May 17, 2016

FPL delays nuclear expansion as it deals with canal clean-up, but wants to charge customers for expansion anyway

FPL salt at turkey point

Florida Power & Light has told state officials that it will put a four-year pause on its construction plans for two proposed nuclear power plants at its troubled Turkey Point site but it wants the state to waive the requirement that it show the project is still "feasible" in order to charge customers in advance for it. 

"The analysis would impose a substantial hardship upon FPL and violate principles of fairness," FPL wrote in an motion filed April 27 with the Florida Public Service Commission.

This week, the City of Miami, consumer groups, environmental advocates and some of the state's largest electric power users, urged utility regulators to reject that request, saying FPL should be required to justify whether it is allowed to continue charging customers for a project that may be on the skids.

"If a project is no longer feasible or practical, then the costs incurred are not prudent,'' wrote City of Miami attorney Victoria Mendez in a motion filed with the PSC on Tuesday. "...Since FPL plans to continue recovering costs pursuant to section 366.93 while doing no additional work towards the completion of the project, it is imperative that FPL demonstrate the project is still economically feasible and practical.'' 

Since 2008, FPL has charged customers $281 million for the planning and licensing costs of two new nuclear power units -- Units 6 and 7 -- at its Turkey Point site on Biscayne Bay. It now wants to be able to charge customers another $22 million in the coming year.

The co-called "nuclear cost recovery" fee has been controversial since lawmakers created it in 2006. In 2013, after Duke Energy customers spent more than $1.5 billion financing a failed nuclear project, the Florida Legislature revised the law to require utility companies to prove that a nuclear project is feasible before the Public Service Commission gives the company permission to move into the "preconstruction" phase of the project.

"This annual feasibility analysis serves to safeguard customers from potentially paying millions of dollars over numerous years on a project when the long-term feasibility analysis may show that it is no longer viable going forward, and, accordingly, may be abandoned,'' wrote the Florida Office of Public Counsel, which represents the public in rate cases in its motion filed Monday.

The future of FPL's planned nuclear expansion project has become inevitably tied to the clean-up of a massive underground salt water plume that is migrating towards South Florida's water supply. The plume is expected to have been caused by the utility company's 2013 nuclear plant expansion, intended to increase power output by 15 percent, which forced the canals to become dangerously warm. Story here. 

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May 03, 2016

Jeffrey Bragg, rejected as insurance commissioner, applies for the Public Service Commission

Gov. Rick Scott's top choice to become insurance commissioner, Jeffrey S. Bragg, is among the 11 candidates who have applied to become Public Service Commissioner, the powerful board that regulates utilities.

Bragg, a Palm Harbor resident and former executive director of the U.S. Department of the Treasury's Terrorism Risk Insurance Program under Presidents George W. Bush and Barack Obama, previously applied to become insurance commissioner and was the governor's top choice. But his nomination was rejected by Chief Financial Officer Jeff Atwater, who preferred state Rep. Bill Hagar for the job, and their impasse led them to agree to an alternate, David Altmaire, a deputy insurance commissioner.

Reached by phone late Tuesday, Bragg would not say if he had been recruited for the powerful PSC post by the governor.

"I'm just looking for a good fit and hope this will be it,'' Bragg told the Herald/Times. "I do want to get back in the game in some meaningful way." 

The post is being vacated by for the position being vacated by Lisa Edgar, the longest serving member of the PSC who confirmed Tuesday that she will not seek a fourth term to the commission. She served three four-year terms and had been appointed by Govs. Jeb Bush, Charlie Crist and Rick Scott

The other candidates applying to fill Edgar's post include: Johnnie E. Cooper. John R. Coleman, Albert E. Martin, Dennis E. Shannon, Jeffrey S. Foster, Cynthia J. Wilson Orndoff, Donald J. Polmann, Thomas P. Brantley, Stuart W. Pollins and Todd N. Chase. No additional information was made available late Tuesday. 

The Public Service Commission Nominating Council, a 12-member panel controlled by legislators, will interview the candidates in Tallahassee on Thursday and recommend three names to be submitted to the governor. Scott will then select his appointee from the list. 

Times report Steve Bousquet contributed to this report. 

Here is Edgar's statement: 

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April 26, 2016

After waiting years, state cites FPL for threatening drinking water, wants clean-up plan in 60 days

FPL salt at turkey point

via @JenStaletovich

 

Days after issuing a controversial plan for managing the troubled cooling canal system at Turkey Point, state environmental officials have cited Florida Power & Light for threatening nearby drinking water supplies and ordered the utility to hammer out a fix to stop the spread of an underground plume of saltwater.

In a notice to FPL officials Monday, the Department of Environmental Protection gave the utility 21 days to provide any information about how the 40-year-old canals have seeped into the Biscayne aquifer over the years and enter negotiations to come up with a clean-up plan. If the two sides fail to agree, the agency may come up with its own measures in 60 days, the notice said.

DEP Water Resource Management Director Frederick Aschauer also warned FPL that a new problem — in March Miami-Dade County detected canal water in Biscayne Bay — may be violating other state laws, for which the utility may be liable for damages. Aschauer gave FPL 15 days to set up a meeting.

The two notices come years late for critics, who say there has long been compelling evidence that the massive one-of-a-kind cooling canal system was degrading water quality far beyond the borders of the nuclear power plant along southern Biscayne Bay.

After DEP signed off on a December 2014 uprating project that expanded power output from the plant’s twin reactors, rock miner Steve Torcise, Tropical Audubon and neighboring cities including Miami sued, saying state regulators did too little to address a growing underground plume that has pushed saltwater inland about four miles. An administrative judge in February agreed, faulting DEP for not citing the agency for violations and ordering state officials to redo the plan.

Last week, the Miami Herald reported that FPL knew about super salty canal water pushing inland since at least 2010 when it conducted its own in-house study. The study found adding fresh water alone, a fix FPL sought repeatedly as canals grew hotter after the expansion, would likely worsen the plume.

More here. 

 

January 15, 2016

Update: FPL seeks 24 percent increase in electric rates; public counsel vows to fight it

Florida Power & Light on Friday asked the Public Service Commission to allow it to raise rates on 4.8 million Florida customers by 23.7 percent by 2019, a $1.3 billion increase that is also designed to reward its shareholders with substantially higher profits.

FPL argues that while it has delivered stable and low-cost power to customers since its last rate case in 2009, it must charge customers more to offset the increase in expenses and accommodate the growth in population.

“We are committed to delivering our customers exceptional value for their money and will continue to make smart investments that will further improve service for customers and help keep costs down,'' said Eric Silagy, FPL president and CEO, in a press release.  Download 2016 Rate Proceeding - News Release (TYL) - FINAL

If approved, the increase will lock in base rates for four years and the typical residential customer bill of 1,000 kilowatt hours would increase by about $13 a month — with $8.50 imposed in 2017, another $2.50 in 2018 and $2 more in 2019. The current base rate imbedded within a customer’s overall bill is $54.86 per 1,000 kwh. Other charges are added to every bill, and the current total for 1,000 kwh is $93.38.

The request comes on the heels of the company spending more than $3.4 million in campaign funds to stave off competition from the solar industry by mounting a campaign to keep a constitutional amendment off the November ballot that would have opened the door to a competitive solar market in Florida.

The PSC has the final say over the rate request but the current panel of governor-appointed commissioners has consistently-sided with FPL on its controversial requests. The company is the third largest utility in the nation and one of the most active campaign contributors in the state.

Despite that record, J.R. Kelly, the lawyer who represents ratepayers in utility cases, said Friday he will "fight the good fight" and argue that FPL's rate hike should be rejected. FPL is earning profits at the top end of the rate allowed under the current agreement with the state, and Kelly said, the company can afford to make the investments it needs to continue to operate an efficient and reliable system without a rate increase..

"I  know why they want the money. They want to continue to earn all they can for their shareholders and earn at the top of their range,'' Kelly said. "If  they are earning like that, they don't need that $1 billion."

Under state law, the utility is allowed to earn a return on equity of between 9.5 percent and 11.5 percent without having to justify its profits before regulators. Kelly said for every 100 basis points, or each percentage point of ROE, FPL earns about $165 million in profit.

Continue reading "Update: FPL seeks 24 percent increase in electric rates; public counsel vows to fight it" »

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.

Continue reading "PSC rejects staff, sides with FPL, votes to have ratepayers finance fracking projects" »

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.

Continue reading "PSC rejects staff, sides with FPL to have ratepayers finance fracking projects" »

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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