Electric Deregulation is Bad for Florida

Amy Zubaly, Executive Director of the Florida Municipal Electric Association, published an Executive Insights column in the latest issue of FMEA’s Relay magazine denoting the problems associated with electricity deregulation. The original piece can be viewed here.

A political action committee called Citizens for Energy Choice is actively seeking signatures from Floridians for a proposed 2020 ballot initiative to change Florida’s Constitution to allow for the deregulation of Florida’s electric market. This proposal would completely undo the framework of our current electric system – one that has worked well for families and businesses for more than a century. This proposal is bad for Florida – bad for local governments, bad for Florida’s current electric utilities (including public power utilities), and ultimately, bad for all consumers.

Florida’s Constitution sets forth our fundamental rights and duties of the state. This bad special interest proposal has no place in our state’s constitution. No other state has implemented deregulation of electricity markets through a constitutional amendment and neither should Florida. In fact, if advocates have their way, Florida would be the first state in two decades to deregulate its electricity market.

The backers of this amendment claim “choice” would result in lower electric prices and better service. That couldn’t be farther from what the facts have shown from other states that went down this road. Rising prices, skyrocketing demand, and limited supply in some areas have raised questions about the viability of deregulation, causing many states to re-regulate after failed deregulation efforts.

Florida’s electric customers already enjoy affordable rates that are well below the national average. In addition, Florida’s electricity rates are already well below those in states with deregulated markets. In 2018, residential electricity prices in deregulated electricity markets were 27 percent higher than Florida.

In addition to being affordable, Florida’s electricity is reliable; however, in a deregulated market, that reliability would be threatened. Fluctuations in power generation and peak usage due to demand and supply spikes could lead to the types of black-outs that have occurred in other states that have deregulated their electric market.

Confusion over ownership and responsibilities for transmission and distribution lines, wires and poles would reduce service and lengthen power restoration times. This is especially concerning for a state like Florida that is vulnerable to widespread power outages caused by hurricanes, like we’ve seen in recent years.

While the current proposal for deregulation of electricity in Florida has an “opt in” clause for public power utilities, it would still be devastating for us. Currently, we rely on power generation and transmission agreements with our investor-owned utilities. However, these IOUs would be prohibited from owning power plants and transmission assets, leaving our current agreements in question and creating chaos in the wholesale electric market that we rely on.

Florida’s 33 public power communities are locally owned and operated, locally governed, with rates and utility policies set by our local elected officials or governing boards. We provide safe, efficient, reliable power to our customers with rates that are affordable. We are directly accountable to our customers and our communities have direct control over the decisions we make, so all the benefits produced by public power are for the communities they serve. If a public power community decides it wants to be 100% renewable, then that is what it can direct their utility to do.

As public power communities, we respond to our customers desires. We take pride in seeing our communities succeed, and we actively work toward making them a better place to live. Public power is about building strong communities. Under deregulation, important decisions about rates and policies would no longer be local. They would be made by for-profit out-of-state companies that only care about make a profit, not about investing back into our communities.

If this proposal gets added to our Constitution, there’s no turning back. It’s not something that can be undone by legislative or administrative action. Talk to your customers about the value of your local utility and the benefits it brings to your community.