Proposal could open utility options

Utility experts say a proposal submitted to a group reviewing the state's constitution could save Floridians money on their monthly electric bills, but city officials say it would create serious ramifications.

The proposal submitted Oct. 31 to the state's Constitutional Revision Commission, which meets every 20 years, would allow residents to choose where they want to buy their electricity. If approved, a referendum asking whether to allow the measure would then be placed on the November 2018 ballot.

The change could take effect as early as January 2021, if passed.

Rich Blaser, a co-founder of Infinite Energy and president of Florida Energy Freedom, said the change would be a positive one, saving ratepayers money on monthly bills.

“It leads to increased customer service because you have to compete for your customers now,” he said.

Blaser, who submitted the proposal before it was filed by commission member Rich Newsome, an Orlando-based lawyer, said the change could give people the freedom to select a cheaper and neighboring electric provider or buy power from a landlord with solar panels on a house.

But some say the shift will have a negative effect across the state, especially for municipal-owned utilities.

“This is classic energy deregulation,” Gainesville Mayor Lauren Poe said. “This would be an incredibly bad idea for Florida utilities … I don’t think in the long run that it’d be good for customers at all.”

Poe said the change would prevent utilities from properly planning for future needs because officials would have no idea how large their customer base will be.

Gainesville Regional Utilities, a city-owned utility, provides power to some 95,000 customers. Although its rates are among the highest in the state, GRU's additional revenue generates about one-third of the city's annual general fund budget.

Significantly reducing GRU's customer base, Poe said, would impact services and funding provided by the city of Gainesville.

“If any given utility today lost half its customers, it’d have a devastating effect on that utility to keep operating,” he said. “It’s not in the best interest of anybody.”

Blaser said utilities, like GRU, would still be responsible for maintaining power lines and could "rent" their wires to other utilities to transmit electricity. That fee, however, would be set by the state’s Public Service Commission, he added.

Darin Cook, Infinite Energy's other co-founder and chair of the city’s Utility Advisory Board, which offers city commissioners recommendations on all GRU-related policy decisions, said the change could result in more solar panels being used on homes and businesses. He also acknowledged the impact deregulation would have on GRU.

“Its impact could be huge on Florida and even locally, considering that GRU has near the highest residential electricity rates in the state and the highest by far commercial rates in the state,” Cook wrote in an email.

In turn, Infinite Energy, a natural gas utility, could stand to gain from the deregulation, as it has in Texas.

The Gainesville-based company has about 45,000 customers in Texas, which allows customers to choose their utility provider. Infinite Energy also provides electricity for about 85,000 other customers throughout Florida, Georgia, New Jersey and New York.

Other states that have switched to a choice-driven market, Blaser said, resulted in savings for customers that ranged from 10 to 20 percent. California has saved about $100 million since 2014, according to a 2016 report from the California Independent System Operator, a nonprofit that runs power markets for most of that state.

In 2015, Floridians spent about $25 billion on power, nearly two-thirds of which was produced from natural gas. Floridians would collectively save between $2.5 and $5 billion annually on electricity if the proposal was changed, Blaser said.

Poe says those figures are speculative, at best.

“What we’re talking about is a rollback of regulations,” he said.

The proposal, one of 103 being considered, still needs to pass through a few committees before being voted on by the Constitutional Revision Commission.

A number of factors could change between now and then, including whether municipal utilities will be exempt from the change, Blaser said.

Twenty-two — or 60 percent — of the commission's 37 members would have to approve the proposal before it could end up on the November 2018 ballot. Then it would need 60 percent of voters to approve for it to pass.

Contact reporter Andrew Caplan at andrew.caplan@gvillesun.com or on Twitter @AACaplan.