Electricity deregulation amendment pulled from Florida’s ballot

Register now

The Florida Supreme Court has rejected a proposed constitutional amendment that would have deregulated the state’s electricity market.

In a unanimous opinion penned by Chief Justice Charles T. Canady, the court said the ballot summary of the amendment was “affirmatively misleading” in violation of state statutes.

“This initiative should not be included in the ballot,” the Jan. 9 decision concluded.

The sponsor of the proposed amendment, Alachua, Florida-based Citizens for Energy Choices, didn’t respond to a request for comment.

The proponents had gathered 658,385 voter signatures supporting the measure in its quest to place the constitutional amendment on the November ballot. A total of 766,200 signatures were necessary to accomplish that goal, according to the Division of Elections.

The court’s ruling was requested by the state Attorney General Ashley Moody, who had argued that the ballot title and summary didn’t fairly inform voters of the chief purpose of the amendment, which was “to eliminate investor-owned utilities from the electricity-generation market.”

That wasn’t what justices found troubling, after dissecting the language of the ballot summary and the wording of the longer and more detailed amendment that would have been placed in the state constitution.

“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,” Canady wrote. “At no point does the initiative grant a freestanding constitutional right to sell electricity.”

The amendment would have granted people the right to purchase electricity from a provider of one’s choice, the right to purchase electricity in competitive wholesale and retail markets, and the right to generate electricity oneself or in combination with others, the court found.

A diverse group of entities opposed the amendment for various reasons, including its potential impact on municipal bonds issued to finance joint generating facilities.

The initiative would have directly affected investor-owned utilities by requiring them to divest their generating assets, but public wholesale power agencies owned by municipal electric utilities and municipalities owning electric utilities also stood to be impacted negatively, according to an industry spokesman.

“We’re joint owners with investor-owned utilities in assets, and if IOUs have to divest their assets that affects us,” said the spokesman, who asked not to be identified.

The Orlando Utilities Commission, the Florida Municipal Electric Association Inc., and the Florida Municipal Power Agency said in a joint filing in the Supreme Court case said that deregulation would impermissibly breach the statutorily protected contract with bondholders.

FMPA and OUC are joint owners in the St. Lucie Unit No. 2 nuclear plant, a majority of which is owned and operated by Florida Power & Light, an investor-owned utility.

FMPA issued court-validated bonds to finance a portion of its ownership, the filing said, and divestiture of the IOU-owned asset would impair the contract with bondholders.

“Not only does the initiative run afoul of the general constitutional prohibition on the impairment of contracts in [state law] but it is in direct conflict with the state’s contractual pledge,” a pledge in which the state agrees not to take any action to dissolve a public agency as long as bonds are outstanding.

The Supreme Court didn’t address the contract issue or other problems cited by opponents of the deregulation initiative.

For reprint and licensing requests for this article, click here.
Energy industry Revenue bonds Election 2020 Utilities Florida