City of Vernon Opposes the “Energy Choice” Amendment
The amicus curiae is a group of small and rural local governments consisting of the City of Belle Glade, Village of Indiantown, the City of Chipley, and the City of Vernon (the “Small Local Governments”) and the Lake Okeechobee Regional Economic Alliance of Palm Beach County, Inc. (“LORE”). The Small Local Governments and LORE are located in rural areas of the state. We represent citizens of Florida who rely on electrical power, just like the other citizens of Florida, but whose location and income make them a less desirable customer for electrical power providers whose rates are not regulated by the State, but instead are driven purely by the desire to make the most profit.
The communities represented by the Small Local Governments will be disproportionately impacted by the proposed amendment, because we are located in areas that are less developed and less population-dense, providing less incentive for an unregulated purely profit-driven electrical provider to supply power. Additionally, our smaller and less developed communities rely significantly on taxes and fees provided by existing electrical utilities, and the proposed amendment jeopardizes many of these taxes and fees. The likely results of the passage of the proposed amendment, as detailed below, give rise to our interest in this case.
While the Small Local Governments and LORE agree that the ballot title and summary are misleading and the proposed amendment violates the single-subject rule as argued by the primary parties opposing the proposed amendment, we seek to inform the Court on issues unique to our communities.
The Proposed Amendment will have a disproportionate negative impact on small and rural communities by removing existing requirements that the IOUs provide power to all consumers in their territories without discrimination as to rates. Currently, Florida law protects consumers by ensuring that IOUs do not “make or give any undue or unreasonable preference or advantage to any person or locality, or subject the same to any undue or unreasonable prejudice or disadvantage in any respect.” § 366.03, Fla. Stat. See also § 366.07, Fla. Stat. (permitting the Florida Public Service Commission (the “PSC”) to set fair and reasonable rates when a utility is charging “unjustly discriminatory or preferential” rates).
Under the deregulated system, the PSC will no longer have the power to mandate that rates charged are based upon costs plus the ability to earn a return that is set – and monitored – by the PSC, nor would it be able to ensure that those rates are charged to customers on a non-discriminatory basis. Instead, companies whose only limitation is profit would enter the field. While these companies may compete to provide lower cost power to large consumers of power, such as large business and large cities, the small and rural communities will not receive the same amount of attention or competition. The likely outcome will be that small and rural communities will have, at best, a single electricity provider that can charge whatever price it chooses without competition, raising rates for the lower-income communities that live in these areas. Worse yet, with no provision for an electricity provider of last resort, some hard-to-reach areas could find themselves with no electricity provider at all. Likewise, rural areas would face increased challenges in economic development and growth as there would be a significant disincentive to extend electric service into new, as-yet-under-developed areas unless a customer or the community is willing to front the cost for the new facilities, as further addressed below.
Small and rural communities will also be prime targets for discriminatory blackouts in favor or “higher value” customers. Under existing law, IOUs are required to keep records of all interruptions in service, “make all reasonable efforts” to avoid interruptions in service, and if service must be interrupted, interrupt the service at a time that is least inconvenient for the customers. Fla. Admin. Code. r. 25-6.044. Under the Proposed Amendment, nothing prevents a profit-driven electrical provider from diverting power away from small and rural communities to supply a larger customer with power, causing the smaller customers to have random and frequent power interruptions.
Read their full legal brief filed with the Florida Supreme Court here.
