February 13, 2015

Power company settlement ends obstacle to Babcock Ranch development

By: Vicki Parsons - IT

By Josh Salman – Thursday, October 23, 2014


CHARLOTTE COUNTY – The developers of Babcock Ranch have reached a settlement with two utility providers, lifting one of the last roadblocks to breaking ground on the massive development.

The settlement allows Florida Power & Light to serve the new city, which its developers still plan on powering largely with the sun.

The deal ends months of squabbling before the Florida Public Service Commission over a proposal by the Babcock Ranch Community Independent Special District to create its own power utility for the planned development in rural eastern Charlotte County.

Kitson & Partners, the Palm Beach developer behind the Babcock Ranch project, had intended to create a separate utility franchise to serve the community through unique approvals Florida lawmakers granted amid the Great Recession.

But the Lee County Electric Cooperative, which also had been slated to sell power in the area, challenged Babcock’s plan, saying the new utility would cost it revenue and make it raise rates for its members.

FPL — the state’s largest utility provider, which also sells energy to the Lee County utility — will now serve the area under the franchise agreement announced Thursday. FPL will also continue negotiations with Kitson to build a 75-megawatt solar farm at the development.

The deal clears the way for Kitson & Partners to break ground on the development, slated for as many as 19,500 homes and roughly 6 million square feet of office and retail space, Syd Kitson, the company’s chief executive, said Thursday.

“This is a really big deal for us,” Kitson said. “It paves the way for the solar, smart grid, smart homes and all of the things we have been talking about for the past seven years.”

Kitson made national headlines in 2006 with his purchase of Babcock Ranch, about 91,000 acres bordered by eastern Charlotte and Lee counties.

Reports at the time said Kitson’s investors spent nearly $500 million on the acquisition, though he has declined to disclose terms of the deal.

Kitson immediately sold 74,000 acres of the ranch to the state for $350 million — Florida’s single-largest land deal — for a preserve that can never be developed. He plans to build enough homes for some 50,000 residents on the rest of the land.

A Power Struggle

A territorial agreement approved by the PSC in 1965 divided the Babcock Ranch property between FPL and the Lee County Electric Cooperative.

But in 2007, Florida lawmakers created a special district that allowed Babcock Ranch to apply to sell power through its own municipal utility.

The Babcock Ranch Community Independent Special District was just the second of its kind established in Florida, joining the Reedy Creek Improvement District created more than five decades ago to support Walt Disney World.

Kitson previously said the utility was essential for his vision to become a reality, by keeping rates low and using only energy-efficient practices.

But Kitson touted the settlement Thursday as a win for all parties involved.

“We were fully prepared to move forward with our own franchise,” Kitson said. “But FPL has the best rates in the state, and our residents will now be able to take advantage of that.”

Kitson now plans to break ground on the roads and utility systems by the middle of next year. The first phase of homes and offices would follow about 18 months later.

Both utilities involved in the deal said this sets the stage for more large-scale solar use in Florida.

“We feel this agreement protects the interests of all stakeholders and is promising for the Babcock Ranch community and Southwest Florida as a whole,” said Dennie Hamilton, CEO of the Lee County utility.