Would deregulating the electric industry save Floridians money?

by | Jan 9, 2018

Florida consumers and businesses could have save billions of dollars if the state’s electric industry was deregulated. That’s according to a coalition of groups who support giving Floridians the right to chose their electric providers.

But, critics of deregulation claim those estimated savings are exaggerated.

It’s all part of a debate taking place in Florida over how consumers buy their electricity. At the center of the issue is a proposed amendment to the Florida Constitution that is currently being considered by the state’s Constitutional Revision Commission (CRC). The CRC meets every  20 years to consider possible changes to the constitution.

Proposal 51, as it’s referred to by the CRC, would give Floridians the right to chose their electric providers. Electric companies would still own the electric lines and infrastructure for providing the electricity, but customers would get to choose who they buy the electricity from.

The Partnership for Affordable Clean Energy (PACE) has reviewed cases of deregulation that have occurred in other states and doesn’t like what it has seen.

“In state after state, the deregulation experiment has failed,” PACE Executive Director Laura Schepis wrote to the CRC last month.

Schepis says consumers in those state’s haven’t benefited from deregulation. She points to statistics from the Energy Information Administration (EIA), which regularly tracks state-level retail electricity prices.

“According to a 2015 review of EIA data (attached), over the period of 1997 to 2014 retail electric price increases were higher in states with deregulated electricity markets,” Schepis wrote. “For the year 2016, when comparing Florida to all deregulated states and the District of Columbia, in 16 out of 18 cases, prices per kilowatt hour were higher under deregulation than in Florida.”

The Florida Energy Freedom coalition estimates Floridians would have saved $6 billion in 2016 if the sell of electricity been deregulate.

“What we have repeatedly found is that rates are much lower than what you would find in a regulated environment. I know mine are,” said Ray Perryman who operates an economic analysis firm in Texas which has spent years working on the impact of electric deregulation.  “It’s a regular ritual in my household. About every six months we shop for power and see what we can save.”

“I’ve been through this in a number of states, including Texas, and a lot of people say the benefits primarily go to folks other than the residential users, but that’s simply not the case,” Perryman said.

Proposal 51 is scheduled to be taken up by a CRC committee later this week. If it’s approved, it will go before the full commission later this year which will decide whether to put it on the November ballot for voters to decide.


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