Electricity Markets

Fla. Supreme Court keeps competitive energy initiative off ballot

The Florida Supreme Court on Jan. 9 blocked inclusion of a ballot measure that would have opened the state’s electric power market to competition.

“The ballot summary tells voters that the proposed amendment grants a personal right to ‘sell electricity,’ when in fact the amendment does no such thing,” the court ruled.

For an initiative to make it on the ballot in Florida, the Supreme Court must sign off on two issues: whether the initiative fulfills the state’s single subject requirement and whether or not the summary of the initiative – limited by law to 75 words – is misleading.

The proposed constitutional amendment would have granted several rights, including the right to choose an electricity provider, the right to purchase electricity in competitive wholesale and retail markets, and the right to generate electricity oneself or in combination with others.

In its analysis, the court found that “at no point does the Initiative grant a freestanding constitutional right to sell electricity.” The initiative provides that “nothing in this section shall be construed to limit the right of electricity consumers to buy, sell, trade, or dispose of electricity.”

“The question is not whether a person has the right to sell electricity if the Initiative is adopted,” the court ruled, but whether, “as the ballot summary claims, the Initiative grants that right. It does not, and the ballot summary is therefore affirmatively misleading.”

Proponents of the initiative argued that the ballot summary is accurate because the initiative necessarily implies a right to sell electricity, but the court rejected that argument.

The ballot measure, which sought to transform Florida’s electric power sector along the lines of Texas’ competitive power market, was opposed by the state’s investor-owned utilities, the Florida Chamber of Commerce, Associated Industries of Florida, and the Florida Municipal Electric Association and Florida’s electric cooperatives.

“Florida’s electric customers already enjoy affordable rates that are well below both the national average, as well as those in states with deregulated markets,” said Amy Zubaly, Executive Director of the Florida Municipal Electric Association.

The ballot measure, “Right to Competitive Energy Market for Customers of Investor-owned Utilities; Allowing Energy Choice,” would have allowed electricity customers to purchase competitively priced electricity; limited the activity of investor-owned utilities to the construction, operation, and repair of electrical transmission and distribution systems; promoted competition in the generation and retail sale of electricity; protected against deceptive or unfair practices; prohibited the granting of monopolies or exclusive franchises for the generation and sale of electricity, and established an independent market monitor to ensure the competitiveness of the wholesale and retail electric markets.

The ballot measure would have exempted electric cooperatives and municipally owned utilities from competition, except that they would have been able to participate in the competitive wholesale electric market and choose to participate in the competitive retail electricity market.

“While the proposal contained an “opt in” clause for public power utilities, FMEA and its members were opposed to the initiative,” Zubaly said. “Currently, public power utilities rely on power generation and transmission agreements with Florida’s investor-owned utilities. However, these IOUs would have been prohibited from owning power plants and transmission assets, leaving our current agreements in question and creating chaos in the wholesale electric market that we rely on.”

“In addition, confusion over ownership and responsibilities for transmission and distribution lines, wires and poles could reduce service and lengthen power restoration times,” said Zubaly. “This is especially concerning for a state like Florida that is vulnerable to widespread power outages caused by hurricanes, like we’ve seen in recent years.”

“Floridians need and deserve affordable, reliable electricity. Fortunately, the robust electric system currently in place does just that,” Zubaly continued. “FMEA applauds the Florida Supreme Court for keeping the faulty and misleading initiative language off the ballot.”

Citizens for Energy Choices had proposed the ballot measure, which would have directed the state’s legislature to complete enabling legislation by June 1, 2023. The group, whose supporters include Infinite Energy, NRG Energy, and Vistra Energy, faced a Feb. 1 deadline to submit 766,200 signatures to be able to include the measure on the ballot in November. The group collected about 642,300 signatures.

“While, we were confident in our plan to gather the remaining signatures required, we cannot overcome this last obstacle for the 2020 ballot,” Alex Patton, chairman of Citizens for Energy Choices, said in a statement.

“As to what is next, it is too soon to speculate. We will review the data, seek legal advice, and regroup after a detailed post-mortem,” Patton said.