After losing a major battle in court last year, Florida Power & Light is now turning to the Florida Legislature to change the state law and give it the authority to charge customers, and profit off, speculative natural gas fracking.
The bill, HB 1043 by Rep. Jason Brodeur, R-Sanford, is titled "Prudent Utility Investments in Natural Gas Reserves," and the Senate companion is SB 1248 by Sen. Aaron Bean, R-Fernandina Beach.
"Natural gas is a proven commodity that brings rates down and so we are going to allow FPL to go forward with a proven technology to have these reserves so that we pay down the road,'' Bean said in an interview.
The bill would essentially overturn a Florida Supreme Court ruling last year that said that Florida regulators exceeded their authority when they allowed FPL to become the first utility in the nation to be allowed to charge its customers, not its shareholders, for its speculative investment in fracking operations.
In June 2015, the Florida Public Service Commission unanimously went against its staff recommendations and approved FPL's request to charge customers up to $750 million annually for the speculative natural gas fracking activities. FPL, a regulated monopoly and Florida’s largest utility, then entered into a $191 million joint venture with PetroQuest Energy of Louisiana to explore for natural gas in Oklahoma.
In June 2015, the Florida Public Service Commission went against its staff recommendation and unanimously gave final approval to a request by FPL that it be allowed to pass along costs of investment in natural gas fracking to its customers. FPL’s original request to charge customers up to $750 million annually was reduced by the PSC to $500 million for the speculative natural gas fracking activities. FPL, a regulated monopoly and Florida’s largest utility, then entered into a $191 million joint venture with PetroQuest Energy of Louisiana to explore for natural gas in Oklahoma.
The proposal, called the Woodford Gas Reserves Project, allowed FPL to earn a guaranteed profit off of the investment — about 11.3 percent. Although FPL claimed the investment would provide a long-term hedge against volatile fuel costs and save customers money, FPL revealed that the Woodford project had cost customers about $5.8 million and did not save fuel costs.
The Office of Public Counsel, which represents ratepayers in utility cases, filed a lawsuit arguing that the PSC exceeded its authority in allowing the company to charge customers for the speculative investment. The Florida Supreme Court agreed and, in a 6-1 ruling, ordered FPL to refund nearly $24.5 million to customers.
“Treating these activities as a hedge requires FPL’s end-user consumers to guarantee the capital investment and operations of a speculative oil and gas venture without the Florida Legislature’s authority,” wrote Justice Ricky Polston. Justice Charles Canady dissented, saying regulators did have the authority to use the fuel clause to allow the company to make risk-based investments.
Bean said his bill is intended to help FPL "do what's best for their ratepayers in Florida."
"I am looking to save the taxpayers and ratepayers money and there is proven technology that can lower consumers energy bills,'' he said. "Do we have things to iron out? We do. And will not everybody agree? maybe."
Brennan Linsley AP File/2013