The effort to bring competition to electricity markets in Florida has reached the state Supreme Court.
Earlier this year, energy choice advocates in Florida put forward a ballot initiative to overhaul the state’s electric utility industry. The proposal calls for wholesale and retail electricity markets to “be fully competitive so that electricity customers are afforded meaningful choices among a wide variety of competing electricity providers.”
The proposal, which faces fierce opposition from state leaders, business groups, and utilities, is scheduled for an August 28 hearing before the Florida Supreme Court.
The initiative itself would not directly change the structure of the state’s electric-power retail market, according to the website Ballotpedia. Instead, the amendment would declare that the state’s policy is to establish an open and competitive market for electric power; provide consumers of investor-owned utility companies with the rights to choose providers in competitive wholesale and retail markets and to produce electricity for themselves; and require the Florida State Legislature to pass laws to implement the amendment.
Despite the realization of these benefits in more than a dozen states and the District of Columbia, legacy utilities across the Sunshine State have thrown their weight behind an effort to stop the initiative. The battle is now headed to the Florida Supreme Court where comments in the case were due May 23. (The Energy Choice Coalition is a signer of comments in support of the ballot initiative.)
Energy Choice in Florida & The Path to This Point
Despite being the second-largest consumer of electricity in the United States, Florida remains the only state among the nation’s seven largest to not have customer choice in its power sector.
Advocates for energy choice tried last year to advance a constitutional amendment through the Florida Constitution Revision Commission. After the amendment failed to gain traction with the commission, advocates shifted to the public ballot process with the aim of putting the question before voters in the 2020 election.
Initiative backers need to gather 766,200 signatures by February 1. So far, they’ve collected roughly 250,010 signatures. Once on the ballot, the initiative would need to receive 60 percent approval to pass and be added to the state constitution.
The Florida Attorney General has filed a petition to the state Supreme Court arguing the initiative summary is misleading and does not comply with the state's single-subject rule meant to ensure voter initiatives are simple to understand.
Advocates for Energy Choice
The group’s stated goal is to protect customers against deceptive and unfair practices in the utility industry. According to Citizens for Energy Choice, opening Florida’s electricity sector to competition in could save consumers up to $5 billion annually.
On the other side, leaders in the Florida House and Senate have both filed comments opposing the initiative, while several other groups representing the status quo of the power industry in Florida have also sided with those trying to block the initiative with claims that the market changes are complicated and wouldn't save customers money.
House leaders argue that allowing competition in the electricity sector would have a “deleterious effect” and that the ballot initiative represents an abuse of the ballot initiative process by trying to govern through amendment rather than through legislation.
Senate leaders argue the rule would dramatically alter the functions of multiple government agencies and force voters to choose among many different choices on the ballot, violating the single-subject rule that mandates voters must know what an amendment does and how it will affect the Constitution for it to be on the ballot. Also, the Senate’s comment expressed concern about the broad effects of the initiative that would “upend the entire electric utility regulatory framework.”
Alex Patton, chairman of Citizens for Energy Choices, told the Tampa Bay Times in April that his group has “far more respect” for voters in deciding the worthiness of the initiative than the utilities that have lobbied against it.
Patton went on to compare electricity choice to other ballot measures.
“Marijuana, $15 minimum wage are all things that do very well in public opinion. This petition initiative process is the way to break that logjam.
Energy choice advocates want this issue to go before the voters to decide for themselves, but the debate comes at a time of intense partisan clashes over the issue.
The Republican-led Florida Legislature is considering legislation that would make constitutional amendments more difficult to enact, while Democrats are looking to constitutional amendments to enact popular measures because they've been unable to retain consistent control of the capital.
On the second point, proponents point out that a broad transformation is the goal. It is also worth noting that Florida already allows for customer choice for natural gas, which did not destabilize the marketplace.
The Florida proposal is designed to mirror the successful free market of Texas.
Florida’s investor-owned utilities have poured millions of dollars into candidates and political committees to retain monopoly.
“When you are powerful and entrenched, you fight against change and disruption. The monopoly utilities have proven in other states that they will bankroll almost an unlimited amount of money. We're going to have to do more with less, be smarter and make our case very clear,” Patton told the Times.
Potential Benefits to Allowing Florida Energy Choice
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.
While residential participation rates in states with electricity choice is somewhat low, the commercial and industrial sectors have seen a notable number of customers switch to competitive service options.
A spokesman for the retailer Walmart noted that competitive energy markets could save the company $15 million annually on energy costs in Florida alone. The Florida Restaurant and Lodging Association has been a key advocate in the fight for energy choice, noting that open markets would result in a boon to the state’s prized tourism industry and could lead to new businesses opening up across the state.
In other states that have implemented customer choice, the resulting market has been one filled with increases in efficiency, job growth, innovation, and environmental performance.
Ideally these factors will be considered when the oral arguments begin in front of the Florida Supreme Court, which are currently scheduled for August 28. If Citizens for Energy Choice is successful, Florida residents will be given the first of hopefully many choices: whether or not energy choice should be a right under the state’s constitution.