Most members of the seven-member City Council on Monday approved issuing requests for proposals to companies interested in potentially buying the electric utility system within Destin from the city.
DESTIN – Most members of the seven-member City Council on Monday approved issuing requests for proposals to companies interested in potentially buying the electric utility system within Destin from the city.
Councilman Cyron Marler and Councilwoman Prebble Ramswell cast the two "no" votes on the issue.
This particular RFP would be "the largest that’s ever been done" in the city’s history, City Attorney Jeff Burns said at Monday’s meeting. Destin was incorporated in 1984.
In order for the utility purchase by another company to occur, however, the city would first have to buy the system from Gulf Power. The city entered into a 30-year franchise agreement with Gulf Power in May 1986 and, after several updates, that contract is now set to expire next May.
While city officials are still open to forming a new franchise agreement with Gulf Power, they also have the right to buy the utility system from the company.
Destin officials are interested in purchasing the system for at least a couple of reasons: They say the electric rates that Gulf Power currently charges to its customers in Destin are among the highest in Florida, and that other utility companies appear to have more favorable policies on converting overhead electric distribution facilities to safer, more reliable underground service. Plus, underground lines help the city look better aesthetically.
A consulting firm told Destin officials earlier this year that the possible purchase of the utility system from Gulf Power might cost about $71 million. The actual price would be determined through an arbitration process, which likely would take several months.
The proposals from companies interested in buying a potential city-owned utility system must be submitted to the city by 2 p.m. Jan. 19, and a contract could be awarded on April 30, according to city information.
The chosen company would help the city buy the utility system from Gulf Power and then complete the transfer of the system from the city to that same, new company.
They added that the city would consider issuing bonds to support the possible purchase if the council decides to establish a city-owned electric utility system, but would not issue bonds if a new company takes over.