FPL spends millions to sway lawmakers. The result can affect your electric bill.

Florida Power & Light Co. is on track to spend as much as $1 million this year to lobby lawmakers, regulators and state leaders, a situation that critics say could make customers the losers.

Lobbying and campaign donations help FPL limit competition and hang onto its monopoly powering 5 million homes and businesses, which can lead to higher electric bills, environmentalists and watchdog groups contend.

In nine months this year, FPL has spent $545,000 on lobbying legislators, according to state filings required by Nov. 14. The utility also has spent between $80,017 and $330,000 through September on lobbying the executive branch, which includes the governor, cabinet members and state regulators.

State law requires lobbyists to report only a range of executive lobbying expenses, so it’s impossible to know how much FPL spends overall. But at the high end, records show FPL could spend more than $1 million in six of 10 years.

In a recent meeting with the South Florida Sun Sentinel’s Editorial Board, FPL president and CEO Eric Silagy defended the utility’s extensive lobbying efforts as well as its massive campaign contributions: “I think it’s legitimate to lobby on issues,” he said. “We play by all of the rules. We report everything.”

Silagy said lobbying costs are not part of customers’ bills — FPL’s shareholders pay for it. “Not one dime of it — no travel associated with flying up to Tallahassee,” he said. “And it should be,” Silagy said, arguing that lobbying often benefits customers.

In terms of the legislature, lobbying in the first nine months of 2019 falls just short of the $645,000 that FPL spent in all of 2018. That included $230,000 from October to December.

Executive branch lobbying last year ranged from $170,000 to $480,000.

Five years ago, FPL spent $415,000 on legislative lobbying and up to $409,000 on executive lobbying, state records show.

FPL has more than 30 registered lobbyists, including the most powerful and well-paid lobbying firms in Florida, such as Ballard Partners, Capital City Consulting, Ron Book of Plantation, and Rubin Turnbell & Associates. Lobbyists also include high-powered Miami law firm Greenberg Traurig and former legislators including state Sen. Christopher Smith of Fort Lauderdale.

FPL also spent more than other utilities in the state: TECO Energy has paid $380,000 to legislative lobbyists through September and Duke Energy $145,000.

Lobbying the lawmakers and regulators is one way companies seek to sway votes. And in FPL’s case, it often works, observers say.

“Utilities use lobbyists to control the Public Service Commission and eventually gain favorable recognition out of the Legislature,” said Ben Wilcox, research director at government watchdog Integrity Florida. He said the state’s utilities, including FPL, typically “hire an army of lobbyists” to watch their backs in legislative and regulatory proceedings.

Frank Jackalone, Florida chapter director of the Sierra Club, summed it up this way: “Florida Power & Light is probably the most powerful of Florida’s utilities in terms of their influence in the state — by size, money and their skill. They have this tremendous ability to spread money around.”

Some of FPL’s clout comes with its enormous size. The Juno Beach-based electric utility provides power in South Florida and to half the state. And its customer base has been expanding. In 2018, FPL’s parent company, NextEra Energy, acquired Gulf Power, which provides power to the northwestern part of the state. Now NextEra is one of the potential buyers of the Jacksonville Electric Authority.

With big money comes the ability to hire lobbyists who are well-connected to the Legislature, the governor and the Florida Public Service Commission, which regulates electric utilities.

Lawmakers are important to FPL because they choose the nominating council for new PSC members. The governor’s choices then must be confirmed by the Senate.

“The state Senate is not going to approve anybody who is critical of the utilities. They would be biting the hand that feeds them,” said Florida chapter head Jackalone, referring to campaign donations. “They’re going to reject anybody the governor appoints if FPL is unhappy.”

Except for one notable decision on conservation goals, Florida Public Service Commission’s decisions have mostly gone FPL’s way in 2019:

  • Tax windfall: Commissioners decided in favor of FPL in May, allowing the utility to keep $772 million in annual tax savings, instead of returning it to consumers. The decision went against the PSC’s own staff recommendation.
  • Hurricane costs: Commissioners agreed with FPL’s accounting that it spent $1.3 billion to recover from Hurricane Irma, and did not seek a further review of the costs.
  • Storm protection recovery: Commissioners paved the way for FPL and other utilities to provide less detail than the law specifies on costs to bury power lines underground, a 30-year project that FPL’s CEO has said would cost as much as $35 billion. The Office of Public Counsel, the state’s consumer watchdog, is challenging the proposed rules, saying they don’t protect consumers from being overcharged for the underground projects.

FPL and other utilities didn’t get their way this fall when they wanted to reduce energy conservation goals starting next year. Commissioners voted to retain the previous goals, rather than reduce them, which could have eliminated many consumer educational and rebate programs.

‘Tentacles are everywhere’

The Southern Alliance for Clean Energy, a Tennessee-based group that advocates for renewable energy, points to FPL’s attempt to install transmission lines near Turkey Point nuclear power plant as one example of how FPL exerts “oversized influence” in Tallahassee.

Sen. Jose Rodriguez, D-Miami, who has spoken against FPL in regulatory hearings and sought legislation to allow more rooftop solar, said FPL’s practice is to make donations to organizations that matter to a lawmaker. “The approach is indirect, but their tentacles are everywhere,” Rodriguez said.

Jackalone of the Sierra Club said FPL’s donations to environmental groups are one example. The utility has offered funding to the Sierra Club, which often opposes FPL on environmental issues, but the group has rejected it.RELATED: FPL seeks state approval to slash energy-efficiency goals »

Other environmental and business groups do accept FPL’s funding.

In 2018, FPL gave more than $926,000 in the 2018 election cycle to the Florida Chamber of Commerce’s political action committees. When asked about the donations, the Florida Chamber didn’t directly address its funding. But spokeswoman Edie Ousley said the chamber’s support of FPL and other “innovative” employers that create jobs and invest in infrastructure “is good for all Floridians.”

The chamber is a frequent ally with FPL on issues before regulators and lawmakers. In 2018, the chamber urged passage of a bill that would allow power companies to install transmission lines without consulting local zoning boards.

In the recent meeting with the Sun Sentinel’s Editorial Board, CEO Silagy used the transmission lines as an example of FPL not always getting its way. The plan was “shot down,” he observed.

But that’s not the whole story because FPL later went to the Legislature to change the rules.

Then-Gov. Rick Scott and his Cabinet had approved the transmission lines, which would have run through densely populated Miami-Dade County and across wetlands. A Florida appeals court ruled in 2017 that the decision failed to consider local development rules.

FPL’s lawyers tried to get the Florida Supreme Court to hear the case, but the court declined. So FPL turned to the Legislature to change the law. And it succeeded. In March 2018, then-Gov. Scott signed a bill that now enables power companies to decide where to install transmission lines for its grid.

Campaign donations

While Florida law prohibits utilities from contributing directly to candidates, FPL and other utilities give to political action committees that support specific candidates or certain political parties.

FPL made a total of $8 million in campaign contributions during the 2018 election cycle.

Debbie Larsson, spokeswoman for NextEra Energy, FPL’s parent company, said it’s important for the power company to be involved in the political process “since every aspect of our business is affected by policy decisions at every level of government.”EDITORIAL: Florida’s shady solar amendment »

Campaign donations particularly swelled in the 2014 and 2016 election cycles, when FPL joined with other utilities in the state to support constitutional Amendment 1, purported to advocate solar use. During those election cycles, FPL alone made $22.9 million in political donations, according to a report by Integrity Florida.

This time, throwing money at the issue didn’t work. The controversial amendment’s language was shown to be misleading in that it would have actually limited solar rooftop expansion, and it failed in the 2016 election.

“FPL’s model is to monopolize power. They do not like competition from homeowners and businesses producing power on their rooftops,” said Jackalone of the Sierra Club, one of the groups that worked to defeat the amendment.

In the following election cycle, 2017-2018, FPL’s contributions to political action committees totaled $7.9 million.

Critics say sizable campaign donations can play a part in swaying state policies on the environment, as well as driving up electric bills.

The 2019 approval of a new natural gas plant in Dania Beach is one example.

FPL applied in 2017 to replace its aging natural gas plant in Dania Beach with a more efficient one. The Sierra Club objected, arguing in regulatory filings that more fossil fuel-powered plants could worsen sea-level rise.

Susannah Randolph, senior campaign representative for the Sierra Club, said the vote ultimately came down to Gov. Scott and his cabinet, which made up the “siting” board that decides whether plants can be built.

“The governor, chief financial officer and agriculture commissioner at that time had received hundreds of thousands of dollars from FPL” through their political action committees, she said. “We knew the deck was stacked against us.”

The group got the decision delayed until after the election, but the plant ultimately was approved in March 2018.

The Dania Beach plant, with a price tag of $288 million, is expected to be operational in 2022, and FPL will be able to charge customers for the cost of the plant through its base rates.

FPL’s policy concerns today include a proposed constitutional amendment that would allow consumers to choose their electric service. While the amendment still has to obtain more than 200,000 additional signatures for a chance on the 2020 ballot, FPL already is building its war chest for the next major election.

As of mid-November, the electric utility had already contributed $1.5 million to political action committees and political parties for the 2020 election, according to Florida’s campaign finance database records.

Lobbying costs in Florida, Jan.-Sept 2019

1. U.S. Sugar Corp.: $680,000

2. AT&T: $610,000

3. FPL: $545,000

4. K.A.S. & Associates: $525,000

5. FCCI Insurance Group: $505,000

6. Title Clerk Consulting Group: $474,000

7. HCA Healthcare, $423,000

8. AshBritt Environmental: $420,000

9. Automated Healthcare Solutions, $405,000

10. Dosal Tobacco Corp.: $390,000

10. Florida Medical Association, $390,000

Source: Florida Lobbyist Registration and Compensation Reporting, Nov. 20, 2019

Original Story

Report Finds Florida Fails to Regulate Utility Monopolies

State’s Lack of Oversight Leaves Ratepayers Unprotected

“The Florida Public Service Commission, the State Legislature, the Attorney General and all those charged with the protection of consumers have failed to act to provide reasonable regulatory oversight and restrictions on the expansion of utility monopolies. This leaves consumers, rate payers, small businesses and local communities at risk while utilities leverage their monopoly status and use ratepayer funds to subsidize expansion into new unregulated industries.” – Florida’s Failure to Regulate

ST. PETERSBURG, Fla. – A state-wide small business alliance called the MEP Coalition for Fair Competition today released a report entitled “Florida’s Failure to Regulate” which found that the state has failed to provide reasonable regulatory oversight and restrictions on the expansion of utility monopolies. This leaves consumers, rate payers, small businesses and local communities at risk while utilities leverage their monopoly status and use ratepayer funds to subsidize expansion into new unregulated industries.

Over the past twenty years, many utilities across the U.S. have attempted to leverage their monopoly power, access to customer data and ratepayer funded infrastructure to subsidize easy entry into electrical, heating, air conditioning, plumbing and other industries. In response, many states have enacted laws to regulate so-called Utility Affiliate Transactions, preventing regulated utilities from using ratepayer funded resources to subsidize nonregulated subsidiaries. By contrast, Florida has yet to implement even the most basic regulatory protections.

The MEP Coalition stated that this is likely due to the massive political spending, lobbying and donations by the utilities. In fact, Integrity Florida reported that Florida’s four largest energy companies contributed more than $43 million to state level candidates, political parties and political committees in the 2014 and 2016 election cycles.

The coalition’s review of 13 states chosen randomly illustrates the type of restrictions used across the country to prohibit misuse of ratepayer funds and prevent subsidization. These regulations address the sharing of customer data, joint marketing, sharing of personnel and corporate infrastructure and much more in order to shield ratepayers, local businesses and entire industries from insurmountable and unfair competition.

“This report demonstrates that Florida has fallen behind other states when it comes to regulating these utility monopolies,” said Skip Farinhas, President of the South Florida Air Conditioning Contractors Association which is a member of the coalition. “We can’t allow aggressive lobbying and political spending to prevent our elected officials from doing the right thing to protect consumers, ratepayers and small businesses.”

Get the Report Here: “Florida’s Failure to Regulate”

About Us

We are heating and air conditioning, electrical and plumbing service professionals from locally owned and operated small businesses as well as neighbors and members of your community who are concerned about Florida Power & Light’s (FPL) predatory practices. Specifically, FPL is using public resources to enter the HVAC market as FPL Energy Services. This subsidization of a private entity by a public utility will put many small companies out of business. We are not opposed to competition – just unfair competition by a ratepayer-funded monopoly. Together, we will fight FPL’s use of their name and logo, public resources and economies of scale to give them a competitive advantage in this market. For more information, please visit us at www.mepcoalition.org.

State’s failure to regulate powerful utilities is ‘rallying cry for change’ | Opinion

By Jaime DiDomenico | May 27, 2019

As pointed out in the recent Sun Sentinel editorial, the Florida Legislature and the Public Service Commission have continually abdicated their responsibilities to provide regulatory oversight over the state’s utility monopolies and have failed to protect ratepayers.

The utilities’ political spending and lobbying has been conducted so skillfully and excessively in Florida that legislators and the PSC rarely dare to oppose their wishes.

The irony is that the funds these utilities use to exert their will over legislators and regulators, to protect market share, gain rate increases, thwart competition and increase profitability comes from ratepayers. We pay for the lobbyists who act in direct opposition to our interests.

Not content with control of a utility monopoly, Florida Power & Light is leading the way in utility expansions into new unregulated businesses. They have created a subsidiary of FPL that competes directly with electricians, plumbers, air conditioning contractors, and home security companies, and it is a subsidization model that will likely be copied by all of the other utilities state-wide if they are allowed to get away with it.

While most other states have dealt with the over-reach of “regulated” utilities expanding into non-regulated businesses, Florida has not. States have acted to protect utility ratepayer money and ratepayer assets and to prevent utilities from subsidizing new unrelated businesses.

These states took action in the face of utility political pressure to protect the use of customer data and prohibit the misappropriation of ratepayer funded assets.

Ratepayer funds should only be used to ensure the efficient operation of public utilities and to allow them to build and maintain their infrastructure. They shouldn’t be used to line the pockets of utilities and to lobby for their special interests.

Florida’s repeated and systemic failure to protect ratepayers is an embarrassment and should serve as a rallying cry for change. That’s why we formed the MEP Coalition for Fair Competition.

As small local business owners from across Florida, we have approached legislators asking them to support legislation that would enact the kind of restrictions and prohibitions used around the country to protect utility ratepayers. The reception is often warm, sympathetic and understanding but the reality is that most legislators are afraid to touch utility regulation and incur the wrath of FPL’s political power and army of lobbyists.

Recently, a state representative expressed her exasperation with her first legislative session, and specifically called out utility companies and their influence over the legislature. State Rep. Anna Eskamani, D-Orlando, cited as an example a bill backed by FPL that she said gives permission for rate hikes to pay for burying utility lines without requiring the upgrades actually be built.

“Ratepayers will be the ones who lose out in the end,” she said. “And I was one of I think three or four Democrats to vote against that bill. Everyone else voted it up. And the bill also had Democratic co-sponsors on it as well. And that just speaks to the power of these companies and their influence on party politics. They’re writing checks to both Democrats and Republicans.”

The only counter to the dark deals, lucrative lobbying and political power of the utilities is the voice of the people. Raising awareness, raising our voices and raising concern that elected officials who continue to represent the interests of monopoly utilities over those of citizens are in danger of losing their offices may well be the only way to force legislators and regulators to do their jobs.

Jaime DiDomenico is president of Sarasota, Fla-based Cool Today and a spokesman for the MEP Coalition. The coalition represents more than 20,000 statewide electrical, plumbing and air conditioning contractors. Also contributing to the op-ed: Coalition members Doug Lindstrom, Keith Martin, Skip Farinhas and Paul Stehle.

Join us!

The Legislature is to blame for those rising power bills | Editorial

Sun Sentinel Editorial Board
May 21, 2019

The seriously misnamed Public Service Commission gave the back of its hand to the public yet again this week when it let the Florida Power & Light Co. keep its windfalls from the December 2017 federal tax cut rather than share them with its customers.

That’s nearly $1 billion so far and growing by some $60 million every month. The pretext was that FP&L is using the money to recover what it spent on the damage from Hurricane Irma, which hit Florida three months before Congress enacted the massive tax cut. FP&L claims that Irma cost it $1.3 billion

The excuse is fatuous because the PSC has yet to decide what Florida’s largest utility will actually be allowed to claim for Irma repairs. So it may be piling up excess profits in the meantime. The PSC already permits FP&L to earn a generous 11.5 percent profit.

As it usually does, the PSC is allowing some of the Irma cost data to be kept from the public on the premise that it’s “confidential business information.”

The Office of Public Counsel and lawyers for other parties will get the unredacted data, for whatever good it will do.

If that sounds cynical, it’s meant to be. The PSC mostly serves the utility industries, rarely the public. In the current case, it rejected not only Public Counsel J. R. Kelly’s pleas on the behalf of FP&L’s ratepayers but also the recommendation of its own staff, which said FP&L should deduct its Irma costs from the tax windfall and share the rest with its customers. It’s unusual for the PSC staff to be brushed off like that.

The decision also overrode the objections of the Florida Retail Federation and the Florida Industrial Power Users Group, which in this instance were on the same side as residential customers.

The PSC’s true function as a subsidiary rather than a regulator of the utility industry has been an ongoing scandal for nearly all of the 41 years since the Legislature agreed with then-Gov. Reubin Askew to enlarge the agency from three members to five and have them appointed rather than elected.

Askew believed that appointees chosen for their integrity and expertise would regulate utility industries more responsibly than elected commissioners had. One notorious former commissioner, Jerry Carter, had described himself to a congressional committee as “a cheap politician — the only kind my constituents can afford.

But the Legislature slipped a poison pill into Askew’s reform. Although the governor appoints the PSC members, they are nominated by a council selected by the Senate President and House Speaker. Six of the twelve members must be legislators. Unsurprisingly, ex-legislators have often been nominated to the PSC though none currently sit there.

In effect, the PSC is an extension of the Legislature, and that’s what it was meant to be. No other Florida industry is regulated that way. Insurance and banking, the other big ones, answer to professional regulators appointed by the governor and Cabinet.

The worst of it is that the Legislature itself is effectively controlled by the utility industry through its campaign contributions and lobbying. Thus, so are the council and the PSC.

Recent history serves up a sobering warning to any PSC member who might think of bucking those traces. In 2010, the PSC turned down rate increases for FP&L and Progress Florida. Retribution came swiftly. The long arms of the utilities purged all four members who had put the public interest first. The council refused to renominate two whose terms were expiring and the Senate denied confirmation to two others who had been appointed recently by Gov. Charlie Crist.

One of the ousted commissioners was Nancy Argenziano, an iconoclastic former legislator and a not-so-conservative Republican, who said she had “never seen anything so corrupt as the PSC.” She said she had been in office only three months when “the threats came in from the Legislature to do as they say.”

Former Florida Comptroller Bob Milligan, a retired Marine general and one of the most widely respected officials in this state’s modern history, didn’t even make the cut for final consideration by the council two years ago.

Integrity Florida, a nonprofit watchdog agency, slammed the PSC as being “’captured’ by the industries it regulates – which often leads to decisions that are not in the best economic interest of Florida’s families and businesses” in a highly critical report issued in 2017.

“Since the utilities exercised their legislative muscle to remove the four PSC commissioners, the PSC rarely rejects a request by the utility industry,” Integrity Florida said. “In November 2016, the PSC unanimously approved a $400 million Florida Power & Light rate hike for 2017 as well as a $411 million increase over the next three years. The agreement was endorsed by the Office of the Public Counsel, but was opposed by consumer groups, including the Sierra Club and AARP. The ruling was a typical settlement agreement in which the utility backed off its original rate increase request of $1.3 billion in return for the four-year rate guarantee.”[More Opinion] Florida finds its own Steve King in Dennis Baxley | Editorial »

In a separate report, Integrity Florida said the four largest utilities contributed more than $43 million to Florida candidates and political committees in the 2014 and 2016 elections.

What the PSC can’t do for the utilities, the Legislature does directly. By votes of 37-2 in the Senate and 110 to 3 in the House the just-concluded session passed legislation allowing utilities to bill customers extra for the cost of burying power lines to protect them from storms. Such work should be treated as normal maintenance, a routine expense that’s figured into the rate base upon which the PSC decides what profits to allow. Treating it as a separate expense makes it less subject to PSC oversight.

The Integrity Florida report, which called for various reforms of the PSC and the nominating process, was ignored by the Legislature and by the Constitution Revision Commission. That wasn’t surprising, since the revision commission is also dominated by legislators.

You can’t vote for or against the PSC commissioners who raise your rates. But you can vote for or against your legislators. They’re the ones you should hold to account.

Editorials are the opinion of the Sun Sentinel Editorial Board and written by one of its members or a designee. The Editorial Board consists of Editorial Page Editor Rosemary O’Hara, Sergio Bustos, Steve Bousquet and Editor-in-Chief Julie Anderson.

Read the original editorial here

NBC2 investigates a claim that a utility company is deceiving you

Have you received one of these letters?

Have you received one of these letters offering ‘Water Service Line Coverage’ for your home?

A lot of people in Southwest Florida have been receiving them.

“Have you ever received a letter that looked like this?” NBC2 Investigator Rachel Polansky asked Ada Dennington, of Lee County.

“Absolutely,” said Dennington.

“Who did you think it came from?” asked Polansky.

“FP and L,” said Dennington.

“Why did you think that?” asked Polansky.

“Their logo is on the front, so I assumed immediately it’s from them,” said Dennington.

Residents started asking NBC2 if their electric utility, FPL, is now in the water business.

“I was just curious why FPL was getting involved with water pipe issues?” asked Jim Crumbid, of Lee County.

While the logos may look alike, these mailers are not from Florida Power and Light. They’re from FPL Energy Services.

“Consumers do not know that. It is not explicit. It is discreet,” said Jaime DiDomenico, president of air conditioning company, CoolToday.

DiDomenico claims it’s deceptive advertising.

“An average consumer won’t see anything but that FPL logo and that jagged symbol in there,” said DiDomenico.

Fort Myers contractor Jim Britton, said the same thing.

“It just doesn’t smell right,” said Jim Britton, president of air conditioning company, Southwest Florida Air Conditioning.

FPL Energy Services doesn’t only sell water service line coverage. The NBC2 Investigators found out it recently acquired a company called Jupiter-Tequesta, which offers air conditioning, plumbing, and electric services.

So, how can one company wear so many hats?

Jupiter-Tequesta is a subsidiary of FPL Energy Services -> FPL Energy Services is a subsidiary of FPL -> FPL is a subsidiary of NextEra Energy.

All four share the same main office, registered agent, and several of the same officers. Watch the video below for a break down. 

The NBC2 Investigators also got their hands on this email from an FPL Energy Services recruiter who uses an FPL email address, and says he works “on behalf of Florida Power & Light.”

“Is FPL Energy Services breaking the law?” Polansky asked construction attorney, Tray Batcher.

“In my opinion, they are committing an advertisement violation under Chapter 489, yes,” said Tray Batcher, partner at Cotney Construction Law.

Batcher represents some of the contractors who are upset over the branding.

“They’re [FPLES] listing scopes of work that are outside what they’re qualified to do. They have a general contractor qualifying, and they’re advertising AC services. That’s a big licensing violation, that’s an advertising violation,” said Batcher. “I believe that 489.127 and 489.105(6) make it clear that you need to be licensed in the corresponding work to advertise as being available to engage in contracting for that work,” Batcher said.

“489.105(3) defines a CGC as being subject to 489.113, which says that a CGC cannot do ‘electrical, mechanical, plumbing, roofing, sheet metal, swimming pool, and air-conditioning work’ unless it is also licensed to do this work. Therefore, in my opinion, a CGC cannot specifically advertise for work related to or specifically as an electrical, mechanical, plumbing, roofing, sheet metal, swimming pool, or air-conditioning contractor without a corresponding license.”

Debbie Larsson, a spokesperson for NextEra Energy, tells NBC2 in a statement:

“NextEra Energy and our subsidiary companies operate efficiently by utilizing available resources where it makes sense to keep costs low for our customers. This practice is commonplace in corporate America. FPLES is an unregulated subsidiary of FPL. That means that FPLES is a separate company from FPL and that its operations are not regulated by the Florida Public Service Commission the way that FPL’s operations are regulated.”

As far as the logos and branding goes, Larsson said, “They are two separate logos.”

The NBC2 Investigators also reached out to the Florida Public Service Commission, the state agency that is responsible for regulating utilities like FPL. Spokesperson, Cindy Muir, told NBC2 in a statement:

“PSC staff has cautioned the company against misrepresenting the communications of unregulated subsidiaries.”

Florida contractors have also started a petition, asking Attorney General Ashley Moody to investigate FPL. The petition has more than 1700 signatures.

The AG’s Office tells the NBC2 Investigators that it’s “in the process of reviewing the petition to determine if it raises any issues.”

Read the original story here.

Petition urges AG to investigate FPL

Recently a petition was launched to demand incoming Attorney General Ashley Moody investigate the business practices of NextEra Energy and Florida Power & Light (FPL).

We fully support this petition and urge you to sign as well. (https://www.change.org/p/attorney-general-ashley-moody-we-want-utility-monopoly-oversight)

As you know FPL is “is engaged in aggressive, predatory and unlawful practices that use ratepayer funds from their regulated utility to protect, grow and enhance their monopoly at the expense of Florida’s consumers and citizens. These practices, if allowed to continue, will be adopted by other Florida utilities and will expand across the state.”

Take a moment and sign this important petition, before it is too late.

https://www.change.org/p/attorney-general-ashley-moody-we-want-utility-monopoly-oversight

 

Gulf Coast Builders Exchange Endorses Coalition to Oppose FPL’s Predatory Expansion

Joins More than a Dozen Organizations Fighting Company’s Unfair Business Practices

LAKEWOOD RANCH, Fla. – The Gulf Coast Builders Exchange (GCBX), which represents a broad cross section of the building industry in Manatee, Sarasota and Charlotte Counties, today announced that they have endorsed the MEP Coalition for Fair Competition. The coalition recently organized to oppose Florida Power & Light’s (FPL) entrance into the home services market including air conditioning, heating, plumbing and electrical services.

The GCBX joins more than a dozen organizations representing hundreds of companies that have endorsed the campaign. Those organizations consist of the Florida Refrigeration and Air Conditioning Contractors Association and all of its eight regional associations, the Sarasota County Plumbing, Heating and Cooling Contractors and two national associations including the Virginia-based Air Conditioning Contractors of America and the Minnesota-based Nexstar Network.

FPL entered the home services market using a subsidiary called FPL Energy Services. Jupiter-Tequesta Air Conditioning, Plumbing & Heating is now promoting themselves as an FPL Energy Services Company. In addition, their website features a photo of a Jupiter-Tequesta co-branded truck and FPL Energy Services Home Solutions branded truck. The company claims to now serve 30,000 customers from Lucie to Broward County.

“It’s clearly unfair to have a ratepayer funded monopoly using its public assets for private gain,” said Mary Dougherty, Executive Director of the Gulf Coast Builders Exchange. “If they are allowed to continue these practices unchecked, it will have a devastating impact on small businesses. It will also set an awful precedent for their continued expansion into the home services industry.”

About the Gulf Coast Builders Exchange

The Gulf Coast Builders Exchange (GCBX), represents a broad cross section of the building industry, including contractors, subcontractors, suppliers and others from affiliated industries. GCBX’s advocacy efforts on behalf of the building industry are conducted in Manatee, Sarasota and Charlotte Counties. Wholly owned by the membership, the Builders Exchange is a not-for-profit corporation operating as a trade organization under the guidance of a volunteer board of directors as representatives of the industry.

Florida Utility Pursues Market Share in HVAC Services

Contractors claim the utility is tilting the playing field

EXTENDING A HELPING HAND: An FPL Energy Services truck proceeds to its next destination, stocked with a ladder from Jupiter-Tequesta A/C, Plumbing & Electric, a subsidiary of the utility that is also a local HVAC contracting company, reportedly serving 30,000 customers. PHOTO COURTESY OF THE MEP COALITION

Most businesses keep an eye out for ways to diversify their offerings and their revenue streams, but should a public utility?

Thanks to a move by Florida Power & Light into residential service for HVAC, the question is no longer hypothetical in that state, and a group of contractors called the MEP Coalition have joined forces to deliver a firm answer: No.

“Everything owned by the utility, which was derived through a state-sanctioned monopoly, should not be permitted to be used when competing against those of us without such benefits,” said Jaime DiDomenico — he is one of two spokesmen for the MEP Coalition; president of Cool Today in Sarasota, Florida; and director and chairman of Nexstar.

The Florida Refrigeration and Air Conditioning Contractors Association (FRACCA) agrees. Not only has FRACCA joined the MEP Coalition, but it filed a complaint last spring with Florida’s Public Service Commission. FRACCA claimed that FPL should not be able to use an entity named FPL Energy Services to support Jupiter-Tequesta A/C, Plumbing & Electric in a way FRACCA characterizes as unfair. On its website, Jupiter-Tequesta states that it is now “an unregulated subsidiary of FPL Energy Services Inc. and Florida Power & Light.” The contractor serves St. Lucie, Martin, Palm Beach, and Broward counties, listing a 30,000-household customer base.

Before exploring MEP Coalition’s concerns about this relationship further, it should be noted that FPL did not respond to The NEWS’ request to answer several questions regarding the coalition’s allegations for this article.

OTHER PEOPLE’S MONEY

A large entity using its size and resource muscle to carve out business at the expense of smaller companies may elicit a David-versus-Goliath reaction from many.

Some may perceive it as unfair. However, plenty of actions are unfair without being illegal. It is worth taking a moment to explore one question: Would subsidization of Jupiter-Tequesta or other HVAC contractors actually break any law or rule?

Tray Batcher is unusually positioned to weigh in on this question. Batcher worked as an estimator for a structural contracting company before earning his law degree and joining Cotney Construction Law in Tampa, Florida, where he began in 2012 and now serves as a partner.

Batcher summed it up this way: “The underlying legal principle is that ratepayers cannot be called upon to subsidize non-utility related costs.”

In one particular line of argument, he pointed to Citizens of the State v. Graham, a 2016 case that went to the Florida Supreme Court.

Batcher recalled that in that case, FPL was found to be “acting as an investor, rather than a purchaser, in the natural gas market” in an Oklahoma energy development opportunity. Ultimately, he said, “the Court considered a long-term hedge in a volatile market a capital investment, and not a hedge to stabilize fuel costs.”

That kind of investment, it ruled, was an expenditure that created an inappropriate financial vulnerability for the utility’s ratepayers. Batcher acknowledged that the Jupiter-Tequesta situation is not quite the same, but he maintained that the legal relevance stands up.

“If FPL gambles on and subsidizes multiple MEP service companies, who ultimately bears the risk of loss? This, of course, is the ratepayer,” said Batcher. “As shown in Citizens of the State v. Graham, it does not matter if the subsidization may actually result in a benefit to ratepayers — the subsidization is still improper and illegal to begin with.”

Batcher went on to speculate on potential consequences.

“If left unchecked, FPL’s illegal subsidization of MEP service companies will result in artificially inflated behemoths, capable of vertical manipulation of the supply chain and manipulation of pricing to consumers within the service market,” he said. “This is why we are asking the attorney general to initiate an investigation into FPL’s unlawful and predatory scheme to use regulated utility ratepayer assets to subsidize expansion into new unregulated industries.”

(One other piece of pertinent regulatory history: A 2010 audit by the Public Services Commission did flag FPL for forwarding customer calls on to subsidiaries such as FPL Energy Services, who then pursued business opportunities with those consumers on the call and also offered them other products by companies who paid FPL for the placement opportunity.)

INTEL AND ENTICEMENTS

Getting back to current conduct, DiDomenico listed “the buildings, the billing systems, the trucks, the support, and yes, the iconic FPL logo” as assets that FPL should not be able to use to establish a market presence at the expense of other companies. But beyond potential misuse of traditional infrastructure, DiDomenico and the coalition have worked to paint a picture of interference designed to push out smaller contractors.

“They place advertisements for Jupiter-Tequesta in invoices mailed to utility customers,” he said.

Specifically, he cited a promo offering a $25 60-point air conditioner tuneup — $54 off the regular price.

FPL even offers to schedule Jupiter-Tequesta to perform a free inspection for the consumer at any residence when transferring power services, DiDomenico added.

These are things that local contractors can’t do, he argued, much like contractors often cannot offer to break a customer bill for a system service agreement into monthly billing (much less fold it into the customer’s existing electric bill).

This advantage extends to other areas, such as insurance and marketing, according to the MEP Coalition. Its website contains a photograph of a letter that appears to be FPL Energy Services’ documentation of self-insurance as submitted to the Port St. Lucie city government. The average HVAC contractor has to pay for liability coverage and does not have pockets deep enough to self-insure, while FPL Energy Services’ letter seems to attest that it can spare a subsidiary like Jupiter-Tequesta the expense.

DEEP POCKETS: The average contractor has to pay for liability coverage and does not have the reserves to self-insure, while FPL Energy Services’ letter seems to attest that it can spare a subsidiary like Jupiter-Tequesta the expense.

The MEP Coalition has collected multiple marketing pieces that have been sent to existing FPL customers in its effort to demonstrate that a subsidized contractor would enjoy yet another considerable advantage over its independent

competition: an extensive customer database.

Finally, there is one audio recording posted among the online documentation for what the MEP Coalition sees as “the case against FPL.”

In what appears to be a recorded voicemail, a man the coalition describes as a paid recruiter calls to pitch what he says is “a great opportunity in the Sarasota area for HVAC technicians that would like to work with FPL.” Not with Jupiter-Tequesta, for instance, or for FPL Energy Services, but with the actual primary utility itself.

 

STATE TO STATE

In addition to FRACCA, Nexstar, and at least three other local and regional contractors’ associations joining the MEP Coalition, the situation has attracted some interest and support from the north.

ACCA’s Todd Washam, director, industry relations, said that this sort of thing is nothing new for contractors around the country.

He stated that while his organization focuses on national issues and at least primarily leaves state-level issues to state organizations, ACCA stands ready to help with its grassroots action alert system, should it be appropriate.

ACCA Interim President and CEO Barton James recalled similar previous situations, including one in New Jersey and “a long battle in Michigan,” while the MEP Coalition cited an almost identical move by Baltimore Gas & Electric, using an entity called BGE Home. In that case, Baltimore Gas & Electric eventually drove close to one-third of locally owned HVAC contractors out of business, according to the coalition.

James recognizes that just as the utility agendas vary, so does the level of organized contractor political infrastructure from state to state. He is clear that ACCA will mobilize their resources to raise awareness when the time is right, and he hopes that will also attract more contractor members into the organization at the end of the day.

“ACCA has a history of stepping in and righting what the utilities were doing,” James said, “but we want to do that in conjunction with people in the state. We want people to join for the voice but stay for the value.”

STANDING THEIR GROUND

The MEP Coalition takes pains to emphasize that it is not against a healthy free market but that it will aggressively defend its right to what it considers a level playing field.

“We are not opposed to competition — just unfair competition by a ratepayer-funded monopoly,” said DiDomenico. “Together, we will fight FPL’s use of their name and logo, public resources, and economies of scale to give them a competitive advantage in this market.”

Whether Florida’s Public Service Commission or its attorney general, Pam Bondi, will interpret some portion of the current dynamic between FPL and Jupiter-Tequesta as a step too far — and whether FPL will have to make a case that this initiative represents no improper encroachment — remains to be seen.

Publication date: 11/26/2018

https://www.achrnews.com/articles/140152-florida-utility-pursues-market-share-in-hvac-services

Sarasota PHCC Endorses Campaign Against FPL’s Business Practices

Becomes twelfth organization to join a coalition of companies.

SARASOTA, FL. – The Sarasota County Plumbing, Heating & Cooling Contractors today endorsed the MEP Coalition for Fair Competition. The coalition recently organized to oppose Florida Power & Light’s (FPL) entrance into the home services market including air conditioning, heating, plumbing and electrical services.

It becomes the twelfth organization representing hundreds of companies to endorse the campaign. Those organizations consist of the Florida Refrigeration and Air Conditioning Contractors Association (FRACCA) and all of its eight regional associations and two national associations including the Virginia-based Air Conditioning Contractors of America and the Minnesota-based Nexstar Network.

FPL entered the home services market using a subsidiary called FPL Energy Services. Jupiter-Tequesta Air Conditioning, Plumbing & Heating is now promoting themselves as an FPL Energy Services Company. In addition, their website features a photo of a Jupiter-Tequesta co-branded truck and FPL Energy Services Home Solutions branded truck. The company claims to now serve 30,000 customers from Lucie to Broward County.

“Our association is committed to doing everything we can to protect our members and ensure a level playing field,” said Ken Jackson, President of the Sarasota County PHCC and a former President of the Florida Association of PHCC. “Hundreds of companies and thousands of people have already joined this fight and our elected officials need to take notice. We can’t allow these predatory practices to continue.”

The Sarasota County PHCC is a regional trade association dedicated to enhancing the health and safety of society and the environment while serving the interests of its members through advocacy, education and training. For more information, visit www.mepcoalition.org.

https://www.contractormag.com/plumbing-contractor/sarasota-phcc-endorses-campaign-against-fpls-business-practices