Turning the lights out on the City’s Renewable Energy Fund.

Tropical City Streets at Night

Tropical City Streets at Night (Photo credit: epSos.de)cit

It’s been a while since I last posted on this website.  And although I have hoped, that since November, 2010, this website would remain active to serve not just as a reminder and an informative tool to future generations who want to grow our energy independence.

But unfortunately, I am back to tell you that things have changed.  What little we received from signing a 30 year agreement with FPL to provide the city of Sarasota electricity in 2010, is now being taken away.  Three of the five city commissioners have voted to rid the city of the renewable energy fund from the FPL franchise agreement.

This Monday, September 17th, 2012, we will have one last chance to try to change their minds.  Please come down to city hall at 6pm to support our efforts.

Here is the link to the decisions behind their vote and the vote itself.  Sarasota City Decision on Renewable Energy Project

VIDEO to hear the arguments: Starts at 4:21

XII.A.3.

Public Hearing Re: Proposed Ordinance No. 12-5022, amending Ordinance No. 10-4917 which granted to Florida Power & Light Company, it successors and assigns, an electric franchise, imposed provisions and conditions related thereto, and provided for monthly payments to the City, by removing from Ordinance No. 10-4917 certain franchise fee use restrictions set forth in section 17 thereof; providing for repealing of ordinances in conflict herewith, but only to the extent of such conflict, etc. (Title Only) – Presenter(s): Financial Administration Director Lyons

City of Sarasota and FPL reach a final agreement

I would like to thank Mayor Kirschner and Commissioner Atkins for having the backbone to question FPL and what they offered the City of Sarasota.  I would also like to thank Commissioner Clapp for voting with the Mayor and Commissioner Atkins on the PACE-like amendment added by Mayor Kirschner before the vote.

Sincerely,

Susan Nilon

Here is the franchise agreement signed by the City of Sarasota and FPL.  FPL Agreement_20101130142902

Breaking away from big power not easy

By Rick Barry | Nov. 3, 2010

Sarasota didn’t make the leap to energy independence Monday night, but it isn’t alone: Dozens have considered divorcing a large, investor-owned power company and going independent. But in recent memory, only one has actually done it: Winter Park.

And Winter Park Electric Utility Director Jerry Warren is as proud as a new father of his city’s hard-won independence, the 20 local employees who keep the system up and running, and the evolving promise of big improvements and revenues to come.

The city-owned electric utility began serving its 28,000 residents in 2005 after voters overwhelmingly approved its creation, and the purchase of Progress Energy’s entire distribution system. The deal was expensive. The generally affluent Orlando suburb issued bonds to pay the investor-owned utility $43 million for its feeder lines, substations, poles and wires.

It would have cost Sarasota more than double that.

But today the Winter Park utility is well into Phase 1 of what will ultimately be a $67-million, 20-year program to vastly improve system reliability, especially including the elimination of overhead lines by burying them underground. It has started that process with main feeder lines, virtually eliminating their vulnerability to hurricanes. Burying the lines also greatly improves the appearance of commercial and residential areas, as the visual clutter of poles and lines disappears.

That’s expensive, too: At about $220 a foot, it’s a cost big power companies traditionally have not undertaken.

Part of the $18-million bond issue paying for that first phase of “undergrounding” is reserved for matching funds for neighborhoods willing to pay half the cost of burying their power lines sooner, rather than waiting many years. A few have seen the work completed already. Automated meter-reading equipment is also planned.

But Winter Park is far from the only Florida city providing residents’ electricity. Thirty-three others run their own utilities, serving 3 million people, 14 percent of the state’s customers. There are 2,000 nationwide. Among the largest in this state are Jacksonville, Gainesville, Tallahassee, Lakeland and Ocala.

Some have had their systems almost from their cities’ founding. But Winter Park is the only one in decades that has severed the ties with Big Power and gone independent.

What strongly motivated Winter Park was the fact its electrical service had become unreliable, arguably the worst in the state, said Barry Moline, executive director of the Florida Municipal Energy Association, which serves its 34 client cities. And, Winter Park’s franchise agreement with Progress Energy was expiring – and with it the city’s right to buy out the utility’s local assets and bury those vulnerable, unsightly wires. What’s more, Moline said, the utility wouldn’t even agree in writing to fix the reliability problem – or allow the city to buy out the poles and wires at any point in the future, just as FPL allows no buyout clauses.

So, Winter Park took the opportunity and went independent with better than 2-1 voter approval, and it’s worked out very well indeed, Warren said.

But going it alone is not for the faint-hearted, he allowed.

If a city’s leaders are prone to excessive “hand-wringing” in making major decisions, it probably isn’t for them, he said. It takes dedication and unwavering, relentless effort on the part of city administrators and elected officials to make it happen, and they have to stand up to the investor-owned utility’s “scare tactics as they try to convince them to sign another 30-year contract – and they are generally pretty successful at it.”

If cities do go independent, he quickly added, “They need to hire really good, experienced people to run the system. You have to think of it like a business.”

This is not news to the city of Sarasota. Both Moline and Warren came to Sarasota for a workshop several weeks ago to discuss creating a municipal utility. It was Moline’s assessment that it was largely the idea of someday increasing renewable power sources that had inspired Sarasota’s interest – it wasn’t that the power was kicking off all the time or that costs were really high. FPL’s rates are the lowest in the state.

He said he doubts such vague motivations are enough to drive officials to action or win the citywide referendum it could take to make such a big and costly change. It could be 30 years or longer before the city got to keep its “profit” from electric customer revenue – after bond issues were paid off. Such revenue today pays about one-third of the City of Gainesville’s budget, for example, keeping taxes there quite low.

“It mustn’t be an emotional decision.” Moline said, and Sarasota could have delayed a decision for many months or longer without any fallout from having no franchise agreement. But at some point, FPL would have threatened to stop collecting the tax that customers pay to the city as a “franchise fee,” and on which the city depends if it is determined not to raise other taxes or fees to make up the difference.

Moline said three or four cities come to him each year to explore the possibility of forming an electric utility. His association provides a wealth of professional experience and factual information, and it spends a lot of time with them – but every city except Winter Park has backed away from the challenge.

Winter Park’s Warren concedes that sometimes “it’s been rough” over the past five years. “But if a city really wants local control over its infrastructure, it’s critical … If we had it to do over again? I’m sure we would.”

Rates can go up, especially at first because of bond issues or unexpected capital expenses, Warren said, but they’ve leveled off there. The average Winter Park homeowner pays $123.90 a month, just 20 cents higher than the average among investor-owned utilities.

But with crews right there in the city, small outages are taken care of really quickly; service is very good, he said.

Laws require existing power producers to sell power wholesale to municipal providers, and all electric utilities – cooperatives, city-owned utilities and big power companies alike – have signed mutual aid pacts to work full-bore statewide to restore power in the event of massive outages, such as those from a major hurricane.

“Like anything that’s really worthwhile, it’s hard to do.” Warren said. “But it’s the way to go.”

 

City of Sarasota gets bullied by Florida Power & Light

Posted by Michael Carlson on Wed, Nov 03, 2010 @ 10:26 AM

I began to study sustainable design, renewable energy and energy conservation in 1983 while studying architecture and environmental design at Ball State University.   Energy did not command the same sense of urgency that it does today.  The demand for increased renewable energy development and the rapid changes in technology, knowledge and economic forces are drastically different than they were 27 years ago.  The pace of change is continuing to accelerate as the City of Sarasota locks itself into a 30 year deal with Florida Power & Light.  2040 is an eternity when you imagine how much the energy landscape is expected to change even 10 years from now.

The City of Sarasota seems to have forgotten that the City signed the U.S. Conference of Mayors resolution Adopting the “2030 CHALLENGE”.  The U.S. Conference of Mayors resolution document in part states:

NOW, THEREFORE, BE IT FURTHER RESOLVED that the U.S. Conference of Mayors will work to increase the fossil-fuel reduction standard for all new buildings to carbon neutral by 2030, in the following increments:

60% in 2010

70% in 2015

80% in 2020

90% in 2025

Carbon-neutral by 2030 (meaning new buildings will use no fossil fuel GHG emitting energy to operate); and

BE IT FURTHER RESOLVED that the U.S. Conference of Mayors will urge mayors from around the nation to join this effort by developing plans to fully implement the above mentioned targets as part of their procurement process and by establishing policies to insure compliance and measure results; and

BE IT FURTHER RESOLVED that the U.S. Conference of Mayors will urge mayors from around the nation to develop plans to fully implement the above mentioned targets for all new and renovated buildings within the City; and

BE IT FINALLY RESOLVED that the U.S. Conference of Mayors will work in conjunction with ICLEI Local Governments for Sustainability and other appropriate organizations to join this effort to develop plans to fully implement similar targets as mentioned above.

I do not see how a 30-year agreement with Florida Power and Light, even with a few commitments to renewable components, can even begin to address – let alone accomplish – these goals both now and by 2030. It will not.

I have a vested interest in how I receive my electrical power.  Carlson Studio’s office is in the City.

Michael Carlson

 

Sarasota locks in to 30-year deal with FPL

Reprinted from the Sarasota Herald Tribune

By J. DAVID McSWANE

Published: Tuesday, November 2, 2010 at 1:00 a.m.
Last Modified: Tuesday, November 2, 2010 at 12:22 a.m.

( page 1 of 3 )

SARASOTA – The Sarasota City Commission voted to lock city residents into a 30-year contract with Florida Power and Light late Monday night, ending months of tough negotiations with the utility company for more green energy benefits.

The commission passed the agreement, and a coupled renewable energy agreement, on a 3-2 vote, with Mayor Kelly Kirschner and Vice Mayor Fredd Atkins opposed.

At the center of the heated energy talks was the city’s stake in a nearly $5 million-a-year franchise fee, which the city pulls in through FPL charges to consumers — a revenue source the city cannot afford to drop during a recession and a leverage point some say FPL representatives have taken advantage of.

Over the course of tense negotiations with city staff — and an outside energy attorney who was paid $55,000 to consult — FPL agreed to some concessions, but would not agree to a shorter contract, which the commission sought earlier this year.

In an accompanying contract FPL representatives agreed, over the next three decades, to provide:

• Educational programs to inform residents about energy efficiency;

• Energy audits on city and consumer accounts;

• Home energy makeovers for 1,500 homes;

• Fifteen electric vehicle charging stations, to be replaced over time; and

• A longer-term promise to install a large-scale rooftop solar facility and LED street light pilot program.

Raye Dowling, area manager for FPL, lauded the “partnership” as the best deal the utility company had ever offered to a municipality. But the concessions did little to impress commissioners, who expressed doubts about the long-term promises.

“For a company this size, this is chump change,” said Atkins, who along with the mayor, led an at-times-dramatic offensive against FPL representatives Monday.

Under the contract, Sarasota effectively grants a 30-year monopoly for FPL, a company whose renewable energy profile is in stark contrast to the city’s aggressive green energy and sustainability goals. The company imports a vast majority of its fuel energy from out of state, and reports only 2 percent of its energy as coming from renewable sources.

Robert “Scheff” Wright, the Tallahassee energy attorney contracted by the city to help in negotiations, advised against locking Sarasota into a 30-year contract. By his calculations, FPL’s concessions would save the city roughly three-tenths of one percentage in energy costs.

That number, Kirschner said, was enough for him to oppose the FPL deal.

“I apologize to our citizens, and it’s an unfortunate thing,” he said as the commission approved the deal.

About 20 residents spoke emphatically against the contract, citing likely advancements in energy sources over the next three decades, in which the city will have little to no ability to partake. Members from the Argus Foundation and Sarasota Chamber of Commerce, of which FPL is a member, argued in support of the contract.

Commissioner Terry Turner spoke to the financial gridlock that handicapped the city since the beginning of negotiations as he cast his vote in favor of signing on with FPL.

“It would be wonderful if Sarasota could lead the way, but Sarasota is not an island.”

A last-minute amendment to the contract, approved on a 3-2 vote, will allow the city to invest some of the future proceeds from franchise fees into renewable energy investments.

FPL’s power lock

Sarasota has little choice but to approve a 30-year deal with FPL

Reprinted from the Sarasota Herald Tribune

Published: Monday, November 1, 2010 at 1:00 a.m.
Last Modified: Friday, October 29, 2010 at 6:42 p.m.

It is clearly in the best interest of Florida Power & Light to lock down a 30-year franchise agreement with Sarasota. But does such a long contract serve the public interest?

That is the question that city commissioners face, and there is no easy answer.

The city’s franchise agreement with electric giant FPL expired earlier this year. FPL now wants another 30-year contract, sweetening the deal with some binding but modest sustainable-energy commitments. City commissioners are scheduled to vote on the matter today.

In our view, a 30-year contract is too long, depriving citizens of leverage to demand improvements if they grow unhappy, 10 or 20 years down the road, with FPL service.

But realistically, FPL won’t budge on the 30-year term, and the city can’t afford to walk away from the deal.

With or without a franchise agreement, FPL is obligated to provide Sarasota with electric service. But the hard fact is, Sarasota depends on FPL for more than electricity. It also counts on the company for money — the $5 million each year the city receives via franchise fees, paid by FPL customers. That revenue, which helps fund local government services and jobs, would disappear — creating a huge budget hole — if a franchise agreement can’t be reached.

Already hit by severe recession and a crash in property values, the city is negotiating from a point of weakness — and FPL knows it.

Limited alternatives

Boulder, Colo., is in a similar predicament. Its franchise agreement with for-profit Xcel Energy expires at year’s end, and so will the revenue the city gets from it.

This summer, Boulder — desiring a cleaner energy profile — opted against renewing Xcel’s franchise. To make up the lost dollars, Boulder is asking voters this week for permission to start a new tax that would sunset in five years. In essence, the tax is not an increase; it’s just a continuation of what customers already pay in franchise fees. If approved, the proposal would allow Boulder time to thoroughly explore its power options without triggering a budget crisis.

Sarasota could try the same approach. But again, the city is at a disadvantage. Sarasota’s franchise agreement already has expired, and the city has not engaged the public over the possibility of a replacement tax.

Mayor Kelly Kirschner has been investigating the possibility of appending a new tax on water-and-sewer bills, to cover the gap in electric fees if the FPL franchise is not renewed.

The water-sewer route is unwise. A replacement tax, if considered, should be closely tied to electric usage. Either way, a thorough public dialogue followed by a referendum would be advisable.

Uncovered costs

The quest for cleaner energy is at the heart of the debate. Solar and biomass generation, which would shrink Sarasota’s carbon footprint, won’t grow fast enough if the city stays shackled to FPL, critics say.

We agree that clean energy must become a much larger share of the energy picture. But it’s important to recognize that cost, not FPL, is the primary hurdle on the road to a solar tomorrow.

Renewables involve higher start-up expenses, and the city has not identified how it would cover them. Sarasota has not created a significant funding source to invest in clean energy or conservation. Citizens might be willing to contribute to these initiatives, but that’s by no means clear amid today’s lingering economic malaise.

To be sure, the energy industry is on the cusp of mega-change. Clean-energy research and development, as well as possible climate legislation, could level costs to a great extent. But it is also possible that alternative energy’s momentum could decline in the face of falling prices for natural gas, which may be a more immediately adoptable way to reduce carbon emissions.

Either scenario lacks certainty, and Sarasota is running out of time. 

City Manager Robert Bartolotta, who led negotiations to extract some renewable-energy concessions from FPL, recommends that commissioners approve the franchise agreement.

It is the most pragmatic approach, from a government perspective. On its own, the city is not financially positioned to become a renewable-energy leader, though it has the desire.

Approving the franchise agreement should in no way be the end of the story. Action is needed:

The city should lay the groundwork for its own investments in conservation and renewable energy programs, to make the most of its FPL contract.

The state’s utility regulation structure must change to remove hurdles that now discourage opportunity.

Perhaps the most important step is this: Voters should choose lawmakers — at the state and federal levels — who won’t bow to the clout of big utilities or shrink from the hard task of passing climate legislation.

COMMISSION CONSIDERS FPL FRANCHISE AGREEMENT

What they are leaving out is the timeline for all of this.  These offerings will be dispersed over the 30 year period.

Sarasota, FL:  The City Commission will consider a franchise agreement and an accompanying renewable energy agreement between the City of Sarasota and Florida Power & Light Company (FPL) during its next regular meeting Monday, November 1, 2010.  The proposals will be discussed during the evening portion of meeting which begins at 6:00 p.m. in the Commission Chambers in City Hall, 1565 First Street.  Public comment will be heard. The proposed renewable energy agreement contains the following provisions: FPL will provide educational resources and programs to inform the City of Sarasota and its residents and business owners about energy efficiency and conservation programs

  • FPL will perform an energy audit on all City electric accounts every five years
  • FPL will perform an energy audit on the 100 largest electricity consuming accounts within the City limits
  • FPL will conduct home energy makeovers for 1,500 homes within the City limits
  • FPL will install 15 electric vehicle charging stations which will be replaced over time
  • FPL will pay for one City employee to obtain LEED certification
  • FPL will establish an educational testing facility within the City of Sarasota which will include new solar photo voltaic panels
  • With enabling legislation, FPL will develop a large scale rooftop solar facility within the City limits; install a LED streetlight pilot program; and develop a utility scale solar generation project.

To view backup materials for this agenda item visit www.sarasotagov.com For more information contact City Auditor and Clerk Pamela Nadalini:  941-954-4160.

Top 10 Reasons NOT To Sign Another 30-Year Contract With FPL

By Don Hall, Transition Sarasota

In advance of the Sarasota City Commission Meeting on Monday, November 1, where there is likely to be a vote on whether or not to renew a 30-year franchise agreement with Florida Power & Light, it makes sense to bring together in one document the most salient arguments against signing this highly problematic contract:

10. Eliminate a hidden tax on the public: The 5.6% franchise fee that the city is given in exchange for its loyalty is fully paid for by a surcharge on your electric bill. If local government really needs that $5 million a year now provided by the franchise fee, they should find another way to create this revenue that will be openly approved of by the public. One option is to cut our currently oversized $24 million police budget by $5 million a year. If we did this, we would still have one of the highest per capita rates of police spending in the state.

9. Create a more equitable tax structure: Because the city’s franchise fee is paid for by what is essentially a flat tax on those who purchase energy from FPL, and because those who are the least fortunate in our community naturally spend a higher proportion of their income to meet basic needs, such as electricity, this hidden tax hits poor people hardest. Furthermore, families that are just scraping by are less likely to be able to afford energy-saving appliances, home weatherization, solar PV, or solar hot water heaters.

8. Declare our independence: Thinking that signing a new 30-year agreement with FPL is our only option is just plain wrong. In fact, we have several viable options. We can continue with FPL without a franchise agreement (as many communities do, including Manatee County), we can buy electricity from another investor-owned utility, or we can decide to create our own municipal electric utility (for more information about this third option, please visit the Florida Municipal Electric Association’s website: http://PublicPower.com).

7. Spur innovation by increasing competition: Signing a new franchise agreement with FPL is effectively giving one company a monopoly over energy production in the City of Sarasota for the next 30 years. If we really want to lower energy prices and encourage innovation, we should make it possible for other companies (as well as homeowners who decide to put solar on their roofs) to compete on a level playing field with FPL.

6. Refuse to give in to fear: FPL wants you to believe that they are the only reliable source of electric power and that we couldn’t possibly run an electric utility ourselves. However, you just have to take a look at our municipal water, sewer, trash, and recycling utilities to see that we are fully capable of doing the same with energy. We aren’t talking about building and operating power plants here in Sarasota. A municipal electric utility would instead purchase power freely on the open market.

5. Keep wealth circulating locally: In 2002, the consulting firm Civic Economics did a case study of booksellers in Austin, Texas that showed for every dollar spent at a chain store, only 13 cents was reinvested locally. But for every dollar spent at a locally-owned, independent business, the number was 45 cents, a three-fold increase! In our case, FPL operates like a chain store, continually siphoning our community’s wealth away to foreign investors and back to corporate headquarters. A municipal electric utility, on the other hand, would operate more like a local business, keeping more of our community’s wealth circulating within the local economy.

4. Lower taxes or provide more government services: It is true that if we choose to create our own municipal electric utility there will be significant upfront costs estimated at $90 – $120 million to purchase our electric infrastructure back from FPL. However, we currently give FPL $87 million dollars a year to pay for our electricity, money that could otherwise be redirected to local government. In contrast, Gainesville currently derives approximately 1/3 of its annual budget from profits from its electric utility. We could do the same here, choosing to use those profits to lower taxes, increase government services, or, as is most likely, a mixture of both.

3. Get serious about renewable energy: Despite trying to cultivate a public image that they are a “green” company, FPL’s own website, as recently as a month ago, stated that less than 1% of their electricity derives from renewable sources. They might think we will be satisfied with their “Renewable Energy and Energy Efficiency Agreement,” but what FPL offered in their first draft is only a token gesture, a drop in the bucket (to read this document and learn more about this and other related issues, please visit http://SarasotaPower.org). We need to demand more.

2. Help the city meet its sustainability goals: One of the City Commission’s “Top Five Priorities” is Environmental Sustainability, and its first and second “Measurable Objectives” are an “Energy/Utility Conservation Program” and “Carbon Emissions Reductions.” In 2007, our commissioners formally adopted Resolution 07R-1963 in support of the US Mayors’ Climate Protection Agreement, pledging to reduce carbon emissions to 7% below 1990 levels by 2012. However, a Greenhouse Gas Inventory Report that was published just last year showed that from 2003 – 2007, citywide carbon emissions actually increased 2.55% despite the fact that population only increased 2.17% over the same period.

1. Provide resilience in an age of energy uncertainty: The International Energy Agency, in the opening paragraph of the Executive Summary of their 2008 World Energy Outlook report, unequivocally stated: “The world’s energy system is at a crossroads. Current global trends in energy supply and consumption are patently unsustainable — environmentally, economically, socially [...] It is not an exaggeration to claim that the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today: securing the supply of reliable and affordable energy; and effecting a rapid transformation to a low-carbon, efficient, and environmentally benign system of energy supply. What is needed is nothing short of an energy revolution.” 30 years is a long time and a lot will surely happen between now and 2040.

Whatever we ultimately decide to do, we would be wise to keep our energy options open at this time and ensure that we will have the flexibility to adapt to changing circumstances. Remember, this is a once-in-a-generation decision. Please show up and speak out this coming Monday at City Hall, 1565 1st Street in Sarasota. The FPL agreement is the last item on the agenda, so plan to arrive when the meeting reconvenes at 6 p.m. All members of the public are entitled to speak for five minutes each.

In the meantime, please call or write your commissioners and let them know what you think about this most important issue. Their contact information can be found below.

*       *       *       *       *

Mayor Kelly Kirschner (District 3): Kelly.Kirschner@sarasotagov.com

Vice-Mayor Fredd Atkins (District 1): Fredd.Atkins@sarasotagov.com

Commissioner Richard Clapp (District 2): Richard.Clapp@sarasotagov.com

Commissioner Suzanne Atwell (At-Large): Suzanne.Atwell@sarasotagov.com

Commissioner Terry Turner (At-Large): Terry.Turner@sarasotagov.com

You can also reach all commissioners by calling 941-954-4115 and asking for each one by name.

 

Dear Sarasota City Commissioners: FPL is not the right choice.

I have learned that several of you have decided to, or are strongly inclined to, approve another 30-year franchise agreement with FPL. Through this letter I express my strongest possible disagreement with such a decision. I have already spoken at one public forum. This letter, however, allows me the space to better explain why I think such agreement is detrimental for Sarasota and many other communities.

Provided the length of the letter, I must assume some of you will not have the energy or time to read it all. Hence, I offer an executive summary in the next paragraph. I follow up with a lengthier explanation. I apologize for its length, but after all, as an academic I do not think that simple explanations are always the best.

Executive Summary: By providing FPL a 30-year franchise agreement, we are agreeing to send local money as profits to external investors’ portfolios that are not necessarily invested in our community. We are actively supporting a failed business model, one that refuses to invest in truly innovative technology because such approach does not offer quick and large returns. We actively discourage the innovation inherent in competitive capitalism, and hence, our capacity to compete with new innovations that are growing fast in nations like Germany, China, India, and Brazil. We actively discourage small and medium local entrepreneurs from developing and bringing to the market the kinds of ideas that corporate America refutes. Yet these are the kinds of ideas that strengthen both the local and national economies. Because this affects local economies, it is as much the duty of city elected representatives, as it is of state and federal representatives to find the means to enhance our economy. This is a case where local communities have the necessary capacity for change, the change that state and federal authorities cannot impose on localities. The choice to renew the franchise also illustrates that our elected officials are uncomfortable challenging the status quo, and hence, disinclined to changing the road that is leading the United States to become a second-tier economy.

Having said the above, allow me to share the information that informs such view.

Many times, a focus on the immediate does not allow us to see the lessons to be learned from other contexts. As such, I bring to your attention some of the most current research in Development Studies (A course I currently teach at the undergraduate level). At the risk of not providing the full picture, I share with you information that is most relevant to Sarasota’s relationship with FPL and hence, an explanation for why I think a 30-year agreement to a near monopoly is not advisable.

As you know, China (in conjunction with India, Brazil, and Russia – a group known as BRIC) is considered an emerging economy, one that already has surpassed Japan’s GDP. China’s growth has been based on the opening of its economy to the global market and on significant (but not total) privatization of state-owned enterprises. Its ability to attract investment from abroad has been based on the low wages offered to its workers. This has permitted China to become an important exporter of manufactured goods. The United States carries a large trade deficit, being a very large consumer of China’s low-cost manufactured goods. In the United States, this has allowed us to afford the declining real value of workers’ wages. Since the 1970s, U.S. workers’ wages, when controlled for inflation, have been declining. Cheaper products from China allow workers to consume while earning less. Simultaneously, however, our nation has been disinvesting in research, technology, and education.  At the same time, China (among other nations) has been investing in such fields. Some scholars anticipate that as China grows, its wages will grow as well. This will make Chinese products more expensive. People in the United States, therefore, will find it more difficult to afford such products. At that point, they will need to turn inward for internal production. Yet, given the internal disinvestment, we will be less able to have our economy grow. It is therefore, imperative that we reawaken our innovative and creative capacities, as well as our willingness to take the risks necessary for such innovation and growth.

It is also worth noting that U.S. news currently cover the financial crises in Greece and Britain. Yet, they have not covered the growing strength of Germany. Germany is making its money, in part, through the sale of the machines that allow the production of the goods that are manufactured in China. This is done through medium size and small producers, not the large multinational corporations. These companies do not offer large returns on investment, yet, together have sustained Germany’s economic strength. Both, Germany and China are investing tremendously in research on ways to transfer renewable energy into useful sources (electric, heating, etc.).  The United States has lagged behind.

There are many reasons the U.S. has lagged behind. An important one has been the comfort and narrow-mindedness of corporate leaders. Regardless of what the news try to tell us, neither GM nor Chrysler went bankrupt because labor costs were too high. It was not because workers were making too much, or because they were insisting on too many benefits (Opel in Germany was the strongest profiting branch of GM, their workers are not cheaper than American ones). It was rather the short sightedness of business leaders. A simple example is the fact that CEOs of the Big Three chose to dedicate millions of dollars to lobbying efforts to avoid implementation of low-emission policies. While they were spending millions fighting the infiltration of government into the economy, the Japanese were investing in alternative technology. US executives came up with all kinds of excuses for their unwillingness to invest in such research. They sought quick, large returns on their investments, in response to investors’ desires. The result has been that Toyota captured the hybrid market quickly.  We continue to lag behind. China is in fact moving fast forward with car models and alternative energy. Yet, corporate America has not changed its ways. They continue to push for the same economic strategies that have been proven untenable and ineffective in the long-run.

FPL, in my view, is no different. I gather – but do not know the details- they have promised many things, including making Sarasota the front-runner in alternative technology. Yet. I should point out that their approach continues to be one of large corporate control. They seem to view the users of electricity as potential competitors because if we invest in photovoltaic systems on our roofs, they lose business. In response, they dissuade people from feeding power into the grid by arguing that they will use cleaner energy, like their solar power plant in Arcadia. In the long run, however, turning agricultural land or green areas into vast spaces filled with solar panels will not contribute as much to the protection of our environment, as having the panels on the roofs of homes. Furthermore, not unlike the findings by journalists of the Sarasota Herald Tribune regarding reinsurance corporations, the profits gained from FPL’s clients in Sarasota will not be reinvested in the community. Instead, these are profits going to external investors, who reinvest in other venues, unknown to us.

The best way to sustain local financial resources locally is to send more of the profits to the people who live here. Therefore, if there were stronger programs to enhance citizens’ investment in photovoltaic systems, their savings would give them more income to invest locally. They are more likely to use their increased income to engage in the local economy, visit local theaters, restaurants, beaches, remodel their homes using local construction workers, etc.

It is well-known that when the state supports the development of monopolies, as in import substitution economic strategies, even transnational corporations become comfortable with low-quality products. It is our responsibility as citizens to create the incentives for companies that are innovative, that are willing to take the necessary risks to open new venues for business and, ultimately, develop the products and mechanisms that allow us to become energy-independent and active in sustainable development. By agreeing to a 30-year contract, we are agreeing to offer a monopoly market, a system of disincentives for citizen empowerment, and disincentives for investment in true innovation. Hence, our local decisions have larger consequences.

It is only through local willingness to challenge the status quo that the United States will regain and maintain its global economic strength. No matter how much we wish to dismiss China’s achievements, the reality is that China will be able to surpass us and eventually will become a more open political system. China, as noted above is not the only existing model of development among the emerging economies. Brazil, while much smaller than China, has a consistently growing economy, but is doing so with efforts for strengthening its middle class and reduction of internal inequality. Germany also offers some good models. We will not strengthen our middle class unless we change the way corporations continue to dominate our economy. For Sarasota, this is the historical moment to embark into programs for greater competitive capitalism, one that strengthens local businesses, as well as local citizens’ power (both political and economic). We do not need a franchise agreement in order to get electricity. I believe U.S. citizens can be as daring as the mayor of Bogota, Colombia – Antanas Mockus- has been. I encourage you to view this video regarding how the mayor of Bogota turned his city around:

http://www.youtube.com/watch?v=fX7HBxLBZ28 (minute 30:48 is the item on taxes)

There are things we can learn from his strategy. If the mayor of Bogota – one of the biggest urban disaster zones in the world just a few years back — was able to gain sufficient voluntary payment of taxes, we too can find an alternative means to transfer the 5 million dollars from the citizens to the city. The fact is, that if you, as my representatives in government, do not stand against FPL’s imposition of a 30-year contract, no one will; and we all will play our role in permitting the economic decline of our nation. Without exaggeration, for the sake of the people in Sarasota, for the sake of Florida’s emerging businesses, for the sake of Florida’s economy, and for the sake of the U.S. economy, you should reject a 30-year franchise agreement with FPL, leaving the door open for our creative capacities and true local economic growth.

Sarah Hernandez

 

City Commission to Vote on FPL Franchise Agreement

This Monday, November 1st at 6pm, the Sarasota City Commission will have the second reading of the FPL Franchise offer.  It looks like the City commission is planning on voting that evening.  Please plan on attending that evening.  You can also let the Commissioners know your thoughts by email or telephone.    All of their information is listed here:  http://sarasotapower.org/city-commissioners/

The meeting will be held at Sarasota City Hall on 1st Street in downtown Sarasota.