Energy Exploration
By Jeremy Morrison
Temperatures around Pensacola have been dipping lately while Florida Power & Light (FP&L) bills have climbed higher. That’s pretty normal for winter, but what seems a little off is the amount of the increase.
“We’re not using any more power, but we’re getting charged double!” one local utility customer yelled at Pam Rauch, FP&L vice president of external affairs and economic development, as she spoke to the Pensacola City Council last month.
Rauch assured the vocal public gallery full of customers that her employer recognized their “difficult situation” and would do everything it could “to mitigate that kind of pain.” Rauch said, “We understand that high bills are no fun.”
The spike in electricity bills had people come to Pensacola City Hall to express their discontent and encourage the council to explore the possibility of establishing a municipal utility at its Jan. 26 workshop.
Councilwoman Jennifer Brahier wasn’t too impressed with FP&L’s invitation to continue undistracted in long-running franchise agreement negotiations. At the time, she dismissed it as “disingenuous.” Upon reflecting a couple of days later, she described Rauch’s presentation as “a long commercial” and “not really factual,” a sort of soft-focus yet strong-arm approach to convince the city to remain with the known—“They’ve been good stewards in the past … they’re our friends … we should stick with them because they’re big and powerful.”
“I know that sounds really rude of me to say it that way,” Brahier reflected, “but that’s honestly how I feel.”
When Brahier mentioned last November conducting a feasibility study to assess whether the city should take over electricity production, rising utility rates weren’t part of the discussion. Back then, it was trees and taking power lines underground.
The proposal existed along the fringes of municipal business—amusing, but academic, almost theoretical and boutique. But with utility rates increasing as FP&L completes its takeover of Gulf Power, exploring a municipal utility option has gained steam.
“How Disturbed They Are”
Brahier began to consider how the local power company served the city when she saw how FP&L was cutting the tree canopy surrounding its infrastructure and its lack of progress on relocating miles of power lines underground to better the area’s chances of weathering storms without suffering outages.
“This was all before the rates kind of created this room,” the councilwoman noted with a nod to the FP&L customers filling council chambers for the workshop.
Rauch tried to explain at the council workshop that the reason for the higher utility bills was a combination of rising fuel costs and a recent rate structure plan approved by the Florida Public Service Commission.
“We have just received state approval for a rate settlement agreement, which is a four-year agreement that, while there is an increase right now, it is designed to bring bills down every single year for our customers in Northwest Florida,” Rauch said, explaining that customers should see their bills fall below what they were last used to with Gulf Power by 2025. “We can’t do it overnight.”
Four years of rising utility bills before the pressure eases? Brahier understands her constituents’ frustration.
“For them to tell us, ‘In four or five years, we’ll be back down’—Be back down to what? What we were before? That doesn’t even make sense to the residents here,” she said. “You can imagine how disturbed they are.”
The Rub
While the prospect of conducting a feasibility study for a municipal utility has piqued the interest of those dissatisfied with FP&L’s service, the utility does have local supporters.
State Rep. Alex Andrade has implored city officials to stick with FP&L, as has Todd Thompson, the Greater Pensacola Chamber of Commerce CEO. Proponents lean into the power company’s established credentials and track record.
Pensacola State College President Ed Meadows reminded the council how challenging it can be for an experienced utility company to restore power following outages due to disasters such as hurricanes and cautioned against getting into such a game—“I’m not against the feasibility study, but I am against the city being a utility company.”
The council also heard from FP&L critics whose concerns were based on environmental, or even ethical, considerations. Christian Wagley of Healthy Gulf pointed to the lengths the company goes to influence state lawmakers—“If you just go online and look, it’s just unbelievable”—and what he sees as anti-environment efforts, such as a bill currently being pushed by the company that critics contend will slow the installation of solar power arrays on Florida’s rooftops.
“FP&L absolutely does not want you to have solar on your home or business,” Wagley said a few days after the workshop.
The environmentalist is hopeful that this furor surrounding higher power bills “gets channeled into the proper place,” such as raising awareness about the monopoly’s political influence, and that while customers may be struggling to keep the lights on, FP&L’s CEO Eric Silagy pulls in north of $8 million—“That really rubs people the wrong way.”
To Pursue Both Paths
Pensacola Mayor Grover Robinson seems to be skeptical of any talk about looking beyond FP&L. He has expressed a reluctance to entertain the feasibility study, contending that the city has enough challenges on its plate.
After the workshop, he said, “Although the decision about the feasibility study ultimately rests with the city council, I believe that losing focus to build an enterprise entity from nothing will adversely impact our efforts to address those current problems.”
However, he understands the concerns about rising rates.
“I am incredibly sympathetic to citizens dealing with the challenges of rising energy prices,” Robinson said. “However, in a market dominated by material and labor shortages, I am not convinced the city can provide electricity any cheaper.”
While city council has not yet decided if it will move forward with a feasibility study on establishing a municipal utility, members did receive a good bit of information on the topic during its recent workshop.
Tom Cloud, an attorney with the Gray Robinson law firm who has extensive experience with franchise litigation cases, works as city attorney for multiple jurisdictions in the state and was voted the state’s top attorney by the Florida Municipal Attorneys Association last year.
Cloud outlined the landscape and pointed council toward other municipalities in the state who had asked similar questions as Pensacola is now asking. He encouraged council members to arm themselves with all the information they could get, even if it means ponying up around $25,000 for a feasibility study.
“The question is, can you really know any of this without doing a study? The answer is, no, you can’t,” Cloud said.
If nothing else, the study could prove useful in continuing franchise negotiations with FP&L.
“One thing I can tell you,” Cloud told city council, “ignorance is not a sound position to negotiate such an important issue.”
The attorney stressed that the city should pursue the feasibility study but also stick with franchise negotiations—“To not go on both paths, you might miss an opportunity.”
“I think Tom was real good at pointing out that knowledge is power,” Councilwoman Brahier said, “and that doesn’t mean we’re not going to do another franchise agreement with them. But we absolutely need to do a franchise agreement that’s reasonable.”
