August 13, 2015

Consumer advocate asks court to reverse FPL gas fracking fee

Florida's consumer advocate in utility cases said Thursday he will ask the state Supreme Court to reverse a decision by state regulators to allow Florida Power & Light to charge customers for exploratory drilling for natural gas. 

The Florida Public Service Commission last December gave approval to FPL's plan to ask customers to finance a venture into the controversial natural gas fracking business in Oklahoma. FPL  plans to invest $191 million in a joint venture with PetroQuest Energy, Inc.

In July, regulators gave FPL permission to enter into agreements with other gas fracking companies and charge customers for their investment of up to $500 million a year, without seeking regulatory approval.   

FPL argues the investments will help stabilize volatile future energy costs, saving customers about $100 million over 30 years or two cents a month for the average 1,000-kilowatt-hour bill.

But the Office of Public Counsel, which represents the public in utility rate cases, as well as the Florida Industrial Power Users Group, oppose the ruling and each filed a notice of appeal with the high court.

They argue there is no guarantee that the risk of shouldering the costs gas drilling in an uncertain regulatory environment will produce benefits for ratepayers. They also say the decision gives the state’s largest utility unprecedented permission to use ratepayer dollars to finance an energy exploration and production.

The PSC overruled its own staff when it approved the FPL request, allowing the company to become the the nation’s first utility to use ratepayer money for what the staff called a “non-regulated risk.”

June 18, 2015

PSC rejects staff, sides with FPL, votes to have ratepayers finance fracking projects

Millions of homes and businesses who are customers of Florida Power & Light will be financing as much as $500 million a year in unregulated natural gas fracking projects conducted by the state’s largest utility, state regulators decided Thursday. 

The Florida Public Service Commission sided with FPL and against consumer advocates and unanimously approved guidelines that give the company carte blanche approval to charge its customers for natural gas fracking and “wildcatting” activities without oversight from regulators for the next five years.

The decision gives the state largest utility company unprecedented permission to use ratepayer dollars to finance an energy exploration and production business. According to an analysis by the PSC’s staff, FPL will be the first utility in the nation to be allowed to use ratepayer money for such an “non-regulated risk.”

FPL spokesman Mark Bubriski disputed the characterization that the projects are not regulated, arguing that the guidelines "nsure the PSC has the power to monitor project costs through the required independent audit."

But PSC spokeswoman Cindy Muir said that while FPL will now "have the opportunity to recover non-regulated investments through regulated rates...this should not be considered regulation." 

The decision also gives the company, a regulated monopoly, a guaranteed new source of revenue that will allow it to increase its rate base for the next several years in the face of increasing competition from solar and other alternative energy sources.

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PSC rejects staff, sides with FPL to have ratepayers finance fracking projects

Millions of homes and businesses who are customers of Florida Power & Light will be financing as much as $500 million a year in unregulated natural gas fracking projects conducted by the state’s largest utility, state regulators decided Thursday. 

The Florida Public Service Commission sided with FPL and against consumer advocates and unanimously approved guidelines that give the company carte blanche approval to charge its customers for gas fracking and “wildcatting” activities without oversight from regulators for the next five years.

The decision gives the state largest utility company unprecedented permission to use ratepayer dollars to finance an energy exploration business. According to an analysis by the PSC’s staff, FPL will be the first utility in the nation to be allowed to use ratepayer money for an “unregulated risk.”

The decision also gives the company a guaranteed new source of revenue that will allow it to increase its rate base for the next several years, in the face of increasing competition from solar and other alternative energy sources.

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June 17, 2015

FPL ask regulators to have customers finance the expansion of its fracking business

Fpl plantState utility regulators will decide Thursday whether Florida Power & Light’s 4 million customers — or its shareholders — will finance the company’s expansion into oil and natural gas reserves.

The Florida Public Service Commission gave the company approval to get into the controversial fracking business in December. It now must decide whether to approve guidelines proposed by FPL that would let the company spend up to $750 million a year more on gas exploration without regulatory approval.

In a rare pushback to the powerful utility, PSC staff members recommended against having customers foot the bill for the untested venture.

Their argument: the success of FPL’s natural gas exploration — including gas fracking and “wildcatting” in untested territories — is risky because it depends on the ability of the state’s largest utility to do something no utility company has ever done at a time when natural gas prices are volatile.

“The distribution of benefits to FPL and its customers is not equitable,” the staff concluded. While customers have to wait decades to see any drop in fuel costs resulting from the investment, there would be an immediate benefit to the company and its shareholders because it would “grow earnings” by expanding the rate base.

FPL counters that the risk is worth the reward.

“The guidelines we proposed are designed to enable us to take advantage of future opportunities to obtain more essential clean natural gas directly from the source, generating additional savings for our customers and helping protect them from the risk of fuel market volatility,’’ said Mark Bubriski, FPL spokesman.

More here.

May 04, 2015

Court rebukes Public Service Commissioners for 'ill serving' rate payers

In a rebuke to the Public Service Commission, a state appellate court ruled Monday that the utility regulator hurt utility customers when it refused to explain why it banned the public’s lawyers from asking questions in certain rate cases. 

The ruling by the First District Court of Appeal in Tallahassee ordered the PSC to explain why it refuses to allow the Office of Public Counsel to conduct discovery in pending rate cases as had previously been the tradition. 

The Office of Public Counsel is the agency whose lawyers are charged with representing the public in rate cases. They argued the PSC was inviting lawsuits from them by refusing to explain why they refused to allow the public's lawyers from asking questions and seeking discovery in rate case proceedings known as “proposed agency action" or PAA.

The cost of those lawsuits are borne by the public. In a 3-0 decision, the appellate court agreed.  

“The PSC ill serves rate payers by insisting that utilities incur the expense of litigating and re-litigating this issue in a piecemeal manner before pre-hearing officers in individual PAA rate cases,’’ wrote Chief Judge Robert T. Benton of the First DCA.

Public Counsel J.R. Kelly said the PSC ruling “severely undercut our ability to represent ratepayers” because the PSC, unlike the lawyers for the public counsel, “don’t ask questions like we do because they don’t represent the ratepayers.”

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January 27, 2015

Facing down a constitutional amendment, FPL plans three new solar plants

By Ivan Penn, Tampa Bay Times @Consumers_Edge 

Florida's largest investor owned utility announced plans Monday to build three new solar farms that would nearly double the state's solar capacity.

In its announcement, Florida Power & Light said it had found a "cost-effective" way to expand solar power in Florida and proposed to install the systems at three sites in its service area. The utility proposes to add 225 megawatts of solar to the state's current 229 megawatts by the end of next year in Manatee, DeSoto and Charlotte counties.

FPL is still refining the details of the project so the utility did not provide cost estimates. But the company said there would be no significant impact on customer rates.

"Over the past decade, we have continuously focused on advancing reliable, affordable, clean energy for our customers," said Eric Silagy, president and CEO of FPL. "In particular, we have been working especially hard to find ways to advance solar energy in Florida without increasing electricity costs, and we have developed what we believe will be a cost-effective plan.

But FPL utility noted in a news release that "solar power — even the most economical large-scale installation — is generally not yet cost effective in FPL's service area."

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December 18, 2014

Regulators give FPL approval to charge customers to invest in fracking

The Public Service Commission gave approval Thursday to a request by Florida Power & Light to charge customers for its exploration of natural gas using fracking technologies.

The panel concluded that the project, which allows the company to invest $191 million in a joint venture with PetroQuest Energy, Inc., would help to stabilize volatile energy costs and save customers more than $100 million over 30 years – about two cents a month -- and stabilize a fraction of the company's energy costs. 

The measure was opposed by the lawyers who represent the public in rate cases, as well as the state’s largest industrial energy users, the Florida Retail Federation and several environmental groups. The PSC postponed a decision until March on the question of whether FPL will be allowed to charge customers up to $750 million a year in similar projects without PSC approval.

The opponents argued that there was no guarantee that the risk of shouldering the costs of oil and gas drilling in an uncertain regulatory environment would produce benefits for ratepayers and could backfire in higher costs. They argued the decision to allow the company to use customer dollars for speculation was something that should be left to the Legislature.

“FPL will shift all risks of investing in gas reserves to the customers in exchange for promises of potential customer fuel savings and guaranteed trued-up profits (or returns) for shareholders,’’ the public counsel said in its brief. It noted that it is not opposed to guaranteeing fuel savings to customers however, "FPL simply cannot guarantee those savings to customers over the next 50 years.”

The ruling could be the beginning of a trend as Duke Energy, the largest utility in the Tampa Bay market, said it is also considering asking for permission to charge its customers for fracking exploration.

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December 03, 2014

FPL parent, NextEra, buys Hawaiian Electric for $4.3 billion

Florida Power & Light's parent company, NextEra Energy, announced Wednesday it has reached a $4.3 billion deal to buy Hawaii's largest utility, Hawaiian Electric Industries.

The transaction includes the assumption of $1.7 billion in HEI debt and excludes HEI's banking subsidiary. 

"NextEra Energy and Hawaiian Electric share a common vision, a more affordable clean energy future for Hawaii," said Connie Lau, Hawaiian Electric's president and chief executive. "While our goals are among the most ambitious in the nation, including increasing renewables to 65 percent, tripling solar and lowering customer bills 20 percent by 2030, we are confident that by leveraging both NextEra Energy and Hawaiian Electric's expertise and the additional financial resources that NextEra Energy brings, we can meet these targets even sooner."

The merger raises lots of questions about what this means for the Juno Beach-based company. Hawaiian law requires utilities to meet get 70 percent of their supply from clean energy by 2030 and, in Florida, NextEra's largest subsidiary, FPL, has aggressively fought off attempts to establish a similar clean energy goal here.

NextEra has also effectively blocked the emergence of competitive distributive energy generation in Florida with a dominant, take-no-prisoners approach to regulation and politics, while Hawaii has merged as one of the nation's top one of the markets where competitive distributive generation is becoming a reality.

Forbes contributor William Pentland points out that "Hawaii has become a flash point in the battle over the future architecture of the electric grid. The relentless rise of power prices in the state has accelerated customers’ adoption of distributed generation."

That's in stark contrast to Florida where FPL and its parent, NextEra, has kept wholesale competitors out by controlling access to the transmission grid except for incumbent utilities.

"NextEra’s expansion into Hawaii is likely a mixed blessing for the distributed generation business,'' Pentland wrote.

NextEra's press release didn't offer too many answers.

“NextEra Energy shares Hawaiian Electric’s vision of increasing renewable energy, modernizing its grid, reducing Hawaii’s dependence on imported oil, integrating more rooftop solar energy and, importantly, lowering customer bills,” it said.

The transaction is subject to approval by regulators and Hawaiian Electric shareholders. 

Here's the investor presentation.

Here's the joint press release:

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December 02, 2014

FPL wants to get into the gas drilling business -- and add costs to base rate

Florida Power & Light wants to get into the natural gas fracking business and it wants its customers to pay for it.

At a hearing on Monday, the state’s largest utility asked regulators for permission to charge customers up to $750 million a year to form a partnership with an Oklahoma oil and gas company because, it argues, the investment would help FPL stabilize fuel prices and save customers money.

How much? Estimates indicate the savings would be between $51 million and $107 million over the life of the project — or a total of 50 cents to $1 for the average customer over several years. In addition to the savings, FPL argues that customers also will benefit from less volatility in fuel prices.Similar projects would be sought to reach the annual $750 million investment cap.

In tapping a well that already produces gas, FPL argues, customers are unlikely to see price increases because exploration costs will be offset by savings from the investment — the first time any utility has asked to have its customers pay for gas exploration.

Opponents, representing the state’s largest commercial electricity users and the general public, had a simple response to the question before the Public Service Commission: “No thank you.”

They argued at a day-long hearing that the risks of operating the hydraulic fracturing, or fracking, outweigh the rewards. They said FPL can’t be sure that the natural gas wells will produce enough gas to meet its needs and customers will shoulder the costs of dry wells, environmental impacts and market changes for the next 50 years.

“Fifty years is a long time to receive guaranteed profits on something that’s not guaranteed,’’ said Eric Sayler, an attorney for the Office of Public Counsel, which represents the public in cases before the Public Service Commission.

He said the idea is an attempt by FPL to earn a guaranteed profit on the investment and have the risk borne by customers, not shareholders.

“No other utility has attempted to put this in its base rate,” he said. Story here. 

 

September 18, 2014

Gov. Scott appoints Jimmy Patronis and Julie Brown to utility board

Jimmy_Patronis (1)

Four years after the state Senate rejected two of former Gov. Charlie Crist's appointees to the Public Service Commission because they had no industry experience, Gov. Rick Scott has appointed state Rep. Jimmy Patronis to the same board, even though he has had no industry experience.

The difference: Patronis is a Panama City Republican who announced last year  he will step aside as a candidate in 2016 for the state Senate seat held by Senate President Don Gaetz, making room for Gaetz's son, Matt Gaetz, to be the heir apparent. Patronis was also an early support of Scott's against former Attorney General Bill McCollum. 

Scott also reappointed, as expected, Tampa lawyer Julie Brown based on a list of six candidates, sent to him by the legislatively-controlled PSC Nominating Council.

Patronis, who is term-limited out of office this year, fills a seat now held by Eduardo Balbis on the board that has the power to approval utility rates in Florida. Balbis surprised observers in May when he announced he would not seek a second term after being appointed to the post by Crist.

Balbis got the job after legislators sided with electric companies in 2010 to oust Crist appointees David Klement and Benjamin “Steve” Stevens who rejected controversial rate increases sought by Florida Power & Light and Progress Energy, now known as Duke Energy Florida.

On Thursday, Scott also announced the reappointment of Tampa lawyer Julie Brown, 39, from a list of six candidates sent to him by the legislatively-controlled PSC Nominating Council. She has been on the commission since 2011.

Commissioners are paid an annual salary of $131,036 and the appointments are subject to Senate approval.

Patronis is the vice president of Captain Anderson’s Restaurant in Panama City Beach and listed no utility experience on his application for the job. He earned his bachelor’s degree from Florida State University and was an early and avid supporter of Scott's first campaign for governor in 2010.

Scott held a rally last Friday at Patronis’ Panhandle restaurant with New Jersey Gov. Chris Christie. Patronis is also a member of the panel evaluating the finalists for the FSU presidency.

Brown, 39, of Tampa, has been a PSC member since 2011 and is a University of Florida graduate. The two four-year terms begin Jan. 2, 2015, and end Jan. 1, 2019.

Among the candidates Scott rejected was former state Rep. Dave Murzin, R-Pensacola, and Patrick Sheehan, director of the Office of Energy in the state Department of Agriculture and Consumer Services.

Scott's appointment of Patronis shows how far he has shifted from the outsider in 2010 who said in his Republican primary victory speech that "the deal-makers are crying in their cocktails." The Patronis pick is an obvious reward for an early and loyal Scott supporter. Patronis' wife Katie has donated $500 to Scott's re-election.

“Representative Patronis has faithfully served Florida families during his years of service in the Florida House of Representatives,’’ Scott said in a statement. “I am confident that Jimmy will make an excellent addition to the Public Service Commission as he continues to put Florida families first.”
 
Here's the press release today from the governor's office:
 

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