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The City Council has asked a committee of residents to oversee a first-phase study on the benefits to electric users if the city were to buy the electric company. The study will help determine whether a purchase would be in the best interest of the community and if the that deserves further consideration.

Why is the city buying the electric company?

The city is not buying the electric company. The city is simply studying whether further analysis is sensible.

Why even study the issue?

Marco Island is under continuing pressure to maintain high quality services while reducing taxes. Therefore, the city is constantly examining ways to reduce costs, diversify revenues and become more efficient. One possibility is municipalization of electricity. Thirty-three communities in Florida now own their electric systems.

What are possible advantages of municipalization?

In addition to paying for vital services and possibly reducing property taxes, there are other potential benefits, such as lower rates for users and businesses.

How – in concept – could rates be reduced?

The rate for electricity on Marco Island is the same as the rate for rural areas, and there are substantial questions whether Marco Island’s residents and businesses subsidize the cost of service to those more remote and sparsely populated areas of Collier and Lee Counties. A very preliminary analysis of revenue generated per square mile indicates that this is an issue worth considering. As a so-called “donor” city Marco Island pays a disproportionate share of electric rates to support other communities.

Many Marco Islanders believe LCEC provides excellent service. Why do this to that good company?

The study is just that – a study. There is no negativity regarding LCEC. Instead, a study allows the city to make certain that Marco Islanders are receiving proper rates and are not subsidizing the rest of LCEC’s service territory, and to determine if significant other revenues could be made available to pay for vital services.

What are the next steps?

A diverse committee of residents will conduct the cost-benefit analysis with the aid of a professional consultant. The City Council would carefully consider the committee’s findings, hold public hearings and decide whether to take the entire issue to a referendum. There is also the possibility of a special arrangement to lower electric rates without city ownership. If the City Council concludes that there is no significant advantage no further discussion may be necessary.

If the voters ultimately decide to pursue purchase of the utility, how will the city pay for it?

The purchase of the electric company would be done through long-term financing paid off from normal electric rates. The expectation is that there would be no out-of-pocket costs for anyone, and rates will be the same or lower.

What can electric users do to help?

Share this information to anyone interested in understanding the action City Council took regarding the electric company, and remain open to different ways to receive service.

How can users stay informed?

The meetings will be noticed and updates provided on the city’s Web site. The City Council is working diligently to maintain high quality services at an affordable price. The council invites and welcomes Marco Islanders to participate in this important project.