Proposed constitutional amendment on Florida consumer “energy choice” gets fire from all sides
A proposed state constitutional amendment promising choice to electricity consumers has achieved the rare feat of alienating nearly everyone in Florida politics, from the GOP establishment that runs Tallahassee to progressive environmental groups that traditionally challenge utility monopolies.
Citizens for Energy Choice, the Gainesville-based group pushing for the amendment, says the measure would give customers the chance to choose their own power suppliers by requiring the Legislature to deregulate the state’s energy market. The group says the measure will lead to lower electricity bills, increase renewable energy options, and provide new, permanent jobs.
But opponents claim that it won’t be able to fulfill its promises and could lead to chaos.
The measure is the brainchild of Rich Blaser, the co-CEO and co-founder of Gainesville-based Infinite Energy, which supplies natural gas to four states (including Florida) and sells electricity to homes and businesses in Texas. In the early 2000s, Texas lawmakers deregulated that state’s electricity market to allow retail price competition.
It’s that Texas model that Florida advocates point to, and they include a 2017 study on their website that says the change “appears to be yielding the benefits to consumers that were intended.” (A 2015 independent report doesn’t go as far, saying that results have been mixed since Texas energy deregulation started in 2002).
Some Florida political heavyweights are opposing it, including Republican Florida Attorney General Ashley Moody, the leaders of the Florida House & Senate, the Florida Chamber of Commerce, and Florida Power & Light, Gulf Power, Duke and TECO – so-called “investor-owned utilities,” which are private enterprises acting as public utilities.
“While phrased both in its title and in its summary as a purportedly pro-consumer choice measure, the proposed amendment does the opposite,” Attorney General Moody wrote in a filing with the state Supreme Court. “The undisclosed chief purpose of the proposed amendment is to eliminate the main providers of electricity service to Floridians, the investor-owned utilities.”
But the amendment’s advocates say their proposal wouldn’t eliminate the investor-owned utilities at all. Instead, they say, it would simply break up the utilities’ monopoly on generating energy, opening up the market for healthy competition.
Let’s break down what that means.
Currently a company like Florida Power & Light provides power to its customers from its plants that generate power from natural gas, coal, nuclear and/or solar. FPL then sends that power through transmission lines, where it’s distributed to homes and businesses through the poles and wires that are omnipresent in every community in the state.
Under the proposed measure, investor-owned utilities would still be involved in transmitting and distributing power, but they would no longer be the only companies in Florida allowed to generate electricity. Although both advocates and critics say it would “deregulate” energy markets, Alex Patton, the chairman of Citizens for Energy Choice, prefers to use the term “restructuring.”
Patton points out that the state panel that regulates utilities – the Florida Public Service Commission – would still be involved in policing rates and other aspects of the energy industry. As it stands now, the Public Service Commission has to review all electricity rates and approve new generating plants, and the investor-owned utilities are always guaranteed to make a profit in exchange for running all the electricity infrastructure.
While it’s no surprise that the Tallahassee political establishment (which receives millions of dollars in utility campaign contributions) is against the proposal, it’s somewhat more surprising that several environmental groups are opposing it.
One environmental group that’s been critical of investor-owned utilities’ reluctance to embrace renewable sources of energy is the Southern Alliance for Clean Energy. Officials with the group say that the idea of opening up Florida’s energy markets for competition is a good thing and had early conversations about possibly collaborating on the proposal. But their deepest concern is that the amendment requires the Florida Legislature to implement the bill.
“There is no guarantee that the Legislature is going to implement this in a way that is actually good for consumers, and good for some of the things that we’re really interested in, like renewable energy and energy efficiency. So that’s a complete black hole,” says Stephen Smith, the Southern Alliance for Clean Energy’s executive director.
Officials with the Nature Conservancy and Audubon Florida also express concerns about what the amendment would do to the long-awaited expansion of solar power. The major utilities in Florida are finally embracing solar after years of watching states like New Jersey supersede the Sunshine State in its commitment to alternative energy.
In January, Florida Power & Light announced its “30-by-30″ plan to install more than 30 million solar panels by 2030. Tampa Electric Company has an estimated $850 million project to build ten solar power farms by 2021, creating enough electricity to power 100,000 homes in Hillsborough, Polk and Pasco counties. And Duke Energy Florida says it is investing in three new solar power plants, adding to the six already operating.
“Passage would likely result in years of delay in solar energy development,” says Greg Knecht, deputy executive director with the Nature Conservancy, in explaining why his group opposes it.
Another concern that environmental groups have: The energy choice amendment – and getting the Legislature involved in implementing it – could put a wrench in “net metering.” That’s when customers who install solar power get money or credits from utilities, based on the amount of clean energy their solar arrays are sending into the electricity grid.
Florida’s rooftop solar production is tiny compared to other states. Duke Energy Florida now has about 15,000 roof-top solar customers, and is helping more than 700 residential and business customers per month connect their private solar systems to the local electric grid, according to spokesperson Ana Gibbs. Florida Power & Light has about 10,000 such customers, and Tampa Electric has nearly 4,000 who have “net-metered” solar panels to the electricity grid.
If the constitutional amendment survives the scrutiny of the Florida Supreme Court in August, is allowed on the ballot for 2020, and then gets the 60 percent required approval to pass, it will all come down to the Florida Legislature. The constitutional amendment requires that the Legislature come up with rules by 2025.
In his own legal brief opposing the measure, Republican state Senate President Bill Galvano makes the case that the Legislature doesn’t want that responsibility.
“This Initiative comes disguised as a grant of a constitutional right to energy choice when in reality it is a directive to the Legislature to restructure the electricity market within a framework the sponsor believes is the best model,” attorney Jeremiah Hawkes wrote on behalf of Galvano in the brief.
Stephen Smith of the Southern Alliance for Clean Energy says recent history shows that constitutional amendments that have good intentions have been “corrupted” by the Legislature.
“And this one will probably be one of the most complicated one’s ever attempted, because you’re talking about completely restructuring how we produce and consume energy in the state of Florida and we have no visibility about what that implementation looks like,” he says.
Though it’s fair to say that the majority of the public doesn’t know much about this proposal, what they hear they like, an early poll shows.
A St. Pete Polls survey released earlier this month of 3,790 voters statewide showed that more than 66 percent said yes when asked if they would support a constitutional amendment “that would deregulate electrical utilities in Florida and allow customers to choose their electricity provider.”
Citizens for Energy Choice will have its day in the Florida Supreme Court on August 28. The group also needs to have 766,000 qualified signatures by next February to get on the ballot. As of now, the Florida Division of Elections website reports the group has more than 313,000.
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