Proposed sale of Florida utilities could create monopoly
Southern Alliance for Clean Energy concerned over proposed Southern Company deal
By Jon Gosa
TALLAHASSEE, Fla. — The Southern Company announced Monday that it had entered into agreements to sell Gulf Power Company, Florida City Gas and the entities holding Southern Power’s interests in Plant Oleander and Plant Stanton to NextEra Energy for an aggregate purchase price of approximately $6.475 billion, and officials with the Southern Alliance for Clean Energy, a nonprofit organization that promotes responsible energy choices, are concerned that the deal is not in the best interest of Florida’s public.
“While Southern Alliance for Clean Energy (SACE) is still reviewing this deal, it raises concerns that any one monopoly utility would control such a significant percentage of Florida’s energy market,” a SACE press release said Monday. “Such consolidation of control may limit competition at a time when we need more and not less.”
Officials with the Southern Company had a different opinion about the deal and offered the following statement on the company’s website:
“This sale provides Southern Company the opportunity to deliver great value to our organization, bolster our financial profile and continue to build the future of energy as one of America’s premier energy companies,” Southern Company Chairman/President/CEO Thomas A. Fanning said. “These Florida businesses are being sold at a price that provides substantial value to our stockholders, while entrusting the customers of these exceptional franchises to a high-quality utility company that has a well-established presence in the state.”
NextEra is the parent company of Florida’s largest investor-owned utility, Florida Power & Light (FPL).
Headquartered in Juno Beach, Fla., NextEra, which advertises itself as a “leading clean energy company,” has consolidated revenues of $17.2 billion, operates 46,790 megawatts of net generating capacity, employs 14,000 people in 33 states and Canada as of year-end 2017, and owns subsidiary companies in Delaware and the Cayman Islands.
“The transactions are designed to allow Gulf Power and Florida City Gas to continue their customer-focused business models and strong commitments to safety, reliability, customer service and community engagement,” a statement about the proposed sale said on Southern Company’s website. “Proceeds from these transactions are intended to be used to reduce debt and improve Southern Company’s balance sheet.
“Southern Company’s goal remains to simultaneously provide benefits to customers, preserve solid credit metrics and improve the contribution of its state-regulated utilities to its value proposition. The opportunity to fund the business without raising significant additional capital makes the value proposition of these transactions even stronger.”
According to officials with SACE, the Florida Legislature has never authorized the Florida Public Service Commission to review the sale of a utility as to whether it is in the best interest of consumers, so there is no protection of the public’s interests.
“Because there is a long history of FPL’s influence with policymakers resulting in policy outcomes not in the best interest of consumers and the environment, the impact of this proposal should be closely examined,” the SACE press release said.
According to the Southern Company’s website, completion of each transaction is conditional upon, among other things, the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
That piece of legislation requires that any investor seeking to acquire a 15 percent stake or a stake valued at more than $15 million in a security to file with the government. The form is called a premerger notification report, with the filing marking the beginning of the 30-day review.
“The Gulf Power and Plant Oleander and Plant Stanton transaction will require approval by the Federal Energy Regulatory Commission and the Federal Communications Commission,” Southern Company’s website said. “The target completion for the sales of Gulf Power and Southern Power’s interests in Plant Stanton and Plant Oleander is the first half of 2019. The Florida City Gas transaction’s target completion is third quarter 2018.”
Southern Company hosted a financial analyst call to discuss the announcement at 9:45 a.m. Monday, during which Fanning and Chief Financial Officer Art P. Beattie went over details of the transaction.
A replay of the webcast will be available on the site for 12 months at http://investor.southerncompany.com/webcasts.
For more information about NextEra Energy companies, visit these websites: www.NextEraEnergy.com, www.FPL.com, www.NextEraEnergyResources.com.
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