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Deal to sell Florida Water is off

Published Aug. 31, 2005

A controversial deal that would have given two Panhandle towns ownership of the state's largest private water utility is dead.

Florida Water Services, which serves more than 500,000 customers in 26 counties, including Citrus, Hernando and Pasco, announced Monday that it was ending its $492-million sale agreement with the towns of Milton and Gulf Breeze.

The two towns have a combined population of 13,000. None of Florida Water's 152 water and sewer utilities fall within their jurisdictions.

Local governments, saying they feared that the sale would put precious water resources at the mercy of distant owners unaccountable to the public, have filed numerous lawsuits to stop the sale since it was announced in September.

A blow was dealt Friday in Leon County when a judge issued an injunction that put the deal on hold until a state regulatory board could determine whether it was in the public interest.

"It was the injunction that was the straw that broke the camel's back," said Mike Twomey, a Tallahassee attorney who had fought the sale. "They couldn't pass the public interest test, and they were scared. They threw in the towel."

Lisa Lochridge, a spokeswoman for Florida Water, would not speculate on how state regulators would have viewed the sale, but acknowledged that the injunction and all the litigation proved too great an obstacle.

"They basically prevented the closing," she said.

Lochridge maintains that money, not high-minded convictions about protecting their citizens, prompted local governments to issue legal challenges.

"It represents a great revenue stream for them," Lochridge said of the utility network. "They want to own those systems."

Sen. Nancy Argenziano, R-Crystal River, an outspoken critic of the deal, said she was skeptical that Florida Water was really backing down.

"This may be a charade to keep us all busy," she said. "They are up to something else, and we need to watch."

Argenziano has proposed several bills aimed at closing loopholes in state utility law that allowed Milton and Gulf Breeze to form an authority and attempt the purchase of the utility giant. She noted that Florida Water had recently hired its own lobbyist.

"We have to move forward and make sure something like this doesn't bite us again," Argenziano said.

Citrus County Commissioner Gary Bartell was enthusiastic, calling it a triumph for consumers.

"From my standpoint, this was an ill-conceived plan from the beginning," he said. "This shows that the system worked for the customers who would have been adversely affected by the sale."

Bartell said he hoped Allete Inc., Florida Water's parent company, would consider the bid offered by the Florida Governmental Utility Authority, a coalition of government agencies that had been negotiating to buy the company for more than a year before being jilted in favor of the towns.

The utility authority renewed its bid in February, offering $416-million for Florida Water.

Lochridge would say only that the company was exploring all its options and would not comment on the status of the offer.

_ Will Van Sant covers Hernando County government and can be reached at (352) 754-6127. Send e-mail to Times Staff Writer Carrie Johnson contributed to this story.