Earlier this year, The Walt Disney Company and Florida Governor Ron DeSantis got into a heated battle over the passing of Florida’s “Parental Rights in Education” bill. The bill prohibits kindergarten through 3rd-grade educators from talking about things like gender identity and sexual orientation. Disney and its CEO Bob Chapek spoke out against the bill and said the company would work with legislators to overturn it. In turn, Governor DeSantis and Florida Republicans voted to dissolve the Reedy Creek Improvement Act, essentially stripping Disney of its self-governing status.
There were — and still are — a lot of questions surrounding the legality of dissolving Reedy Creek, along with all the things that need to happen in terms of the debt and bonds that Reedy Creek has. However, things are still moving along as planned and Reedy Creek is set to be dissolved in June 2023.
Even though Reedy Creek may no longer exist in under a year, the district is still making deals to help ease fears of the consequences that will come from its dissolution. On October 3, Reedy Creek entered into a reimbursement agreement with Duke Energy Florida, LLC — one of the top power providers for Reedy Creek.
The Orlando Business Journal reported more on the deal:
That credit line will ensure that Reedy Creek will be able to pay its May 2023 bill should it be dissolved on June 1, 2023, per the legislation, district officials told Orlando Business Journal.
“From Duke’s perspective, they want to make sure there’s a guarantee they get paid for May’s charges in June if we are not here — it’s a safety net [for Duke],” John Classe, district administrator of Reedy Creek told OBJ. “It makes smart sense for Duke to make sure they are covered from a business perspective.”
Ana Gibbs, spokeswoman with Duke, told OBJ: “A letter of credit is a standard contractual mechanism to secure obligations between parties. Duke Energy requests letters of credit in a number of different transactions as it deems appropriate. Duke Energy does not typically disclose the details surrounding negotiations for commercial transactions such as this.”
Most of Reedy Creek’s electrical power — roughly 90% of the output — comes from utility providers like Duke Energy and others. The remaining 10% comes from solar power. That power then is distributed to the district’s customers including the Walt Disney World properties, third-party hotel and retailers and residents in the cities of Bay Lake and Lake Buena Vista.
It still remains to be seen what will happen once June 2023 actually rolls around. Ron DeSantis has not outlined a clear plan, but has said that he is considering a special district — like Reedy Creek — to oversee the area that Reedy Creek once oversaw. DeSantis has also shared that the debt Reedy Creek has accumulated will not be passed along to Florida taxpayers, although he has not said how that will happen.
Disney has not commented on the dissolution of Reedy Creek, which has been around since 1966.
