SACE staff George Cavros and John Wilson also contributed to this post.
Which is the true face of NextEra Energy?
The company which is widely admired for advancing renewable energy everywhere BUT Florida? Or, the company that is issuing press release after press release announcing solar projects and contributions left and right in Florida while planning a massive new natural gas plant and limiting solar on its system to approximately 1% of its energy generation? The answer is that these are both the faces of NextEra, but the only one that matters for the state of Florida is the one that shows up in Tallahassee – the company’s Mr. Hyde face in the form of Florida Power & Light (FPL).
Setting the record straight on FPL and solar energy
In recent months, Florida Power & Light has been making some high profile moves to turn around its image as a monopoly utility opposed to growing the solar market in the Sunshine State. In January, the company announced plans to build 3 new utility-scale solar plants totaling 225 megawatts (MW) and made a donation of solar panels to the Miami Science Museum. In February, it announced a partnership with Daytona International Speedway to build a 1.7 MW solar array at the “World Center of Racing.” In March, it announced a partnership with Formula E to power the cars in the inaugural Miami ePrix with solar energy. In April came the Party for the Planet at the Palm Beach Zoo, where FPL announced it will build a 100 kilowatt (kW – or 1/10 of a megawatt) solar canopy.
While the Southern Alliance for Clean Energy supports FPL’s planned solar projects, we feel it’s important to consider these in the context of the utility’s size in the state of Florida. Despite the recent good publicity, FPL has been taking some hard knocks over its anemic record of solar development in the Sunshine State, which has the best solar resource east of the Mississippi but lags far behind other states – including several others in the Southeast – in putting this clean, renewable energy source to work. Is FPL really a company that’s committed to solar energy?
We take a deeper look here into the utility’s planning in order to set the record straight.
FPL’s solar development compared with its neighbors
Florida Power & Light is the largest investor-owned utility (IOU) in Florida, with 4.7 million customer accounts (serving over 9 million people) and with 25,000 MW on its system, which generates roughly half of the state’s energy sales. Currently, FPL has a total of 110 MW (less than half a percent) of utility-scale solar power on that system; with the planned additions announced this year, the total will increase to approximately 335 MW by the end of 2016 – still representing just 1.3% of FPL’s total generating capacity.
Compare that to FPL’s neighbor to the North, Southern Company subsidiary Gulf Power – with a mere 430,000 customers. This year, Gulf Power received the go-ahead by the Florida Public Service Commission to enter into a 120 MW solar power purchase agreement (PPA), and another 178 MW wind PPA, together totaling almost 300 MW. Once online, those resources will represent almost 11 percent of its total generating capability. For FPL to achieve similar levels of renewable energy in its energy mix, the company would have to add almost three gigawatts (about 2.7 GW, or 2700 MW). Or, put another way, almost 10 times FPL’s current goal.
Looking even further North, both Georgia and North Carolina – states with fewer people and less sunshine – far outstrip Florida in solar development. By the end of 2016, both are expected to have installed more than a gigawatt (1000 MW) of solar. Georgia Power, the single IOU in the state, has procured 900 MW of solar that is expected to come online by the end of 2016, representing about 5% of their total capacity. And the 953 MW of solar energy currently installed in North Carolina ranks the state 4th nationally in installed solar capacity.
FPL is not NextEra Energy Resources
SACE has been raising the flag about FPL’s lack of leadership on renewable energy in FL, shining light on its lower profile announcement in January – embedded further down in the solar press release – to build a new and ten times larger natural gas-fired power plant, which the company has since filed for in its 2015 10-year Power Plant Site Plan. Last year, in a two-part blog series we called FPL’s solar leadership into question by examining the potential (negligible) impact of its newly-announced SolarNowTM Program and asking how a company owned by the largest provider of wind and solar power in the country – NextEra Energy – could be so resistant to taking advantage of the abundant solar resource in Florida.
Because it is very important to make that distinction: NextEra Energy Resources, the other subsidiary of NextEra Energy, is not the same thing at all as FPL. NextEra Energy Resources – a wholesale electricity supplier – is indeed a leader in advancing the development of clean, renewable power in the U.S. About 59% of its generating assets are comprised of wind (56%) and solar (3%). The difference is that NextEra Energy Resources competes for business in the deregulated markets, primarily in the mid-Atlantic and Texas, but also for commercial customers in California, where its renewable energy portfolio is a competitive asset. FPL, on the other hand, has a guaranteed monopoly in its service territory and is known for putting shareholder profits above the public interest.
There is clearly a regulatory disincentive for FPL to promote customer-owned solar, as it can reduce utility sales and thus make it harder for the company to argue the need for more power plants – upon which its shareholders earn a hefty return. And while it plans to self-build more utility-scale solar, the company continues to talk down this clean, renewable resource as not cost-effective. In its petition for approval of the SolarNowTM Program, the company stated, “Because FPL’s system is highly efficient, the cost of commercial-scale distributed solar facilities – regardless of who owns and operates them – exceeds the fuel and environmental savings that they create.” January’s press release included the statement, “Solar power – even the most economical large-scale installation – is generally not yet cost effective in FPL’s service area.”
Further continuing its schizophrenic behavior, NextEra Energy the parent company is now making a bid to purchase Hawaiian Electric Companies (HECO) – the electric utility with the highest levels of rooftop solar penetration in the country, in a state with a legislative goal to achieve 40% renewable energy penetration by 2030 (although that happened before NextEra entered the picture). FPL’s history in Florida has rightly given the Hawaiian legislature cause for concern, leading the House of Representatives to issue Resolution 158 this year “Requesting the Public Utilities Commission to Protect the Public Interest in Reviewing the Proposed Acquisition of Hawaiian Electric Industries by NextEra Energy, Inc.”
In the meantime, FPL is doing quite well for itself. Its reported net income, or profits, for 2014 were $1.52 billion, or $3.45 a share, up from $1.35 billion, or $3.16 a share, in 2013. A key way that monopoly utilities generate these profits, as highlighted recently in the Wall Street Journal, is to keep building bigger and more expensive facilities – like natural gas plants, for example. We call on NextEra Energy to stop this two-faced approach to clean energy and give its captive customer base in the Sunshine State the same access to clean, renewable energy as its customers in other parts of the country.