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City keeps close watch on electric rate request

Each day costs the city $900; each year, $330,000.

That's how much the city loses as it waits for Florida Power Corp. to enact a long-promised 25 percent reduction in street-lighting rental and maintenance rates.

The waiting soon will be over.

That reduction _ promised in 1988 _ is part of a complex rate restructuring that the utility has requested.

And City Council members are happy about that.

It's the other part of Florida Power's request that they're worried about. Florida Power wants a 12 percent increase during the next two years. Council member Paul Yingst said he is concerned that the utility would try to make up the money it loses in street-lighting rentals by increasing other parts of the city's power bill.

That's why council members voted voted Thursday to keep a watchful eye on the proceedings before the Public Service Commission (PSC) as the utility asks for higher rates.

Council members instructed the city attorney's office to intervene in the utility's rate increase case. The intervention will allow the city to monitor how Florida Power proposes to increase its revenue. The rate case likely will take eight months to resolve.

"We want to watch very closely to see how those rates are shifted around," Yingst said.

Wally Abell, Florida Power district manager, said he was "a little bit surprised" that the city will move to intervene in the case. He said he has a meeting scheduled with interim City Manager Don McRae next week, and he said he thinks he would be able to set city leaders' minds at ease about the utility's rate increase request. Nevertheless, he said, he has no problem with the city's action.

"If they want to intervene, I certainly have no objection to that," Abell said.

Abell said he could not ensure that the city's rates would not increase in other areas. He said it is possible that those rate increases could offset the savings in the street-lighting rates.

"It could wipe that out, but I don't know," Abell said.

The promised street-lighting rate reductions stem from a deal in 1988 in which the power company said it would, among other things, cut rates if the city stopped trying to buy back the street-lighting system.

The city kept its end of the bargain. But it still is waiting for Florida Power to do its part. As each day passes, the city loses about $900, or $330,000 a year, according to city records.

Before Yingst retired and was elected to council, he was the city's director of energy and technology. He had done consulting work for the city on the street-lighting issue. In April 1990, he wrote a letter to the city manager expressing doubts that the reduction ever would occur.

Yingst wrote in his letter that it is "evident that (Florida Power Corp.) may never take steps to get the street-lighting rate structure in line!"

Yingst had recommended that the city resume its effort to buy back the street-lighting system. The city could save $7.75-million during 15 years if it bought back the system, Yingst's analysis shows.

Failing that, the city ought to think about acquiring the system through condemnation, Yingst wrote.

Power company officials said the holdup was that the company hadn't had a "full rate case" before the PSC. A full rate case is a detailed review of a utility's rates and income that usually takes about eight months to complete.