Guest Author
If advocates of a proposed ballot petition have their way, Florida would be the first state in two decades to deregulate its electricity market.
“Choice,” these supporters claim, would spur lower electric prices and better service.
Actual data and experience suggest otherwise.
The promise of bargain electric bills and better service hasn’t occurred anywhere — not in California, Virginia, Illinois, Massachusetts, Connecticut or Texas, to name a few of the states where the deregulation experiment was implemented and failed.
It won’t succeed in Florida either.
Yet, a political action committee called ‘Citizens for Energy Choices’ wants to change the Florida Constitution in 2020 to create new wholesale and retail electricity markets that would let customers choose their electricity providers and limit already established investor-owned utilities, like Florida Power & Light, Duke Energy and Gulf Power, operating transmission lines and distribution systems.
It sounds good. However, if it’s too good to be true, it’s likely to be false.
Choice and competition don’t work in the electric power industry the way they do with automobile dealerships, brand-name stores and fast-food restaurants.
A regulated utility market provides the oversight necessary to keep electric prices low, while also increasing investments in infrastructure and clean, renewable energies. In states that have “deregulated” their market, prices went up, fraud increased, and investments in infrastructure and renewable energy went down.
Study after study show customers living in states that regulate electric utilities pay lower rates than their counterparts in the 16 states that have a “deregulated” model.
In 2018, according to federal Energy Information Administration, residents living in “deregulated” states paid almost 39 percent higher rates than residential customers in Florida — about a $591 annual increase on your bill.
In Massachusetts, about nine of 10 families who switched power companies in thinking savings would result actually paid more, according to a study by the state’s Attorney General’s Office.
The study also found that low-income, seniors and minority communities were more likely to pay higher bills.
Similar results occurred in Illinois and Connecticut, where customers paid hundreds of millions more than if they’d stayed with their previous, regulated electric provider.
The Massachusetts Attorney General has called for a return to a regulated market. Consumer advocates in Illinois and Connecticut also want to end the “choice” model in their states.
Higher prices aren’t the only concerns that come with upending utility regulation. Several deregulated states have struggled with reliability, as communities suffered from brownouts and extended periods without power.
Fraud has also been a serious problem, and part of the driving force in many of the states now calling for an end to the deregulated market
Florida has avoided problems thanks to its regulated market, which has kept power prices below the national average, while increasing reliability.
The current system has worked well for families and businesses. There’s no valid reason to change it.
Floridians for Affordable Reliable Energy, FARE, is a new nonprofit designed to raise awareness about the consequences our state could face by deregulating our electricity market. To find out more about FARE and get the facts about this dangerous proposal, please visit us at FAREFlorida.org.
The hue and cry to bring “choice” and “competition” to Florida’s electric utilities will grow louder, and the appeals will sound tempting.
Don’t be fooled. Reject the false promises of electricity deregulation.
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Joe Gibbons is a board member of Floridians for Affordable Reliable Energy, a former member of the Florida House of Representatives, and the CEO/President of the Gibbons Consulting Group.
12 comments
I Know Better
April 1, 2019 at 8:43 am
Gibbons is the same guy who helped run that fraudulent effort against the solar energy amendment because the organization he works for is funded by the big power companies. He has used his title as a former state rep and his race to deceive people. He worked for a major law firm while he was in the legislature, despite the fact that he’s not a lawyer.
Joe Gibbons is the model of what people hate about politicians. He has done nothing but used his offices for personal gain.
He has as much credibility on this issue as Trump does when he talks about Christian values.
Barbara Jones
April 1, 2019 at 9:03 pm
I know better doesn’t know anything. Since you bought his race into this issue, you should know better, you sound like a racist, did you know that? Since when did you have to be a lawyer to work for a law firm? Troll.
I Know Better
April 1, 2019 at 9:30 pm
Amazing! He worked for a law firm while serving in the legislature and then became a lobbyist/consultant after he lost a county commission race. He’s a swamp creature! He’s just as bad as the Republicans who work for charter school companies!
Racist? No. Willing to call out a guy who uses his race to lie to his own community about how a constitutional amendment will impact them? HELL YES!
JOE GIBBONS DOESN’T CARE ABOUT ANYTHING BUT THE $$$$$$$$$ GOING INTO HIS BANK ACCOUNT!
Marilynne Martin
April 1, 2019 at 10:18 am
This Constitutional Amendment is a TROJAN HORSE and shouldn’t be supported by Floridians.
I don’t know much about the article’s author Gibbons or his organization, but I have studied the electric markets over the past 7 years. Sadly there is a Central Plan called “Grid 2030” which you can find on the US DOE website. It calls for deregulation of the power generation part to get them out of State control which gets in the way of their global market efforts.
The “choice” is phony. You only get a choice of suppliers. What you lose? You lose price regulation over the power generation piece of your bill. Believe it or not, the utilities will love it. They want power generation to be treated like a commodity – unchecked, manipulated prices – just like filling up your gas tank.
Investor owned utilities are NOT monopolies. They are REGULATED monopolies and that is a BIG difference. Don’t be fooled.
Hey Gibbons & “FARE” – The former general counsel to the FPSC gave quite a farewell speech at the December 18, 2014 Internal Affairs meeting predicting his desire and plans for the de-regulation of this industry would occur. I just went to get that video off the FPSC website and guess what? The audio is missing. Funny, huh? The corruption at the FPSC needs investigation. The regulated model – cost of service plus reasonable rate of return is NOT broken or outdated. Our regulators and politicians ARE broken and outdated.
Know Better
April 1, 2019 at 11:11 am
Best April Fools joke of the day is that under this amendment power generation will be unregulated.
The PSC will still regulate generation as will the Federal regulatory agencies.
The current Florida based power companies hate this because it will break their monopoly and impact their bottom line.
Marilynne Martin
April 1, 2019 at 12:38 pm
Show me where “deregulation” of the electric industry kept State price-regulation of power generation? Insane, doesn’t exist.
I don’t know who “Know Better” is either.
But I know Grid 2030 – read it here https://www.energy.gov/sites/prod/files/oeprod/DocumentsandMedia/Electric_Vision_Document.pdf
And I know “NATIONAL ELECTRIC DELIVERY TECHNOLOGIES ROADMAP”, read it here https://www.energy.gov/sites/prod/files/oeprod/DocumentsandMedia/ER_2-9-4.pdf
Note who participated in this “national vision”. Lots of electric companies. Note one of their roadblocks is “Siting and permitting of new electric facilities needs to be streamlined.” Do you want to hand the Fed’s complete control over siting of power plants and transmission lines in Florida?
Do your homework and don’t listen to these paid unnamed trolls. This is bad for Florida citizens.
They want to globalize the electric industry. All I can say is that many decades ago we lost State control over banking. Banking is a Global industry – how did that work out for you?
We also de-regulated telecommunications. And when in the next few years you come home to a 60 foot tower on your front lawn (HB 687 – 2017), you may not believe that was such a good thing either.
Electric services should be local and should remain completely under our control. It is hard enough getting to Tallahassee to fight for your rights, you don’t need to make the trip longer or more costlier to go to DC.
JESUS Z ABIKARRAM
April 1, 2019 at 12:10 pm
Deregulation would hurt Florida’s Families. With deregulation comes an enterprise model that disregards the ideal of service due to the lack of control from the state’s consumer protection guidelines and oversight. Families will end up paying more because the Grids would still be owned by FPL, there for maintaining certain control, but now, without regulation to protect the families. IF you think that we will get rid of FPL with deregulation you are mistaken… FPL is here to stay; the choice is clear; if you feel FPL is bad?, imagine them without control.
Michael Giberson
April 1, 2019 at 2:38 pm
Gibbons makes the claim that, “In states that have ‘deregulated’ their market, prices went up, fraud increased, and investments in infrastructure and renewable energy went down.”
Texas opened up retail competition beginning in 2002. When it opened there there was about 4,500 MW of installed wind energy capacity. As of 2018 there is over 24,000 MW of installed wind energy capacity in Texas. Publicly available government data freely available on the internet right here: https://windexchange.energy.gov/maps-data/321
The state of Texas has also seen a massive investment in infrastructure to promote reliability since restructuring electric power regulations to allow customers to make their own choices. Read about the biggest such investment program here (there are other smaller investments, too): https://www.businesswire.com/news/home/20100520006001/en/Texas-Study-Finds-Substantial-Economic-Benefits-Consumer
In fact the CREZ infrastructure investments was designed to support the investment in renewable energy. Read here: https://www.texasmonthly.com/energy/west-texas-future-texas-energy-resilience/
Gibbons must have a low opinion of Floridians if he thinks they can be so easily mislead.
Marilynne Martin
April 1, 2019 at 6:21 pm
He was correct on one item – prices increased for consumers.
Check out this AARP article from 2010
“No End in Sight for High Electricity Bills”
Texas rates have skyrocketed since deregulation
by Thomas Korosec, AARP Bulletin, July 1, 2010
Or better yet, if you want to get an independent opinion on whether rates typically rise or fall with deregulation, call the Office of Public Counsel, he’ll tell you.
Regarding investments – how much did all these wind and other investments cost the taxpayer? Or should I say, add to our national debt? I am not anti-wind or solar – but how many decades will it take for these industries to stand on their own? We have been told for decades that prices are coming down. When do the subsidies for the rich actually end?
Michael Giberson
April 1, 2019 at 10:54 pm
Texas ratepayers saw an increase in the part of the bill that pays for infrastructure, but at the same time the infrastructure additions boosted competition and helped push down overall prices.
Much more recent and better quality research establishes rates in the competitive retail market in Texas have fallen since 2002. (Prices did rise on average up to 2010 or so because fuel prices were higher, since then prices have fallen in Texas more than in Florida.)
I’ll find a link to the research on prices.
Michael Giberson
April 1, 2019 at 10:56 pm
The link: https://www.bakerinstitute.org/research/electricity-reform-and-retail-pricing-texas/
Marilynne Martin
April 1, 2019 at 11:39 pm
Not for nothing BUT – from the report you link they state:
“When averaged from 2002 to 2016, the price paid for electricity by residential consumers in competitive areas has been higher than that paid by residential consumers in non-competitive areas, but” page 4
Here is a 2018 report on Texas:
“Although average residential electric prices in areas of Texas with retail electric competition have remained consistently higher than prices in deregulation-exempt areas — the annual percentage price gap between these two areas has dwindled to the narrowest point ever.”
https://tcaptx.com/reports/snapshot-report-electricity-prices-texas-april-2018
(so after about 16 years competitive rates are inching closer!)
I am sorry – every time I look at it I find – higher prices not lower prices.
Your report goes on about wholesale/retail. What we consumers care about is the following – my bill this yr vs last yr. Always lots of talk about cost savings coming from all these tech investments etc – BUT we never see lower costs.
AND if you are foolish enough to believe FP&L’s “let’s get ready for a rate case” advertising about our rates being lower than ten years ago – well I’ll sell you this nice bridge in Brooklyn I own.
FP&L rates are lower because of the pass through fuel charges being lower – period. And when natural gas (a commodity) goes up again – watch them disassociate themselves and then give you lots of info on pass through’s and how they have nothing to do with it.
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