The Florida Legislature's research office will not submit an updated financial impact statement on the potential ramifications of deregulating the state's electricity market amid the legal battle over an advocacy group's ballot proposal.
The Financial Impact Estimating Conference, a committee within the state's Office of Economic and Demographic Research that examines the financial effects of proposed constitutional amendments, told Attorney General Ashley Moody on Aug. 12 that it would not submit an update to its findings on what would happen if Florida opened its wholesale and retail electricity markets to competition and redesigned a new electricity market system.
As part of her petition to the Supreme Court of Florida to determine whether the proposed ballot question is legally sound, Moody had asked the committee to submit an update to its March 2019 report on the proposed ballot initiative in light of a new law regarding potential constitution changes. Under the law, instead of just looking at changes to revenues or costs to local and state governments, the Financial Impact Estimating Conference would also have to assess the estimated economic impact on the state and local economy and the overall impact to the state budget.
Because the proposed ballot question was filed before Gov. Ron DeSantis enacted the law, the Supreme Court of Florida gave the committee 20 days to submit a new report that complied with the current law if the group wanted to, said Amy Baker, the coordinator for the Office of Economic and Demographic Research. But Baker said her team concluded that was not enough time.
"Even though they granted us an additional 20 days, that was not enough time to do a full-blown economic analysis," Baker said in a phone interview with S&P Global Market Intelligence. "The new law says that you have 75 days to do the review, and we felt like there wasn't anything we could do within a 20-day period, when the clock was already running, that would be meaningful."
Citizens for Energy Choices, the organization behind the proposal, is gathering signatures for Floridians to vote on whether to allow utility customers "the right to choose their electricity provider and to generate and sell electricity." The proposed amendment would require the Florida Legislature to adopt legislation, effective June 1, 2025, that opens wholesale and retail electricity markets to competition.
At the same time, investor-owned utilities would be limited to building, operating and repairing transmission and distribution systems and would have to sell their generation assets. Moody and several utilities, including NextEra Energy Inc.'s Florida Power & Light Co. and Duke Energy Corp.'s Florida subsidiary, have spoken out against the initiative.
Citizens for Energy Choices needs more than 776,000 valid signatures, or 8% of the votes cast in Florida's 2016 general election, for the proposal to be included on the November 2020 ballot. So far, the group has approximately 386,604 signatures. The group must have its required signatures by Feb. 1, 2020.
In its earlier findings, the Financial Impact Estimating Conference said the financial effect from market deregulation "is unknowable until the Legislature acts," though there would be significant costs to state and municipalities to transition to a fully operational system.
"The cost of purchasing electricity by governments may be higher or lower, depending on changes in charges for electricity resulting from the amendment," the committee said. "As currently administered, several government revenues would be reduced, but the legislative response to these effects is unknown."
Oral arguments on Citizens for Energy Choices' proposal will be held on August 28. Baker said the short turnaround for a new financial impact statement might have been because of the upcoming court hearing and the fact that all parties have already filed briefs on the matter. However, the court was understanding about the Financial Impact Estimating Conference declining to do another review.
"They were very nice about it," she added.