What can we expect from our utility company? – 37th Annual PURC Conference

Who is your utility company?  Do you know if they are a public or private company?  Publicly owned utilities include cooperative and municipal utilities and are owned by the customers they serve. Only a small percentage of Floridians are a part of a utility that is publicly owned.  However the rest of us are serviced by private utilities, also called investor owned utilities (IOU’s).  These private companies are owned by investors and can be found on the Stock Exchange.

The question is, “What does that mean to you?” 

Well, if all you expect out of your utility company is consistency of service and a bill for that service each month, then the definitions might not matter.  But if you expect for your utility to recognize you as an important part of their business plan, then the definitions will make a difference.

Can we expect more out of our utility? 

I recently attended the 37th Annual Public Utility Research Center (PURC) conference in Gainesville, Florida where I asked the question, “Where does the will of the people fit into the business decisions that are made by the utilities?”  I went on to say that the public is increasingly asking for more out of their utility company.  No longer is the customer apt to sit by and think that they have no say in the future of their utilities other than expectation of service.  Social and environmental responsibilities are being placed on the list of what is important to the customer.  I explained that climate change and jobs are now just as important to the public as continued service and low utility bills.  The reaction that I received from one of the participants was a little disconcerting. I was chastised for asking the utilities to consider “jobs” as a part of their  business model.  The gentleman went on to advise the utilities to recognize that if “jobs” where a part of their consideration when making choices for the future, then he implied they weren’t doing their job.

The truth is, I didn’t have any expectations of the utilities considering the employment of Floridians when it comes to developing new projects within the state.  I realize that their main obligation is to service their customers in the most efficient way possible.   In addition, for the private utilities: to make a profit for their investors. My intention was to point out that if the focus on renewable energy became a key factor in the development of their business model, than the public would be more apt to support future energy projects due to the side benefits of job and industry creation along with creating alternatives to battle climate change and the issues of our national security.  

The Public Service Commission (PSC) just recently made a decision on the rate hike that was proposed by Florida Power & Light (FPL).  While it did grant FPL a rate hike of their base rate, it was not a near to what FPL had asked for.  The reason that they gave was, although they felt that FPL should be able to increase the base rate, tough economic times should be bared by all.

“The state’s largest utility has said it needs to increase rates so it can afford to pay for upgrades of its infrastructure and “to address the deterioration in earnings that will take place during 2010” based on its projections of a down economy. “

 “As one reaches farther into the future, predictions and projections of future economic conditions become less certain and more subject to the vagaries of changing variables.” – South Florida Business Journal

Just like their customers, tightening their belt and finding other ways to cut their costs should be considered by the utility before asking the customer take on further financial responsibilities. This decision came after the PSC voted down a rate hike proposed by Progress Energy (IOU) and after an strong outcry of public dissent.

“FPL President Armando Olivera said the Juno Beach-based utility, Florida’s largest, will immediately cease modernization efforts at its Riviera Beach and Cape Canaveral plants and halt work on a new nuclear plant that would have put 20,000 workers on the job this year.” – Palm Beach Post

Does the argument of FPL’s President Olivera ring true with the public?  If it did, why did the public not rally around the rate hike with the understanding that FPL was ready to put 20,000 workers on the job when our state is at an all time high for unemployment? Could it be that the public is tired of feeling like a pawn when it comes to the needs of their utility company?

FPL has been a leader in this state when it comes to renewable energy.  Nationally, FPL will be the second largest solar state in the nation with DeSoto County’s solar field and the completion of two additional plants in Martin County and Cape Canaveral. On FPL’s website, they boast, “In addition to the environmental benefits to the community, DeSoto County will receive more than $2 million in additional property tax through the end of 2010. Also, 400 jobs were created during the construction of the plant.” – FPL .  If the criticism of my questions at the PURC conference is true, using the public’s desire of renewable energy and job creation as a marketing tool to show their corporate responsibility leaves one to question how sincere they are.  

In the case of renewable energy, even more noteworthy is Gainesville’s municipal utility – Gainesville Regional Utility (GRU), who has not only embraced renewable energy, but has also developed a Feed-in Tariff (FIT) program where their customers can participate in the generation of energy for a profit.  Their customers are continually shouting the praises of their publicly owned utility and feel very much a part of the future when it comes to the importance of energy. Support in GRU’s future is glowing.

Throughout the summer of 2009, the PSC held public hearings to find out where the public stood on FPL’s request for a rate hike. Would it have made a difference to the PSC if the public found the reasons for the rate hike something they could get behind?  How much influence do we really have when it comes to our electric company?  If the gentleman at the PURC conference was right and the utilities should only be worried about the bottom line, then we are just pawns being played in a game.  But if he is wrong, they we are heading in the right direction.  The more the public demands the corporations to become more responsible to the will of the people, the more we can find solutions to our problems.  Because I believe that regardless of the fact that we don’t have a choice when it comes to who we get our electric from, we do have the power to influence how they run their company.