State and Utilities Gang Up Against Proposed Amendment Deregulating Electricity

State leaders and powerful business groups are trying to kill a proposed constitutional amendment that would lead to major changes in the way Floridians get electricity.

Opponents, including Attorney General Ashley Moody, legislative leaders, business groups and utilities, filed 13 briefs late last week at the Florida Supreme Court arguing that the proposal should be blocked from going on the November 2020 ballot.

The briefs were the latest batch of arguments about the proposal, which would uproot the long-established regulatory structure that leads to residents and businesses in much of the state receiving electricity from four utilities: Florida Power & Light, Duke Energy Florida, Tampa Electric Co. and Gulf Power.

The proposal, backed by a political committee known as Citizens for Energy Choices, calls for creating “competitive” electricity markets in which customers would have the right to choose electricity providers or to produce their own power. Supporters, including companies that want to supply electricity in Florida, point to a similar structure that Texas has used for nearly two decades.

But the opponents contend that the measure should never reach the ballot because it violates legal standards for citizens’ initiatives, such as tying together multiple subjects in a proposed constitutional amendment. A brief filed Friday by the Senate alleged that the initiative includes a “Frankenstein’s Monster of policies.”

In part, those arguments stem from the effects of the proposed amendment on FPL, Duke, Tampa Electric and Gulf Power, which are known in the industry as investor-owned utilities, or IOUs. The amendment would limit the companies to building, operating and repairing electrical transmission and distribution systems, a far-smaller role than they now play in generating, transmitting and selling power.

“(The) initiative encompasses at least two very disparate subjects — purportedly promoting ‘competition’ in a restructured energy marketplace while at the same time eliminating IOUs from competing in that marketplace,” said a brief filed Friday by the Florida Chamber of Commerce and the Florida Economic Development Council.

But Citizens for Energy Choices, in a brief filed last month, disputed that the proposal violates legal standards for going on the ballot. It also said allowing the four major private utilities to “wield their enormous, entrenched power as competitors in a restructured market is antithetical” to competitive electricity markets. It pointed to Texas, where it said utilities changed their corporate structures to separate generating electricity from transmitting it.

“The amendment presents what the proponents believe to be the only method of achieving a fully competitive wholesale and retail electricity market affording meaningful choices among a wide variety of competing electricity providers in Florida, and that includes divestiture of the IOUs’ generation and sales components of the … monopolies the IOUs have long enjoyed,” the Citizens for Energy Choices brief said. “The voters are free to accept or reject that proposal.”

The Supreme Court plays a gatekeeper role in deciding whether citizens’ initiatives go before voters. Justices are not supposed to weigh the merits of proposed constitutional amendments but look at issues such as whether the proposals involve single subjects and whether ballot titles and summaries — the wording that voters see — are misleading.

The court is scheduled to hear arguments on the Citizens for Energy Choices initiative Aug 28. If justices sign off, Citizens for Energy Choices appears to have a decent chance of getting on the ballot. As of Monday afternoon, it had submitted 325,445 valid petition signatures to the state and would need to submit a total of 766,200 to be able to go before voters.

Opposition to the measure has come from some of the most-influential players in the Capitol, including Moody, House and Senate leaders, the Florida Chamber of Commerce, Associated Industries of Florida, the Florida Hospital Association and the Florida Health Care Association. Also filing or signing onto briefs have been FPL, Duke Energy, Tampa Electric, Gulf Power, the Florida Electric Cooperatives Association, the Florida Municipal Electric Association and the Florida Public Service Commission, which regulates utilities.

Supporters of the proposal have included Infinite Energy, Inc., NRG Energy, Inc., and Vistra Energy Corp. Citizens for Energy Choices had raised and spent nearly $2.7 million as of May 31, a finance report shows.

In the brief last month, Citizens for Energy Choices pointed to the “enormous clout” and political contributions of FPL, Duke Energy, Tampa Electric and Gulf Power.

“The IOUs’ expenditures not only underscore their astounding influence, they poignantly demonstrate why the ballot initiative process is the only means by which a restructuring of the energy market can be achieved,” the brief said.

But the Senate brief Friday fired back about the motives of the political committee.

“Contrary to the image of regular citizens trying to change the way they are governed, this is a well-heeled special interest group trying to advance a policy change that would benefit their industry,” the Senate brief said. “The (Supreme) Court should be skeptical of commercial interests attempting to use the citizen initiative process to benefit themselves.”

–Jim Saunders, News Service of Florida