How to Better Succeed as an Energy Broker after the Pandemic
Like many industries, energy brokers are working with a new reality when it comes to business during the time of coronavirus. COVID-19 has diverted many people’s attention away from the task at hand and has instead focused them on their own lives, health, and imperatives. Today’s economy is a new place for many people who just months ago believed in a totally different economic reality. While this has placed a burden on thousands of businesses and individuals, this creates an opportunity for energy brokers to innovate insofar as how they present themselves to potential clients and make sure to re-emphasize the value they offer. After the pandemic, following these tips will help ensure that you and your business stand out from the pack when the energy market is on the road to recovery.
Customer service is paramount. No matter the economic timing, good customer service is never out of style. In fact, during a recovery, the business that makes life easiest for their customers will more likely than not see their customers’ loyalty to the broker who ensures the best deal with the smallest wait time on prices. Knowing and anticipating your customer’s needs not only helps you stand out from the pack but it helps you keep up a steady cadence of contact so your customer knows you as the go-to energy broker and refers their friends and business colleagues to you.
Be Transparent About Savings and What Your Business Does. So many wonder what an energy broker is and how you can save them money. You should be transparent about how you can save consumers money and what your business does to ensure they get the best price and treatment possible when it comes to making their energy decisions. While you are an expert at the energy broker business, you should be prepared to ensue you have the answers for the questions they will ask. No matter the consumer, keeping their interests top of mind will help ensure that you’re seen as a reliable and trustworthy partner.
Be Sensitive to Business’ Immediate and Long-Term Needs. Following the pandemic, individuals and businesses will be in various states of needed and receptivity to energy broker services. While the first impulse would be a hard sell of saving money immediately, only some may be receptive to that as they may be unwilling to change from a provider who they may have an outstanding debt with during the pandemic or who they felt was there for them during a time of economic and health uncertainty. Although everyone is a potential client, there is a time and place to pitch them. Ensure that your pitch and information is calibrated to their economic situation and state of mind. Sometimes, just opening the door to working together in the future is a win.
Ensure That You’re Apprised of All Industry, Regulatory, and Legal Developments. Above all, clients will be looking to you as the expert on how exactly using your services can benefit not only their bottom line when it comes to energy bills but how they can leverage your services to benefit them in other parts of their business such as through government or other tax rebates or incentives. Being the master of each piece of information in your world and how it can benefit your clients in a multitude of ways will distinguish your services from the rest.
No one can predict when or how the pandemic will end but energy brokers and be prepared for the next steps both clients and the economy overall take so when we’re back on the road to recovery, you can be at the front of the pack.
COVID-19 and Its Impact on Energy
It’s no surprise to anyone that COVID-19, also known as coronavirus, has roiled the energy markets and the economy worldwide. With general economic activity and consumption going down, there have been many who pessimistically view the energy market as another victim of this global downturn and urge consumers, business leaders, and others to hoard cash and not take any steps until there is absolutely 100% certainty about the future. While this advice may hold true for some markets, it certainly does not hold true for energy markets. Below, you’ll see why now is an ideal time to help secure cost savings in the face of declining revenue for some and new opportunities for others.
What is COVID-19 and how has it impacted the global economy?
COVID-19 is a viral disease which is transmitted through person to person contact which causes severe symptoms in those it impacts, in particular the elderly and those with underlying health conditions. Most anyone can be impacted and be a carrier, even if there are only mild symptoms, a person who carries the disease may have a disproportionate impact on the health of others. Given the amount of commerce that is conducted in person from meetings to individuals patronizing restaurants, gyms, spas, and other establishments to the drop in travel, COVID-19 has hit almost every sector of the economy. This has had the ripple effect of causing layoffs, making businesses and consumers slash their spending, and resulting in a general downturn of economic activity no matter the kind of business to the point that governments around the world have had to bailout or provide certain monetary support to individual businesses or sectors of the economy.
What does COVID-19 and the economic downturn mean for the energy sector in particular?
During this time of economic uncertainty, demand has dropped for a wide variety of services. For better or worse, this includes the price of energy that both businesses and consumers will pay. Energy prices are now at their lowest level in more than 15 years due to the lack of demand from those who use energy on a daily and reliable basis. Additionally, the increase in production from key energy suppliers overseas has led to a large surplus related to normal demand and an even larger surplus of oil related to the current global demand. As energy is produced from a variety of sources, including oil, when there is a glut of supply in the market then overall energy prices go down.
What does this mean for those who are watching energy prices?
For those who are watching energy prices and the energy market, the low prices continue to be a boon for consumers who may be suffering operational losses elsewhere or may need to save money. Locking in a lower rate today is the first step to helping those who need to cut costs identify a center of cost savings. With the uncertain economic climate, any place that can help lower total expenditures should be under serious consideration.
The Carbon Pricing Plan
Climate change and global warming have gone from a niche political issue 20 or more years ago to front and center topics, which impact a wide variety of industries and much of our public discourse. From the Green New Deal to other plans to combat the spread of climate change and other ecological impacts, a wide variety of solutions have been proposed to help reduce the economic impact of any plan that might constrain industry in addition to promoting Earth’s long-term well-being. For many, one of the more business or market-friendly solutions is a carbon pricing plan. Below, we’ll explore what it is, how it works, and what it means for industry going forward in uncertain economic times.
What is Carbon Pricing?
Carbon pricing is when carbon emissions themselves are calculated and a cost is associated with the emission. For example, carbon emissions are created when coal, natural gas, and oil are used to create energy. These energy sources, known as fossil fuels, create the carbon emissions which are primarily responsible, if not heavily contribute, to climate change. Proponents of carbon pricing argue that climate change, including rising sea levels and temperatures, is mainly caused by industries and activities which disproportionately produce these outputs, and, therefore these effects.
By working to assign a price to these carbon outputs, businesses will become more conscious of creating these outputs and will, in turn, find a way to create less of them. This burden shifting from those who have to deal with the impact of climate change and find a solution, namely government and taxpayers, to those who create the carbon outputs, energy producers and other industries, is just one goal of carbon pricing. The other goal is to help ensure that more climate-friendly technology will be introduced and used in the fight against climate change by businesses as they look to reduce their overall carbon usage.
How Do Carbon Pricing Plans Work?
The principal method for executing a carbon evaluating plan is through a plan which has accepted its reasonable part of information inclusion and is ordinarily known as cap-and-trade. This system would force a cap on how much carbon outflows that could be utilized in a year and utilize a market-based system so makers, energy makers, or others could acquire more. For instance, assuming that 100 carbon units are split between qualifying organizations in entire or to a limited extent, a few organizations can pay others or go to an open market to offer on carbon units which assist with guaranteeing they make their energy or creation standard. This boosts numerous organizations to 1) put resources into more effective methods for creating their item or energy and 2) put resources into all the more harmless to the ecosystem ways for these activities to occur. This likewise helps reward energy-productive organizations by permitting them to offer their portion of the carbon unit to recover the expense of introducing and putting resources into harmless to the ecosystem innovation and in the end benefitting from such a choice in the short or long haul.
The second method for executing a carbon evaluating plan is through a carbon tax. A significantly more direct method for executing a carbon valuing plan, the carbon tax would punish the individuals who use carbon more by taxing them more. The motivator for any carbon maker would in this manner be bringing down their tax trouble by putting resources into energy-proficient and harmless to the ecosystem innovation. Some have likewise proposed a rising carbon tax over the long haul so even the biggest firms are not resistant from the immediate expense of delivering carbon without finding a way ways to further develop their energy productivity. At last, there are a few half breed models that consider the two plans which have been proposed and perhaps serviceable.
What’s the significance here for energy makers and other carbon-weighty ventures?
Numerous people and business pioneers have been watching the advancement of the carbon valuing plan and the various proposition encompassing it with interest for how might affect both the economy and the climate. While there are numerous propositions being talked about at different degrees of government, Congress still can’t seem to pass a bill that would order an authoritative carbon evaluating plan plot. Until further notice, the public discussion will go on with regards to the most ideal way to carry out a carbon estimating plan, on the off chance that one is carried out by any stretch of the imagination.
The Impact of Extreme Weather on Energy Consumption
It’s no secret that the climate is changing. In various parts of the world, we’re now seeing new types of weather; whether its higher temperatures, less frequent occurrences of winter weather, and dynamic shifts that foreshadow a worsening of global temperatures. For so many, questions abound on how this will impact our personal lives, businesses at large, and other crucial components of society and our economy. However, one of the lesser questioned parts of climate change and extreme weather is its impact on energy consumption.
Does climate change have an impact on extreme weather and energy consumption?
Many times, there is an open question as to whether climate change has an impact on creating extreme weather which, in turn, creates a higher demand for energy consumption. Changing needs have created changing consumer habits. Extreme weather events for some areas may not even be something as dramatic as a hurricane, earthquake, or tornado. They can be as predictable as a heat wave or cold snap meaning more energy will be required for a longer amount of time.
What are some examples of the impact extreme weather can have on energy consumption?
According to the Environmental Protection Agency (EPA), there are very real costs to extreme weather events such as a warmer climate. The agency cites data which indicates that a 6 to 9 degree rise in summer temperatures could increase the need for energy output and production by 10 – 20% by 2050. For some, this may not sound like much but it represents hundreds of billions of dollars in investment in infrastructure and output mechanisms. Additionally, some of our existing structures may be rendered less efficient due to the need for cooling water to efficiently run most of these power plants. With warmer water, plants will have to work harder to produce the same amount of power at less efficiency.
What other indirect impact could occur as a result of energy consumption?
One of the unheralded issues that could arise is the competition for natural resources that occurs when there are impacts as a result of relatively extreme weather. For example, power plants sometimes require large amounts of water to ensure they operate within safe, not even efficient, parameters. As water is a necessary and desired resource, power companies will be in competition with local governments and reservoirs to be the first to use the diminishing supply of water available to keep pace with traditional demand. Additionally, given the rising temperatures, power companies will not only have to keep pace with traditional demand, they will have to somehow compensate for increased demand to cope with the rising heat.
Are there any other vulnerabilities that could impact energy consumption or availability?
Given the amount and severity of hurricanes, it is entirely possible that oil-producing platforms which may have been previously considered safe will now be in the path of terrible storms. Hurricanes Katrina and Rita damaged hundreds of platforms which had negative impacts on oil distribution and availability, for example, hurting not just local energy concerns but impacting global supply as well. For many, it may well be time to take some stock on distribution channels and construction suitability for extreme weather events.
Will an extreme weather event impact energy consumption soon?
Although there is no way to know when or how an extreme weather event can or will impact energy consumption, it is likely that we will again see energy consumption impacted by extreme weather in the years to come.
How Trump’s Proposed Changes to the NEPA Could Affect Energy Sources
One of the heavily watched industries in our nation’s capital is the energy industry and, crucially, one of the most talked about laws subject to change is the National Environmental Policy Act, which governs a multitude of industries which interact with the environment.
What is the National Environmental Policy Act?
The National Environmental Policy Act (NEPA) was established in part to help ensure that environmental impacts were studied and considered before any project could take place. This extends to energy, infrastructure, and a multitude of industries which impact the environment through their projects or their operation. This law, in effect since the Carter administration, has been a mainstay for decades. Now, the Trump administration is working to streamline and make changes that would circumscribe federal powers and perhaps provide a clearer path to some upcoming energy projects.
What changes to NEPA can we expect?
One of the most significant changes to NEPA is that a new category of “non-major” products would escape review. This would narrow the standard by which projects are judged and could lead to many more being approved quickly. The current standard of review takes into account how a project impacts global climate change by looking at the “cumulative” effect of the project, thus a project could be measured against eventual or overall sea level rise or carbon dioxide emissions. However, the Trump administration’s change in category would substantially narrow that review to what are seen as “foreseeable” situations.
For example, a new coal power plant in West Virginia would not be judged by how much carbon dioxide it adds to the world’s air supply and its overall contribution to climate change. It would be judged on how it would affect air quality in its state and possibly surrounding areas over time in addition to any other local environmental impacts. Another project might be judged by how it impacts the local streams and tributaries instead of how it contributes to sea level rise and coral bleaching throughout the world.
Are there any other relevant changes to NEPA that impact the law?
Currently, given the judicial challenges to some projects, environmental impact statements can take more than five years to produce. Given how that can delay a project, its impacts, and any potential job prospects for those dependent on it, the administration is proposing establishing a two year limit on environmental impact statements. They would also establish a one year limit for the more narrowly tailored environmental assessments. The administration also wishes to clarify definitions of some terms so they are technically feasible and so that not all projects or those with minimal federal involvement are not swept into the “major federal action” category.
What do these potential changes to NEPA mean for the energy industry overall?
These changes, while still not law, represent a significant step forward for potential use of energy sources. By lessening the bureaucratic red tape and clarifying the federal government’s role in these projects, those who wish to utilize energy sources more effectively can look toward a greater ease in their environmental assessment or environmental impact statement. Although some of these proposals look promising, it will be up to all leaders in the federal government to work together to pass and implement them in a timely manner.
The utility deregulation amendment: why did it fail to get on the ballot for the 2020 election?
The 2020 elections are upon us and this year, our country will make important decisions regarding our future. One of the biggest questions supporters of energy deregulation had was: would there be an amendment on the Florida ballot that allowed for voters to approve energy choice?
The drama has resolved itself in the hallowed halls of the Florida Supreme Court, recently ruling that an amendment regarding energy deregulation would not appear on Florida’s 2020 ballot due to its “misleading” wording. For this year’s proposed ballot amendment, it was a death knell that sets back the energy choice amendment process until 2021.
What were the arguments for and against the energy choice amendment in Florida?
Both sides held fast to their positions regarding a possible energy choice amendment for Florida. Had it not been struck from the ballot, the proposal, like other constitutional amendments, would have required 60% approval from Florida voters in order to pass.
On the pro side, Citizens for Energy Choice argued that energy choice was helpful to the state of Florida and would benefit energy consumers throughout the state. Using the examples of Texas and Georgia energy markets, those advocating for energy choice made the case that free market solutions helped energy companies move toward focusing on energy production and not energy purchasing or billing. This injection of competition into the market, according to advocates, would have not only made energy consumption more efficient but more cost effective also by saving Florida consumers $5 billion a year.
On the anti side, many Florida government officials, unions, and others lined up against the amendment. In Florida’s state government, Attorney General Ashley Moody, House of Representatives Speaker Jose Oliva, and Senate President Bill Galvano all lined up in opposition in addition to Floridians for Affordable Reliable Energy and the Florida AFL-CIO. Their reasoning included the amendment eliminating a reliable and affordable energy scheme that had benefitted Floridians for generations. Florida’s government leaders stated that although the amendment purported to provide energy choice, it might in fact do the opposite. The AFL-CIO was particularly concerned about the fact that there was a potential for thousands of union workers who are employed in the power industry to lose their jobs.
What was the Florida Supreme Court’s reasoning in striking down the energy choice amendment in 2020?
The Florida Supreme Court took a dim view of the energy choice amendment as it related to its impact on Florida and on energy consumers. The court, in its opinion, called the amendment’s ballot summary misleading to voters, which would cause them to believe they might have a right to sell electricity. While the court did concede that the amendment allowed consumers to purchase electricity from a provider a person chooses or an energy wholesaler of electricity, in addition to the right to generate their own electricity, they remained focused on the issue of selling electricity which they state the ballot summary claimed but the amendment did not back up.
Florida business groups, such as the Florida Chamber of Commerce and Associated Industries of Florida supported the decision. Adding their voice to the chorus, the Urban League and League of Cities took a similar tack citing a potentially damaging impact to local governments to the tune of more than $1 billion.
What’s next for electricity choice in Florida?
Proponents of energy choice have their project left off the ballot in 2020, but nothing is stopping them from regrouping for the 2022 election and fixing the issue cited by the Florida Supreme Court.
Which U.S. States and Cities Use the Most Electricity?
There are many who question how we can better save electricity through renewable methods, decreased consumption, or any other strategy to keep costs down. However, who the top energy-draining culprit is among the United States is often up for debate, as there is a size vs. energy efficiency debate. We’ve compiled a list of the U.S. states and cities that use the most electricity.
Among states, a surprising leader in energy consumption per 2017 U.S. Energy Information Administration gives way to more usual suspects. Notably, the highest total energy consumption does not necessarily equal the highest energy bill per capita.
- Louisiana (960 million Btu per capita; $6,860 per capita annually)
- Wyoming (885 million Btu per capita; $7,672 per capita annually)
- North Dakota (836 million Btu per capita; $7,087 per capita annually)
- Alaska (822 million Btu per capita; $6,911 per capita annually)
- Iowa (496 million Btu per capita; $4,418 per capita annually)
- Texas (472 million Btu per capita; $4,540 per capita annually)
- Nebraska (457 million Btu per capita; $4,299 per capita annually)
- South Dakota (441 million Btu per capita; $4,393 per capita annually)
- Oklahoma (418 million Btu per capita; $3,969 per capita annually)
- West Virginia (416 million Btu per capita; $4,111 per capita annually)
- Indiana (406 million Btu per capita; $4,069 per capita annually)
- Montana (399 million Btu per capita; $4,347 per capita annually)
- Mississippi (394 million Btu per capita; $4,396 per capita annually)
- Alabama (390 million Btu per capita; $4,192 per capita annually)
- Kentucky (372 million Btu per capita; $3,893 per capita annually)
- Kansas (369 million Btu per capita; $3,841 per capita annually)
- Arkansas (352 million Btu per capita; $3,765 per capita annually)
- Minnesota (329 million Btu per capita; $3,604 per capita annually)
- South Carolina (327 million Btu per capita; $3,776 per capita annually)
- New Mexico (327 million Btu per capita; $3,520 per capita annually)
For many of these states, geographical size does not necessarily indicate the amount of energy consumption. The largest exception to the rule is the state of Texas, which is the largest energy consumer overall but still falls short on the per capita measurement. For many states, such as Louisiana, residential and commercial energy consumption is dwarfed by industrial consumption which clocks in at almost 70% of energy consumption in the state. Similarly, the rest of the top five top energy consuming states have high energy consumption due to a robust industrial sector. Industry often refers to manufacturing but in the case of some of these states, can also refer to energy production facilities which may not directly put energy back into the local power grid, such as an oil refinery.
Cities provide an even more interesting window into energy where warmer climates dominate. In 2019, the following cities were the top energy users in the United States.
- Phoenix, Arizona
- San Antonio, Texas
- Dallas-Fort Worth, Texas
- Tampa, Florida
- Austin, Texas
- Palm Bay-Melbourne, Florida
- Houston, Texas
- Miami, Florida
- Pittsburgh, Pennsylvania
- Columbus, Ohio
- Kansas City, Kansas
- Atlanta, Georgia
- Orlando, Florida
Whether the culprit is a climate which requires a more active air conditioning system or a lack of energy efficient appliances or education, there seems to be an overall trend in energy use based on the location of the city. No matter where you stand on energy use, energy efficiency, or alternative energy, you can see that this data demonstrates that size does not always determine amount of use.
Surprising Facts About Energy Consumption in America
Energy consumption in America is nothing new for those who use it or work with it on a daily basis. America is one of the world’s leading creators and users of energy no matter the method of origin, from coal to solar and everything in between. Though energy is relied on to run most of our daily lives, how it actually works can be misunderstood. Oftentimes, the true surprise is how much even seasoned professionals do not know. Below are just some of the surprising facts about energy consumption in America that many are unaware of.
- Americans use around 25% of the world’s energy although we comprise of only about 5% of the population
- The third largest industry in the United States is energy or energy-related
- Among renewable energy, hydropower is the most used. This accounts for around 7% of America’s electricity
- More than $17 billion in energy-related natural gas improvements have been invested in the United States
- Though not commonly used in the United States, one wind turbine can power up to 300 typical homes
- Surprisingly, solar and wind production have more than tripled since 2008 although they still are not a large part of America’s energy production
- America continues to work to promote renewable energy sources through the federal and some state governments, but the U.S. Energy Information Administration has forecasted that the United States will be using non-renewable energy sources for most of its energy consumption through 2040
- The Bureau of Labor Statistics estimates that there are more than 3 million jobs related to clean energy in the United states
- Hospitals are one of the largest energy consumers throughout the United States
- Energy use is a leading cost of K – 12 education, ranking as more expensive than textbooks and computer costs combined
- Heating and cooling costs in the summer and winter account for more than 50% of the average American’s annual utility bill
- The United States is the world leader in providing nuclear energy
- Energy inefficient homes are a cost drain on both energy producers and U.S. consumers. Estimates indicate that the United States spends more than $300 billion a year on energy that could be saved as a consequence of inefficient appliances, drafty windows, and other energy-wasting devices
- Since 2008, coal energy consumption has reliably reduced from one billion short tons to 636.5 million short tons. The United States is the world’s second largest coal energy consumer behind only China, whose consumption dwarfs many other countries combined
- The expected 2019/2020 average price of heating oil for homes is $3.02 a gallon, down from a record high of $3.88 in 2013/2014, but still exceeding the record low $2.06 in 2015/2016
- Among sectors of the U.S. economy, transportation has led total energy consumption since 1985 followed by industrial, residential, and then non-industrial commercial
- The United States was not the world leader in energy consumption in 2018. It was second to China. America was trailed by India, Russia, Japan, Canada, Germany, South Korea and others
- In 2017 and 2018, energy consumption in the United States by source increased for petroleum (oil), natural gas, nuclear, biomass, wind, solar, and geothermal, while it decreased for coal and hydroelectric energy sources
- Natural gas consumption in America is at an all-time high since 1995 after consistent increases in demand from 2009 – 2016. This has largely been driven by high demand from electric power followed by the industrial sector
The Top 5 Myths About Energy Choice
Energy choice is becoming more common across the United States. Many states have adopted full energy choice or a variant allowing partial choice depending on the market. However, no matter how accepted or even ubiquitous energy choice is, there are still pervasive myths that harm the industry which can be tough to shake. Here are the top five myths about energy choice and the truth about each one.
Myth #1: The utility company that used to have the monopoly on energy is the best choice for energy
Truth: Everyone buys and sells energy in the same marketplace, so there’s no “advantage” or best supplier for energy beyond price and customer service.
So many companies and brokers buy and sell energy but they all participate in the same energy exchange, thus there is no appreciable difference between the original utility and any other provider. Any energy supplier can use the same power source as the utility and not suffer any difference to consumers. There are a variety of ways both utilities and brokers work to serve customers, including lower prices and better marketing. However, the actual energy product never differs no matter the name on the bill.
Myth #2: Leaving the utility company as a customer causes power or service to be unreliable & switching to a private provider leaves you without service
Truth: Your service and response to outages remains the same no matter who you buy energy from.
Some people believe that by leaving the utility company, you are on a lower priority list for response times after outages or when your service becomes spottier. However, nothing could be further from the truth. The utility company has to maintain all the service lines and ensure that the is no “discrimination” against consumers for not buying from them. Likewise, switching to a private energy provider does not leave you without service.
Myth #3: Government-owned or otherwise monopolistic energy companies are not interested in making a profit and are better for long-term energy production
Truth: Private entities are no worse for energy than government owned energy companies or energy companies that act as monopolies.
While some may argue that government-owned or monopolistic energy companies have less incentive to make a profit and thus will not cut corners, there is no proof to that argument. For example, some energy companies continue to make profits despite being a monopoly. Additionally, they may not demonstrate any extra effort in reinvesting those profits into clean energy. Private energy companies help create a more competitive marketplace so that customers can save money and utility companies can modernize and innovate.
Myth #4: You are obligated to pick the utility company as the only energy supplier where you live
Truth: In many states, there are a variety of options to get your energy that don’t require you to do business with your utility company.
The ever-growing movement which allows consumers to choose the supplier for all or part of their energy needs has opened up markets in many states to energy choice. Consumers can now choose who supplies their energy with the help of brokers, so they save the most money possible on their bill. Whether it be electricity or natural gas, brokers are helping revolutionize how energy is sold and marketed in order to help spur competition benefitting customers.
Myth #5: Private energy suppliers are unreliable and can lead to supply issues
Truth: Signing up with a private energy supplier is no different than staying with your utility company.
The utility company still has to provide you with power no matter the vehicle you choose, and private energy suppliers often provide a cheaper alternative for customers. Any utility company that takes retaliatory action may be subject to penalties under the law. That way, there is a very strong incentive for utility companies to continue to provide service to every consumer, no matter how they choose to get their energy.
Conclusion
While there may be some myths surrounding energy brokers and the competitive energy market, the truth is that it is just as safe as purchasing directly from the utility company. Add to that the fact that customers have the potential to save by buying competitively, and you have a winning way to get energy where everyone wins.
Sunshine for All: Florida’s Proposed Road to Energy Deregulation
For many of us, the prospect of using energy is as simple as turning on a light switch. The way we grew up dealing with energy was direct: we contracted with a company which is often the only power producer and distributor in the state, and we pay the rates they set. It is one of the last government-controlled monopolies in the United States which impacts our day to day lives. Importantly, like some states, Florida is now taking steps towards energy deregulation, which would help increase consumer choice when buying power. Many may ask if you can choose which airline to fly, which vendor to purchase groceries from, and a litany of other consumer choices: why can’t you choose an energy company?
What does deregulation mean and what is its current status in Florida?
As of now, Florida Power and Light (FPL), is the only energy provider residents of the state are able to use. Unlike Florida, other states have allowed for power companies to come in to their state markets and charge competitive rates in order to provide the best deal possible to consumers. This also has the additional benefit of fostering competition in the market.
Across the country, many states have begun the process of deregulating. In some states, they have already implemented full deregulation. However, in other states, partial deregulation was achieved by allowing only the energy market or the gas market to be competitive. As deregulation is not yet legal in Florida, allowing for consumers to pick who they purchase power from is still seemingly a foreign concept, but one which will be decided in 2020.
Where is deregulation politically and legislatively?
Currently, supporters of a statewide ballot initiative are gathering signatures to help ensure it appears before Florida voters on their November 2020 general election ballot. They have until the February 1, 2020 deadline to gather and submit more than 766,000 valid signatures to meet the legal requirement for an amendment to the Florida constitution to be placed on the ballot.
In addition to these typical hurdles, deregulation has become a political flashpoint as the Florida Supreme Court has heard a challenge from Florida Attorney General on the ballot initiative’s language. She has argued that it is invalid under Florida’s single-subject rule, and that the language which will be placed on the ballot is misleading. Others such as FPL, Duke Energy, the Florida Public Service Commission, the Florida Association of Counties, the Florida League of Cities, and many others have concurred with this interpretation or filed amicus briefs, (also known as friend of the court briefs) supporting this position. The Florida Supreme Court has not indicated when it will rule on this challenge.
Florida voters seem more optimistic on whether or not to support energy deregulation as an initial poll in June by St Pete Polls demonstrated slightly more than 66% of voters would support such an amendment. Constitutional amendments in Florida require 60% or more of the vote to pass, so if backers can convince a similar percentage of Floridians to vote for the measure, they will be in good political shape.
What’s next in Florida energy deregulation?
First the Florida Supreme Court must allow the ballot language to remain and the initiative’s backers must reach the required number of signatures to place the amendment on the ballot. Following that, a heated political campaign will likely occur between those who want this amendment to pass and those who oppose it. In the end, Florida voters will decide whether they believe energy deregulation will be helpful in working to bring down the price of energy, increase market competition and efficiencies, and be an overall benefit for the state. The alternative for Florida residents is the status quo monopoly, which provides little to no recourse for customers who would prefer to join the ranks of those in states like Texas who have deregulated and are working to continue to lower energy costs.
