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FPL Proposed Withholding Solar Benefits from 'Disloyal' Customers, until Journalists stepped in

Miami Herald

This was a pretty alarming story that I came across today, where the role of journalists in keeping utlities representing the public interest in line came in play in a really fascinating way. 

 

Background of Energy Choice Debate in Florida

To set the stage, the state of Florida is looking to join the list of a dozen or so other states that have offered deregulation to the energy market and allow customers to choose their power providers. In such a scenario, the local utility remains in control of the transmission and distribution systems (and is paid accordingly), but customers have the ability to shop around for their company of choice to provide generation. Customrs can choose based on price, extra 'features' offered by utilities, amount of renewable energy in the mix, or anything else they desire. The basic idea behind this change is that monopolistic utilities aren't motivated to innovate, improve, or offer new features, but competition breeds the best in all involved. 

The topic of energy deregulation is a heated debate, with either side having many examples and arguments to throw out. Florida is set to allow its voters a chance to voice their take on such deregulation at the ballot box this fall, but whether or not that vote will be allowed to take place has been elevated to the state Supreme Court. As a primer, you can see the arguments for this proposal by the energy choice advocates here

In the states with competitive electricity markets, increased competition has generally led to lower power prices, improved service, and innovative product offerings as the previously uncontested utilities must now do what they can to stand out amongst new rivals in order to keep customers.

Energy choice has also driven efficiency improvements, prompted energy providers to turn to greater renewable energy offerings, and even enabled community aggregation to enhance the benefits of electricity choice by grouping together large numbers of customers to drive down prices, according to the National Renewable Energy Laboratory.

On the other hand, opposition groups have of course sprung up and tried to reverse that narrative:

While proponents of the measure say increased competition would reduce prices, the Florida Chamber, AIF and utility companies argue that’s not the case. FARE’s board members are also pushing back on that claim.

“Deregulation allows third party providers to come between ratepayers and the power company and charge whatever they want,” Asencio said.

“It also allows them to engage in market schemes that unfairly target our most vulnerable citizens, particularly our seniors, leading to spikes in costs.”

“The latest efforts by some in Florida to deregulate our energy market is yet another attempt to bait and switch voters with a misleading initiative,” added former Democratic state Rep. Joe Gibbons, another member of FARE’s board.

 

What Happened with FPL

So, given all that-- what happened next and broke last week in the Miami Herald was pretty alarming, in my opinion. Florida Power and Lighting (FPL) proposed its 'SolarTogether' plan that would add 20 solar power plants and nearly 1.5 GW of renewable energy over the next two years, a groundbreaking plan that should certainly be celebrated by renewable energy advocates. Even customers who don't sweat renewable one way or another would have reason to be happy, as the long-term savings would be $139 million and most customers would be able to voluntarily participate by paying a premium to support these projects and then later receive credit back as the solar installations started bringing in money to the utility. This type of program seemed like a win-win and allowed everyone to reap the financial benefits of solar power.

FPL President Eric Silagy gives remarks on October 18, 2018, after touring the power company’s 465-acre Miami-Dade Solar Energy Center during construction with county Mayor Carlos Gimenez, right.

However, the Miami Herald noted a catch-- "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 Chocies ballot initiative.' This surprising exception was obatined after receiving video recordings of a public meeting, and upon investigation by the journalists the surprising clause was simply dropped by FPL. 

The words of those involved need to be read on their own to be truly understood: 

During the meeting, PSC staff pressed FPL on how it would track customers’ so-called “loyalty” and whether advocating against the program or FPL would automatically kick them off the list.

FPL attorney Maria Moncada said FPL wouldn’t use data mining to look into current or potential customers but would instead look at “credible evidence” of people who make public statements or sign petitions.

“We will not be data mining, we will not be conducting any Spanish inquisitions of any kind,” she said. “But if there is credible evidence that someone is speaking on both sides of this ... then we consider that to be unfair to the other customers.”

The idea of the slippery slope of punishing customers for public stances on energy regulation should be eyebrow-raising for everyone, no matter where you land on the energy deregulation issue. The concept of a utility looking into someone's individual beliefs and actions on political topics, which energy deregulation is, and offering them (or revoking) access to financially beneficial programs as a result is not a road we should go down.

 

What's your take on this whole issue? Let's discuss down below in the comments

Matt Chester's picture

Thank Matt for the Post!

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Discussions

Bob Meinetz's picture
Bob Meinetz on July 9, 2019

Agree Matt - stupid of FPL to penalize customers based on their opinions - it would never make it out of the gate. However, I agree with opposition groups who point out:

• Deregulation allows (unregulated) third party providers to come between ratepayers and the power company, charge whatever they want, and deliver whatever they want  (customers would somehow be able to verify where their electricity was generated - how would that work?).

• CCAs will have free reign to engage in non-competitive market schemes that exploit ratepayers (has it been that long since Enron?).

Privatizing regulated utilities, under the name of DERs, CCAs, or any other - is both an environmental and economic disaster in the making.

 

Matt Chester's picture
Matt Chester on July 9, 2019

Totally understand where the opposition is coming from, though the egregiousness of trying to control the opinions of customers or penalize those who don't comply is such that I would hope those who agreed with FPL that deregulation should be avoided would still push back against such behavior. Thankfully I haven't seen anyone defending such a move by FPL regardless of where they stand on the root issue

Richard Paez's picture
Richard Paez on July 9, 2019

With all due respect, both generation companies and retailers in competitive markets are highly regulated. 

I'm not sure what you're basing these claims on, other than the ancient history that was the California Enron disaster. Wholesale competition serves most of North America and retail competition is common as well, especially in Texas where the model has been an unrivaled success for going on 20 years. 

Bob Meinetz's picture
Bob Meinetz on July 9, 2019

Richard, at least in California CCAs are not regulated by the California Public Utility Commission at all. Interstate commerce in electricity is regulated by FERC, but the commission has no authority to examine the books of CCAs and know whether their electricity is 100% green, or 100% brown, or anything in between.

btw, that goes for Texas too - if you think you're getting 100% renewable electricity in Texas when the wind isn't blowing and the sun isn't shining, you don't know enough about electricity.

Oh, and Enron-style price manipulation has gone out of style in the last 20 years? Who knew?

Richard Paez's picture
Richard Paez on July 10, 2019

>Oh, and Enron-style price manipulation has gone out of style in the last 20 years? Who knew?

I'm sure there are those who would love to; the oversight in Texas makes it impossible. 

Bob Meinetz's picture
Bob Meinetz on July 12, 2019

Richard, it does appear Texas has been able to corral early instances of market manipulation. I think having its own grid has a lot to do with that.

The proposed Western Imbalance Market, of which California will be a member, opens the doors wide to market manipulation by entities other states, and FERC is taking a largely "hands-off" approach.

Richard Paez's picture
Richard Paez on July 9, 2019

One note, Matt -- keep in mind that FPL is claiming that all of these numbers will work out, that Phase one won't run over their proposed $1.8 billion dollars, that there will be some $139 million in avoided cost savings, that everything will work out so that rate payers who don't opt-in won't be subsidizing the program -- but then again, FPL also pimped that fake amendment, and is now engaging in Orwellian practices as a public utility. There's a reason that the Office of Public Counsel demanded a conference to put the breaks on this proposal so that stakeholders can get in the weeds: when FPL is selling it, it's too good to be true.

Matt Chester's picture
Matt Chester on July 10, 2019

Unfortunately, that seems to be the result when a company has shown an ability to mislead the customers, eroded trust is hard to win back-- so whatever next moves comes from FPL should hopefully keep that in mind. If anything, they should worry that this whole saga will leave a sour taste in their customers' mouths and push them even more towards being allowed to select their own energy provider. 

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