Florida Energy Consumers Win

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February 2, 2018

Common sense prevailed earlier this month at a brief, but important meeting of Florida’s Constitution Revision Commission (CRC). Under extraordinary pressure, five members of the General Provisions Committee did the right thing and rejected a measure that sought to force drastic changes to the state’s electricity landscape on a rigid timeline. Under “Proposal 51,” Florida’s consumers would have been pushed down a path of uncertainty, experimentation and higher costs.

Since electricity deregulation special interests could revive their push for energy choice, it’s critical to understand why consumers won. The clever, but misleading banners of energy choice and energy freedom mask some harmful ideas and impacts for average citizens.

Over the past three decades, hedge funds and other creative financiers became drawn to the nation’s regulated electricity markets. They saw predictable businesses in long-standing partnerships with communities and wondered how more profit could be squeezed from the equation. Companies such as Enron picked states with potentially lucrative energy markets and began to push “deregulation,” although sometimes using warmer and fuzzier labels like “consumer choice.” A minority of U.S. states adopted deregulation, allowing marketers to sell electricity distribution packages to consumers. Twenty years ago, Florida’s leaders examined deregulation thoroughly and decided against rolling the dice.

Choosing electricity providers akin to choosing a cell phone plan or an airline flight sounds appealing on the surface. But the realities of generating electricity and bringing it over long lines and sets of poles mean that choice and competition at the retail level are illusory. True competition requires different sources and delivery mechanisms all along the value chain – which just isn’t possible given current technology unless Floridians want power stations and lines on every horizon.

Families aren’t benefiting in states that tried electricity deregulation. Instead, in almost every deregulated state, middle class families, single moms, and seniors on fixed incomes are paying more for electricity than Floridians. Consumer complaints about bait-and-switch marketing abound. As well, when asked to rate deregulated energy providers, many consumers give failing grades.

Deregulation is not being pushed by a groundswell of grassroots support, but rather by a very small network of companies seeking to profit more at the expense of everyday Floridians. Indeed, the sole individual who advocated for deregulation in the CRC’s 2017 public hearings is a founder and owner of a company that stands to profit greatly under electricity deregulation.

Today, Florida is well-served by a network of electric utilities – investor-owned, community-owned and cooperatives. All succeed at their core mission – providing constant, reliable and affordable power – and then also go the extra mile as partners for consumers and businesses. Florida’s electric rates are quite low, and as demonstrated during recent storms, the state’s home-grown utilities are present and accounted for when trouble arrives. Renewable energy, especially solar, is becoming more prevalent, thanks to joint efforts of government, utilities and consumers.

Having critical conversations is never wrong, and Florida should be proud of its unique Constitution Revision Commission. Floridians should also thank the citizen leaders on the General Provisions Committee who recognized that electricity deregulation is a losing formula for Florida.