Government Regulation, Crony Capitalism Is Keeping 1000s In Florida Without Power

Authored by Tho Bishop via The Mises Institute,

Almost two weeks have passed since Hurricane Irma made landfall in South Florida, yet tens of thousands remain without power. With temperatures regularly eclipsing over 90 degrees, these outages are not only a grave inconvenience for Floridians cleaning up after the storm, but have proved to be deadly. Given the power of Irma, it is not surprising that it has left behind incredible devastation. Unfortunately it is also not surprising that it is a government-protected utility that has done the most to impede recovery. The pain and suffering currently being felt is the direct result of government policy and the perverse incentives of crony capitalism.

One of the talked about examples of how bad policy is making things worse for Florida families are a variety of government policies that discourages the use of solar power in the Sunshine State. Government policy dictates that Floridians are required to be connected to the central power grid, even if they have enough solar panels installed to power their entire house. Because of this requirement, a family stuck in areas without power with solar panels installed cannot use them now because doing so could endanger workers trying to restore power for their neighbors. Once again government’s desire for centralized control has unintended consequences.

Of course, even without such rules, it’s unlikely that all of Florida would decide to go off the grid. Given that, it’s important to understand how the legal monopoly granted to electric companies not only traps customers into being entirely reliant upon a single company, but actively incentivizes those companies to be reactive – rather than proactive – when it comes to natural disasters and other events that threaten service.

After all, companies like Florida Power & Light will respond to Irma as they have done to hurricanes past, by increasing prices on their customers.  Unfortunately, the revenue reaped seems to have made little impact in FPL’s preparedness for future storms. While the company has reported that its recovery efforts have moved faster this year than when Hurricane Wilma hit South Florida in 2005, more residents suffered outrages due to Irma – in spite of the fact that Wilma actually had higher sustained winds when it made landfall.  

Along with the temporary wage hikes following storms, the company also charges annual “storm fees” meant to pay for tree maintenance around power lines. FPL is now facing a class-action lawsuit in the aftermath of Irma over their apparent failure to do so.  Legal cases are certainly nothing new to FPL, as they have often legally fought measures requiring more of their powerlines to be buried underground, rather than be subjected to tropical storm winds above.

While FPL may be skimping on storm preparedness, they do make significant investments in the one resource that is truly vital to their business model: government.

FPL and other power companies are regularly among the largest political contributors in the state of Florida. In return, their lobbyists have been able to earn significant influence in writing energy legislation in the state of Florida. Of course this is the inevitable result of government granting monopolies to private companies. Isolated from the competition of the market, a business has no need to satisfy the needs of the customer, they only need to protect the relationship they have with government. Mises summed it up well in Human Action when he wrote, “Corruption is a regular effect of interventionism.”

Now given the amount of heat companies like FPL are facing following Irma, it’s possible the companies may finally have the political incentive to make some changes in the way they conduct business. Legislators may even be shamed into removing some of the restrictions on solar panels.

What Florida really needs, however, is to do away with the entire concept of natural monopolies for public utilities. There should be no legislation arbitrarily awarding either private or public companies a commercial fiefdom by legally protecting them from competition. Doing so ensures that desires of customers will always take a back seat to the good will of politicians, and will stifle the ability of the market to innovate superior methods of delivering such important services.

As Murray Rothbard wrote in Man, Economy, and State:

Regulation of public utilities or of any other industry discourages investment in these industries, thereby depriving consumers of the best satisfaction of their wants. For it distorts the resource allocations of the free market. Prices set below the free market create an artificial shortage of the utility service; prices set above those determined by the free market impose restrictions and a monopoly price on the consumers. Guaranteed rates of return exempt the utility from the free play of market forces and impose burdens on the consumers by distorting market allocations.

Hurricanes in Florida are as inevitable as Florida Man headlines. It is not a matter of if Florida will be hit with another powerful storm, but when will it happen next. If its state government wants to truly do everything it can to protect its citizens from the damage Mother Nature can wrought, it should free them from the devastation they face at the hands of government monopolies and crony capitalism. 



SafelyGraze YUNOSELL Thu, 09/21/2017 - 13:46 Permalink

world's richest woman.well bless her heart.I hope everything goes well with the walmarts, and that they continue in their quest to maintain intergenerational wealth through commerce. that is the true path to prosperity. those who seek to follow that path should borrow as much money as possible in their quest to acquire the blessings of monopoly.good look to all of you!hugs,serena

In reply to by YUNOSELL

realmoney2015 SafelyGraze Thu, 09/21/2017 - 14:02 Permalink

I realize this article is about the Florida flooding. But Hurricane Maria destruction of Puerto Rico is just so bad. Many of the residents could not evacuate the island. Please help us raise money for Puerto Ricans to get the food, water and shelter they need. For every retweet, we will donate $0.10 to ConPRmetidos! help out!

In reply to by SafelyGraze

Dr. Richard Head Jimbeau Thu, 09/21/2017 - 14:43 Permalink

I live in Ohio and my neighbor is a line worker out here.  He was licking his chops to be called down to help in the repairs.  $1,100 a day is what he would get, including travel time, as well as lodging and food.  He would most definitely be working his ass off for that money, but a great pay day overall.  Just think what could be done with these funds on proactive measures.  In fact, proactive limb removal and maintenance would go a long way to preventing much of the damage. I look back to the whole eastern portion of the US that lost power centered around one of our plants in Cleveland - my brother in the fire department has said, "Those whole fucking electric grid is bailwire and duct tape!"  Third-world with a first-world face. 

In reply to by Jimbeau

greenskeeper carl RAT005 Thu, 09/21/2017 - 14:55 Permalink

There are isolation switched that can be installed on Florida homes that will isolate the house from the power grid, instantly, if it stops getting power from the grid. This article's whole point is nonsense. The best systems are grid tied with battery backups. Granted, these are the most expensive, but these will have automatic measures to prevent feeding power into the grid and can be installed in FL.

In reply to by RAT005

new game BennyBoy Thu, 09/21/2017 - 13:56 Permalink

as a side note in MN; trying to start a sole proprietorship and 1/2 the requirements are fuking needless. ein- ok check, resolution of authority at bank- ok check, publication of business- say what-who gives a shit, business license- fuking fees and time wasted, assumed name with sec of state- another fuking fee and lockup of name, ok check, done. dl, ss# too. wtf, am i a terrorist for starting a business?simple under 10k gvwr delivery van. 1099 income.

In reply to by BennyBoy

sheikurbootie Thu, 09/21/2017 - 13:27 Permalink

There was a REASON the native American's did not live in mid and southern Florida in large numbers.  The hurricanes and heat were deadly then too.  Weather fit for a alligator.

Stuck on Zero Thu, 09/21/2017 - 13:28 Permalink

It is not uncommon for governments to fall after a natural disaster. The 1972 Nicaraguan earthquake is an example. The poor response of the West Pakistan government to the 1970 typhoon in East Pakistan was a principal reason for the ensuing war which resulted in Bangladeshi independence the following year.  The plagues that hit Europe in the 1400s resulted in the overthrow of the feudal orders. Maybe ...

goldenrod Thu, 09/21/2017 - 13:32 Permalink

If you have solar panels with battery backup you should have power when the grid goes down.  It doesn't matter whether you are connected to the grid or not.  When the grid goes down your batteries act like a backup generator until they are drained.  This article makes no sense whatsoever. 

chubbar goldenrod Thu, 09/21/2017 - 13:44 Permalink

It's written by someone with no knowledge of how solar systems work. We went over this already in an earlier article on the same topic. Dedicated grid tie systems can't power homes if the grid is down. The inverter automatically doesn't allow the system to come on line, doesn't matter what the fucking power company rules say. Get a battery backup system with a generator and then you have some redundancy. The sun will power the home during the day as well as charge the batteries for powering the house at night. If you have a few days without sun you can run the generator to power the house and charge the batteries which should give you power for essential items for a few days between charges.

In reply to by goldenrod

swmnguy goldenrod Thu, 09/21/2017 - 13:48 Permalink

You're close, but not quite right.I have a grid-connected solar array on my roof.  The inverter has a switch in it, that shuts off if it doesn't sense some AC coming into it from the grid.  That way the system doesn't send power to the grid, to potentially fry a lineman working on repairs.However, if one had a transfer disconnect switch, as one would if one had an emergency backup generator, that would safeguard the system by cutting off the feed to the grid.The utilities don't want those with solar panels to have such switches, due to the system of rebates and tax incentives.  They want the power from the systems going to the grid, and when the grid is down, they want solar PV systems to stop working as well.The thing to do would be to get a tri-fuel (propane, diesel, natural gas) generator, with the transfer disconnect switch, between the solar PV system and the grid.

In reply to by goldenrod

any_mouse goldenrod Thu, 09/21/2017 - 13:50 Permalink

There needs to a disconnect between the panels and batteries to not back feed to the grid. In Michigan I knew rural homeowners who would break the seal on their meters to disconnect from the grid to run a generator during extended blackouts. The utility workers would ignore the broken seals. This was in the time before 9/11. Now I imagine SWAT shows up for a broken meter seal.

The FL regulations around solar prevent the installation of a disconnect. Instead they went with when the grid is down so is your solar.

And then there is the FL law that says all residences must be connected to the grid.

You are not allowed to opt out of the matrix.

In reply to by goldenrod

Hubbs Thu, 09/21/2017 - 13:37 Permalink

Come on people. If the Deep Dark State is willing to sacrifice 3,000 on 9-11 plus thousands more for Afghan and Iraq Wars, and follow up with VA Medical Care for the survivors, did you really expect them to be serious about hurricane victims?

goldenrod Thu, 09/21/2017 - 13:37 Permalink

Note that until about 3 years ago, solar power was expensive.  That is why most people don't have solar panels.  Even today, it is expensive if you want a battery backup.  Also, putting solar panels on your roof with a battery backup requires an initial investment of $20k - $30k.  Most people don't have that kind of money laying around.  So even of there was no government mandate to connect to the grid, 99% of the population would still be connected to the grid. 

Jethro Dull Ban KKiller Thu, 09/21/2017 - 14:41 Permalink

True, but, you can have some power at the price of a grid-tie system, with, a SMA Sunnyboy inverter with Secure Power Supply.It will be limited to 1500 or 2000 watts --- inverter model dependant. So, about the same as a standard Nema-15 wall outlet.So, you can have the fridge, freezer, lights, fans, the basic critical load circuits, for, the price of a grid tie system. But, it will only work when the sun is providing enough radiance.And, it will anti-island to prevent backfeeding the grid without manual or remotely operated circuit breakers.But, you will have to manually plug into the receptacle.

In reply to by Ban KKiller

Kidbuck Thu, 09/21/2017 - 13:38 Permalink

These Florida power ass wipes tried to sell me "lightning protection" for my appliances as an add on to my electric service when I moved into my present home. Turns out they have previously installed a black box inside my garage. It is not on the main input line. It is just hanging on the wall above the water heater. I doubt it can possibly do anything useful and I asked them why they are not supplying me with the safest connection by default. Of course I won't pay for it nor will I let them in my garage to remove it.

greenskeeper carl 2banana Thu, 09/21/2017 - 15:08 Permalink

Kinda like the Internet company where I live. Their cable modem/wireless router combo costs 7.99 a month to rent. It's 75$ several places online. A better model is 100. I asked the lady on the phone if it was rent to own, as in after a certain number of months I would just own it outright, since if it's close to that price id just do that rather than go through the hassle. Of course it's not, but most people just pay for it forever anyway, because they are stupid. I told the lady that you do realize you are renting a modem that's 75 dollars retail to people for 96$ a year, and asked if most people actually do that, and she said yes. Sounds like a total scam, but it's hard to feel sorry for the dumbasses that fall for it

In reply to by 2banana

E. Phil Chew Thu, 09/21/2017 - 13:39 Permalink

Unintended Consequences is a book by John Ross - a good book.  Please read it.There are no unintended consequences when it comes to government grabbing things like rights, freedom and the use of private property.  The consequences are fully 'war-gamed', etc.