Supporters and companies that want to supply electricity in Florida point to a similar structure that Texas has used for nearly two decades.
Opponents, however, contend that the deregulation scheme Texas adopted almost two decades ago has been plagued with problems – ranging from a massive and likely unrecoverable surge in household electricity costs, millions lost in energy, and a spike in customer complaints.
Opponents, including Attorney General Ashley Moody, legislative leaders, business groups and utilities, filed 13 briefs in June at the Florida Supreme Court arguing that the proposal should be blocked from going on the November 2020 ballot.
But a financial impact study released by the Florida Chamber shows that there are bigger issues with the proposed ballot initiative.
On Monday, the Florida Chamber of Commerce pointed to independent financial impact research showing that the proposed amendment will cost $1.2 to $1.5 billion annually to state and local governments.
Studies conducted by Charles River Associates shows that the proposed restructuring of Florida’s electricity market would have an adverse financial impact, in terms of lower tax revenues and increased costs, of $1.2 to $1.5 billion or more per year to Florida’s state and local governments, and ultimately, to taxpayers.
The economic impact by the proposed amendment strip funding from vital local services, including fire departments and firs responders, as well as higher taxes for consumers and local businesses.
“Voters deserve to know the facts – this price hiking electricity related ballot measure is a drastic and costly proposal that will drive up costs on Florida’s families, consumers and local businesses,” said Mark Wilson, President and CEO, Florida Chamber of Commerce.
Other impacts an financial losses include:
- Franchise Fees – $650 million
- Gross Receipt Tax -- $270 million to $320 million
- Municipal Public Service Tax -- $200 million to $300 million
- Property Tax -- $60 million to $140 million
Also included in the study were administrative costs totaling $30 million to $80 million.
“We cannot secure Florida’s future with regulatory policies that will make our state less competitive and electricity more expensive,” Wilson added.
When the FIEC originally met on the energy regulation proposal in March, they did not determine the financial impact that drastically changing Florida’s electricity market would have on Florida’s communities – despite the empirical evidence presented by expert economists.
At the urging of the Florida Chamber of Commerce, lawmakers passed and Gov. Ron DeSantis signed into law HB 5 requiring a financial impact estimate on both the state and local communities.