In a suite at BayCare Ballpark this year, the Clearwater Gas System hosted handpicked guests to watch Philadelphia Phillies spring training games.
Over 11 games in March, about 80 business owners, developers, local government officials and energy industry executives got the invite to mingle over baseball with a spread of hot dogs, chicken wings and other snacks.
The $40,000 tab was paid by the city-owned gas system. It’s part of a decades-old program that, since 2015, has contributed nearly $2.3 million of ratepayer money to local nonprofits and businesses. In exchange, those organizations provide access to events and exposure of the natural gas brand.
Clearwater Gas executive director Chuck Warrington said the sponsorship deals give back to the community while allowing the utility to engage with some of its biggest customers.
But the practice has started to raise eyebrows, including at City Hall, where some officials are voicing concern about the size of the expenditure and the way the money is used. Clearwater Gas, with 30,000 customers in Pinellas and Pasco counties, spends significantly more on sponsorships than any of the other 26 municipally owned utilities with natural gas in Florida, an analysis by the Tampa Bay Times found.
Pensacola Energy has about 14,000 more customers than Clearwater Gas but spent eight times less on sponsorships since 2015, about $267,000. Gainesville Regional Utility, with about the same number of gas customers as Clearwater, spent one-fourth of what Clearwater did on sponsorships in the last seven years. And Tallahassee’s gas utility has 2,000 more customers, but spent $73,480 on sponsorships in the same period compared to Clearwater’s $2.3 million.
While most of the groups receiving sponsorship money from Clearwater Gas are charities, no organization has received more than the for-profit Philadelphia Phillies. The utility has paid the team $359,000 since 2015 in exchange for the stadium suite, food and drinks, and the Clearwater Gas logo displayed on the scoreboard and pamphlets.
Clearwater also sets itself apart in another way, by sharing the benefits of its sponsorship deals with elected officials and other selected guests. In addition to Phillies games, the perks include tickets to nonprofit banquets, concerts at Ruth Eckerd Hall and participation in charity golf tournaments. In contrast, most of Pensacola Energy’s sponsorships go to youth athletic teams, and it receives no perks other than its logo on players’ jerseys, according to records provided by the utility.
“Some people would say, ‘What is the public purpose?’” said Allen Putnam, director of the municipally owned Beaches Energy in Jacksonville, which has 35,000 electric and gas customers and does not participate in sponsorships. “If you can’t explain the public purpose, you shouldn’t spend it.”
Money for Clearwater’s sponsorships has historically come from an additional charge in every customer’s bill set aside for promoting energy conservation. The amount could be adjusted each month.
When Clearwater Gas System’s logo is displayed on banners at golf tournaments or on the Phillies’ scoreboard, for example, Warrington said it has the effect of encouraging residents to use less electricity.
“It helps to explain to our customers that we are an energy-efficient source that is available, because many people don’t know gas is available in a lot of Florida,” Warrington said.
Unlike investor-owned utilities, which are overseen by the Florida Public Service Commission, municipal utilities like Clearwater Gas are regulated by the cities that own them. Sponsorships and charitable giving are more common among investor-owned utilities, but the commission prohibits using funds from rates for promotions related to “image enhancing,” according to state statute.
All investor-owned utility sponsorships must be paid through shareholder profits.
“They’ve always viewed it that customers don’t have a say so in who the utility is contributing to, therefore they shouldn’t have to pay for those contributions because they might not want those contributions going to them,” said Marshall Willis, a utility consultant at the Florida Office of Public Counsel, which represents citizens in utility rate cases before state regulators.
In October, interim City Manager Micah Maxwell directed Clearwater Gas to begin paying for sponsorships from base rates, instead of the additional charge for energy conservation. The change brought Clearwater in line with how other municipal utilities pay for those expenses.
“ It feels more transparent this way,” Maxwell said. “Putting the sponsorship expenses with the rates or even against profit slows things down substantially and gives the ratepayers more of an opportunity to see what their utility is doing and question it if they disagree.”
Over the past seven years, Clearwater Gas has contributed $365,649 to nine chambers of commerce across Tampa Bay, $200,500 to Clearwater for Youth, $126,475 to the Pinellas Education Foundation, $90,000 to Ruth Eckerd Hall, $64,070 to Morton Plant Hospital and thousands more to about 150 other groups, according to records provided by the utility.
In exchange for its $25,000 sponsorship of the 2019 Sugar Sand Festival, Clearwater Gas’ logo was blasted throughout the two-week event, on TV ads, banners, sand sculptures and shirts worn by volunteers. The utility also received 225 general admission tickets to the festival and four VIP dining experiences.
Twenty-two people, including developers, restaurant owners, elected officials and their unnamed guests, joined six Clearwater Gas staff members for the VIP dinners, according to a list provided by assistant director Brian Langille.
But Clearwater Gas could not provide the names of the 225 people who got the festival tickets. Until late 2019, when Maxwell and city Finance Director Jay Ravins began scrutinizing the utility’s finances, Clearwater Gas was not tracking everyone invited to participate in hundreds of sponsored events over the years.
Maxwell required Clearwater Gas to track those names beginning in 2020.
Ravins also has raised concerns about the sheer amount of ratepayer money being spent on sponsorships and “whether there’s a return for the investment.”
“From the budget and finance perspective, it’s something we have always questioned,” Ravins said.
Warrington said for the past two decades, he discussed sponsorships in general with former City Manager Bill Horne once a year. In July, Maxwell said Horne asked him to help the utility create more structure in how it selects which organizations it sponsors. The process now includes Maxwell reviewing and signing off on each expenditure.
Maxwell became interim city manager in August when Horne died shortly before his planned retirement. Jon Jennings, the city manager or Portland, Maine, will begin work as Clearwater city manager on Nov. 8.
Clearwater Gas returns a dividend each year to the city’s general fund, the pot of money that covers operating expenses for police, fire, parks and other services. By policy, the dividend must be at least 50 percent of net income. Clearwater Gas has returned to the city an average of $3.3 million every year since 2015.
That money acts as a return on investment for Clearwater residents, who own the utility, and helps keep property taxes low, Warrington said.
Mayor Frank Hibbard said, as an enterprise fund, he expects Clearwater Gas to act like a private business. While it spends significantly more on sponsorships than other municipal gas utilities in Florida, Hibbard said Clearwater’s program gives back to the community and shows gratitude to loyal customers.
“It’s all about relationships and not taking anybody for granted, so in business, that’s something that’s an ongoing thing,” Hibbard said. “As soon as you take customers for granted, then you’re on a downhill slide.”
For many of the recipients, the sponsorships support charitable missions and help people in need, Hibbard said. The $25,000 the Beth Dillinger Foundation received from Clearwater Gas between 2016 and 2020 went to feeding children on weekends, and to college and vocational scholarships.
“It’s made a huge impact on us,” said Bob Dillinger, vice president of the foundation and retired Pinellas-Pasco Public Defender.
Warrington also defends the sponsorship program because it accounts for less than 1 percent of revenue per year. “It’s pennies on the dollar for our customers,” he said, “and we believe it serves a purpose of keeping us involved in the community and serving the community.”
In a 2019 study, the Energy and Policy Institute, a fossil fuel industry watchdog group, found that most investor-owned utilities use charity as a way to influence policy, like how Duke Energy gave more than $200,000 to Black community groups in North Carolina in 2015 while pushing them to cosign a “solar power hurts the poor” campaign against renewable energy.
Although Clearwater Gas’ sponsorship program is a fraction of investor-owned utilities’ charitable giving, Alissa Jean Schafer, a research specialist for the institute, said the pattern of using money to build goodwill is the same.
“The dollar amount is almost less important than the real implications of what they’re doing, because influence over decision makers can come at a wide range of dollar amounts,” Schafer said.
“It’s the emphasis on spending money to build those relationships to then turn around and get an outcome that’s going to be favorable to the company.”
Clearwater Gas is growing at a rate of roughly 2,000 new hookups per year, according to Warrington. This growth, coupled with the utility’s goodwill efforts of giving sponsorships to local organizations, comes as environmental activists push to phase natural gas out of homes and businesses nationwide and replace those appliances with electric sources.
Though natural gas is a cleaner energy source than coal or oil, it is still a fossil fuel that creates emissions when burned. Utilities like Duke Energy and TECO have set goals to drastically reduce the portion of their electric grids that natural gas generates.
While 37 percent of its electricity was generated by burning natural gas in 2020, Duke Energy predicts 6 percent will come from natural gas in 2050, with the rest created by renewable sources, new zero emitting technologies and existing nuclear sources, according to spokesperson Erin Culber.
“If your goal is to have a safe climate future, if your goal is to have healthy air for people to breathe, you can’t really have either the coal or the gas,” said Mike Henchen, a principal at Rocky Mountain Institute, a nonprofit that promotes clean energy. “The fact gas produces fewer emissions than coal doesn’t get you all that much credit at the end of the day.”
But many utilities like Clearwater Gas that distribute gas from pipelines to appliances in homes and businesses still advocate for expansion.
“Our whole image is ‘Live Greener with Gas.’ We’re exposing that it’s less costly, it’s more energy efficient,” Warrington said, noting that over the past two decades, natural gas rates have remained less expensive than electric rates.
Because the state does not allow more than one natural gas provider in a territory, Clearwater Gas is the only option for residents and businesses in north Pinellas and west Pasco counties for gas water heaters, cooking ranges, dryers and other appliances.
Ben Wilcox, research director at the nonpartisan government accountability group Integrity Florida, questioned the need for such extensive promotion at the expense of ratepayers who don’t have a say in which organizations receive sponsorships or whom the utility invites to events.
Wilcox said the perks the gas system receives from various groups and distributes to elected officials and city staff members also raise ethical questions, because they are receiving them as part of their official duties.
“The whole foundation of ethics law in Florida is public office is a public trust, and they’re not supposed to be using their public position for private gain,” Wilcox said. “I would think a Phillies skybox ticket would be considered private gain.”
Source : https://news.yahoo.com/clearwater-gas-paid-millions-sponsorships-100000730.html2005