Commentary

Florida legislators OK bill likely to lead to higher water and sewer rates

In other states, similar bills have led to big corporate takeovers and much higher rates

May 4, 2023 7:00 am

Legislation threatening municipal control of water systems is pending in Tallahassee. Credit: Getty Images

Florida once had two capitals, Pensacola and St. Augustine. That was because it was two separate Spanish colonies, West Florida and East Florida.

The story goes that when the two colonies became a single U.S. territory in 1819, a guy from Pensacola set out headed east and a guy from St. Augustine headed west, and where they met became the new state capital of Tallahassee.

Historians roll their eyes when someone mentions this east-meets-west legend, but I think it’s true. I also think that the two guys who created Tallahassee were lobbyists for utilities and development interests, because that’s who’s been running the show ever since the first legislative session there in 1824.

They’re certainly in charge this year.

I’ve written several previous columns about how the developers hold sway over our legislators, despite the obvious damage they’ve been doing to the state and its resources.

Now let’s talk about the utilities.

The one that’s clearly established ownership is Florida Power & Might — er, excuse me, Light. You may recall how last year, at FPL’s behest, the Legislature passed a bill that would have killed off the part of the solar energy industry that FPL doesn’t already control.

Then, to the surprise of everyone (possibly including himself), Gov. Ron “If It Ain’t Woke, Don’t Fix It” DeSantis vetoed the bill, citing the cost to the average citizen.

FPL didn’t bring that one back this year, thank heavens. Instead, we’re seeing a bill that involves a different kind of utility — the municipal ones that provide people with their water and sewer service.

Stan McClain. Credit: Florida House

The bill is HB 125. It’s sponsored by Rep. Stan McClain, a Summerfield residential building contractor with 11 children and 14 grandchildren. (He could probably stay busy just building homes for all his offspring.)

The bill hasn’t gotten much coverage, thanks to all the other kookoo-crazypants stuff our Legislature has been up to. Their seriously deranged actions this spring have included approving using radioactive phosphate waste in building roads, making it harder to sue insurance companies right after a major hurricane in which 40 percent of the insurance claims went unpaid, and — nuttiest of all — blocking local governments from imposing summer fertilizer bans despite the rampant toxic algae blooms we keep seeing.

At least Politico ran a brief story about McClain’s bill last week. The story noted that it “would allow companies to petition the Public Service Commission to increase water and wastewater rates based on the purchase price of those utilities.”

That should have set off alarm bells similar to an approaching hurricane, but it didn’t.

I blame the bill’s boring name. It’s titled “Utility System Rate Base Values,” which sounds (yawwwwwn) about as exciting watching as a 90-year-old retiree in a recliner binging a “Golden Girls” marathon.

But that’s misleading.

When similar legislation passed in a dozen other states, “it set off a feeding frenzy of corporate takeovers of smaller water systems,” warned Mary Grant of Food and Water Watch, an advocacy group focused on government accountability on those issues. “And then all these small towns started seeing their water and sewer bills going up.”

In one Pennsylvania township, she said, “the rates have gone up 90 percent … and a lot of it’s just going for corporate profits.”

I don’t know about you, but with the prices for gas, groceries, and property insurance going up faster than the last Space X launch, seeing higher bills for my water and sewer use is about the last thing I need.

You’d think the Legislature would feel the same way — if not for themselves, then for all of Rep. McClain’s children. Imagine HIS water and sewer bill!

Shotguns and buckshot

Water is a precious resource on the Florida peninsula. The demand for it increases as our population swells like an overinflated party balloon on the verge of popping. When it runs out, we can all sing along with Willie Nelson: “Turn out the lights, the party’s over …”

Just ask the homeowners in Cape Coral. Their water wells keep drying up, year after year, as more and more residents there sink wells for their own drinking water.

Their response has been to spend thousands of dollars to sink the older wells even deeper, chasing after a dwindling natural supply.

How far will people go in chasing water? You’d be surprised. Consider this Florida history lesson:

About 20 years ago a pro-development group, the Florida Council of 100, proposed then-Gov. Jeb “Mr. Punctuation!” Bush appoint a seven-member board to oversee the distribution of water around the state.

This board would have the power to take water from North Florida, home of our beautiful springs, and arrange for it to be piped to developers down in thirsty South Florida.

Florida law mandates “local sources first” for water. In other words, cities and counties must exhaust all reasonable possibilities for obtaining water within their borders before attempting to get it from somewhere else. The Council of 100 wanted to repeal that law in the name of “sharing” the H2O for cold, hard cash.

“A statewide water distribution system would establish an economic value to water and water would become a general revenue source for the state of Florida and sending areas,” the Council of 100 recommended.

When state senators held a series of public hearings on the Council of 100 proposal, though, they ran into a lot more opposition than anyone expected.

The last hearing, at rural Chiefland High School, drew an estimated 1,000 people. Some were wearing T-shirts declaring, “Our Water is Not for Sale,” and toting signs that proclaimed, “Not one damn drop!”

“There are people in Williston right now getting shotguns and buckshot,” a Levy County commissioner warned them.

That was enough to convince Bush to reject the plan. It was, you could say, dead in the water.

But some people still see water as liquid gold just waiting for someone to grab hold of it.

FPL’s owner, the Juno Beach-based NextEra Energy, has jumped into the water and wastewater business in Texas and in Pennsylvania. But when I contacted FPL’s press office to ask about HB125, corporate spokesman Christopher McGrath insisted the energy giant wasn’t actively lobbying for or against it.

“In fact,” he said, “we have stated publicly in recent months that we are deemphasizing water as part of our overall business strategy.”

So why was FPL registered to lobby the McClain bill at all? “We register on behalf of all utility related bills in case the legislation, or any future amendments to it, would impact our operations or customers,” he told me.

You can’t see my face right now, but my expression is what you might call “skeptical.” It’s like the one my mom wore that one time my dad suggested her birthday gift might be a new motor for his fishing boat.

Bevis but no Butt-Head

FPL wasn’t the only organization signed up to lobby for this bad bill.

Also signed up to lobby were a pair of mouthpieces from the pro-business, anti-environmental group Associated Industries of Florida. Although Associated Industries bills itself as “the Voice of Florida Business,” its membership is just six Florida businesses: FPL (hello again!), U.S. Sugar, Florida Crystals, Disney, HCA, and Florida Blue.

Brewster B Bevis via Linkedin

One of the two lobbyists was Associated Industries’ president, the hilariously named Brewster B. Bevis. I am sorry to report that there are no lobbyists named Butt-Head, although plenty of them act that way, heh-heh, heh-heh.

But the most active lobbying — including the drafting of the bill — was done by the Gunster law firm, according to records obtained by Alissa Jean Schafer of the Energy and Policy Institute, who has been closely tracking these bills in each state.

Gunster, incidentally, gave $1,000 to McClain’s campaign fund, as did the FPL parent NextEra Energy. Perhaps it was just meant as a gesture of friendship and not a way to guarantee access. (I’m wearing my skeptical face again.)

Gunster, in its lobbying filing, said it was working for a company called Sunshine Water Services of Altamonte Springs, which is owned by the Vancouver-based Corix Group of Cos. Corix owns a lot of utilities all over the U.S.

And who owns Corix? Another Canadian corporation, one specializing in pension fund investments, the British Columbia Investment Management Corp.

In other words, these companies are in business to make scads of money, unlike the municipalities now providing water and sewer services.

Currently, when a private company buys a city or county water system, rate increases are limited because the corporations are allowed to recover only the system’s book value.

McClain’s bill would let corporations hire outside consultants to come up with an inflated value for the water system, then turn around and recover that amount from the ratepayers.

A letter signed by Food and Water Watch, Earthjustice, Florida Conservation Voters, and several other groups contended that McClain’s bill “would have a dual effect of making it more profitable for companies to buy local systems and making it easier to entice local governments to sell their water and sewer systems for more cash.”

In a Feb. 15 subcommittee hearing, McClain contended the poor little municipalities just can’t keep pace with the state’s rampant growth fed by the people in his business.

“I don’t think the local governments, I don’t think the state, I don’t think ANY of us has the ability to take care of all the needs we have of supplying the water or wastewater to the citizens,” he told subcommittee members. “Therefore, we have to have the private sector be involved. They can bring the investment we can’t have the ability to do.”

I asked Brooke Ward, senior Florida organizer for Food and Water Watch, how many utilities might be affected by this bill. The answer was more than 1,000, with several million customers total.

Those are the folks whose rates may soon be headed skyward thanks to the new corporate owners.

“This is the pattern we’re seeing, as the privatization of these utilities becomes more and more prevalent,” Ward told me.

Have a donut!

The Food and Water Watch folks pointed me toward an analysis of the bill by the staff of the House Energy, Communications & Cybersecurity Subcommittee.

The analysis says it “may encourage transactions involving the purchase of water or wastewater utility systems,” and that rate hikes could follow, if the Public Service Commission approves.

Brooke Ward of Food and Water Watch via Linkedin

McClain, in that February subcommittee hearing, emphasized the PSC’s importance in deciding on any rate hikes.

“I think the PSC does a great job of looking out for the consumers,” he told the subcommittee.

None of the subcommittee members rolled their eyes at him, but I did. If you’ve lived in Florida for a while, you have seen plenty of headlines about how the public is the last thing the Public Service Commission worries about.

Many of the commissioners tend to be pretty cozy with the utilities they’re supposed to regulate. Even some legislators have noticed it. One newspaper columnist went so far as to refer to the PSC as “a wholly owned subsidiary of Florida Power & Light.”

How tight are the utility regulators with the industries they regulate? It’s as if the Florida Highway Patrol counted speed-limit scofflaws like me among their closest pals. Instead of speeding tickets, we’d get a free pass to go fast whenever we want.

“You’re probably wondering why I pulled you over,” the troopers would tell me. “Well, it’s to share my donuts with you.”

So don’t count on the PSC to save us.

No, I’m afraid the only person who can save us from this nightmare scenario of sky-high water and sewer rates is the same unlikely character who saved the solar industry from FPL last year.

Can water be woke?

The reason Politico wrote about the bill last week is that both the House and Senate had passed it by overwhelming margins — 112-2 in the House, 38-0 in the Senate. It won votes from both the Republic majority and the Democratic minority.

You’d think at least a half a dozen or so would have objected, given what’s happened in the other states, but they apparently didn’t pay attention to that.

Because the bill passed both houses of the Legislature, that means the only thing that can stop it now is a veto from our Disney-obsessed, memoir-hawking, wannabe Oval Office resident. You know, that guy who recently returned from his Underwhelm the World Tour.

Alissa Jean Schafer via Energy and Policy Institute.

Don’t have any false hopes here. Just because he did the right thing last year is no reason to expect him to do it again this time.

On the one hand, his justification for vetoing that pro-FPL, anti-solar bill last year was the expense. That is definitely a concern with this bill too.

But is that enough to persuade him to use his magic Sharpie a second time to write the V-word on the bill? I fear it is not.

I think if we want to get DeSantis to do something that’s not DeSastrous, we have to try something else. My idea may sound kookoo-crazypants, but that’s where we stand with Florida government these days.

I say we tell him that water is woke.

You know how much he hates the whole “woke” thing, even though he and his staff flounder around when asked to define the word. If he thought big water utilities like Corix were woke, he’d veto that bill in a fetal heartbeat.

And if that doesn’t work, then we can point out that Disney seems to be for it. Heh-heh, heh-heh.

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Craig Pittman
Craig Pittman

Craig Pittman is a native Floridian. In 30 years at the Tampa Bay Times, he won numerous state and national awards for his environmental reporting. He is the author of six books. In 2020 the Florida Heritage Book Festival named him a Florida Literary Legend. Craig is co-host of the "Welcome to Florida" podcast. He lives in St. Petersburg with his wife and children.

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