Fla. PSC Set to Propose RES Plan

Guest Blog | October 1, 2008 | Press Releases

Tallahassee, Fla. – The Florida Public Service Commission’s staff is set to issue recommendations for the creation of critical renewable energy standards, Thursday, October 2, in Tallahassee, Fla.

A coalition made up of the Southern Alliance for Clean Energy, the Environmental Defense Fund, Florida Crystals Corp., The Climate Group, the Natural Resources Defense Council and Covanta Energy, among others, is issuing this reminder to the news media with the aim of ensuring that this important issue continues to receive the coverage it deserves in the public interest. Coalition members share a keen interest in development of a robust renewable energy industry in Florida.

We expect the staff recommendation to improve on the “straw man” proposal for renewable energy standards issued by PSC staff August 13. That proposal, accurately described as “timid” in one recent newspaper editorial, was roundly criticized by a host of non-utility stakeholders as well as newspaper editorial boards statewide.

In the recommendations to be issued Thursday we will look to see whether the rule has been improved to “level the playing field” between conventional generation and renewable sources of energy. Conventional generation sources have been responsible for a 25 percent increase in utility rates since 2005 and next year some Floridians will see increases of as much as 30 percent.

Renewable sources of energy help to insulate customers against such price shocks caused by spikes in fuel costs and skyrocketing construction costs for new power plants.

The straw man version of the rule was heavily weighted towards cost containment (allegedly to protect consumers) to the detriment of meaningful investment in renewable energy development that would truly benefit consumers and also create jobs.

The cost containment argument is misleading. The bottom line is that this provision virtually guarantees that the cost of both conventional and renewable energy will remain unnecessarily high. Given the fact that conventional energy providers are passing along cost increases to consumers totaling between 25 to 30 percent, we will look for greater fairness on the cost containment issue.

Relying on coal, gas and nuclear power is a costly and risky strategy for Florida. The current trend for the existing coal, gas and nuclear power electric system is to increase the average residential electric bill by 55 percent, based on trends that anticipate 16 cents per kWh rate by 2020.

The increasing cost to build large power plants and the rising cost of all power plant fuels drives this trend in rate increases. Investing in renewable energy today will reduce the risk of fuel-related rate increases because solar and wind power have very low operating costs and no fuel costs. Biopower, meanwhile, relies on locally grown agricultural and wood waste resources and its costs are not affected as much by trends in global energy demand.

The draft rule?s first suggested cost cap would additionally limit third-party providers of renewable energy to an average of 6.71 cents per kWh of renewable energy provided. Yet it makes sense to commit to more than 6.71 cents per kWh for renewable energy when the alternative is paying residential rates that will grow from 11 cents today to 16 cents per kWh in 2020.

In summary, we should look to see if the PSC staff improves the rule with new recommendations in these areas of concern to non-utility stakeholders:
• Arbitrarily low and oppressive cost cap that limits renewable energy investment.
• Renewable energy targets for Florida that are, compared to other states that have already adopted renewable energy standards, the weakest in the nation.
• Lack of enforcement provisions when renewable energy generation goals are not met.
• A provision that mandates renewable energy developers sell power to utilities at a cost below rates. (The practice is known as “avoided costs” and puts renewable energy producers at an economic disadvantage and can thus discourage new investments). # # # Southern Alliance for Clean Energy is a nonprofit organization thatpromotes responsible energy choices that create global warmingsolutions and ensure clean, safe, and healthy communities throughoutthe Southeast.