Sarasota Power Position Paper
RE: May 28, 2010 expiration of the Florida Power and Light 30 year franchise agreement.
Sarasota Power is an informal group of citizens of Sarasota that are requesting the Sarasota City Commissioners to exhaust all possibilities of becoming their own utility prior to signing a new franchise agreement with Florida Power and Light. The advantages in a City owned utility are, but not limited to:
· We would have more control over pursuing a Renewable Energy Policy that will become an Economic Engine for jobs and business growth.
· Electric utility provider controlled by the City will be held accountable for their performance in reliability and responsiveness by the citizens of the city.
· The distribution systems will become an asset of the city.
· Funds that would normally have been profit for FPL can provide the city with the opportunity to pursue conservation and finance utility improvement projects such as: Renewable Energy projects, underground power lines, smart grid technology, fiber infrastructure, and stabilizing cost to the rate payer.
· Our rates would be locally controlled and would promote transparency of taxes
· The current franchise fee (which is just a pass thru tax for the citizens) and is not tax deductible. This fee could be collected in a way that would have more advantages to the taxpayer.
The City presently manages our Water and Sewer Utilities. This is an excellent example of how the city can manage an electrical utility or contract with an experienced and reliable provider to operate and manage the System. This, again, will create local jobs.
Energy is changing so rapidly. Knowing that our Federal Government is creating laws and incentives to accomplish a shift to Renewable Energy from fossil fuels, our City Commissioners must position the City to take advantage and control of our Energy Future. A 30 year Franchisee Agreement is not the answer. To explore our options with having our own utility, it will require more time.
We call on all city and county citizens to support our demand that the City Commission postpone any decision to renew the FPL 30 year Franchise Agreement, until the City properly evaluates all options and every effort is exhausted.
Electric munis are not regulated by the Florida Public Service Commission, which means the city can charge you whatever it wants for electricity and there is nothing the citizens can do about it. Florida munis are 30 – 40% more expensive than FPL. FPL has the cheapest rates in the state.
Lydia,
The regulation of Florida’s Municipal Utilities is achieved largely through local boards or commissions. These utilities are regulated by an elected city commission, or an appointed or elected utility board. The distinct difference between the Investor Owned Utilities, such as FPL, and Municipal Utilities are the Muni’s are governed by the citizens that they serve.
The second distinction is that they are a “Not For Profit.” You will never hear the words – if we do it for you then we would have to do it for everyone else. This is something that we hear from FPL all of the time.
2.8 million customers, or 25 percent of Florida’s population are currently being served by Municipal Utilities.
Did you know that FPL is putting in for another rate hike? Did you know that the four Public Service Commissioners who voted down the last FPL rate hike request have been removed from their post? Who do you think is running the Public Service Commission and who do you think FPL is answering to?
Municipal utilities are not-for-profit. Capital is raised through operating revenues or sale of tax-exempt bonds.
Susan – The PSC sets the rates and regulates all IOUs in Florida – so if there are service problems, you can file a complaint with the PSC and you can intervene in any rate increase request. IOUs must also file cost of service studies which match costs to the services they provide during the rate making process (I have over 38 yrs experience in the electric utility industry – ratemaking, transmission, distribution and most recently wholesale energy) Munis, on the other hand, set their own rates without justification. Just look at Winter Park for example. 12/08 they sent a letter to the residents that they intend to “mirror” any rate increase that Progress Energy receives through 6/09. That is what munis do — they make no promise to lower your electric rates — they use the electric rate structure as a way to add additional hidden “taxes” to citizens’ electric bills and they spend the money however they so choose. In fact, Cocoa Beach is looking at creating a muni as a “way to make money” for the city coffers — how? By charging higher rates and there is nothing any citizen can do about it. Please visit http://www.publicpower.com/electricrates.shtml and they have the monthly electric rates for all electric providers in the state of Florida since 2007. For example, for 1000 kwh,in May Winter Park residents paid $145,49 while FPL customers paid $97.52 (franchise fee included in both)
I would be happy to direct you to various Cocoa Beach Commission meetings where the Mayor and city attorney talk about making a profit, “charging what the traffic (ie the citizens) will bear”, etc because they can charge whatever they want. FPL has 4.5 million customers in Florida. 85% of the state is served by an IOU, only 15% by munis (which is the same breakdown throughout the US)
If FPL puts in for another rate increase and gets it, you can be assured that all the munis in FPL’s footprint will automatically jack up their rates to match FPL. So FPL will still be the cheapest provider of energy in Florida
Please listen again to the Winter Park presentation where the city manager states that they are still under credit watch because of the electric muni. I have extensive experience in the wholesale market and I would be happy to share with you 2 papers I prepared for Cocoa Beach on how difficult it is to buy power in FLorida. I also recommend that you research Vero Beach – which signed a $2 billion 20 year power commitment with OUC that begain 1/10- with a $50 million default clause, that they may be forced to pay as the commission voted in 12/09 to try to sell the system to anyone who would take it – only FPL is interested at this time. Creating a muni has tremendous risks for the citizens – additional debt and uncertain fuel costs, which account for 60 – 70% of a customer’s monthly bill. Not to mention the time it takes for the city to understand how to run an electric company – Jacksonville /Beach made a presentation to Cocoa Beach (again please review the video if you get a chance) as it is very imformative — he predicted it would take 10 years to get up to speed to really run the system well. Can you imagine anyone putting up with bad electric service for 1 day let alone 10 years?
Lydia,
Thank you for taking the time to defend FPL. I would love to see your position papers that you prepared for Cocoa Beach. But you must also know that the city has more than one option when it comes to buying power. Our purpose is to support the city in exploring all of the alternatives. I would like to mention that you are neglecting to mention how much control FPL has over the PSC. Please take a moment and read these two articles about the Public Service Commission that were published this week:
http://www.dailykos.com/story/2010/7/2/881278/-Energy-Independence-Day-Postponed-In-Sunshine-StateAgain
http://www.heraldtribune.com/article/20100704/COLUMNIST/7041046/2416/NEWS?p=1&tc=pg
Is this who you are suggesting that we should remain in business with? You are also ignoring the fact the municipal utilities are under the jurisdiction of the people they serve. You speak of Munis like that are the corporate giants who are motivated to profit for their shareholders. Maybe you should spend a little time in Gainesville and learn what a real successive muni is run like. Gainesville will be making great leaps to reduce their carbon footprint when their Bio fuels plant goes on line later this year. I believe they will only be using 20% of their energy from coal after that. Let alone that over 75% of the people in Gainesville voted to spend their money on producing renewable energy…even if it mean it thier bill would go up. However, when everyone gets their bill in Gainesville, no one is complaining.
Another important aspect of the argument is to realize that most reasonable consumers recognize that it is not just about the money. What has FPL done for us lately that we couldn’t have done for ourselves? The Franchise fee is a pass through tax. The money that FPL pours into our community came out of my pocket…excpet their the ones who get to take credit for such great generosity. And the fact that the “business as usual” mentality has gotten us into this mess in the first place. Why is FPL any different than BP? Cooperate Greed begets more greed. But then have heard that “Greed is Good,” right? But it doesn’t matter, does it? Becasue FPL will get to decide who the winners and the losers are and we should just be happy that we can turn on our lights.
Don’t forget to send my your paper. I will be more that happy to publish it.
Susan – How about a little “balance” in your comments? Are you happy with the electric service you get from FPL? I know I am. I come from Philadelphia where power outages are a common problem. In fact, the current heat wave up there is causing brownouts and other power outages, which we do not have with FPL. I am really glad for you that you can afford to pay up to 50% or more each month for your power – but I know I can’t and neither can the retirees who live in my community and others on fixed incomes or those losing their NASA jobs. Cost is the number one concern for most people. Good luck getting a power plant built in your neighborhood – I guess NIMBY is not in your vocabulary. That’s great!! Good luck with your efforts to buy the electric distribution system from FPL -then Sarasota can be its own monopoly.
A little balance? Really?? I thought that is what I was providing. A NIMBY? Me? I live in the town where I am advocating for alternatives. Where do you live? It better be Cocoa Beach, otherwise your the NIMBY. And Philly – Born there, have a house there. Know PECO very well. Is that really a good reason to not explore the alternatives. 50% more for your power? Where do you do your research? Show me your evidence. Stop throwing around those numbers like they should mean something without providing backup. Where’s that paper you promised?
How about these numbers: Do you realize that conservatively, at 3% annual interest rate, on an average monthly balance of $306 million for the Franchise Agreements money they handle, FPL earns roughly $9 million dollars annually on the franchise agreements that they float. Not a bad deal for FPL. It would seem to me that the cities could enjoy that benefit.
Do you also realize that if the city was to add that franchise fee to the city millage rate, that the consumer could then use that as a tax deduction. As it stands now…they receive no credit for the money that they give FPL who then they pass it back to the city. Do you also realize that if the city collected that tax and not FPL, then the city would not have to collect as much to recieve the same thanks the the fees that FPL charges the city for the service.
Lydia – who do you work for? I’m trying to figure out why you have skin in my game. If you are not a resident of my town…are you on the payroll of FPL?
Susan – Great to see you showing your true colors. It appears you only want to hear from people who agree with you. If you would check out the FEMA website, you can see for yourself that Winter Park residents paid 50% more for their power in May than a similar customer of FPL. I do not work for FPL but I have spent my entire career in the electric utility industry. I am very proud of my accomplishments and proud to have worked in the power business. And you know what? I am proudest of the linemen that work through all kinds of weather to keep the lights on for all of us. And if you think this website is balanced, you really are clueless about what you are talking about.
No Lydia, the balance here is me providing a balance to your argument. My fairness is in publishing your comments and then disputing them publicly. If I “only want to hear from people who agree with me,” then you wouldn’t even appear here. Let your agruments stand on their own merit…not on personal attacks of my integrity.
You do realize that Municipal Utitlities also employ linemen and women. Why did you bring that up?
We hosted Winter Park here last month. The city manager and the gentlman who runs the utltity did not state that their rates went up 50%. In fact, they both said unequivically that they would do it again in a heart beat when asked if they regretted starting thier own utility.
Again, what if your skin in this game? Since we are not attacking the energy community and we are just saying that we feel FPL is not the only deal in town…I still can’t understand what your beef is with us.
Lydia, I am a staunch supporter of the FACTS and TRUTH which is why I personally am 100% behind Sarasota Power and it’s initiative to educate the people on the issue of the FPL Franchise Agreement. You seem very angry and bitter and willing to attack kind-hearted individuals who are VOLUNTEERING their time to educate the public. Sarasota Power and it’s UNPAID VOLUNTEERS are diligently working to air the facts and educate the public on this very important issue. Nobody is advocating for a municipal electric utility at this point, merely the “gift of time” to explore the benefits, risks and potential downsides of such a proposal.
If the City signs another 30 YEAR Franchise Agreement under the current terms, there will be no opportunity to explore any opportunities for a very long time.
The purpose of the Town Hall meeting is to educate the public and only for that purpose. FPL has been invited to attend the meeting and to be present to express their comments, concerns and answer questions posed by the public. At this point, they have declined – we continue to hope they reconsider their position.
I believe it is unreasonable for you to post hyperboly and disconnected facts and figues that suggest that an electric utility will increase the resident’s bills by 30% to 50%. There are myriad factors to be considered in evaluating the benefits, risks and potential disadvantages of a municipal utility. In order to properly weigh ALL of the FACTS, a complete feasibility study needs to be conducted and for that we need TIME.
You state several times in your posts that you have extensive experience in the electric utility industry – ratemaking, transmission, distribution and most recently wholesale energy. Perhaps your efforts could be put to better use in helping identify the problems and suggest solutions other than to make the shareholders of public utilities richer.
I have had the good fortune to live in Gainesville, FL and Orlando, FL where municipal utilities are hugely successful and have reaped the benefits of improved Customer Service and reduced downtimes. I have also benefited from living in areas where power was provided through independent rural cooperatives. All of these experiences are far superior to my current relationship with the monopoly FPL.
Please stop attacking the citizens who are giving their valuable free time for a public cause.
Lydia,
I talked with the City of Vero Beach this week. They are talking with FPL to see about the technical feasibility of selling parts of their municipal energy system to FPL. The city commission office as well as the utility director (John Lee) made it very clear that they are not “looking to sell” their municipal power company like many people are reporting. They are seeing what is feasible for their community so they can make informed decision and serve their customers/citizens as well as they can. The city power plant now serves more non-city residents than residents and many of those customers would like to have “choice” in their energy provider. Vero Beach’s energy rates are at the state average, which is 30% higher than FPL.
Lydia, please explain your understanding of the Vero Beach situation. I always like new sources and perspectives.
Thanks,
Andrew Noune