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Scott’s Plan For New Business Could Cost You On Your Electric Bill
December 24, 2010
With Gov.-elect Rick Scott promising to save businesses a stunning $3.2 billion on their electric bills, consumer groups are bracing for a fight, fearing his plan will push higher costs onto residential customers.
Scott’s advisers are already floating the idea of an “economic development rate,” for corporations that agree to relocate to Florida or expand businesses within the state. The level of utility cost savings would be tied to job creation, under the plan.
But Florida’s four big investor-owned utilities would not have to absorb the rate reduction – or ask investors to pick up the tab, said those familiar with the proposal. Instead, rate reductions given these companies would be offset by higher charges imposed on a utility’s overall rate base – with residential customers shouldering most of the costs.
“What’s good for businesses is going to be too bad for consumers,” said Bill Newton, executive director of the Florida Consumer Action Network. “The only thing we can hope for is that a rate increase can backfire on legislators, and they may not want to get involved in it.”
With Scott still almost two weeks from taking office, communications director Brian Burgess wouldn’t comment on the rate plan. But utility industry officials briefed on the plan by members of Scott’s economic development transition team say the proposal is designed to help him reach a central goal of his campaign: creating 700,000 jobs over the next seven years.
It also would help Scott meet a campaign pledge to “address Florida’s relatively expensive electricity costs so businesses could save approximately $3.25 billion,” part of the Republican candidate’s regulatory reform platform.
Tampa Electric Co., (TECO) and Florida Power & Light, two of the state’s largest publicy-held utilities, were among the top contributors to Florida political campaigns this fall, with each giving more than $1.2 million, according to the National Institute on Money in State Politics.
While offering an economic development rate could help Scott meet his business cost-cutting goal – some steps also are likely to emerge to help existing Florida companies that can’t offer the lure of job creation.
“We’ve got to come up with some ways to incentivize businesses,” said Rep. Clay Ford, R-Gulf Breeze, chairman of the House Energy and Utilities Subcommittee. “But we also know that we’ve got to be able to afford them.”
Mark Wilson, president of the Florida Chamber of Commerce, said he is familiar with the concept behind the economic development rate, but had not been briefed by Scott’s team. Wilson, though, said the idea of asking residential customers to pay more, while reducing costs for businesses, was defensible.
“If we find out that residential customers pay lower rates and businesses pay more – that’s not fair,” Wilson said. “But if they pay a little more and that contributes to their community and brings jobs that generate revenue….then it could benefit everyone.”
Such an approach seems to be at the heart of the recommendations released Wednesday night by Scott’s transition advisers. State utilities, particularly Florida Power & Light, emerged as some of the biggest winners in the economic development push.
Scott advisers said FPL and other utilities should be free from regulatory limits to significantly generate more power from renewable energy. FPL’s Sam Forrest, vice-president of energy marketing and trading, helped craft the recommendations, which borrow heavily from the company’s own push to expand its use of solar and other alternative energy sources.
The transition team cited an industry report that claims 700 megawatts of additional renewable power could yield $8.1 billion in economic activity and 40,000 new jobs. Homeowners, though, will likely be asked to pay more for this increase.
Advisers said a survey conducted in association with Florida TaxWatch, the business-backed advocacy organization, found “more than 70 percent of Floridians believe that paying a dollar or more on their monthly utility bill is reasonable for renewable energy generation.”
“It could really attract industry,” Mark Bubriski, an FPL spokesman, said of the expanded renewable effort. “You could bring costs down for the solar industry and for companies. And it would eventually lower costs for homeowners, too.”
The economic development rate being shopped around could pit residential customers against businesses. But with Scott, businesses appear likely to get an edge because they carry the added political muscle of creating jobs.
“There’s a lot of money, potentially, on the table if this goes statewide,” said Barry Moline, executive director of the Florida Municipal Electric Association. “Sure, residential customers may pay a little bit more money. But in the end, they also might have the benefit of more jobs.”
Comments
14 Responses to “Scott’s Plan For New Business Could Cost You On Your Electric Bill”
REGARDING MISSING COLA:
According to the Social Security Administration, they give COLAs whenever the third quarter Consumer Price Index is higher than it was the last time they gave one. So far it is still lower than it was in 2008 even if it is higher than it was yesterday or last year.
Please note that they didn’t cut downward when the Consumer Price Index dropped, just quit giving more. This means you are still getting what the index says you needed back in 2008 even though it says you don‘t need that much now and haven‘t needed that much since 2008.
Maybe they are figuring it wrong, probably they are figuring it wrong, but they are figuring it the same way they did when you got an increase back in 2008 and the same way they have since the law was passed back in 1973.
Maybe you will get lucky and average prices will go up above what they were in 2008 and you will get more money to pay the higher prices.
Regardless, YOU’RE not the one getting ripped off.
I based the above on the SSA explanation found at
http://www.ssa.gov/oact/COLA/latestCOLA.html
“COLA Computation
The last year in which a COLA became effective was 2008. Therefore the law requires that we use the average CPI-W for the third quarter of 2008 as the base from which we measure the increase (if any) in the average CPI-W. The base average is 215.495, as shown in the table below.
Also shown in the table below, the average CPI-W for the third quarter of 2010 is 214.136. Because there is no increase in the CPI-W from the third quarter of 2008 through the third quarter of 2010, there is no COLA for December 2010. ”
Well, I used to consider myself a democrat until they became what we used to call liberals and now the republicans are what used to be democrats.
The democrats have done no better so quit whining. It’s never going to change so get used to it. Too many people don’t vote because they think their vote won’t change anything and so….nothing gets changed.
And, oh yeah, if you didn’t vote, you don’t have the right to complain.
Has Mr Scott thought about what that will mean to seniors on SSI who haven’t had a cola in 2 years? Everything has gone up, from coffee to gas, and now this?!
A lot of the older generations said that Republicans are for big business and rich people, if you hard core Republicans don’t see it in this article, then you are either blind or looking the other way. It doesn’t say it’s to help small business’s to start up, it’s to help corporations. In other words, this rich criminal that you Republicans sold out to, wants the working class people to pay for new stores that corporations like Walmart and Target build in the future. Personally I can’t trust anyone that takes the 5th amendment once to keep from incriminating themselves, and especially someone that takes it 75 times like this cook had to do. As far as I’m concerned, taking the 5th amendment is as good as saying I’m guilty.
So, you republicans still happy with the criminal you put in the gov’s office? This is nothing more than a tax on working people to pad the pockets of big business. Once again repubs get people to vote against their own interests.
If they keep going up on the electric bill 20% percent of us want have lights because we want be able to afford it.
To make the people pay for subsided businesses , isn’t that socialism? And what the Republicans rail against obama about, yet this guy is about to take from the middle class and poor, and give it to businesses
This is a crazy plan! When is someone going to cut workers bills so we can pay them?
Gov.-elect Rick Scott has lost his freaking mind! I didnt like or trust him when he was campaining and now I know why. I don’t like his problem solving skills one bit either!
It takes Residential customers all they can do now to pay their utility bills along with everything else. Let Gov.-elect Rick Scott see how humiliating it feels when the electric bill is so high during the heat of summer and you have to go ask for utility assistance in order to pay it. I’m sure he has NEVER had to do anything like that.
*NO to Scott’s new business plan*
REGARDING:
” have been paying a franchise fee for years. I have asked what it is for and no one can tell me”
It is a sales tax on energy consumption and as to what it is for, government likes to have your money. This is a way to get some. Don’t worry, though, they will use that money to help other deserving people. And they get to define who is deserving.
They tried to get Central Water Works, Inc to turn in our franchise so they could give us a new one which would allow them to tax us for pumping ourselves water. The members declined their offer. We thought WE were the deserving people.
David for the deserving
A corporate crook now in charge of the state of Florida making every move he can to benefit corporations…..hmm. NOT SURPRISED
I guess this is what we get for putting a thief in the governors office! It is foolish of us to think that he would not do the taxpayers the same as he did medicare! Florida will never have the industries that other states have, power costs are not the issue, the over extreme environmental regulations, like the ones designed to protect the everglades, but have no exclusions for the rest of the state, and the frivilous lawsuits by extreme environmentalists, are the biggest problems for industries. We are also someday going to have to accept the fact that tourism alone cannot support this state. I love the beaches as well as anyone, but we can no longer depend on just them. If we keep going in this direction everyone will be headed to Mobile for work! Well I have vented enough this morning, I hope that Everyone has a MERRY CHRISTMAS!
They may be creating more jobs so that more people would have income with which to pay their higher bills, but what about those who are already working and struggling to pay their bill? So we now punish them for having worked all this time? We punish them in order to create jobs for others? In other words, we are asking them to pay to create a job for someone else.
And what about those who are disabled or elderly and cannot work? Their incomes won’t get any higher to compensate for the higher bill. Reckon how many will be disconnected because of something like this?
I’m all for bringing in new business and jobs. God knows we need them……BUT not when the expense for it is placed on the backs of all the rest of us. That’s just wrong. I have to pay my whole bill. I don’t get it decreased because I help other people so why do THEY get that privilege? It’s just not right.
I have EREC and have been paying a franchise fee for years. I have asked what it is for and no one can tell me. Taxed Enough Already.