Get ready for a new era of utility company hardball.
Duke Energy sounded its arrival in Florida by paying only $19 million of its $35 million Citrus County property tax bill, then sued the cash-poor county on Friday over the $16 million difference.
Bullying we don't need. But Duke's trend line is not comforting.
By buying Progress Energy this summer, Duke now is the owner of the dominant provider of electricity in Tampa Bay and west-central Florida. It is also America's largest power company. And so it comes to Florida freshly armed with massive assets, deep legal pockets, plenty of political influence and an apparent enthusiasm to flex its extra muscle.
Alas, Florida may prove its favorite punching bag. And why not? Most of our malleable state legislators and regulators are in lockstep with the wishes of big utilities (and their campaign contributions) and will offer limp resistance.
Duke's economic swagger is reminiscent of the arrival of another Charlotte, N.C., corporation that plowed into Florida in the 1990s and started throwing its weight around. That company, Bank of America, remains a powerhouse in this state.
But there is one big difference. If folks don't like B of A's style or tactics, they can take their business to another financial institution.
Not so with Duke. About 1.6 million Florida customers — residents and businesses — that live and operate in its territory must purchase electricity from the company.
Duke is a monopoly. Despite the government's generosity in allowing it to provide power to citizens without direct competition, Duke has decided to introduce itself to Citrus County not with a thank-you but with a punch to the gut.
For those who missed Duke's iron-fisted message to Citrus last week, an official with the North Carolina giant stopped by to tell Citrus Property Appraiser Geoffrey Greene that Duke would not pay its $35 million property tax bill. Duke argues that the bill on its Crystal River energy complex, which includes multiple coal-fired power plants and the broken Crystal River 3 nuclear plant, is too high.
Duke offered to pay as much as $27 million to Citrus but was rebuffed by a county unwilling to see a loss of $8 million in taxes.
So Duke upped the ante — by offering less. It paid only $19 million, saying "see you in court" to Citrus on the rest.
In the Tampa Bay Times last week, Greene related how the Duke official told him the utility had fought a similar tax issue in Ohio. Any tales of Citrus County woes about budget shortfalls would not change their minds. "He said they already had heard all the stories about (school) kids not having books," Greene said.
So here's the fine line.
Duke is absolutely within its corporate rights to contest property tax bills. Other large companies also contest property taxes. In fact, Progress Energy had argued for lower property taxes in Citrus for years.
Unlike Duke, though, Progress did not underpay its bills and sue Citrus over the difference.
Citrus County officials are upset the power company pursued this scenario after the tax roll was certified Oct. 2 and a new budget year was under way. Now a county of 140,000 people must cover an $8.1 million revenue gap for the school district and $7.6 more million for the county government.
Citrus County Sheriff Jeff Dawsy wasted no time last week detailing the consequences of Duke's shorting its tax bill. He already froze purchases and hiring and informed Duke that he canceled a mutual-response agreement for emergencies at the Crystal River energy complex.
"I cannot guarantee that I can do the protective notifications to the citizens in the area of the protected zone of the nuclear power plant," he warned.
That's not really the one-upmanship you want to hear when it comes to nuclear matters. But it's probably just the beginning.
Dawsy blamed Duke CEO Jim Rogers at the same time other county officials appealed to him directly to pay the tax in full.
Last week, Rogers agreed to retire at the end of next year as part of a deal to end a North Carolina investigation into the shenanigans behind the Duke-Progress merger.
That's hardly a rap on the knuckles. Rogers is at retirement age anyway. This is a CEO with deep political ties, celebrated for helping bring the Democratic National Convention to Charlotte this year. Even the new governor of North Carolina, Pat McCrory, has deep Duke ties. He is a 28-year veteran of the company.
Yes, Duke brought all this attention on itself. I'm just not sure Duke cares whether it's earning a bully image in Florida.
This comes soon after Duke promised the CEO position of the merged Duke-Progress Energy company to Progress chief Bill Johnson, only to yank it away within an hour of Johnson taking the job. That corporate coup is already bound for the Bizarre Business Hall of Fame.
Add it all up and Duke's setting a new tone. Progress Energy's get-along style is out. Duke's me-first mandate is in.
Just remember. Come Jan. 1, those Floridians who must get their power from Duke/Progress Energy will pay more than $116 per 1,000 kilowatt hours of usage. In Tampa Electric's territory, the same amount of power is priced at less than $103.
Now that's an example of an overpriced bill that deserves to be contested.
Robert Trigaux can be reached at [email protected]