“They acted like thugs,” said former Florida Public Service Commission Chairman Nancy Argenziano of NextEra, “and growing up in Brooklyn, I know what a thug is.”
NextEra’s Nuclear Debacle
NextEra is no stranger to nuclear debacles, the cause of much legislative and regulatory ire in Georgia (Southern’s Plant Vogtle) and South Carolina (SCE&G’s Plant VC Summer). NextEra used a similar law in Florida, known as Advanced Nuclear Cost Recovery, to charge customers for nuclear power plants before construction was completed, effectively shifting all risk to customers.
NextEra, through its subsidiary Florida Power & Light, has been attempting to build two additional nuclear reactors at its Turkey Point plant, approximately 25 miles south of Miami. In 2016, FPL suspended the construction of the two reactors, Turkey Point 6 and 7, for four years. Florida’s advanced nuclear cost recovery law allowed FPL to charge customers $281 million for the additional reactors even though they were suspended and are unlikely ever to be finished. And FPL still wanted to collect millions of dollars more.
However, in October 2017, the Florida Public Service Commission finally stopped allowing FPL to charge customers for keeping the plant mothballed. State Rep. Jose Javier Rodriguez, D-Miami, urged regulators to reject FPL’s request: “This project has been an absolute boondoggle for which FPL customers have already paid over $282 million, for a project with no assurances of ever being completed.”
Customers are also on the hook for $200 million in cleanup costs at Turkey Point due to a hypersaline plume FPL released into Miami’s drinking water supply at Biscayne Bay. Florida’s Public Counsel J.R. Kelly noted, “In the case of FPL, the record shows that several decades of management decisions led directly to the development and growth of a hypersaline plume which threatens a public source of drinking water upon which millions of citizens depend.”
Funded 2016 Ballot Campaign to Deceive Voters
In 2016, FPL was the largest funder of a Florida political action committee (Consumers for Smart Solar) that attempted to pass Amendment 1, which was a deceptive ballot initiative that would have set back the growth of solar power in Florida. Amendment 1’s passage would have paved the way for the utilities to add fees to solar customers’ bills and to cut net metering payments for the extra power they produce. The $8 million that FPL poured into the committee was all for naught when an audio recording surfaced that confirmed that Amendment 1 was a “political jiu-jitsu” campaign designed to trick pro-solar voters.
Once the truth was out, support for Amendment 1 cratered.
Weeks before election day, the Energy and Policy Institute and the Center for Media and Democracy released audio through the Miami Herald that revealed an insider speaking candidly about the deceptive Amendment 1 ballot campaign. Sal Nuzzo, the vice president of policy for a utility-funded think tank that supported Amendment 1, called the amendment “an incredibly savvy maneuver” that “would completely negate anything they (pro-solar interests) would try to do either legislatively or constitutionally down the road.”
Nuzzo also said, “To the degree that we can use a little bit of political jiu-jitsu and take what they’re kind of pinning us on and use it to our benefit either in policy, in legislation or in constitutional referendums — if that’s the direction you want to take — use the language of promoting solar, and kind of, kind of put in these protections for consumers that choose not to install rooftop.”
The public backlash was immense. Public officials and figures from former Vice President Al Gore to Jimmy Buffett urged Floridians to vote against the FPL heavily-funded amendment campaign.
The other three investor-owned utility companies, Duke Energy, Tampa Electric, and Gulf Power, also joined FPL in funding the “political jiu-jitsu” Amendment 1 campaign. Of the $26 million the political action committee received, $20 million came from the utility companies.
Floridians for Solar Choice, which led the No On 1 campaign, only had $328,926 in donations.
“This diverse group of supporters rallied together to defeat a powerful foe with unlimited funds. We were on the RIGHT side of the issue and we beat a deceitful amendment with the MIGHT of the Florida voter. Floridians want more rooftop solar and want the monopoly utilities to end their attacks on clean energy, small business and freedom of energy choice,” said Patrick Altier, president of the Florida Solar Energy Industries Association.
NextEra has a decades-long record of bullying regulators and legislators who are not toeing the company’s line. Former Florida Public Service Commission Chairman Nancy Argenziano blames the loss of her job in 2010 on FPL. “They acted like thugs,”said Argenziano, “And growing up in Brooklyn, I know what a thug is.”
In October 2017, the Miami Heraldreported on an analysis of the state PSC authored by Integrity Florida. The report revealed how the PSC had been captured by the utility industry, and detailed many of the utility industry’s actions.
Examples of favorable regulatory action in FPL received from the report include:
A 2017 unanimous approval by the Florida PSC for a $400 million FPL rate hike for 2017 as well as a $411 million increase over the next three years. This was despite arguments from opponents that the decision boosted company profits at a cost to consumers and allowed FPL to fund natural gas expansions that it “has failed to justify as the most necessary or cost-efficient option.”
A 2014 cut of 90% to Florida’s energy efficiency goals and a termination of the statewide solar rebate program in 2015.
More than $6.5 billion in losses over 15 years on natural gas hedging ultimately paid for by consumers.
Ben Wilcox, director of Integrity Florida, stated at a news conference about the research, “Make no mistake, what we’re talking about today is corruption. It’s legal corruption. It’s institutional corruption but it’s corruption nonetheless.”
Integrity Florida released “Power Play Redux: Political Influence of Florida’s Top Energy Corporations” in May 2018. Major findings from the report included:
Florida’s four largest energy companies contributed more than $43 million to state level candidates, political parties and political committees in the 2014 and 2016 election cycles, more than half of which came from NextEra or its subsidiaries.
While the energy companies are not supposed to use customer dollars to lobby, regulators allow them to bypass the ban by paying dues to trade groups and associations that lobby, such as the Associated Industries of Florida and the Florida Chamber of Commerce. NextEra contributed $8.4 million of the $9.4 million utilities gave to AIF and the Florida Chamber in the 2014 and 2016 election cycles.
The Miami Heraldreported in March 2017 on NextEra’s incredible influence with state legislators: “Sen. Frank Artiles put on a brown jacket with “NextEra” emblazoned on the back and waved the green flag for the unofficial start to the Friday night truck race at this year’s Daytona 500 weekend…. Artiles, the chairman of the Florida Senate Communications, Energy and Public Utilities Committee, also used the event to conduct a fundraiser, which he says raised him more than $10,000. Now, Artiles, a Republican from south Miami-Dade County, is returning a favor to Florida’s largest utility.”
The article noted how Artiles scheduled two bills sought by FPL (both pieces of legislation died in committees):
SB 1238 would have allowed the utility to charge customers for exploratory fracking in other states. The bill would have overturned a state Supreme Court ruling against FPL.
SB 1048 would have also overturned a decision made by the judicial branch. It’s purpose was to help FPL install 88 miles of transmission lines by revising rights of way corridors and local land use regulations.
Also during the 2017 legislative session, the Energy & Policy Institute uncovered how FPL drafted language to restrict the adoption of solar power which ended up in Rep. Ray Rodrigues’ legislation to implement Amendment 4 – a ballot initiative that was approved by 73% of voters to prohibit tax assessors from increasing the taxable value of a home or business because of a solar installation.
Florida Rep. Ray Rodrigues sent an attorney with Florida House Bill Drafting an email on Jan. 23, 2017 titled “Feedback on Consumer Disclosure for Solar Amendment Implementation.” He attached a document titled “Chapter 501 Electricity Consumers Solar Energy Choice Act.” The metadata of the attached document listed Barbara J. Washington, Senior Legal Assistant at NextEra Energy Resources, the parent company of Florida Power & Light, as the author.
On Jan. 18, five days earlier, Rodrigues had accepted a $15,000 contribution to his political committee from FPL, and $2,000 from Tampa Electric.
On March 21, when his bill came up for its first hearing before the House Energy & Utilities Subcommittee, Rodrigues filed an amendment that included FPL’s language verbatim in eight different sections. Backlash resulted and the bill’s final version did not have the solar power restrictions. Gov. Scott signed the bill in June 2017.
Scuttled Acquisition Attempts in Hawaii and Texas
NextEra’s previous recent acquisition attempts have met fierce resistance, primarily due to the corporation’s behavior and lack of commitment to existing state renewable policies.
In 2014, NextEra attempted to purchase the Hawaiian Electric Company (HECO). Over the course of two years, NextEra failed to convince regulators in Hawaii that its $4.3 billion takeover proposal would benefit consumers. According to a July UtilityDive report, Hawaii regulators believed NextEra failed to show “good faith” and its promises of its “best efforts” were “too broad and vague.”
The Hawaii Public Utility Commission ultimately voted to reject the takeover. The commission said, “The Applicants [NextEra] failed to demonstrate that the Application is reasonable and in the public interest. In reaching this conclusion, the Commission focused on five fundamental areas of concern: (1) benefits to ratepayers; (2) risks to ratepayers; (3) Applicants’ clean energy commitments; (4) the proposed Change of Control’s effect on local governance; and (5) the proposed Change of Control’s effect on competition in local energy markets.”
Hawaii Governor David Ige also came out against the NextEra takeover. After the Hawaii PUC ruled against the deal, he stated, “I want to thank the Public Utilities Commission and stakeholders for their participation in this historic process. This ruling gives us a chance to reset and refocus on our goal of achieving 100 percent renewable energy by 2045.”
After the rejection in Hawaii, NextEra set its sights on Texas.
NextEra’s first attempt to purchase a majority stake in Oncor, Texas’s largest transmission and distribution electric utility, ended with a scuffle between the company and regulators. First, in April 2017, NextEra’s $18.7 billion bid was rejected. Weeks later, the utility filed a request for a rehearing. NextEra called the commissioners’ actions ” arbitrary and capricious decision-making and an abuse of the Commission’s discretion,” and further said the regulators violated Texas law because the commissioners didn’t have the authority to block the deal.
In June 2017, the Texas PUC rejected the offer a second time by denying NextEra’s petition for a rehearing. Commissioner Kenneth Anderson stated, “I, too, remain unpersuaded. I’m inclined to believe our original decision was the correct one.”
Texas regulators rejected NextEra’s bid due to concerns about Oncor’s future independence from NextEra. The regulators also wanted Oncor’s financials to be separate from NextEra’s in order to protect Oncor’s credit rating.
In the rejected order, the Texas PUC stated that NextEra “failed to meet its burden”. The final order also stated, “under NextEra Energy’s proposal, the tangible benefits of the proposed transactions to Texas ratepayers are minimal in comparison to the status quo.”