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.

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.

Contractors form alliance to oppose what they say is Florida Power and Light’s “predatory” expansion

A state-wide small business alliance called the MEP Coalition for Fair Competition has been launched launched to oppose what it says are Florida Power & Light’s (FPL)predatory practices.

Specifically, the coalition asserts in a news release that the company is using its public resources for private gain in the home services market including air conditioning, heating, plumbing and electrical services.

Video: MEP Coalition’s YouTube message

MEP is an acronym for mechanical, electrical and plumbing contractors. Coalition organizers include the South Florida Air Conditioning Contractors Association (SFACA), the Southwest Florida Air Conditioning Contractors Association (SWACCA), the Manasota Air Conditioning Contractors Association (MACCA) and the Florida Refrigeration and Air Conditioning Contractors Association (FRACCA).

The group says that FPL is leveraging assets from their regulated ratepayer funded utility monopoly to expand into new for-profit businesses.

The news release asserts that FPL entered the air conditioning, electrical & plumbing services and contracting business using a subsidiary called FPL Energy ServicesJupiter- Tequesta Air Conditioning, Plumbing & Heating is now promoting itself 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.

The coalition says it has asked Florida Attorney General Pam Bondi to investigate the FPL’s business practices in, it asserts, misappropriating regulated public assets to enter private for-profit markets.

“FPL is using utility ratepayer funds and assets to buy their way into HVAC, electrical, plumbing and other industries and their goal is to put small local companies out of business and control these markets,” said Jaime DiDomenico, president of Cool Today, an HVAC, plumbing and electrical company based in Sarasota, and a member of the MEP coalition. “We hope the Attorney General will intervene to protect local businesses, jobs and consumers.”

FRACCA originally filed a complaint with the state’s Public Service Commission (PSC) on April 18 to prevent FPL from subsidizing Jupiter-Tequesta A/C through FPL Energy Services.

The MEP Coalition’s letter to the the Florida PSC

NextEra Energy, FPL, FPL Energy Services and Jupiter-Tequesta A/C all share officers and directors. In addition, FPL has admitted to collecting pricing data and customer information from independent contractors participating in rebate programs, the coalition asserts.

Saying the reason was because of the PSC’s inaction, FRACCA and the MEP Coalition for Fair Competition sent another letter on Sept. 13 seeking clarification of FPL’s positions and providing supplemental information to the PSC for consideration, the news release says.

Tray Batcher, a Partner with Cotney Construction Law which represents FRACCA, said in a statement: “FPL is illegally subsidizing a for-profit affiliate using regulated ratepayer funds.

“It is outrageous, unfair and extraordinarily damaging to local small businesses and FPL ratepayers.”

The coalition contends that FPL will continue its expansion into home services “improperly using extensive customer data, infrastructure and market power to decimate local businesses and dominate their markets.”

The contractors group says  FPL is unfairly using ratepayer funded resources from their regulated utility to force their way into new revenue streams and higher profits. “They argue that the company’s goal is to leverage the its market power, aggressively recruit their employees, use predatory pricing to steal their customers and put them out of business,” the news release says.

As evidence of this unfair competition, the coalition points to a precedent that recently occurred when Baltimore Gas & Electric’s (BGE) entered the HVAC market as BGE Home. In that case, about 30 percent of locally owned and operated heating, air conditioning, plumbing and electrical service companies were forced out of business due to BGE’s unfair business practices.

SFACA president Doug Lindstrom said in a statement: “The Public Service Commission and legislature need to intervene to protect local family owned businesses from unfair predatory practices. These small businesses and the jobs they provide are the backbone of our communities.”

“They will not stop with HVAC,” said Keith Martin, co-owner of Badger Bob’s Services, a Sarasota-based HVAC company. “If they are allowed to get away with it, they will continue their expansion into electrical, plumbing and additional industries.”

FPL has not yet responded to a request for comment from Florida Construction News.

Contractors form alliance to oppose what they say is Florida Power and Light’s “predatory” expansion

 

Small Business Owners Ask Attorney General to Investigate FPL’s Business Practices Argue Company is Using Public Assets to Enter Private For-Profit Markets


TAMPA, Fla., Sept. 13, 2018 /PRNewswire/ — The Florida Refrigeration and Air Conditioning Contractors Association (FRACCA) and a statewide coalition of mechanical, electrical and plumbing contractors, the MEP Coalition for Fair Competition, today asked Attorney General Pam Bondi to investigate the business practices of Florida Power & Light (FPL). Specifically, the groups claim that FPL is misappropriating regulated public assets to enter private for-profit markets.

“FPL is using utility ratepayer funds and assets to buy their way into HVAC, electrical, plumbing and other industries and their goal is to put small local companies out of business and control these markets,” said Jaime DiDomenico, the President of Cool Today, an HVAC, plumbing and electrical company based in Sarasota, and a member of the MEP Coalition for Fair Competition. “We hope the Attorney General will intervene to protect local businesses, jobs and consumers.”

FRACCA originally filed a complaint with the state’s Public Service Commission (PSC) on April 18, 2018 to prevent FPL from subsidizing Jupiter-Tequesta A/C through FPL Energy Services. Currently, Jupiter-Tequesta A/C is marketing itself as an FPL Energy Services company and is utilizing FPL’s name and logo in all of its advertisements. FPL is also subsidizing Jupiter-Tequesta A/C in other ways such as recruiting employees, transferring incoming calls directly to the for-profit subsidiary, marketing their services in utility customer invoices and sharing a myriad of infrastructure and other ratepayer funded resources.

NextEra Energy, FPL, FPL Energy Services and Jupiter-Tequesta A/C all share officers and directors. In addition, FPL has admitted to collecting pricing data and customer information from independent contractors participating in rebate programs.

Due to the PSC’s inaction, FRACCA and the MEP Coalition for Fair Competition sent another letter today seeking clarification of FPL’s positions and providing supplemental information to the PSC for consideration. They are also asking the Attorney General’s Antitrust Division to intervene and to initiate an investigation.

Added Tray Batcher, a Partner with Cotney Construction Law which represents FRACCA, “We believe FPL is subsidizing a for-profit affiliate using regulated ratepayer funds.  It is outrageous, unfair and extraordinarily damaging to local small businesses and FPL ratepayers.”

Link to Letter: http://www.mepcoalition.org/wp-content/uploads/2018/09/PSC-Letter-91218.pdf

Private contractors organize coalition to oppose FPL’s new services

By John Hielscher 

A group of air conditioning contractors is protesting Florida Power & Light’s expansion into the home services business.

The new alliance, MEP Coalition for Fair Competition, includes business owners from Southwest Florida who accuse FPL of “predatory practices” by leveraging assets from its state-regulated power business to move into unregulated services like air conditioning.

The coalition wants the state Public Service Commission, which regulates FPL electric rates, and the Legislature to intervene and protect their interests.

“They will not stop with HVAC,” Keith Martin, co-owner of Badger Bob’s Services in Sarasota, said in announcing the coalition. “If they are allowed to get away with it, they will continue their expansion into electrical, plumbing and additional industries.”

Officials from FPL did not respond Wednesday to a request for comment.

The utility, Florida’s largest that serves 10 million people across half the state, operates FPL Energy Services, an unregulated subsidiary that offers energy-related products and services like surge protection, water heater and plumbing protection and backup generators.

The coalition contends that as the nation’s third-largest electric company, FPL can improperly access customer data, infrastructure and market power to dominate smaller businesses in air conditioning and other services.

“We are not afraid to compete, but we should not have to compete against a ratepayer-funded monopoly,” said Jaime DiDomenico, president of Cool Today in Sarasota. “We want a level and fair playing field.”

Organizers of the coalition — MEP is an acronym for mechanical, electrical and plumbing — include the Manasota Air Conditioning Contractors Association, whose members are from Sarasota, Manatee and Charlotte counties. Others are the South Florida Air Conditioning Contractors Association, the Southwest Florida Air Conditioning Contractors Association and the Florida Refrigeration and Air Conditioning Contractors Association.

Read the original article here.