July 13, 2014

July 13, 2014 – Sparks Fly in Babcock Ranch Power Struggle

By: Vicki Parsons - IT

Syd Kitson says he needs to set up his own electric utility on the sprawling Babcock Ranch to build his solar-powered city of tomorrow.

But the Lee County Electric Cooperative and its allies counter that Kitson’s dream would be bad policy and potentially bad for consumers— disrupting the long-term plans of existing utilities.

At the request of Kitson on June 25, the parties have pushed the pause button on the Florida Public Service Commission proceedings that began in March and would otherwise settle the dispute.

But in the absence of a precedent, the debate in and out of the formal PSC process has blossomed into a multitude of public policy issues.

Babock Ranch, on eastern edge of the Lee/Charlotte line, will have 19,500 homes on 18,000 acres. It was part of a much larger ranch, but much of that was sold back to the state for a giant preserve in 2006.

Experts are split on who’s right, but agree the case is a glimpse into the future of how electricity will be generated and sold to consumers. Kitson plans to have large arrays of solar panels plus more panels on rooftops throughout the community.

“It’s a great experiment,” said Joe Simmons, a scientist and FGCU professor who’s director of the school’s emergent technology institute. “It’s designing the future for us.”

But exactly how that experiment is conducted is a matter of debate.

Both sides are arguing their case in a torrent of filings to the Florida Public Service Commission, which has jurisdiction but no precedents in the past 50 years.

Kitson says he has all the authority he needs through the Babcock Ranch Community Independent Special District, created in 2007 by the Legislature.

That authority would be used for the benefit of future residents of Babcock, he said. “Perhaps the most important thing is we want our customers to have the best quality at the lowest pricing. In order to achieve that we’ll have a large element of renewable energy and smart, energy efficient homes.”

The net result for said, is that “We’ll also have the ability to have the lowest possible pricing available.”

Florida Power & Light, which has a small amount of the ranch in its territory and would supply some of the ranch’s electricity to either the cooperative or Kitson, is urging a “mutually acceptable arrangement.”

Kitson said to draw the capital and expertise to make it happen, he needs to have control over the crucial energy component of the project.

But the cooperative, which has the right to provide service, doesn’t see it that way.

“We feel our members wouldn’t want to take that route,” LCEC spokeswoman Karen Ryan said. “We spend a lot of time and focus on providing good service and competitive rates. That’s part of what makes a cooperative work.”

The Legislature only gave the district the right to “provide electricity,” not explicit authority to be its own full-blown utility, its filings point out.

Exactly what the Legislature intended is a topic of debate.

Firmly in Kitson’s camp is Michael Bennett, the Bradenton electrical contractor who sponsored the bill creating the special district when he was a state senator in 2007.

“Believe me, we always expected them to be able to generate electricity through green power,” he said. “The intent of the bill was to give Babcock literally everything they needed to develop their own community, including, if they needed it, an electrical system.

“I’m so positive on that, I’d be willing to testify before the PSC,” he said.

But Florida Electric Cooperatives Association executive director William Willlingham said that point of view ignores a history of electric generation regulation that points to a more conservative interpretation of exactly what Kitson should be able to do.

“The issue is did the Legislature intend to pre-empt the Grid Bill,” he said, referring to 1974 legislation that gave the public service commission authority to regulate electricity providers so the public wouldn’t be hurt economically by turf wars.

Before that, Willingham said, consumers often suffered from a Wild West free market where land grabs were common — there would sometimes be two competing utilities “with power lines on both sides of the street.”

He noted the Grid Bill was passed eight years after the main precedent cited by Kitson — the Reedy Creek Improvement District, which is the property that makes up Disney World.

Disney was granted the right to set up its own utility, complete with two on-site nuclear reactors. Those reactors were never built, but the district operates its own utility.

If Kitson’s project works out it could benefit the people who eventually will buy homes in the new community, Willingham said — but if it doesn’t work out, they could be stuck with higher rates than surrounding areas.

Is there a middle ground?

Simmons said there may be.

Kitson could contract with LCEC to do the work of building electric infrastructure on the ranch, he said. “Maybe LCEC should be allowed a seat at the table.”

However the issue is resolved, he said, it’s important the Babcock project come to fruition because business models like it are vital to the industry and the planet’s environmental health.

© The News Press