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Progress Energy's lesson from Belleair: Do better

By DIANE STEINLE
Published November 13, 2005

Belleair may be a little town - its population hovers around 4,000 - but it certainly did create a lot of heat around the issue of electric power. Communities throughout Florida watched as Belleair battled giant Progress Energy for the right to buy the poles and wires in the town then turned itself inside-out in the lead-up to last week's controversial referendum on creating a city electric utility.

Neighbor turned against neighbor, a mayor risked his popularity and effectiveness to push his objective, and both Belleair and Progress Energy ended up battle scarred.

Why was this dispute in a small town such a big deal?

Belleair isn't the only town in Florida that has itched to create its own electric system, thinking that they would get better service and a passel of profits for their town treasuries if they sold power to their residents rather than letting a private company do it.

There are now 33 public electric utilities in Florida, but 32 were created before 1943, when the electricity generation and distribution business was not so complicated and customers were not so demanding. Since then, only one city, Winter Park, has started its own system, and that one has been in operation only since June.

However, several Florida cities have started down the path Winter Park trod. As their long franchise agreements with Progress Energy, formerly Florida Power, expired, they wanted to consider taking over the job themselves. First they had to battle in court for the right to purchase the power company's poles and wires - an option provided in the franchise agreements that Progress Energy refused to honor until ordered to do so by a court.

After they won the right, the cities had to decide whether they really wanted to start up their own systems or just sign another franchise agreement with the electric company. Only Winter Park, which suffered years of poor service from Florida Power, decided to go ahead.

But Belleair, an upscale residential enclave, came close. The town government was wholeheartedly in favor of creating a municipal electric system, even though the town has struggled to maintain other city services. The leader of the effort, which took several years of study, debate and legal sparring, was undeniably Mayor George Mariani Jr.

Mariani clearly doesn't like Progress Energy. Neither did his dad, a former Belleair mayor, so the son promised his father he would pursue a pullout from the Progress Energy network. Mariani, as well as some other proponents of the pullout, disliked the sight of Progress Energy's old poles and untidy, drooping wires. They wanted the system put under ground. City officials also argued that if someone was going to make a profit off the sale of electricity to Belleair residents, why not the town government?

Like many small towns in Florida, Belleair faces challenges in raising enough revenue to cover the rapidly rising cost of city services. It is hemmed in by other cities, so it can't annex new territory to expand its tax base, and because it is mostly residential, its tax base doesn't have the heft that commercial properties provide.

So the town government pushed hard for residents to approve the purchase of Progress Energy's system in last Tuesday's referendum. Two groups formed by proponents of municipalization, Power to the People and Belleair Citizens for Truth, flooded residents' mailboxes with cleverly designed fliers that portrayed Progress Energy as a menacing presence that would take over town government and raise electric rates. Progress Energy did its own campaigning to woo residents.

Last Tuesday 58 percent of Belleair voters turned out and a majority said no to an electric system operated by the town of Belleair. Residents said they were concerned about the debt the town would incur to buy the poles and wires and set up the new system, about the risk that the city system might be less reliable, and about recovery time if a hurricane hit the area. Finally, some were turned off by the onslaught of negative advertising by proponents of a city system.

However, the battle of Belleair did not end in a true victory for Progress Energy. The company's image was sullied - and justly so - by its stubborn refusal to honor a written contract provision, not only in Belleair but in other communities around Florida. The company's dedication to modernizing its distribution system was called into question, too. Why do those poles and wires look so bad in Belleair? Why can't the residents of Belleair, who have been good customers for 75 years, qualify for a reasonably priced, phased-in program of undergrounding, get their trees trimmed sensitively - and oh, not have to read in the newspaper that Progress Energy has done something underhanded?

Here's the lesson in all this for the top brass at Progress Energy: Sure, you keep the lights on most of the time, but that isn't all that matters to your customers. If you want loyalty, you need to work harder.

Diane Steinle can be reached at steinle@sptimes.com

[Last modified November 13, 2005, 03:00:43]