Power struggle [podcast]

Should Pensacola Establish a Municipal Utility?
by Jeremy Morrison

What does it take to provide the city of Pensacola with power? Could the municipality handle such operations better than the power company? Would that be an advantageous move, as Pensacola eyes renewable energy goals, the undergrounding of power infrastructure and currently soaring power bills for city residents?

“The question is, can you really know any of this without doing a study? The answer is: no, you can’t,” attorney Tom Cloud told the Pensacola City Council on Jan. 26 during a workshop regarding conducting a municipal power feasibility study. “I do think that it’s not a bad idea. As an elected official, you might want to know some answers to some questions.”

While no decision was made during the workshop, city officials may be edging closer to conducting a feasibility study. This development is playing out against the backdrop of stalled franchise agreement negotiations with Florida Power and Light, which recently took over from Gulf Power.

To help walk the city council through this discussion about starting a municipal utility, the council invited Cloud to lay out the landscape. Cloud, an attorney with the Gray Robinson law firm, has a wealth of experience with this matter in Florida, with Councilwoman Jennifer Brahier describing him as “the most knowledged guy in the room about all of this.”

“One thing I can tell you,” Cloud said, “ignorance is not a sound position to negotiate such an important issue.”

During the workshop, council members also heard from FP&L, with Pam Rauch, vice president of external affairs and economic development, imploring the city to stick with the company.

“We value our partnership with the city of Pensacola,” Rauch told council members.

Rauch contended that FP&L, and Gulf Power previously, could best serve the city, touting the company’s economy of scale and reliability. For example, could the city handle post-hurricane operations trying to restore power to the area?

“The reality is, hurricanes are going to continue to happen in Northwest Florida, and every hour you don’t have power affects your businesses and affects your families,” Rauch said.

Additionally, the FP&L representative continued, the company’s aims and values are in line with the city’s own designs: plans to increase its renewable energy portfolio — “we are not just a believer in clean energy, we are a leader in clean energy” — as well as work to underground power infrastructure.

“We think we have the ability to bring so much more to this partnership than ever before,” Rauch said.

The FP&L VP made her presentation to the council as jeers bubbled up from the packed council chambers. Many of the people present were upset by the higher power bill since FP&L took over operations from Gulf Power.

“We’re not using any more power, but we’re getting charged double!” was one of many comments lobbed toward Rauch.

“There have been higher bills this month, and I’d like to address that,” Rauch said, explaining that bills are traditionally higher in winter, plus fuel costs have risen.

Rauch also told the city council that FP&L’s rate structure — approved by the Florida Public Service Commission last year — is designed to be initially higher than Gulf Power’s rates but will then decrease over four years so that rates will eventually be lower than Gulf Power’s 2020 rates: “While there is an increase now, it is designed to bring bills down.”

“We understand that high bills are no fun,” Rauch said.

Councilwoman Brahier seemed less than impressed by FP&L’s presentation. She recalled how this municipal utility conversation began because of concerns about the power company’s trimming of the tree canopy and lack of movement on undergrounding local power infrastructure and added that she didn’t buy the company’s assertion that such issues would be priorities back at the franchise agreement negotiating table.

“It feels a bit disingenuous; I’m just going, to be honest with you,” Brahier said.

As the council moves toward deciding on the feasibility study, Councilwoman Teniade Broughton asked Cloud if any such study might reveal that the city would be better off sticking with FP&L. She wondered if this could be an exercise in futility of sorts.

“So, there are no guarantees?” Broughton asked.

“Oh no, absolutely not,” Cloud replied.

Going forward, Cloud told city council members, the city would be best served by exploring both a municipal utility as well as continuing efforts to negotiate a franchise agreement with FP&L.

“To not go on both paths, you might miss an opportunity,” Cloud advised.

—

Councilwoman Brahier was my guest on WCOA this morning: