If you’ve been baffled by your utilities bill — and wondered who makes the rules for Florida power companies — you’re not alone.
Millions of Florida residents find utilities issues hard to follow. Regulated by a far-away, low-profile state agency, largely the domain of expensive utilities lawyers and powerful corporations, electric utilities regulations often isn’t familiar ground for consumers.
That’s one big reason why AARP Florida has been a leading voice fighting for consumers on utilities across the state and nation. In some cases, AARP Florida is the only voice representing residential ratepayers.
Last year alone, AARP played an important role in the Legislature’s decision to defeat a plan that would have allowed electric-power companies to explore for natural gas in risky drilling projects in other states – and charge consumers up to $22.5 billion over 30 years for the gamble, whether it succeeded or failed.
On Monday, Jan. 22, AARP Florida held a Facebook Live event to discuss how AARP fights for consumers on utilities issues. Associate State Director Zayne Smith explained how AARP Florida works on utilities issues.
Smith notes that AARP Florida’s advocacy for ratepayers can involve formally joining a ratemaking case before the state’s utility regulatory panel, the Florida Public Service Commission. AARP Florida also can fight for residential ratepayers by equipping ordinary Floridians to weigh in on utilities issues to influence Public Service commissioners as well as lawmakers.
The Public Service Commission has five members, all appointed by the governor. It regulates not only electric utility companies but also gas, water and wastewater companies. The state Public Service Commission does not regulate rural electric cooperatives, of which there are 18 in the state, or the 34 municipally owned utilities, which are owned by cities or counties and regulated directly by elected officials in those communities.
The power companies generate electrical power using these fuels: First, natural gas, then coal, nuclear, renewable energy like solar and wind power, and others.
AARP Florida focuses primarily on investor-owned electrical power companies. There are five such companies in Florida, serving about 7.4 million residential households.
The companies are:
o Florida Power & Light, which covers the Atlantic coast, all of south east and west FL
o Duke Energy, which covers north Tampa, Orlando, Ocala and Gainesville.
o Tampa Electric Co., which services Tampa
o Gulf Power which covers nine counties in the panhandle
o Florida Public Utilities Company, which covers three counties in North Florida.
Utility companies are granted licenses to operate in specific areas of the state. In other words, they are a state sanctioned monopoly. If you live in their service territory, you must purchase your power from their company. Regulated companies also are allowed to make a rate of return of 10 to 11 percent on the equity they have invested in their company, at a time when ordinary consumers are lucky to earn 2 percent on their certificates of deposit.
Most Floridians are probably familiar with the bill they receive monthly from their utility company. Here’s what you are paying for:
o There are two designations on your monthly power bill, fuel use and non-fuel use charges.
o Fuel use refers to the actual amount of electricity you are using by turning on lights, running appliances, A/C, etc.
o Non-fuel use represents the various fees and charges an electric utility company charges. Each company can and does charge for different amounts. These fees include things such as environmental cleanup, storm hardening, fixed customer charge, etc.
Utilities companies also are required to maintain an effective power grid. In September 2017, Florida was hit hard by Hurricane Irma, which at one point knocked out power to customers in 62 of the state’s 67 counties and caused billions of dollars in damage in the electrical grid.
The widespread power outages have sparked debate in the Florida Legislature, where numerous proposals are under consideration.
One issue is what priority should be assigned to nursing homes, assisted living facilities and some other elder-care facilities.
Currently, utility companies use a tiered approach to power restoration are required to prioritize hospitals but nursing homes and assisted living facilities aren’t given the same priority.
Legislators are proposing requirements that nursing homes and assisted living facilities get the same high priority for power restoration as hospitals.
AARP supports making the restoration of power to these facilities a top priority.
The Public Service Commission also can allow utility companies to levy storm hardening fees on businesses and consumers.
“Storm hardening” is a term used to describe the work that goes into making electrical transmission lines and the power grid able to withstand major natural disasters like hurricanes.
Storm hardening is ongoing activities required by all utilities, including burying powerlines, replacing wooden power poles with concrete power poles and maintaining power rights of way by trimming trees and other vegetation.
Every three years, investor-owned utilities must file storm-hardening plans with the PSC, including the financial aspect.
Before the very active hurricane seasons of 2016 and 2017, Florida had gone 10 years without a direct hit on the state by a major hurricane. During that time, investor-owned utility companies collected hundreds of millions of dollars in storm hardening fees.
After the major impact of Irma and the widespread outages for extended periods, some in Tallahassee are questioning if enough is being done with all the money collected. AARP Florida is asking how utility companies have been held accountable, Smith said.
If you would like to stay informed about AARP Florida’s work on utilities issues, go here to become an AARP E-activist. As issues important to older Floridians come up in the Legislature, Congress and the Public Service Commission, AARP Florida reaches out to E-activists to update them on key developments and equip them to raise their voices.
At this time, the Public Service Commission has not yet posted dockets for considering changes in storm hardening fees. When the commission opens dockets to public comment, AARP Florida will post information on this blog about how to submit your comment.