Florida power companies accused of being too connected

Lobbyists lavish tens of millions annually on benefactors in Legislature

Herald/Times Tallahassee BureauMarch 31, 2014 

The shuttered Crystal River nuclear power plant in Florida.

TALLAHASSEE -- To understand the influence of Florida's largest electric companies in Tallahassee, look no further than your monthly bill.

You won't see a line item for the "nuclear cost recovery fee" that Florida Power & Light and Duke Energy collect each month for future construction of new nuclear power plants. That's because legislators last year voted down an amendment that would have required them to disclose the fee to customers, something they knew the two companies didn't want to do.

Lawmakers allowed utilities to collect the fee in 2006, and when the companies tamped down their plans to build new facilities and used the money for other needs, such as upgrading existing nuclear plants, legislators kept the fee in place despite complaints from consumer advocates.

The legislative journey of the nuclear cost recovery fee is but one example of how Florida's power companies control the legislative agenda in Tallahassee, according to a new report by Integrity Florida, a nonprofit Tallahassee-based research and watchdog group. They say millions of dollars in campaign contributions and an army of lobbyists help keep corporate interests ahead of the public interest, and are calling on lawmakers to make the power companies more transparent and more accountable.

"Our state's monopoly power corporations have demonstrated how politically influential investments can be profitable," said Dan Krassner, president of Integrity Florida and one of the authors of the report, "Power Play: Political Influence of Florida's Top Energy Corporations." "The volume of spending on campaigns and lobbying give this industry an outsized influence.

The report was paid for with a grant from the Southern Alliance for Clean Energy, an advocacy group that wants Florida to adopt more electricity options. An advanced copy of the report, to be released Monday, was made available to the Miami Herald and Tampa Bay Times.

The utilities vigorously reject the allegations, calling SACE an "anti-utility orga

nization."

"All they do is fight utilities," said Mark Bubriski, FPL spokesman. "It's not a report by Integrity Florida, it's a report by SACE. Integrity Florida was bought out by SACE."

By contrast, he said, utilities such as FPL "are actually working in the best interest of customers."

The company, which serves 4.5 million electric customers, used the nuclear cost recovery fees to improve its nuclear program, saving customers "tens of billions of dollars."

Bubriski said the company is not opposed to transparency, but few customers are demanding the breakdown of the nuclear fee on their bills.

"So many customers are on automatic pay they don't care about a line item on their bill," he said. "They want to hear about utility poles in their neighborhood or other things."

Florida law gives electric companies a monopoly in return for a guaranteed rate of return on investment and regulation.

The Integrity Florida report compiled years of data on campaign finance and lobbying from public records, along with media reports, to make its case. It found between 2004 and 2012, the companies infused more than $18 million into legislative and state political campaigns and spent more than $12 million over the past five years hiring lobbyists. The report also detailed a pattern of favoritism toward utilities by regulators at the Public Service Commission and the Legislature.

The report contends the investments of power companies have paid legislative dividends.

For example, Progress Energy, now known as Duke Energy, charged its customers more than $1.5 billion for the now-canceled Levy County nuclear power plant and even though it will never be built the law allows Duke Energy to keep the money, including $150 million in profit.

The cost to the company, the report found: an estimated $300,000 to hire 15 lobbyists in 2006 to push for the bill, and more than $3.6 million in campaign contributions for lawmakers to keep the charges intact.

"You don't have interest groups that are able to go toe-to-toe with utilities companies so what happens is, they basically get their way," said state Sen. John Legg, R-New Port Richey, who tried and failed to push through a repeal of the nuclear fee last year.

The report also suggested a "revolving door" is commonly used "to lure former government regulators and officials into more lucrative lobbying and consulting jobs" for the industry.

It cites news reports that found 18 former state officials with current ties to FPL. Some worked for FPL, while others joined lobbying firms that represented the company. In addition, five former PSC commissioners, including the current executive director, have worked or are working for FPL.

The report found Florida's four largest utility companies hired one lobbyist for every two state legislators.

FPL spent the most on lobbying -- $4.7 million -- and typically employs up to 33 lobbyists in any given year, the report found. TECO spent $4.2 million and employs up to 31 lobbyists per year. Progress Energy/Duke Energy spent about $2 million since 2007 and employed 16 to 20 lobbyists a year. Gulf Power spent $1.7 million and hired 11 to 15 lobbyists every year.

One persistent opponent of the power companies has been the Southern Alliance for Clean Energy, which has a lobbyist in Florida. The company commissioned the report because, unlike other states in the Southeast where the organization does business, Florida has seen "a breakdown in any proper oversight of the utilities and any real consumer protection," said Stephen Smith, SACE executive director.

"When you have so much money being strategically targeted at key representatives and key senators and all the collateral ability of the corporations to spend, wine and dine, what ends up happening is the public interest gets drowned out," he said. "It's pay-for-play politics that is not in the best interests of consumers."

He believes the public interest safety net supposedly shielded by the PSC, which is appointed by the governor from a list of applications compiled by a legislative-controlled nominating council, has also been "shredded by the utilities."

The current Public Service Commission has never rejected a request by utilities to collect the nuclear fee and has approved every rate increase request sought by the four companies during their term.

That track record won praise from the Senate Communications, Energy and Public Utilities Committee two week ago, when it unanimously supported the reappointment of two PSC commissioners, Art Graham and Ronald Brise.

State Sen. Joseph Abruzzo, a Democrat from West Palm Beach who serves on the legislative-controlled nominating council, told Graham: "I cannot commend you enough for really getting a grasp on the board, working together and making Florida a better place for all our utilities and most of all our consumers."

"We have a love fest," said state Sen. Anitere Flores, R-Miami, committee chairwoman.

By contrast, Susan Glickman of SACE commended the commissioners for their hard work, but told the committee they discouraged energy conservation when they "threw out the conservation goals" for FPL and Duke Energy.

Smith, of SACE, believes the pro-utility approach of legislators and regulators is suppressing competitive progress in Florida, the nation's third-largest energy consumer.

"Florida is falling further and further behind other states in this clean energy boom that is sweeping the country," he said. "That boom has the potential to give customers some choice and some relief and FPL and Duke are scared of that."

Said FPL's Bubriski: "If your assumption is we're screwing consumers, it's a fundamentally wrong assumption. (Our customers) are paying less than they did five years ago and less than the national average. We think that's a big deal."

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