Scott's Jobs Push Could Jolt Electric Customers

By: John Kennedy, The News Service of Florida
By: John Kennedy, The News Service of Florida

Tallahassee, FL - With Gov.-elect Rick Scott promising to save businesses a stunning $3.2 billion on their electric bills, consumer groups are bracing for a fight, fearing his plan will push higher costs onto residential customers.

Scott’s advisers are already floating the idea of an “economic development rate,” for corporations that agree to relocate to Florida or expand businesses within the state. The level of utility cost savings would be tied to job creation, under the plan.

But Florida’s four big investor-owned utilities would not have to absorb the rate reduction – or ask investors to pick up the tab, said those familiar with the proposal. Instead, rate reductions given these companies would be offset by higher charges imposed on a utility’s overall rate base – with residential customers shouldering most of the costs.

“What’s good for businesses is going to be too bad for consumers,” said Bill Newton, executive director of the Florida Consumer Action Network. “The only thing we can hope for is that a rate increase can backfire on legislators, and they may not want to get involved in it.”

With Scott still almost two weeks from taking office, communications director Brian Burgess wouldn’t comment on the rate plan. But utility industry officials briefed on the plan by members of Scott’s economic development transition team say the proposal is designed to help him reach a central goal of his campaign: creating 700,000 jobs over the next seven years.

It also would help Scott meet a campaign pledge to “address Florida’s relatively expensive electricity costs so businesses could save approximately $3.25 billion,” part of the Republican candidate’s regulatory reform platform.

Tampa Electric Co., (TECO) and Florida Power & Light, two of the state’s largest publicy-held utilities, were among the top contributors to Florida political campaigns this fall, with each giving more than $1.2 million, according to the National Institute on Money in State Politics.

While offering an economic development rate could help Scott meet his business cost-cutting goal – some steps also are likely to emerge to help existing Florida companies that can’t offer the lure of job creation.

“We’ve got to come up with some ways to incentivize businesses,” said Rep. Clay Ford, R-Gulf Breeze, chairman of the House Energy and Utilities Subcommittee. “But we also know that we’ve got to be able to afford them.”

Mark Wilson, president of the Florida Chamber of Commerce, said he is familiar with the concept behind the economic development rate, but had not been briefed by Scott’s team. Wilson, though, said the idea of asking residential customers to pay more, while reducing costs for businesses, was defensible.

“If we find out that residential customers pay lower rates and businesses pay more – that’s not fair,” Wilson said. “But if they pay a little more and that contributes to their community and brings jobs that generate revenue….then it could benefit everyone.”

Such an approach seems to be at the heart of the recommendations released Wednesday night by Scott’s transition advisers. State utilities, particularly Florida Power & Light, emerged as some of the biggest winners in the economic development push.

Scott advisers said FPL and other utilities should be free from regulatory limits to significantly generate more power from renewable energy. FPL’s Sam Forrest, vice-president of energy marketing and trading, helped craft the recommendations, which borrow heavily from the company’s own push to expand its use of solar and other alternative energy sources.

The transition team cited an industry report that claims 700 megawatts of additional renewable power could yield $8.1 billion in economic activity and 40,000 new jobs. Homeowners, though, will likely be asked to pay more for this increase.

Advisers said a survey conducted in association with Florida TaxWatch, the business-backed advocacy organization, found “more than 70 percent of Floridians believe that paying a dollar or more on their monthly utility bill is reasonable for renewable energy generation.”

“It could really attract industry,” Mark Bubriski, an FPL spokesman, said of the expanded renewable effort. “You could bring costs down for the solar industry and for companies. And it would eventually lower costs for homeowners, too.”

The economic development rate being shopped around could pit residential customers against businesses. But with Scott, businesses appear likely to get an edge because they carry the added political muscle of creating jobs.

“There’s a lot of money, potentially, on the table if this goes statewide,” said Barry Moline, executive director of the Florida Municipal Electric Association. “Sure, residential customers may pay a little bit more money. But in the end, they also might have the benefit of more jobs.”


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  • by Ron Location: Largo on Dec 30, 2010 at 06:04 AM
    It interesting how FPL continues to push for greater use of renewable energy, but only if it is part of their generation capacity. Florida needs 'Distributed Generation' which is solar energy at the source of use on our homes and buildings not more multi-megawatt utility controlled installations. A simple solar hot water tank on a home can help 'reduce' electric bills by 30% every month. Why isn't this front page news? Other states have set standards to require greater use of renewable energy. Why not Florida??
  • by Anonymous on Dec 26, 2010 at 05:38 AM
    Call the legislator from your district, register your complaint, he/she is the one chosen to represent the interest of the people. Scott cannot force his wishes on the people unless the legislature agrees, that is, unless he decides to do it by executive order which is the route our President is taking/will take if he doesn't get his way. call
  • by VOTER Location: usa on Dec 24, 2010 at 11:21 AM
    ok if you dont like him vote him out when election comes around. dont vote him back in office. THERE IS ONLY ONE WAY TO CLEAN UP OUR LOUSY GOVERNMENT. THAT IS EVERYBODY IN THIS COUNTRY HAS TO GET REGISTERED AND VOTE. THINK BEFORE YOU VOTE. I HAVE SEEN IT ALL MY LIFE THE SAME CROOKS OVER AND OVER GO BACK INTO OFFICE. THINK ABOUT WHAT I SAID ABOUT 100 PERCENT OF THE PEOPLE VOTEING. POOR RICH EVERYONE CAN MAKE A CHANGE. THEY HAVE PEOPLE RIGHT WHERE THEY WANT THEM. DEPRESSED BROAK FEELING LIKE THEIR VOTE DONT MATTER. BUT IT MATTERS ALOT.
  • by Disgusted Location: North Florida on Dec 24, 2010 at 07:46 AM
    Enraged? Yes. Surprised? No. Jail To The Thief!
  • by marilyn Location: jennings on Dec 24, 2010 at 07:42 AM
    Oh dear the residents of our state are in for big problems. I can not afford for my electric to go up and more than it has. We live on a fixed income !!!! Now what are the elderly going to do choose between medicine, food and now electric ?? I always thought that our country was for the people by the people NOT big businesses. It is not going to create jobs, all it is going to do is line the pockets more of business. Just like he wants to stop unemployment after 12 weeks. Mr Scott there are no jobs especially around this area. Plus there is no public transportation either.
  • by larry Location: 32962 on Dec 24, 2010 at 07:33 AM
    Here we go again with big business (FPL) backing Scott to the tune of 1.2 mil--for political favor(aka bribe) FPL wants to control the solar business by getting the customer to pay for THEIR mega solar plant so we pay for it and then we buy the free energy from the sun from them. Why cant the 'sunshine state??' give customers/homeowners rebates to help them buy their on solar installation like NY, NJ, Ca., Cl ,etc.the solar $ could be parlayed and grown with a rebate and 30% federal tax credit so the homeowner could benefit from their own affordable solar system and not pay for a system for FPL that the utility would benefit from, not the homeowner.
  • by Pete Zahut on Dec 24, 2010 at 05:39 AM
    Get used to it folks - Scott will NEVER do anything for the middle class or poor. He's a BUSINESSMAN, and believes he is entitled by his god (the almighty $) to do anything he wants to make money for himself and his already rich buddies. Kiss clean water in Florida GOODBYE; forget about state parks; get used to no firemen or police. He'll "create" jobs for the private sector to build and maintain roads, but no funding to oversee construction and certainly no funding for enforcing regulations - but then why bother enforcing regulations when they'll all be abolished anyway? He'll "create" jobs by establishing a private police force (think "Blackwater"). But then, perhaps he can make a positive difference - maybe he can cut waste in state government - there surely is enough of it, mostly related to "administrators" and sweetheart deals to private entities. Ball's in your court, Rick - let's see what ya got! And this time you can't take the 5th ...
  • by Kiki Location: Tallahassee on Dec 23, 2010 at 06:02 PM
    So what else is new? Republicans always want to squeeze the poor and middle class to line their friend's pockets. We shouldn't expect anything less from this crook.
  • by anon Location: here on Dec 23, 2010 at 06:00 PM
    One business fact that these people are not telling the public is that there is already an existing deduction every company can and does take which includes their power bill - it`s called deductible operating expenses. Guess what? homeowners and renters do not get to have that deduction. I hope the Legislators do consider that in the public`s view this will be like the local county tax increases we have all gotten stuck with too! This idea of Mr. Scott and his crew is like that of the Sheriff of Nottingham - take from the poor (or middleclass) to benefit those who are richer. As far as an increase to pay for the utilities installation of solar photovoltaics, all of us metered customers will pay for that anyway with "rate increases". I may be willing to pay an additional $1.00 per month but no more and with the condition of no rate increases for 10 years. Why do we need new businesses to come here, why not just open our own with people already living here?
  • by Anonymous on Dec 23, 2010 at 03:39 PM
    Hey Scott - this turnip is dry. Go get blood outta some of your middle east dudes -- like the ones who were gonna pay for "Desert Storm" or sumthin. The "middle class" have no more money. Got it?
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