Special interest groups have finally figured out that the easiest path to fleecing taxpayers is to bypass the watchful eyes of state lawmakers and take their case straight to voters who don’t have the time or the inclination to study certain complex issues. The formula is simple: take any controversial issue, wrap it in consumer-friendly language, spend a few million bucks promoting it, and hope voters never figure out the truth. It’s a tried-and-true formula that worked to perfection last year, where 11 of 12 statewide ballot issues easily passed by more than the required 60 percent of support from Florida voters.
Like a reanimated corpse from a zombie movie, one of the most controversial issues that failed to win enough support make onto the ballot last year is back. Less than a year after Florida’s Constitution Review Commission roundly rejected a flawed proposal to deregulate the state’s energy utilities, a special interest group is spending millions of dollars to resurrect the measure for the 2020 ballot.
The group behind the effort, Citizens for Energy Choices, submitted more than 79,000 signatures to qualify the ballot language for review by the Florida Supreme Court. And while this amendment proposal touts the benefits of “consumer choice” both in its title and its mission, it forcibly removes the most logical choice for keeping the lights on in our state: Florida’s existing investor owned utilities.
That omission alone, based solely on the fact that it misleads voters about the true consequences of the scheme, should cause the state’s supreme court justices to reject it. After all, if this measure passes, consumers won’t have any choice if they prefer to stay with the power company they’ve always been with. It’s akin to Barack Obama’s famous statement that “if you like your health care plan, you can keep it.” Just as PolitiFact awarded that whopper the 2013 “Lie of the Year,” the promise of “choice” in a deregulated utility scheme will prove equally false for Floridians.
But the misleading ballot language around “consumer choice” is only part of the problem. Other states that have tried similar deregulation schemes have experienced higher utility costs, misleading and deceptive practices toward customers, and reliability problems from the new electricity sellers who show up once the reliable utilities are forced out. Several states who deregulated their energy utilities prior to 2000 have since abandoned their deregulation schemes altogether or reworked them in an effort to salvage something for consumers after experiencing significant problems.
Two more states, Massachusetts and Illinois, are pushing to abandon their deregulation schemes due to the high level of consumer fraud, higher prices and lower reliability. And because of these widespread failures, only one state – Virginia – has even bothered to attempt deregulation in the past 17 years.
The group behind this push in Florida, “Citizens for Energy Choices,” claims that implementing a deregulation scheme in Florida could hypothetically save ratepayers millions of dollars per year in lower energy bills. Here’s an excerpt of claims from one of their recent press releases:
“Residential and business ratepayers could save as much as $7.5 billion a year by 2030…” [emphasis added]
Deregulation supporters are willing to bet Florida’s economy on the phrase “…could save…” But Florida business leaders, some of the largest consumers of power in the state, think it would be wise to consider the failed history of deregulation in other states before sending Florida down a similarly treacherous path:
“We believe deregulation would have a detrimental impact on Florida’s businesses and citizens in the form of increased cost of electricity and market uncertainty,” said AIF President and CEO Tom Feeney. “Deregulating Florida’s electric utility industry would create inefficient and uneven services throughout the state, causing major chaos when a natural disaster strikes.”
In state after state where deregulation has been tried, energy prices have spiked and the savings have been nonexistent. All available evidence suggests that deregulation would be a disaster for Florida consumers. According to data from the U.S. Department of Energy, the average cost of electricity in states with a deregulation scheme is significantly higher than the average cost of energy in regulated states:
Note the large difference in fluctuation in electric rates for deregulated states, while the trend line for regulated states remains relatively stable. The data reveals two different threats to Florida’s economy:
1) higher rates for electricity in general
2) unpredictable energy prices that destroy consumer confidence and crush small businesses that depend on stable energy costs
Since cost is a losing argument, the primary selling point for deregulation is the idea of “energy choice,” being able to choose from which utility to purchase power. But those pushing deregulation omit the factthat ratepayers have zero protection from spiking energy rates if, say, natural gas prices go up.
In Florida, energy prices are known well in advance because they are set by the Public Service Commission, a body that reviews data and carefully sets energy prices so that businesses and individual households are shielded from unexpected spikes in the cost of oil, natural gas or other resources.
In most states that have attempted deregulation, the ensuing chaos resulting from breaking up the power-producing utility companies caused immediate rate spikes – and consumers were instantly at the whim of market-based energy prices rather than the stable and predictable prices set by regulatory boards in those states.
So what’s the point? Why would Floridians vote for “consumer choice” that doesn’t actually deliver savings, results in less reliability, less consumer satisfaction, and higher instances of fraud and deceptive practices made possible by a slew of new and relatively unknown entities clamoring for Floridian’s energy dollars?
Undoubtedly, those investing millions to put another deregulation scheme in front of voters have something to gain. But it’s not clear what Florida voters will get, beyond feel-good ballot language that tests well in focus groups.