Electric cooperatives could be regulated under the proposed ballot in Florida for the November 3, 2020 election. Electric cooperatives are opposing choice of open electric market. Electric cooperatives are challenging the proposed ballot initiative that seeks to change the energy market in Florida. Florida Energy Choice Initiative (FECI) seeks to have choice in the marketplace. The ballot initiative is titled “Right to Competitive Energy Market for Customers of Investor-Owned Utilities”.
The proposal seeks to create a “competitive” electricity market in Florida where customers can choose electricity providers or customers can produce their own power. This is scary to many electric providers including many cooperatives especially those in rural communities. The idea of customer generating their own power hurts their bottom line and competition can cut into their local market control. The supporters of the initiative come from all over even those across state lines. Texas has been referenced as a model to follow that allows free competition and minimized monopolies and minimized monopolistic pricing.
Electric cooperatives are challenging the element of the consumers having a choice. Choice seems to be the running purpose along with competition for lower rates. Survey around the country have revealed that consumers want choice in the matter of their power source. Florida has demonstrated an overwhelming consumer desire for electric service choice.
The choice initiative opponents argue conflictingly opposing arguments about the ballot without providing consumers needed information. On one end they are to promote competition but then claim they are prevented from competing. Cooperatives argues that they will be affected but fail to inform consumers on how cooperatives will be affected. Scare tactics prevail by keeping consumers in the dark.
Many argue what is wrong with the energy choice initiative when consumers will be granted the right to choose their electricity provider and to generate and sell electricity. The details of the new language will require the Legislature to adopt laws providing for competitive wholesale and retail markets for electricity generation and supply, and consumer protections, by June 1, 2025. The new language to Article X of the Florida Constitution will repeal inconsistent statutes, regulations, and orders.
The clamor against the initiative it is that it is feared that investor owned utilities will be limited to construction, operation, and repair of electrical transmission and distribution systems. That fear is only realistic if they are not competitive with their rates and consumers deem them not as a favored choice in an open competitive market, and that goes for cooperatives as well. The possible end to monopolies in the Florida energy market could be near. Municipal and cooperative utilities may opt into competitive markets, but their customers will have a choice as well.
The measure seeks to add the following language:
(a) POLICY DECLARATION. It is the policy of the State of Florida that its wholesale and retail electricity markets be fully competitive so that electricity customers are afforded meaningful choices among a wide variety of competing electricity providers. [emphasis added]
(b) RIGHTS OF ELECTRICITY CUSTOMERS. Effective upon the dates and subject to the conditions and exceptions set forth in subsections (c), (d), and (e), every person or entity that receives electricity service from an investor-owned electric utility (referred to in this section as “electricity customers”) has the right to choose their electricity provider, including, but not limited to, selecting from multiple providers in competitive wholesale and retail electricity markets, or by producing electricity themselves or in association with others, and shall not be forced to purchase electricity from one provider.. “[emphasis added]
“(v) establish an independent market monitor to ensure the competitiveness of the wholesale and retail electric markets.”
“(d) EXCEPTIONS. Nothing in this section shall be construed to affect the existing rights or duties of electric cooperatives, municipally-owned electric utilities, or their customers and owners in any way, except that electric cooperatives and municipally-owned electric utilities may freely participate in the competitive wholesale electricity market and may choose, at their discretion, to participate in the competitive retail electricity market.. . . “
Texas has been the example to follow allowing for competition and choice, something that cooperatives are bucking and seeking to influence citizens to oppose. Competitive retail markets have delivered cost reductions. Florida consumers want that too. The benefits are real. But the competitive challenges to cooperatives are also real, especially in rural communities.
The opposition to those benefits is real as well from those electric cooperatives and energy providers that do not want consumer free choice to change the market structure and their relative monopoly on prices and market. Consumers in less competitive areas – rural areas, for instance the following counties, Dixie, Liberty, Alachua, Taylor to name a few – do not appear to be able to benefit unless they can choose their provider. Cooperatives have historically been undemocratic in their administration plagued with low voter turnout and incumbents running unopposed. Electric cooperatives have also been noted for having questionable election procedures. Setting rates is also not free of question. Openness and competitive markets is obviously not wanted by elective cooperatives in Florida, regardless of the benefits to the consumer. Lorenzo Law Firm, P.A.