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.

 

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One response to “Top 10 Reasons NOT To Sign Another 30-Year Contract With FPL

  1. You present some great points here. The cost of electricity is a major bone of contention for most people and what you may not know is there is something you can do to lower your personal electrical bill. Its the same electricity and the same billing service but you simply pay less and save more. While I do work with Reliable Power, I would highly recommend them as an alternative power company. This is a great way to take control of your utility bill and immediately see the results of your efforts.

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