Menu
Menu
•🧑⚖️ Who: Florida State Senator Don Gaetz, NextEra Energy, Public Service Commission, Florida lawmakers
•📜 What: SB 354, a bill to limit utility companies’ profit margins from rate hikes by tying them to the Treasury note’s “risk-free rate of return”
•📆 When: The bill is currently moving through the Florida Legislature during this year’s session
•📍 Where: Florida, specifically affecting customers of Florida Power & Light and other utility providers
•❓ Why: To increase transparency in utility rate hikes and prevent companies from excessively profiting at the expense of consumers
On the heels of the announcement Florida Power and Light plans to ask the Florida Public Service Commission for a rate increase of $9 Billion over the next couple of years, we decided to talk to a state senator who wants to have state government demand FPL (and other utility companies with Florida customers) give a public reason for increases over a certain amount – with supporting documentation to justify the increase.
More below
Has this story made a difference for you? Consider making a monthly supporting donation to Mid Bay News so that we can continue to create meaningful local journalism for our community.
State Senator Don Gaetz used to serve as the Okaloosa County Superintendent of Schools and the State Senator for Niceville. And yes, he’s Matt Gaetz’s dad.
RELATED: After Rate Hikes, Gaetz Hopes to Overhaul Insurance Rules for Florida.
Now, he represents Pensacola, Escambia, Santa Rosa and the northwest corner of Okaloosa County in the Florida State Senate.
He introduced SB 354 at this year’s legislative session; it’s a bill that would radically curb utility companies’ ability to increase profits for their shareholders off the backs of utility rate increases you pay for.
The bill, he tells me, would peg the amount of profit that a utility company could make to the ten year treasury note, or what is known in the finance world, according to Gaetz, as the ‘risk free rate of return’. Right now, that return is about four percent per year.
Like the federal T-note, utility companies have historically been the bedrock of safe investments. Little old ladies on fixed incomes love them because they aren’t risky and give you exactly what they promise for your investment.
Utility companies asking for anything above that risk-free rate of investment would have to open their books to the government and make a detailed case to the Public Service Commission as to why they need the money.
“And that’s where we get into questions like executive compensation,” Gaetz said, “If a utility company is coming in for a rate increase because they say they don’t have enough money, but yet they’re paying their executives an excessive amount of money – that’s information the Public Service Commission needs to not only know, but they need to act upon in considering a rate increase.”
RELATED: State Senator Gaetz Suffers Medical Emergency
This bill wouldn’t stop the Public Service Commission from allowing an increase above the risk-free rate of return or even increases above that to pay for infrastructure. It might make that request dead on arrival.
Gaetz adds that he’s taking his lead from the judiciary in the Sunshine State. “The Chief Justice of the Florida Supreme Court has said that the Public Service Commission, and these are his words, ‘is a black hole,‘ because the Public Service Commission can’t explain or justify why it is giving rate increases. And when asked, and this is the Chief Justice speaking, ‘when asked the the Public Service Commission says, Well, you know, we’re just operating on the information the utilities gave us.’
And so this empowers the black hole. We’re trying to place a burden of proof on utility companies when they’re asking for more money.”
We’ve reached out to NextEra Energy in the hope that they would grant us an interview to discuss the bill. A representative for the company told us they would get back to us by March 18. The company’s representatives have not reached back out to us. We will update the story should they decide to engage with us.
Sources close to the situation say that the bill initially didn’t have traction and wouldn’t make it out of its first committee hearing with a 5-2 favorable review. When passed through the Regulated Industries subcommittee, it shocked everyone in the bill’s path.
The two no-votes sure are interesting.
Senator Joe Gruters, who would like Jimmy Patronis’ (old) job as State Chief Financial Officer (he’s running for and will likely win Matt Gaetz’s old seat in Congress) and Republican Majority Leader Senator Jim Boyd both received thousands in campaign contributions from NextEra (The parent company of Florida Power), other utilities and Political Action Committees supported by utilities. Boyd received more than $125,000 to his campaign committee from NextEra Energy. Gruters got $25,000. The other Senator who got money from NextEra directly, State Senator Randy Fine, did not vote on the bill.
All in All, NextEra Energy spent more than $5.5 Million in the 2024 election cycle supporting candidates and parties in Florida.
Sources in the state legislature who spoke on background, because they were not authorized to give official comment, say they are looking to use House of Representatives member from Pensacola Alex Andrade’s House Bill 1316 to get the measure onto Governor Ron DeSantis’ desk for signature into law.
Next up – the bill must make it through the Appropriations Committee on Agriculture, Environment and General Governement.
