'Flip the switch' on Fort Pierce utility service? Let's think this through first| Opinion
Fort Pierce residents, I feel your pain.
We're in the dog days of summer, and your electricity bills are running high.
Some local residents think the solution is to get rid of the city-owned Fort Pierce Utilities Authority and have Florida Power & Light Co., a publicly traded company, provide electricity service instead.
According to an excellent story by TCPalm reporter Olivia McKelvey published a few days ago, more than 1,200 people have signed a petition to "flip the switch" and sell FPUA to FPL.
If you'll pardon the pun, let me shed some light on what I've learned by living in a lot of different communities across the country, some with municipally owned utilities and some with investor-owned utilities:
Anyone expecting a change in utility providers to translate into a substantial long-term drop in electricity bills is in for — please pardon the pun again — a big shock.
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Fort Pierce Mayor Linda Hudson was absolutely correct when she told Olivia "the grass is always greener until you get there."
As noted in Olivia's story, FPUA electric rates are currently higher than FPL's. The Florida Municipal Electric Association, a trade group representing 33 municipally owned utility systems, says an FPUA residential customer using 1,000 kilowatt hours pays $134.84 a month, while an FPL customer would pay $117.57.
FPUA Director Javier Cisneros attributed the higher bills to increases in natural gas costs, which have doubled since late May.
Well, FPL is dealing with higher natural gas costs, too. However, as an investor-owned utility, FPL has to clear any changes to the rates it charges through the state's Public Service Commission.
FPL is apparently poised to increase its rates, pending PSC approval.
So while FPL's rates are slightly lower now, that might not be the case by the time a sale of FPUA could be arranged.
Also, if the city sells FPUA, it would give up control of its own destiny related to utility services, as well as a not-insignificant chunk of money.
Under the current system, 6% of FPUA profits, or about $6 million annually, go into the city's general fund, which provides municipal services like police, parks, and road repair.
Some residents consider that amount of money to be a "hidden" tax they must pay. But here's a question: Where do they think that money would go if it wasn't being directed into the city's coffers?
I'll tell you where. It would go to FPL's shareholders, many of whom are not city residents and therefore care little about whether potholes on neighborhood streets get filled.
City officials would then have to make up the lost revenue from somewhere, which would most likely involve either service cutbacks or a not-so-hidden tax increase.
Before I moved back to Florida, I lived in Colorado for several years. I worked in Pueblo and later Boulder, two towns that couldn't be much farther apart on the socio-economic spectrum.
In both of those cities, one of the hottest topics while I was there was "municipalization." Both were served by investor-owned utility companies, which some residents saw as evil, money-grubbing entities that didn't have the best interests of local residents at heart.
In Pueblo, an economically challenged city, municipalization proponents thought those "hidden taxes" would help boost local government operating revenues. Why send all that ratepayer money to South Dakota-based Black Hills Energy, some argued, when a city-run utility would keep it flowing through the community?
In Boulder, an obscenely wealthy community, the goals were different. Environmentally conscious residents there believed a city-run utility would increase use of renewable energy faster than Minnesota-based Xcel Energy was willing to do.
Ultimately, both cities decided to stay with the investor-owned companies.
In Pueblo, I believe it was because residents lacked confidence in city government's ability to start and run a new department more efficiently. In Boulder, I'm pretty sure residents realized Xcel Energy was making a good faith effort to switch to renewable sources, and state law dictated the company had to meet certain benchmarks toward that goal.
I also lived in Memphis, Tennessee, for more than a decade. When I first moved there, the city-owned utility service was extremely popular and the mayor caught a lot of flak for hinting he might be open to selling the utility.
That issue hasn't gone away, though. More than two decades later, residents are still debating whether to jettison Memphis Light, Gas & Water in favor of the investor-owned Tennessee Valley Authority.
My point in mentioning all of these cases is simple. No matter where you live, you probably feel like your utility bills are higher than they should be.
Also, no matter where you live, replacing the existing provider with an outside entity seems like the obvious solution. It's rarely that clear cut.
If Fort Pierce residents are interested in long-term decreases to their bills, they should start pressuring FPUA to transition away from natural gas to renewable sources like solar and wind power, which are less prone to price shocks than fossil fuels are.
I know that's cold comfort to anyone who's struggling to pay their utility bills this summer. But making a change for the sake of change isn't going to help.
Flip the switch? It's more like passing the buck.