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Blame? Plenty Fixes? None

By ROBERT TRIGAUX
Published August 14, 2006

Isn't it about time that Florida adopt a state slogan that truly reflects our current reality?

This one could work: Like a good neighbor, Florida is there. How about You're in good hands with Florida.

Sure, these slogans sound a lot like those of State Farm and Allstate. But given how many of Florida's elected leaders seem snug and comfy in the pocket of the overly influential insurance industry here, it's only fitting that the state's talk fit its walk.

Let's look at how busy Florida's politicians, the state-run Citizens Property insurer of last resort and big poobah insurance task forces are. Busy fiddling, that is, while Florida's property insurance market burns and threatens the greater economy.

Consider just some of the insurance news from the past week:

- Florida's four candidates running for governor were asked how they would help fix the insurance crisis in the state. All four conceded we're in a big mess. None offered solutions that would help much in the near term. And none suggested the nation's insurance industry should be held more accountable.

- Among 800 surveyed Floridians asked last week who they hold "responsible for the high cost of insurance in Florida," 51 percent pointed their fingers at insurance companies. Only 19 percent named the state government, and just 15 percent blamed "weather patterns."

It's notable that only 14 percent said insurance companies could best resolve the insurance crisis. Floridians still look to the state government for leadership on this nasty predicament. The full survey results appeared in Sunday's St. Petersburg Times and can be found online at www.tampabay.com. Funny how the insurance industry gets the public blame but avoids responsibility to fix the mess.

- On Tuesday, a 15-member state panel created by Gov. Jeb Bush in June, chaired by Lt. Gov. Toni Jennings, and charged with finding solutions by November to the property insurance crisis met for the first time to consider its options. The task force focused not on crucial insurance availability but endorsed a matching funds program for homeowners who spend their own money to help make their houses less prone to hurricane damage. Commendable, but hardly front-burner remedies.

- Citizens Property, the insurance industry's convenient dumping ground for unwanted policyholders, is the state's biggest property insurer. In a board meeting, Citizens came up with this solution: Rather than pay your rapidly rising Citizens' premiums once a year, soon you can pay a portion every three or six months. Hey, mission accomplished.

- Insurance money talks. Since 1996, the property insurance industry has given $11.2-million to Florida candidates and state political parties, with roughly three of every four dollars to Republicans, according to research published by the South Florida Sun-Sentinel.

- On Friday, USAA, the fifth-largest property insurer in Florida, asked state regulators for a 40 percent average rate hike, its second increase in four months.

* * *

On the front page of the Times Thursday, it's tough to ignore the big close-up photo of a Progress Energy Florida meter and a headline that blared one number: $87,000,000. It was a story about how Progress Energy made a big quarterly profit in the state by selling lots of high-priced electricity to Floridians, even as the North Carolina parent company managed to lose $47-million in the quarter.

The story went on to say that Progress Energy Florida enjoyed a 770 percent jump in profits in the second quarter of 2006 when compared to the same quarter of 2005. Inaccurate? No. But it was too narrow a snapshot of Florida profits coming at a time when many Floridians are suffering sticker shock from their latest monthly electric bills.

No surprise, Progress Energy's executives did not like this story. It made the company look greedy. The company argued the story lacked proper context.

Here is some added perspective. Yes, Progress Energy Florida enjoyed $87-million in profits in the latest quarter. But the leap in profits when compared to a year ago is more because of last year's depressed profits from writing off expenses of just $10-million than to any windfall achieved this year. In the same quarter of 2004, two years ago, for example, Progress Energy Florida had profits of $84-million, or only $3-million less than the $87-million achieved this year.

That's the kind of modest financial gain that is more typical of its utility operations here, the company said.

Progress Energy last week toyed with the invitation to send the Times a letter expressing its concerns and explaining its earnings. It held off when I offered to expand on the matter in this column.

That apparently did not deter the company from publicizing its take on the matter. In an e-mail distributed Friday that started with "Dear Community Leader," Progress Energy Florida said the Times story "contained misleading claims," "misrepresented Progress Energy Florida's contributions to second-quarter earnings" and "contained factual errors."

Progress Energy Florida spokesman Buddy Eller acknowledged Friday that the e-mail, signed by community relations manager Nancy Loehr, "was not supposed to have gone out."

Big power companies are proud but unusual animals. They consider themselves, rightfully so, a key and integral part of their communities. They concede they must endure a Big Bad Utility image when customers lose their power or when monthly power bills start to look like mortgage bills. They get sensitive when they take some heat from rising electricity rates. They argue, in this case, that "higher" rates do not mean more profits but reflect the higher fuel costs they must pay to run their power plants.

I appreciate Progress Energy's concerns about being misunderstood, and wanted to share some of them. I'm just not sure how many of their bill-shocked customers will send condolences.

Robert Trigaux can be reached at trigaux@sptimes.com or (727) 893-8405.

[Last modified August 14, 2006, 06:19:20]