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Retail power providers rally behind Fla. electric deregulation initiative

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Retail power providers rally behind Fla. electric deregulation initiative

Infinite Energy Inc., NRG Energy Inc. and Vistra Energy Corp. have thrown their support behind a ballot proposal to deregulate Florida's electricity market, which they believe would help the retail power companies gain a foothold in the Sunshine State.

Opening Florida's wholesale and retail electricity sectors to competition while allowing households to produce their own generation would give customers the ultimate freedom in energy choice, the companies said in a joint brief filed May 23 with the Supreme Court of Florida. Joining the companies were the trade group National Energy Marketers Association and nonprofit Energy Choice Coalition. Electric deregulation, which would also restrict investor-owned utilities to building and operating transmission and distribution networks, would allow Florida to follow the steps of Texas, which enacted retail choice in 2002.

"Fully arm's length competitors, none of which possess market power, compete for customers, fostering price competition, spurring innovation in the marketplace, and granting once-captive ratepayers the ability to 'vote with their feet' by switching away from companies that fail to meet their expectations," said Infinite Energy's corporate counsel, Warren Rhea, who is representing the retail power providers and industry groups. "Eliminating the investor-owned utilities' market power prevents them from using their special status as state-sanctioned monopolies to distort markets and inhibit competition. It is this characteristic that makes Texas the most successful competitive electricity market in America today."

Advocacy group Citizens for Energy Choices is gathering signatures for Floridians to vote in the November 2020 election 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.

The Supreme Court of Florida is reviewing whether the proposed constitutional amendment is valid under state law after Attorney General Ashley Moody filed a petition with the court questioning whether the ballot language is misleading. A hearing on the ballot initiative is scheduled for Aug. 28.

The proposal would also limit Florida's investor-owned utilities such as Chesapeake Utilities Corp. unit Florida Public Utilities Co., Duke Energy Corp. subsidiary Duke Energy Florida LLC, Emera Inc. subsidiary Tampa Electric Co., and NextEra Energy Inc. units Florida Power & Light Co. and Gulf Power Co. to "construction, operation, and repair of electrical transmission and distribution systems." States that have passed retail choice have required electric utilities to either move their power generation assets into a different corporate entity or sell them to an outside party.

Barring investor-owned utilities from providing power would give Gainesville, Fla.-based Infinite Energy a larger foothold in its home state market and allow new retail power providers such as NRG and Vistra to compete. The companies and industry groups acknowledged that they have a financial stake in the outcome of the proceeding and a potential vote but argued that their participation would "allow customers to take control of their energy usage and costs."

"The investor-owned utilities … do not want to compete," Rhea said in the brief. "They seek to preserve an antiquated 19th-century electricity system that allows each to profit nearly risk-free from their state-sanctioned monopolies, socializing their costs and risks upon their captive base of Florida ratepayers."

Utilities and a handful of other groups including the Florida Public Service Commission, the Florida Chamber of Commerce and Moody have expressed opposition to the proposal. Those stakeholders said the ballot measure violates the single-subject rule for citizen proposals, which requires such initiatives to contain one issue for voters to decide on, and its language does not fully capture the consequences of market deregulation.

"The proposed amendment … would unravel that long-established system, mandate open competition and ban an unclearly defined group of electricity companies from generating or distributing electricity or owning the means of doing so," Barry Richard, who is serving as counsel for FPL and Gulf Power, wrote in an April 18 brief.

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. The group must have its required signatures by Feb. 1, 2020.