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Opposition Turns to Dirty Tricks as Florida Fight for Energy Choice Heats Up

Florida protestors.jpg

The push to put retail energy choice on the ballot in Florida has been going on for well over a year. With the 2020 election now officially less than a year away, opposition to the grassroots initiative in the Sunshine State is turning up the heat and turning to dirty tricks to stop Floridians from having their say.

Background

The advocacy group Citizens for Energy Choices has been collecting signatures for months to put the issue of whether Floridians should have the right to choose their power provider and generate and sell electricity on the 2020 ballot.

Energy choice is one of a handful of ballot proposals seeking to amend the state constitution that are currently jockeying for attention in Florida.

The group, Citizens for Energy Choices, is asking voters to approve an amendment that would give electricity customers the right to choose “from multiple providers in competitive wholesale and retail electricity markets, or by producing electricity themselves or in association with others, and shall not be forced to purchase electricity from one provider.”

Proponents say the measure ensures the state’s electricity markets are “fully competitive so that electricity customers are afforded meaningful choices among the wide variety of competing electricity providers.”

Despite opposition from the state’s big investor-owned utilities – Duke Energy and NextEra Energy, which owns Florida Power & Light Co. and Gulf Power Co. – the organizers of the energy choice campaign raised nearly $4 million as of September and collected nearly half a million signatures of the 766,200 needed to qualify for the 2020 ballot. The deadline for qualifying is February 1.

Blocking Tactics

The first big swing from the opposition was an attempt to throw out the potential ballot initiative through the courts. Opponents – including both the Florida House and Senate – argued the initiative language was confusing and misleading. Florida’s Attorney General argued that “voters simply will not be able to understand the true meaning and ramifications of the proposed amendment” during oral arguments before the state’s Supreme Court.

The effort is an attempt to take deny Florida voters the right to have a say on where their energy comes from. On the other side, the chairman of Citizens for Energy Choices, Alex Patton, noted that his group has “far more respect” for voters than the institutions attempting to block the initiative from appearing on the ballot.

“It’s not a secret what we’re really doing,” Jacoby wrote. “We are offering you and your people a higher-paying initiative to ensure that they don’t work for our client’s opposition, which is the utilities initiative.”

— Mark Jacoby with Citizen Voters in the Sun Sentinel, Nov. 22, 2019

Another tactic being employed by opponents of the ballot measure is hiring signature gathers away from Citizens for Energy Choices with the lure of more money and having them sign non-compete clauses.

Attempts by the state’s utility giants and the Florida Chamber of Commerce to thwart the public legislative process have raised questions about whose interests they are serving.

The Florida Supreme Court heard oral arguments in the case challenging the ballot language in late August but has not yet issued its decision.

Misleading Commentary

Allies of the big utilities have taken to the op-ed pages of Florida’s newspapers to challenge the motives of energy choice advocates. The resulting commentaries have attempted to mislead and confuse readers about the intent of the ballot initiative.  

Eric Silagy, CEO of Florida Power & Light, published an op-ed in the Sun Sentinel earlier this year that was rife with misinformation that has repeatedly been debunked time and again. Silagy claimed that “deregulating electricity markets doesn’t work for the party that matters most – residential customers.”

But studies have shown the opposite to be true – the lack of competition leads to higher increases in electricity rates compared to competitive-market states. In fact, rate increases were nearly 20 percent higher from 1997 to 2018 in states without energy choice compared with states with energy choice, and a study on the effect of energy choice in Texas found that average residential electricity prices in deregulated areas declined more than 23 percent between 2008 and 2017, while average residential prices in regulated markets slightly increased during the same period.

In the op-ed, Silagy argues that FP&L’s customers pay, on average, nearly 20 percent less than residential customers in Texas, and cites a June 2019 report from the Energy Information Administration to back up his claim. He goes on to say that FP&L customers pay less than every single deregulated market in the United States. This claim is wrong and overlooks the benefits of geography that Florida utilities enjoy.

According to the EIA, more than 60 percent of the price of power comes from generation, a majority of which is fuel costs and the costs to operate and maintain generating facilities. These costs exist for power providers regardless of whether they are in a state with energy choice or not. Florida benefits from low fuel costs, and that is responsible for the lower-than-average prices more than anything else. Advocates for energy choice maintain that customers would see even lower prices in a competitive market. 

Silagy goes on to argue that reorganizing Florida’s electricity market would threaten the state’s progress on adopting cleaner sources of energy. This point is particularly deceptive as the chairman of Citizens for Energy Choice has pointed out. The adoption of cleaner energy sources by Florida’s incumbent utilities is a result of consumer demand and the push to open the market to more competition. Without the threat of competition or, more costly, a government mandate, it’s unlikely the utility giants would be building renewable energy facilities.  

Silagy’s commentary was just one of the misleading pieces published in recent months. Other attempts to dissuade voters from adopting competitive market reforms include articles by Tallahassee Commissioner Gil Ziffera former member of Florida House of Representatives Joseph Gibbons, and the political advocacy group FARE

To say there’s a full-court press to dissuade Florida voters from embracing competition would be an understatement. 

Attempts to Get Ballot Signers to Revoke Their Signatures

Readership of local newspapers being what it is these days, it’s no surprise that opponents of the ballot measure have begun targeting voters directly.

As reported by the Miami Herald, a political action committee backed by two Miami political consultants with ties to Florida Power & Light, Floridians for Truth, this fall sent an eight-page letter to Florida residents who signed the petition to get the constitutional amendment on the ballot urging them to not only oppose the proposal but to rescind their petition signatures.

The move would appear to be a waste of money since Florida does not permit someone to remove their signature once they’ve signed a petition, however, the letter indicates that its real intention is to gather counter signatures to present to the state’s Supreme Court in the legal fight to try to get the ballot initiative disqualified.

The mailer claims voters who supported the amendment language were being “duped” and “swindled,” but a poll conducted by St. Pete Polls found that roughly two-thirds of voters supported the energy choice language.

Punishing Those Who Support Energy Choice

When persuasion doesn’t work, try punishment. That appears to be the thinking of those opposed to competition in Florida.

According to an the Miami Herald, Florida Power & Light was planning to roll out its “SolarTogether” program, which would have allowed customers to purchase renewable energy from the incumbent utility. The plan was scuttled after a video recording of an internal meeting showed that the utility intended to limit participation to only customers it deemed as being loyal.

The original proposal, filed March 13, included an exclusionary penalty for customers who do not support the “continuity of the program,” specifically those who support deregulation efforts like the Citizens for Energy Choices ballot initiative, according to Public Service Commission documents and video recordings of a public meeting obtained by the Miami Herald.

— Miami Herald, July 3, 2019

In translation, that means residents who supported the energy choice amendment effort would not be eligible for the program. The program’s unique eligibility requirements were dropped after reporters started asking questions of Florida Power & Light executive.

Likely to Get Worse Before it Gets Better

There’s nothing new about entrenched special interests spending a small fortune to protect their monopoly status. Opponents of competition spent about $63 million to defeat an energy choice ballot initiative in Nevada last year.

While political spending is good for the owners of media companies and the consultants who direct it, all those mailers and online ads can be downright annoying to the regular voter. The situation is likely to get worse before it gets better, though. Proponents of the Florida ballot initiative have until Feb. 1 to gather the required signatures.

Opponents of competition have demonstrated that they are willing to do almost anything to keep the language off the ballot and let voters decide the issue. There’s no reason to expect the dirty tricks and disinformation about the benefits of competition to stop before the deadline.

If Citizens for Energy Choices is successful in gathering the necessary signatures – and the state Supreme Court approves the ballot language – then Florida voters should expect the current fight to last all the way up to Election Day. Whoever said “freedom isn’t free” wasn’t kidding.

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Discussions

Bob Meinetz's picture
Bob Meinetz on Dec 14, 2019 1:10 am GMT

Robert, as far as I know all Floridians have the right to either a) generate their own electricity, or b) buy it from Florida Power and Light.

It seems you want to use FPL's transmission and distribution network, in which they've invested a lot of money, to sell your own electricity. What's competitive about that?

Roger Arnold's picture
Roger Arnold on Dec 14, 2019 10:11 pm GMT

I'd have to side with Florida's Attorney General that “voters simply will not be able to understand the true meaning and ramifications of the proposed amendment”. It's not because voters are stupid, but because the measure itself is misleading in its framing.

The measure purports to be about competition and choice; in this country those are right up there with motherhood and apple pie. But the popular conception of those terms is shaped by our experience with storable commodities -- fungible goods that can be purchased from different suppliers and held for later use as needed. Electricity is not a storable commodity. It must be generated, transmitted by power lines to the load, and fed to the load for consumption in real time. Generation and load must always balance.

Choice of power provider, if it were implemented fairly in the way it's intuitively understood, would require that alternative providers generate exactly the amount of power that "their" customers were consuming, minute to minute. They would also need to string their own power lines to their customers, or pay to use the power lines that were already there. Of course there's no mechanism in place to determine in real time how much of the system load is coming from customers signed to a particular provider. So what the backers of the measure are actually seeking is something subtly different: the right of alternative suppliers to sell to the grid an aggregate amount of energy each month that corresponds to the aggregate amount of energy that "their" customers consume. Sort of seems fair, but is it?

Here's the tricky part: since the alternative suppliers are invariably wind or solar farms with little or no control over the timing of whatever power they produce, they are also asking for the right to ignore instantaneous demand and sell energy to the grid at their own convenience. I.e., to pretend that what they're selling is a storable commodity. That places the burden of matching instantaneous supply to instantaneous load entirely on the incumbent utility. They can only do that by idling their own generators when the variable renewables happen to be producing. But idling has its own costs. Those costs include wear and tear on the generators and inefficient use of fuel during frequent cycling. There's also the loss of revenue from the sale of electricity that would otherwise go to cover fixed costs.

The incumbent utility can't generally reduce its costs by retiring some of its conventionaal generating capacity. The capacity is still needed at times, because supply from wind and solar can drop to near zero. As a result, allowing "competition" for supply of electricity to the grid invariably raises overall system costs. Since utility rates are regulated to cover costs, mandating the right of alternative energy providers to compete invariably increases the cost of electricity to ratepayers.

That's NOT to say it shouldn't be allowed. Carbon emissions really are a significant external cost that still isn't captured in the fuel costs for conventional generators. We really DO need to move toward carbon-free electricity. But that's a separate issue. It's complex, and ill-served by the simplistic narrative of "competition" and "consumer choice" that frames the Florida ballot measure. 

Bob Meinetz's picture
Bob Meinetz on Dec 15, 2019 9:22 am GMT

Roger - many good points here.

It's true, that "voters simply will not be able to understand the true meaning and ramifications of the proposed amendment," because the author doesn't understand them himself, nor how to draft legislation.

In the California Assembly, the Legislative Analyst must approve proposed legislation before it's introduced. If it doesn't meet strict requirements of clarity and conformance with existing law, it's either rejected or re-written. A bill with excessively broad language like

 "the legislature shall adopt legislation...which shall implement language which shall...promote competition in the generation and retail sale of electricity through various means, including the limitation of market power."

would be rejected.

"It's complex, and ill-served by the simplistic narrative of 'competition' and 'consumer choice' that frames the Florida ballot measure."

If you haven't already, be sure to read AG Ashley Moody's critique - her comments echo yours.

David Johnson's picture
David Johnson on Dec 19, 2019 5:58 pm GMT

As a Florida resident I'm opposed to deregulation of the electric utilities.  While living in GA the great de-regulation of the natural gas system was supposed to save the consumer money.  The end result has been nearly a 50% increase in the gas bills for the consumer.  I can't expect electricity de-regulation to be any different.  I enjoy great electric rates and I see nothing except greater cost and less reliability with de-regulation.  Just my .02

 

Bob Meinetz's picture
Bob Meinetz on Dec 19, 2019 9:23 pm GMT

David, that's what I've heard from people living in Texas, supposedly the gold standard of deregulation.
In California, Community Choice Aggregation (CCA) now allows a middleman between generators / utilities. Whoever thought that would be cheaper wasn't thinking hard enough.

Matt Chester's picture
Matt Chester on Dec 20, 2019 6:11 pm GMT

My understanding of the Texas deregulation is that it's a bit more nuanced than that. See report excerpt below, linked here, from Texas pricing analysis. It sounds like deregulated areas are more expensive than regulated areas in TX, which isn't good, but the trend since those areas deregulated is that they are decreasing at a faster rate and much of the price difference is because of factors that elevated the prices in those areas before the regulated/deregulated divide arose:

Texans consistently have paid higher average residential electric prices in areas with deregulation, as compared to prices in areas exempt from deregulation. This annual trend began during the very first year of the retail electric deregulation law in Texas, in 2002, and has continued through 2017, the last year for which data are available to conduct this analysis.

However, the gap in residential electricity prices between areas of Texas with deregulation and areas without it has dwindled precipitously over the last 10 years — and it now stands at its narrowest point since Texas began retail electric deregulation.

During 2017, average residential deregulated prices inside ERCOT stood at 11.10 cents per kilowatt hour. Average residential prices in ERCOT areas exempt from deregulation (such as in the service territories of electric cooperatives and municipal utilities) were slightly higher, standing at 11.18 cents per kWh.

Average residential electric prices in deregulated areas have declined more than 23.74 percent during the 10-year period from 2008 through 2017. Average residential prices in areas exempt from deregulation have slightly increased during the same period.

Average residential prices have increased in both deregulated areas and deregulation-exempt areas since the implementation of deregulation in 2002. However, the rate of increase has been lower in deregulated areas. The percentage increase in areas with deregulation was 33.21 during that period; the percentage increase in areas without deregulation was 43.88.

Texas continues to fare well in comparison to other states with deregulated retail electric markets. Average prices for deregulated electricity in Texas have increased at the third lowest rate among 15 states with deregulation and the fourth lowest rate among states overall. [See Exhibit 13].

Bob Meinetz's picture
Bob Meinetz on Dec 21, 2019 12:24 am GMT

So after 17 years, deregulated electricity in Texas is still (slightly) more expensive. What is it that people in these areas are getting for the extra money they pay?

Matt Chester's picture
Matt Chester on Dec 23, 2019 1:37 pm GMT

Again-- it appears more nuanced than that. The deregulated areas had much higher prices when they were regulated like the rest of the state (perhaps why these areas were the ones that were most willing to give deregulation a try). And now as a result, the trend of pricing since deregulation has been better than the trend in still-regulated prices. To say A > B and that's that without digging into the reasons and the past/future trends is only telling part of the story. 

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