with some of the highest electric bills in the state.
A Florida Power residential customer using 1,000 kilowatts in December paid $91.07, tops among the state's four largest investor-owned electric utilities. TECO Energy Inc.'s Tampa Electric Co. was second at $85.57. The well-regarded municipal utilities in Orlando and Tallahassee billed $83.10 and $81.99, respectively.
In a written response to Weekly Planet questions, Florida Power suggested that Tampa Electric usually has the highest private utility rates in the state.
Last month, Florida Power settled a state rate case by agreeing to cut the average residential monthly bill by approximately $10. Public Counsel Jack Shreve, who represents consumers before the state Public Service Commission, had wanted Florida Power to almost double that decrease.
The quality of service to Florida Power customers doesn't appear to be as high as the bills. In 2000, the average service interruption per Florida Power customer was 101 minutes, longest among the four private utilities and far longer than Tampa Electric's 43 minutes. The average wait for an Orlando municipal electric customer was 30 minutes.
Florida Power cited a reduction to 90 minutes in 2001 as a sign of improvement.
Disgust with Florida Power's performance still spewed forth at recent state rate hearings in Clearwater and St. Petersburg.
The most common complaint was long outages. That was followed by Florida Power's inability to maintain steady current. Customers reported having to either constantly reset clocks and VCRs when the lights flicker or replace fried appliances after the power surged.
Clearwater resident Debra Jackson testified that she has taken precautions simply to keep her electronic gadgets running because Florida Power's electricity is unreliable, in good weather and bad.
"We have bought battery backups for all the computer systems. We have bought battery backups for the television and the VCRs because you can't set the VCR to record anything because the power knocks it out," said Jackson. "I haven't gotten ambitious enough to put a battery backup system in the bedroom yet, so I have gone back to a windup clock so that I know I can get up on time and get my husband off to work."
Florida Power executives promise to upgrade their distribution apparatus.
The promises were too late for Belleair. Town officials believe Florida Power has scrimped on equipment replacement and maintenance for years in order to boost profits.
"The book value of the assets, I can guarantee you, are close to zero," said Mariani. "You ought to go down and look at the pole that's on the southwest corner of my house." The pole is partially rotted and listing, he said.
Florida Power threatened to stop collecting franchise taxes from Belleair customers, an important revenue source for the town, if commissioners didn't renew. A judge enjoined Florida Power from carrying out the threat while the two sides duke it out in court, said Mariani.
With a franchise that expired Dec. 1, Florida Power stated there was legal uncertainty about its standing to collect the taxes. Florida Power also has declined to negotiate a price for transferring the electric system from monopolistic to democratic control.
"We intend to remain in the electric distribution business and our system is not for sale," Florida Power told the Planet. "We do not believe that it is in the best interest of our customers or our company to sell pieces of our electric system."
Communities cannot afford the sale price anyway, Florida Power has suggested.
Florida Power has taken the position that municipalities not only should compensate it for equipment but for plant investments and projected lost profits.
Municipal critics find that demand absurd. They point out that other vendors don't feel entitled to such recovery when a contractual relationship ends on schedule.
"Upon further review, as they say in football, that didn't seem to hold water," said Mariani.
By the fall of 2000, momentum was building for public power in Belleair. Florida Power swung into action.
Robert M. "Bob" Rogers, a 55-year-old former electric utility employee, invited fellow Belleair residents to a Sept. 25 forum at the Belleview Biltmore Resort Hotel. Florida Power flew in speakers to bad-mouth municipal power, based on the initial stumbling of a New Mexico city.
The invitation from Rogers had failed to note Florida Power's sponsorship of the forum.
"This issue has the potential of being implemented at the expense of residents and homeowners by bringing higher taxes to us based on a highly risky venture," Rogers wrote. "It is my opinion that the city government is inflexible on this matter, which is cause for grave concern."
The inflexible town officials didn't rate an invite to the forum. Florida Power operatives told Cottrell that town officials were welcome, with one caveat: "If you come, you agree not to say anything."
The forum drew more than 200 residents, who enjoyed free refreshments courtesy of Florida Power while listening to Belleair officials get excoriated. The town attorney informed the crowd that, under the sunshine law, Belleair commissioners couldn't respond to the criticism because more than one of them was present and the forum hadn't been posted as an official meeting.
"So we're made to look like dummies," said Mariani. "We're made to look like we've got something to hide."
Encouraged, Rogers formed Concerned Residents for Belleair and claimed to have 1,000 signatures opposing public power. Rogers turned down an invitation from Belleair officials to enter the names into the record of town commission meetings.
In a Nov. 1, 2000, letter, Rogers demanded that Mariani drop the town's lawsuit to force Florida Power to negotiate municipalization.
A week later, Florida Power brought one of the forum speakers to a Belleair commission meeting to counter a Havana, Fla., official, who extolled the benefits of her city running its own electric utility for more than 50 years.
Joe Burdette, a developer's consultant and newspaper columnist for the weekly Belleair & Beach Bee, has also been on Florida Power's payroll. Burdette attended two meetings at Florida Power offices when, Mariani said, utility executives worked on the mayor to abandon municipalization.
In December 2000, Mariani said Burdette invited him to breakfast at the Belleair Country Club. Mariani agreed on the condition that he pay for his own meal.
"Oh, you don't have to do that," Mariani recalled Burdette saying. "It will go on the expense account."
"That's exactly what I don't want," Mariani said he told Burdette.
The March 2001 city election was on Burdette's mind. After small talk, Burdette got to the point.
"Y'know, George, you guys really need to reach an agreement with Florida Power and you need to do it soon," Mariani recalled Burdette's advice.
"Why is that?" Mariani asked.
"Well, if we can't reach an agreement, we're going to have to take this issue to the citizens," Mariani said Burdette warned. "And you're too good a mayor for Belleair to lose."
Mariani said he burst out laughing. "I mean, he just flat-out blatantly put that threat right on the table," said Mariani.
The meeting was a lunch, according to Burdette, who insisted the rest of the mayor's account was wrong, too. "Mariani just doesn't have the correct information," said Burdette.
Florida Power told the Planet last month that Burdette hasn't worked there in more than a year.
Burdette said he is fighting for Florida Power now because he lives in Belleair, not because he used to get a check from the company. Claiming Belleair officials cannot run their own water system properly today, Burdette said he is afraid of what would happen if they take over electricity in a town situated in a potential hurricane alley.
"When the big one blows in," said Burdette, "I don't want George Mariani or Steve Cottrell coming to my rescue. I want Florida Power."
No mayoral opponent surfaced against Mariani last year. But Bob Rogers ran for town commission on a pro-Florida Power plank.
Mariani surveyed Belleair residents on municipalization. By the March 13 election, only 17 percent of the 1,570 residents who had returned survey forms to Town Hall favored signing up right away again with Florida Power.
During the campaign, Nancy Loehr asked Mariani to meet Michael A. Lewis, a local vice president for Florida Power. Curiously, Loehr also invited James M. Cantonis, a close friend of the mayor. Cantonis was Mariani's campaign treasurer but had no official connection to town government.
The mystery surrounding the Cantonis invitation was cleared up for Mariani before the meeting. Cantonis told the mayor that he was helping Ruth Eckerd Hall raise $22-million. Recently, Cantonis said he had asked Florida Power for $1-million for the Clearwater performing arts center.
"Well, I can tell you why they invited you and me together," Mariani said he told Cantonis in a pre-meeting telephone call. "They want you to influence me to sign a deal and they're going to try to link these things together."
Cantonis agreed with Mariani that the Belleair franchise pact and the Ruth Eckerd Hall fundraising were separate issues. The two friends told Loehr and Lewis that at the meeting. After the election, Florida Power gave $250,000 to Ruth Eckerd Hall's capital project.
Burdette was paid $261 by the Rogers-for-commissioner campaign to put up signs and help with a mailing. But Burdette left it to another Bee columnist, Joanne Faruggia Kavanagh, to stump for Rogers in the weekly's news pages.
"A large vote for Bob Rogers will send a clear and distinct message to the mayor and commissioners," Kavanagh wrote. "It would be a message that they will not be able to "spin-doctor' to suit their personal agenda."
But incumbents Stephen R. Fowler and Gary H. Katica, who are open to Belleair breaking away from Florida Power, were returned to the commission. Rogers finished a distant third and a political ally placed last in the four-candidate field.
After claiming 1,000 pro-Florida Power signatures on his petitions the previous fall, Rogers attracted only 366 votes in Belleair. Florida Power stated that it has never paid nor employed Rogers for anything.
The ballot results didn't turn Florida Power off to election-style sleaze. In April 2001, residents of Belleair and Dunedin started getting calls from a mysterious polling outfit hired by Florida Power.
In the local press, Loehr described the telephonic intrusions as mere customer surveys. But survey questions meandered into areas like whether municipal officials in Belleair and Dunedin could be trusted.
Florida Power was "push polling," according to officials of the two municipalities. Masquerading as an opinion-seeking consumer group, Florida Power used slanted questions to "push" public views toward its side of the municipalization debate.
The company has called that accusation untrue.
Dunedin City Manager John Lawrence told The Tampa Tribune that he escorted Loehr and Florida Power executive Gail Simpson from his office after they denied that their push-poll takers had asked residents about him.
"It was the most incredible meeting I've ever had," Lawrence told the Tribune last April. "Unbelievable."
Despite the disrespect shown Lawrence, Dunedin proved more receptive to Florida Power's entreaties than Belleair.
With the blessing of Dunedin's elected officials, Public Works Director Bob Brotherton priced actual wholesale power sources last summer. Firm 10-year quotes indicated Dunedin's annual electricity surplus would be closer to $5-million than the consultant's earlier $3.7-million estimate.
"I got some very good long-term bids, tremendous services, fixed prices, much better than what the consultants said we could get," said Brotherton.
Instead of cheering the news, however, Dunedin officials got spooked.
Florida Power applied tremendous pressure. "Various ways they did that," said Brotherton, "some of which I don't even know and probably don't want to know."
Belleair Mayor George Mariani said three Dunedin commissioners, whom he wouldn't name, confided their distress to him. "I just want it over with," one told Mariani. "I can't stand the pressure." Said another: "They are just too powerful. How can we fight them when they are bigger than city hall?"
Florida Power left the serious arm-twisting to the Dunedin Chamber of Commerce. Chamber big shots concluded Dunedin should sign again with Florida Power. They cited a study by a membership panel that included Florida Power's Gail Simpson.
The chamber and Florida Power are tight. At the recent rate hearing in Clearwater, Joe Burdette assisted pro-Florida Power witnesses from the Dunedin business sector to offset criticism of the utility's spotty service.
"I know that Florida Power has worked hard over the past three years to improve their reliability," the chamber's Sandy Shuler testified. "This shows their commitment to customer satisfaction and protection, which gives all of us better peace of mind."
The chamber was a willing accomplice in the killing of public power in Dunedin. City commissioners caved last fall.
"Different people have different levels of tolerance in taking this kind of business risk," said Brotherton. "This was dealing with something they've never dealt with before."
Taking the safe route of renewing for 10 more years with Florida Power, Vice Mayor Deborah Kynes said: "It was too much risk for my comfort level."
Kynes took $100 from Florida Power's Nancy Loehr for her recent successful re-election campaign. But the vice mayor said she had no contact with Loehr during the city's deliberations about the electric franchise.
After the commission acted, Cecil P. Englebert told the St. Petersburg Times: "Ten years gives us plenty of time to look at new technology and determine if we need to get into that type of thing."
Englebert, who was subsequently ousted from the commission in the Feb. 12 election, was sadly misinformed if he thought Dunedin would get another chance at municipal electricity in 2011.
Re-signing with Florida Power, Dunedin officials surrendered their right under state law to acquire the city's electric distribution system. The only method to take it over in the future would be condemnation. "The attorney fees alone would more than make it not feasible," said Brotherton.
Kynes said energy deregulation could give Dunedin another shot at severing the cord to Florida Power someday.
John A. Doglione was the only Dunedin commissioner to object. Doglione told the Planet that he was disappointed at Florida Power's refusal to extend for another 10 years Dunedin's right to buy the electric system.
Florida Power's tentacles aren't as extensive in Belleair, where town officials are confident that scare tactics won't prevent public power from getting a fair hearing.
Belleair has joined the Greater Orlando cities of Casselberry, Longwood and Winter Park in going to court while researching the pros and cons of dropping Florida Power. The investor-owned utility is on high alert in all four communities, said municipal power advocate Barry Moline, fearing a "domino effect."
Florida Power has billions of dollars at stake, said Winter Park Commissioner John Eckbert. New 20-year franchise contracts in the three Orlando area cities would be worth $3.6-billion to Florida Power, he said.
Eckbert, who clobbered an anti-municipalization challenger to win re-election in Winter Park last month, said Florida Power's push polls and other electoral interference in his city would be recognizable to Belleair residents.
"Same battle, different geography," said Eckbert. "You see the same bogus charges. As soon as they are debunked in one place, they pop up somewhere else."
Even if the economic benefits of public power turn out to be about the same as with an investor-owned utility, Moline said: "You can still improve reliability."
Moline said elected municipal officials are easier to upbraid about power outages than remote private utility chieftains like Florida Power CEO H. William Habermeyer Jr. "One guy can get a response in a small town," said Moline. "He can't call up Bill Habermeyer at Florida Power."
Contact Staff Writer Francis X. Gilpin at 813-248-8888, ext. 130, or frangilpin@weeklyplanet.com.
This article appears in Apr 10-16, 2002.