Fla. Utilities Fight Tougher Efficiency Standards
Florida’s major electric utilities clashed Monday with environmentalists over how high state regulators should set new power conservation and efficiency goals.
State law requires the Public Service Commission to revise the 10-year goals for Florida’s biggest power suppliers every five years. They are designed to reduce dependence on imported oil and other fossil fuels, cut carbon emissions linked to climate change and save money for consumers.
Two environmental groups urged that the seven utilities be required to generate efficiency and conservation savings equal to 1 percent of their annual sales after a phase-in period of three to four years.
That’s five to 10 times more savings than the utilities have proposed.
"Such goals for this docket are astonishingly low and undermine the potential of Florida utilities to better serve their customers," said former Public Service Commissioner Leon Jacobs, who appeared on behalf of the Southern Alliance for Clean Energy and the Natural Resources Defense Council.
Utility lawyers told the commission the environmental groups’ goals would result in higher rates that would most affect low-income consumers who can least afford them.
Conservation measures could include such steps as giving away high-efficiency light bulbs and rebates to customers who improve their heating and air conditioning systems.
Florida Power & Light Co. lawyer Charlie Guyton said the environmentalists’ 1 percent goal is an arbitrary figure that contrasts with nearly a year of studies by the utilities and an outside consultant.
"They use their scatter gun criticisms to try to convince you that the deliberative, comprehensive studies undertaken should be ignored, and their hurried back-of-the-envelope alternatives should be embraced," Guyton said.
Guyton also spoke on behalf of three other investor-owned utilities: Progress Energy Florida Inc., Gulf Power Co. and Tampa Electric Co. The goals also will cover Florida Public Utilities Co. and two municipal electric systems — the former Jacksonville Electric Authority that’s now known as JEA and the Orlando Utilities Commission.
Public hearings could last through Friday. The commission is expected this fall to set new goals. While the commission will decide on a single methodology, the specific goals for each utility will differ due to variations among them.
The utilities have urged the commission to continue basing its policy on a long-used efficiency test that factors in lost sales due to the conservation and efficiency gains. It reduces efficiency requirements to avoid rate increases that otherwise would be needed to make up the difference.
The environmentalists favor a new method that doesn’t consider revenue loses. They contend changes in state law passed last year require this approach even if it means rates go up. The utilities disagree.
Jacobs told the commissioners that Gainesville’s municipal electric system, too small to be covered by the energy conservation law, adopted a nearly identical policy in 2005 that has resulted in just what the Legislature wants — reduced consumption and lower bills.
"The hue and cry about the mere presence of rate impact I think is misguided," Jacobs said.
He said the affect on rates would be negligible and that utilities are resisting the new method because it would affect their profits.
Guyton called it a "radical approach" and argued its only purpose is to reduce air pollution without regard to "the respective rate impacts and the resource needs of the utilities."