CAPE CORAL, Fla.- LCEC is speaking out for the first time on the possibility of losing its largest customer – the City of Cape Coral.
The city is currently exploring the option of operating its own electric utility service after its contract with LCEC expires in 2016.
Meanwhile, the electric company is taking steps to make sure that doesn’t happen. Wednesday, LCEC will present to city leaders why they believe sticking with them is in the best interest of customers.
“They’re just going to talk a lot about our reliability record, our competitive rates,” said LCEC spokeswoman Karen Ryan.
A 30 year contract between the two expires in October 2016, and the city wants to keep its options open.
“It’s so early, we just did a feasibility study. We’re still working out the details, we’re in the beginning of negotiations with LCEC, on a similar path we’re beginning to look at what we can do as a city to run its own electricity,” said city councilman Richard Leon.
The city would benefit from customers sending checks to them instead of an outside company, but LCEC says a city taking over an existing utility is extremely rare and risky.
There’s another factor, 45 percent of LCEC’s customers are in the Cape. If LCEC does end up losing Southwest Florida’s largest city as a customer, the company says it may end up having to lay off employees.
“We’re hoping that it doesn’t come to that, but if it were to come to that, we would make adjustments,” said Ryan.
Ryan also commented on the likelihood that rates would increase for remaining customers if Cape Coral backs out.
“Most likely not, I mean we haven’t really crunched those numbers yet because we’re hoping it doesn’t come to that. We haven’t raised them in 7 years and we don’t intend to anytime in the future.”
At Wednesday’s meeting, LCEC plans to use Winter Park, Florida as an example of the risky nature of taking over electric utilities.
Winter Park did it back in 2005 and was $11 million in the red in the first few years.
Cape Coral is still months away from making a decision.