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PSC reverses electric conservation goals for FPL and Progress Energy

Cfl State regulators set the clock back on energy conservation in Florida Tuesday and reversed a rule that would have required Florida Power & Light and Progress Energy Florida to encourage customers to use less electricity. Their reason: saving money for some was going to require higher bills for everyone.

The Public Service Commission agreed with the utilities' projections that the cost of implementing the program for the state's two largest electric monopolies would raise bills for customers so they voted to ignore a 2008 law and not require utilities to expand their existing conservation programs.

Staff estimated that to get customers to use less energy under the rules adopted in 2009, the implementation cost for Progress Energy customers would be between $6.24 and $16.52 a month for the average residential customer using 1,200 kilowatts of electricity between now and 2014. For FPL, the increase in the monthly bill would have gone from $2.46 a month in 2011 to $4.11 in 2014.

But consumer advocates challenged those cost projections.

They said the estimates were intentionally inflated to make the programs look more expensive than necessary. They said they reflected only the short-term implementation cost without considering the long-term savings that comes from not building expensive, greenhouse-gas producing power plants. And they chided the PSC for not demanding more accurate numbers and said the decision essentially ignores the mandates of the 2008 Legislature. Lawmakers that year ordered the commission to set more aggressive energy efficiency standards as part of sweeping energy bill designed to promote renewable energy and reduce dependence on fossil fuels. 

"What I heard today is efficiency hurts,'' said Leon Jacobs, a former PSC commissioner and now a consultant for the Southern Alliance for Clean Energy, a non-profit advocate for energy conservation. "That’s not what I heard the legislature say. The legislature said efficiency is a good option we should rely on. I don’t know that we decided that there is pain.”

SACE believes that by reducing energy consumption, consumers save in the long run because it defers the need to build expensive power plants and removes pollution-causing greenhouse gas emissions.

But Commissioner Eduardo Balbis said he was not persuaded by that argument. PSC staff estimates Progress Energy will not need a new power plant until 2016 now and the more aggressive energy conservation programs would not do enough to offset the need, especially since the company now has the capacity to produce 25 percent more electricity than is demanded by customers today.

The commission's decision to roll back conservation programs follows the wishes of Gov. Rick Scott, whose staff has recently weighed into the energy debate. At a meeting of electric company lobbyists and energy industry representatives in late June, the governor's former policy director, Mary Anne Carter said the governor wanted the PSC to soften the energy efficiency goals as a way to lower the cost of electricity in Florida to attract new business. "Conservation is a good thing but the cost of it doesn't have to be this high,'' she said.

The commission may revive the debate over efficiency goals in the future. At the recommendation of Commissioner Julie Brown regulators voted to ask the utility companies how long it would take to get updated information about the cost of meeting more aggressive energy efficiency goals. Commissioners Ron Brise and Lisa Edgar said they supported that suggestion since the downturn in the economy and the need to keep consumer costs down has forced them to reconsider at what cost they are willing to pursue the short-term costs of implementing energy efficiency incentives.

Meanwhile, Balbis succeeded in persuading other commissioners to vote to approve the status quo -- allowing both companies to continue their existing conservation programs but not require them to do more. The average customer in Florida now pays $2 a month to finance conservation programs, he said. In 2011, it will cost Progress Energy customers $2.99 a month. Balbis disagreed that another study was needed because with the pace of technology, when that document is deliver "it is immediately outdated," he said.

Public Counsel JR Kelly did not take a position on the conservation goals because, he said, as a representative of all consumers, not all electric customers agree. Some want to see stronger energy conservation programs because they can afford the short-term cost of buying energy efficient lightbulbs, replacing energy hogging appliances and installing solar water heaters. But others, such as some low income residents, retailers, hospitals, and large industrial energy users, see the short-term cost of conservation as too high, he said.

Kelly acknowledged, however, that embedded in the debate are several conflicting assumptions. For example, is in the interest of protecting the environment, regulators are asking the electric monopolies to create programs that create incentives for customers to use less of their product. But when customers use less energy, electric monopolies make less money -- so they have to charge all their customers more.

So why do we ask utilities to tell people to use less energy when it’s not in their best interest to use less energy? "It goes against all logic,'' Kelly said, noting that it has the intended benefit to delaying the need for new power plants. "It's the utilities that started the programs. They wanted to be good corporate citizens."

But conservation advocates, who worked for years to get the legislature to order the PSC to require the higher energy efficiency goals say that reversing the goals underscores the short-sightedness of Florida’s regulatory system.

George Cavros, a Fort Lauderdale-based lawyer for SACE, argues that because FPL and Progress Energy have never been required to provide rigorous energy efficiency programs in the past, they have less experience at it than their peers in other states, where the cost of delivering energy savings is two to three times less than the cost in Florida. In North Carolina, for example, the sister company to Progress Energy, has encouraged customers to save 90 percent more electricity at 50 percent of the cost than what is projected in Florida.

Progress Energy lawyer Dianne Triplett said that wasn't a fair comparison, however. Her company has been doing energy conservation programs for 30 years and many customers are already saving electricity. "In Florida, 70 percent of customers already have one [compact fluorescent] light bulb so you’re not going to get the market penetration,'' she said.

Meanwhile, the commission did move closer to Scott's goal of using energy policy to promote economic development. New commercial and industrial customers of FPL that re-use existing facilities, use at least 350 kW of electricity and hire at least 10 full-time employees by June 1, 2013, will receive a 20 percent discount in their base electric bill. After that, they must hire at least 25 full-time employees.

The cost of the program will be shared by all FPL customers and new residential customers who move to Florida or move into existing residences in FPL's territory will not receive a discount.

 

Comments

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Can't Take It Anymore

Why am I not shocked that our publically paid PSC staff have again laid down for the industries they are supposed to regulate? Is it because this is how it now works at the municipal, county, state and national level? Can anyone name a genuinely honest Florida politician ? They are all owned by lobbyists, campaign donor corporations and the megarich. They don't even bother to try to hide the fact that this is how it works anymore.

John Wilson

In Florida, Progress Energy wasn't going to have market penetration with CFL bulbs because it WASN'T GOING TO OFFER THEM! And hasn't in the past.

Tired of Stupid

Florida, the "Sunshine State", will be the last one to the dance and last to embrace the new economy. The good old boys of the South that don't give a damn about how they do it up North will be left with egg on their faces and jobs running to other states. As a businessman, I fail to see the benefits. of such poor logic on the part of the PSC, legislators and our Governor. Retreating to old paradigms will not take us into the future. I have seen the future of energy in every other state but Florida, and that is why I have taken my business and jobs to the states that get it. Next year, Solar International will be held in Orlando. I would suggest that these visionaries pay a visit to see how far back in time they are taking us.

Rhonda

Jeez, the monopolies want to charge for conservation assistance, then charge more per kilowatt because customers are using less, so it make sense to just abandon conservation! WTF?! And this is all because one ignorant fat cat in the governor's mansion refuses to believe in the climate crisis? Has it occurred to anyone that laws regulating utilities in Florida may need amending?

shripad

It is well known and globally appreciated that the fossil fuel stock is limited and is depleting fast particularly, with the growing human activities day by day. Moreover, rampant consumption of the fuels like oil and gas is causing threat to our planet as, it is steering the world to the corner of environmental imbalance and catastrophic climate change endangering the “life” on the earth.

Sometimes back in a release, the author Kathleen Byrne has rightly deliberated on the topic and her write up on the importance of renewable energy has significant proclamations and deserves serious consideration in the wake of the global issues like climate change and present day gap between supply and demand as well as from the view point of employment generation.

The author has correctly pointed at the addiction to foreign oil and fossil fuels which puts national economy, the national security and our environment at risk. Parallel to this Secretary Mabus has stated very correctly that reducing our reliance on foreign sources of energy makes the country more secure. Competition over fossil fuel resources has been one of the leading sources of conflict over the years. Today, little has changed - whether it is oil, natural gas, or electricity - disruptions in the flow of energy can cause major economic havoc and negatively affect both our national security and international stability.

Hence, it is imperative for the developed as well as developing nations to plan a systematic shift from usage of conventional fuels to non-conventional energy source. These sources are inexhaustible and ever renewable. The energy derived from the renewable energy sources is clean and safe. The abundance of the natural renewable sources of energy like sun, wind and water are required to be harnessed for the betterment of mankind. Hardly a fraction of the solar energy reaching to the earth is utilised.

It is felt that a transparent mechanism is evolved at the National level covering all the States and formulation is imposed through enactment with active involvement of the SERCs and a composite mapping is done with due recognition and consideration for power generation through Renewable energy sources as, immense potential is available in the country. This arrangement, after assessing the demand-supply situation would go a long way to ensure nationwide energy security.

Parallel to this, it cannot be denied at any stage that apart from the Industries, the civilized society is also consuming energy heavily for its daily needs, be it residence, office, cinema, malls, hospitals and inmates of society are either feebly aware of the sense of conservation or they have hardly been educated appropriately about the same. Merely publishing slogans to adopt the (now very common) device-CFL luminaries is quite insufficient in the wake of the fact that the number of consumers is increasing day by day and consuming conventional energy in higher magnitude is a potential threat to climate on the whole.

Therefore, some concrete measures are to be adopted soon so that the situation remains within control before it becomes uncontrollably magnanimous. Certain measures and steps to words cleaner, better and safe living with conservation of energy in social circle are:

* Educating people about hazards of uncontrolled usage of energy by consuming fossil fuels.
* Inculcate among the masses importance of energy conservation and benefits of the same in their everyday life.
*Introduce concept of renewable energy to people and foster in them value of this inexhaustible energy which when put to application leaves behind no trace of pollution or filth of any kind and a clean, healthy and economic living is ensured.
* Electric geysers be replaced with solar water heater by suitable enactment.
* Solar power plants to support cluster of houses in rural as well as urban localities.
*Restricting usage of inverters and encouraging usage of Renewable devices as stand by in the event of power cut.
*Controlled automobile usage & many more points....

In India too, the Govt. is putting in efforts to promote usage of the renewable energy. Recently the union Govt. has launched nationwide ambitious programme called“solar mission", in order to extend convenient reach to the renewable energy sources for the country men.

Towards the end of March 2011, a report was published titling “60 industries in north India to implement PAT scheme” and elaborated that about 60 energy intensive industries across eight sectors in Punjab, Haryana, Uttarakhand and Himachal Pradesh with energy consumption more than specified limit have been notified under the Energy Conservation Act, 2001, and selected in the Phase-I of PAT (perform, achieve, trade) scheme.

It was encouraging to read about the efforts of Indian Bureau of Energy Efficiency by way of PAT (perform, achieve, trade) scheme. This would go well if reckoned properly in the National interest and the big players rise above the vested interest.

Few things I wish to point out: 1) should BEE focus on the govt offices and institution as well as public utility energy consumption where rampant wastage and misuse is registered then, there would be drastic correction on the energy demand & supply scale. 2) There is plethoric scope and opportunity to supplement the energy need by promoting the Renewable Energy in the country provided smooth and transparent trading is adopted. 3) The article speaks about ESCerts can be used by other designated consumers (who may find it expensive to meet their norms) for compliance. They will be denominated in tonnes of oil-equivalent (ToE) and exchanged on special trading platforms. If this works then the question arises as to what will be the mechanism of this kind of exchange and sale out, and the same needs to be elaborated by the office bearers framing this policy.

With the renewable energy on the national priority agenda there would be lots of opportunity for the youth to be absorbed. For this suitable addition, amendment and reform are to be introduced at the very training level so that employable skills are acquired by the students. Also, as the author has indicated, leveraging alliance partnerships to focus on targeted education, assisting in key workforce development, facilitating development of computer-based training for manufacturers of tomorrow’s smart grid technologies and tools, enhancing existing training systems and those that are currently manufacturing new technologies that will make the smart grid work may increase supply of the future workforce needed. So, the moral lies in the fact that despite above article the significance of conserving energy by gradually adopting non-conventional way of life harnessing renewable energy is not only vital but inevitable too. (shripad)

Amazed and Sad

It is this kind of myopia that causes many problems in Florida and the US. Why can't our legislators look even 10 years into the future (let alone 30) and see that burning coal and gas to make electricity is an obscene idea?
I love Florida but I had to leave because there are no jobs in the renewable industry, an industry that I emphatically believe in.

crabjoeelectric@comcast.net

Saw the total dysfunction of PSC and am personally dismayed. The back slapping and laughter that followed the ruling by the lobby and attorneys was more of a slap in the face to people like me who have been working in the solar industry for more than 5 years. I'm not going to be nice about this anymore.

John

A pig will eat till it can't stand, then get up and do it over and over as log as there's food in the trough. Unless you take away the feed, they will continue to get fatter, and then pass it on to all their little piglets. How about the PSC and IOU's worry about transmission lines, energy storage and the grid system... It's time to hang up the buggy whip Florida(DA).

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