On Monday, NextEra Energy announced that it will buy Gulf Power for $6.475 billion dollars. NextEra Energy is the parent company of Florida Power and Light (FPL). Gulf Power is the largest electricity company in Northwest Florida.
In the news release, NextEra says that it plans to buy Gulf Power, Florida City Gas, and ownership interests in two power plants in Central Florida from Southern Company if regulators approve. NextEra Energy’s company, FPL is already the largest Investor Owned Utility in Florida. FPL currently serves about 46 percent of Florida’s electricity customers. If this deal is approved, NextEra would serve over 50 percent of Florida’s electricity consumers.
NextEra Energy is no stranger to acquisitions as it has made several attempts to purchase utilities in other states in recent years. Florida is a regulated state for electricity service. There are three types of electricity companies in Florida although to consumers, the rules are mostly similar. Florida residents have to choose the electricity company that serves their area. There is no electricity competition in Florida. NextEra Energy and FPL have fought to keep Florida a regulated state and are now making a move to become the state’s largest electricity company. If the sale of Gulf Power is approved, NextEra Energy and FPL will have improved their interest in Florida’s electricity maintaining the status quo.
Unlike electricity in the state of Florida, natural gas is de-regulated. Commercial natural gas customers in Florida can choose their natural gas company based on pricing, products, and service. As consumers, we choose which products and services we buy and the companies that provide them. So, why don’t we have that same option with our electricity in Florida? We should and allowing NextEra to purchase Gulf Power is moving us in the wrong direction. This isn’t an example of free-market capitalism, it’s a transaction to grow an existing monopoly where the customers don’t have a choice. It’s bad enough that Florida electricity is regulated but allowing one company to serve more than half of the state’s consumers is only good for the monopoly.
Just earlier this month, Florida Power and Light settled with the Florida Public Service Commission and has agreed to pay $27.7 million to customers from Hurricane Matthew. According to the settlement, the refund includes $6 million in “over-recovery” charges and “adjustments to the accounting treatment” in the amount of $21.7 million.
In competitive energy markets, mistakes like these would be subject to the oversight of the governing bodies and the opinions of its customers. Customers may go through this experience and choose to find a more stable and reliable energy company.
The acquisition of Gulf Power and two power plants are subject to the approval of the Federal Energy Regulatory Commission (FERC) and the Federal Communications Commission (FCC). NextEra Energy does not need the approval of the Florida Public Service Commission (FPSC) which is the regulatory board for the state’s utilities.
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