Venture

Robert Trigaux

Cut electric rates for business by charging consumers more: Is that a 'jobs' plan?

29

December

electric_meter.jpgWake up and good morning. Rick Scott isn't officially Florida's governor yet but we're getting some clear signals that his arrival -- and the changes he seeks in favor of the business community -- won't be subtle.

One issue that's disturbing is this early talk that Scott wants to lower electricity rates charged new or expanding businesses -- by raising rates charged consumers. Reports The News Service of Florida (full story here):

"Scott's advisers are 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."

It's a curious plan. If Scott had said this during the election... "We're going to subsidize electricity rates for businesses by jacking up already high electricity rates for residential customers"... I'm not sure he would even be stepping into the governor's role next week. The early winter cold spell alone will put plenty of Floridians in shock when they get their next electric bill -- without a hike in rates.

Business backers, not surprisingly, like the Florida Chamber of Commerce (surely eager to stay in Scott's good graces after opposing him in the Republican primary) think Scott's idea is just peachy. Funny how nobody mentioned this concept as a brilliant way to generate jobs in Florida until the new Guv-To-Be brought it up.

In a WTSP (Channel 10) story on this topic, reporter Mike Deeson makes this good point: "Aside from being good for new and expanding businesses, critics say the proposal is also good for utilities." Bill Newton of the Florida Consumer Action Network says he believes it is a payback for utilities supporting the new governor and legislators.

So far, the big Florida utilities -- Florida Power & Light, Tampa Electric, Progress Energy Florida and Gulf Power -- seem mum on the issue since they would be getting the same revenue (less from business but more from consumers). So their bottom line would be preserved and their investors would be unaffected.

It's way too early to call this a trend. (Here's a broader look at Scott's agenda so far) But it will be curious if one of Scott's chief strategies to boost incentives to Florida businesses is to simply lower their costs by shifting those cost burdens on to the Florida consumer. Hopefully, the new Tallahassee administration will have more up its sleeve than that.

-- Robert Trigaux, Times Business Columnist

 

 

[Last modified: Wednesday, December 29, 2010 8:43am]

    

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