Florida Supreme Court Unanimously Rejects Constitutional Proposal to Deregulate Utility Industry

The ruling was a victory for state leaders, business groups and utilities that fought the amendment, which was proposed for the November ballot by a political committee known as Citizens for Energy Choices.

The proposal called for creating a “competitive” electricity market that would have made dramatic changes in the heavily regulated industry in which much of the state receives electricity from Florida Power & Light, Duke Energy Florida, Tampa Electric Co. and Gulf Power.

Amendment supporters, including companies that want to supply electricity in Florida, pointed to a similar competitive structure that Texas has used for nearly two decades.

But the Supreme Court, which must sign off on proposed constitutional amendments, issued an 11-page ruling that focused on wording in the ballot summary. The summary, which is what voters would see when they go to the polls, said the amendment would grant “customers of investor-owned utilities the right to choose their electricity provider and to generate and sell electricity.”

Justices said the full proposal does not back up the summary’s claim that it would give customers the right to “sell electricity.”

“The question is not whether a person has the right to sell electricity if the initiative is adopted, but whether, as the ballot summary claims, the initiative grants that right,” the Supreme Court opinion said. “It does not, and the ballot summary is therefore affirmatively misleading.

“The proponents argue that, notwithstanding this discrepancy, the ballot summary is an accurate statement of the initiative’s effects because the initiative necessarily implies a right to sell electricity. We reject this argument. We do not find any such implicit right in the proposed amendment. The ballot summary expressly states that the initiative grants the right to sell electricity, and the initiative does not do so. Because the ballot summary is affirmatively misleading, it does not satisfy the clarity requirements of (a section of state law). Consequently, the initiative should not be placed on the ballot.”

Thursday’s decision came after Citizens for Energy Choices spent at least $5.5 million trying to get the proposal on the ballot, with most of that money going toward gathering petition signatures. Along with needing Supreme Court approval of the wording, the committee also needed to meet a Feb. 1 deadline for submitting 766,200 valid petition signatures to the state. As of mid-day Thursday, the state Division of Elections had tallied 642,300 signatures.

Supporters of the proposal included Infinite Energy, Inc., NRG Energy, Inc., and Vistra Energy Corp.

Much of Florida’s electric market is highly regulated, with “investor-owned utilities” FPL, Duke, Tampa Electric and Gulf serving specific areas of the state. The proposed amendment, however, sought changes such as creating “competitive wholesale and retail markets” and dramatically limiting the roles of the investor-owned utilities.

As an example, the amendment would have limited those utilities to building, operating and repairing electrical-transmission and distribution systems — effectively preventing them from selling power directly to customers.

During Supreme Court arguments in August, Ken Sukhia, an attorney for Citizens for Energy Choices, said the measure would help do away with utility monopolies in many parts of the state.

“The case involves simply a matter of bringing to a particular industry a free and open choice in a free-market society where a monopoly is no longer needed,” said Sukhia, a former United States attorney. “And I ask you, your honors (the justices), to look closely at the ballot initiative and ask yourselves how else could you accomplish this end?”

But the proposal faced opposition from Attorney General Ashley Moody, state House and Senate leaders, powerful business groups and utilities, including municipal utilities and electric cooperatives. They urged the Supreme Court to keep the proposal off the ballot.

Barry Richard, an attorney for FPL and Gulf Power, said during the August hearing that the Supreme Court has never “faced an amendment that would so radically change an industry of such importance to Floridians. And never before has this court allowed an amendment on the ballot that contained multiple subjects as disparate as does this one.”

–Jim Saunders, News Service of Florida