This blog was written by Amelia Shenstone, former Regional Advocacy Director with the Southern Alliance for Clean Energy.Guest Blog | October 12, 2016
While Floridians await a Public Service Commission (PSC) ruling later this year on a 24% rate hike for Florida Power & Light, the Commission is also considering another matter: acceptance of Ten Year Site Plans from the largest state utilities. The Ten Year Site Plan is a summary of Florida’s largest power companies’ resource plans for the next ten years.
This year’s Site Plans rely on continuing to run old coal plants and building more natural gas fired power. Collectively, they add roughly as much solar energy during the next ten years as neighboring Georgia Power will have by the end of this year; renewables, by 2025, will represent only 2% of the state’s capacity (download a summary).
Fortunately for those still recovering from two weeks of FPL rate hearings that frequently lasted late into the night, but unfortunately for power customers who deserve the PSC’s due diligence to ensure electric service at the least cost, the TYSP public review process is a stunningly brief 2-hour “workshop.”
Ten Year Site Plans (TYSPs) are the closest thing Florida has to a public review of utilities’ long-term plans (click here to see them). In many other states, regulators require a detailed 20-30 year plan for how the utility will produce power and reduce the need for expensive new plants by helping customers use less energy; there is also meaningful stakeholder participation (see these Best Practices from the Regulatory Assistance Project [.pdf]).
In other states, a utility examines several possible future scenarios for power needs, compares options to meet those needs, and then explains its choice. Should it retire old coal plants? Build new nukes? Buy wind power or build solar? A commission then holds multiple public hearings. This is often called an Integrated Resource Plan process, or IRP, and the idea is to ensure that utilities make prudent choices and don’t end up costing customers a lot of money that could have been avoided. Planning is essential, especially to protect those with low or fixed incomes from unreasonable power bills.
By contrast, the Florida PSC holds only one two-hour “workshop” to review the long-term plans of the largest investor-owned utilities: FPL, Duke, Gulf Power, and Tampa Electric. The workshop consists of brief powerpoint summaries of the plans by each utility, and an opportunity for public comment (watch a video of the whole thing). The plans themselves are brief summaries compared to IRPs, containing no modeling of future scenarios or energy production options. Six other investor-owned and municipal utilities submit plans, but these are reviewed entirely on paper, behind closed doors.
During the TYSP workshop on September 14, 2016, the utilities brought no alternative options to the discussion, nor were any pursued in the written plans. Without any comparison, it’s difficult to see whether lower-cost alternatives were available.
In our comments at the workshop, SACE focused on policies that would open the market for utility-scale solar farms: first, a “standard offer contract” for smaller solar installations that want to sell power to utilities, including a standard rate; and second, a competitive bidding process for generators of less than 75MW. FPL is avoiding this competitive bidding requirement by proposing to construct three solar plants of 74.5MW each. As we reminded the five Commissioners in our comments, “Florida has greater solar potential than our neighbor to the north, and we ought to ensure that this state’s policies do not create an unnatural barrier to taking advantage of that potential.”
We also pointed out the fallibility of utilities’ assumption that reliance on coal will be the least-cost option. From our comments:
This assumption is worth taking another look at, as keeping coal plants online is actually subject to a number of risks. There is good reason to plan for the case that the end of a unit’s useful life falls within the next ten years. Utilities should demonstrate that they have factored these risks in, and publicly disclose scenarios in which coal-fired units are taken offline, including the relative costs of retirement compared with the continued costs and associated ratepayer risks of maintaining a coal-fired unit.
As an electricity source, coal is less competitive than natural gas, and because it creates so much pollution of land, air, and water, is subject to a number of newer regulatory standards that will require massive new capital expenditures, as well as increasing operational costs.
For example, Gulf Power’s Plant Crist has two generating units operating outdated once-through cooling systems that suck massive amounts of water from the river and return most of it to the water body at a higher temperature, as does Jacksonville Electric Authority’s Northside plant. Cooling towers to protect aquatic systems and reflect updated standards with which the plants must comply could cost hundreds of millions of dollars.
Tampa Electric recently filed for cost recovery of nearly half a million dollars just to study compliance with new water discharge guidelines for its Big Bend Plant. And many utilities may have to close coal ash storage areas and ship the ash out of state, since Florida’s high water table and porous geology will make it difficult or impossible to comply with new coal ash safety rules.
And of course, the TYSPs push off consideration of how to comply with the Clean Power Plan for a later date, despite the existence of “no regrets” options they could pursue now — a delay we find imprudent and disappointing.
You can download a .pdf of SACE’s oral testimony here, or our more detailed written testimony here. And for those in the Tallahassee area, stay tuned for information about attending next year’s Ten Year Site Plan workshop!