Energy bill's greening power, costs debated

Energy bill's greening power, costs debated

By MONICA HATCHER
mhatcher@MiamiHerald.com

TALLAHASSEE -- Forging ahead
on goals for a greener Florida,
state senators are expected to
take up a comprehensive energy
bill Wednesday that demands
progress in the effort to reduce
carbon emissions and replace
fossil fuels with renewable energy
sources -- from the gasoline
bought by motorists to the way
utilities generate power.
Measures in the nearly 200-page
proposal would require initiatives
as diverse as devising green
building codes to allowing state
employees to telecommute.
Some would bring almost
immediate change to how
business is conducted.
An example: requiring all gasoline
sold in Florida within two years to
contain 10 percent ethanol, a
blend scientists say significantly reduces smog-forming tailpipe emissions. The legislation would
dovetail with a recent federal mandate that some 14 billion gallons of ethanol be sold by 2021,
also about 10 percent of the country's current consumption.
"Florida would just be on the front end of that," said Phil Lampert, executive director of the
National Ethanol Vehicle Coalition.
For the most part, the Florida plan has the support of industry and environmental groups,
including the state's gas stations, although there are concerns about how much the program will
cost.
The sweeping legislation follows nearly a year of heavy campaigning for climate-friendly reform
by Gov. Charlie Crist, who has made the war on global warming a centerpiece of his
administration. Both House and Senate bills, while slightly different, codify much contained in
executive orders signed earlier this year at a climate change summit on Miami Beach.
Among them: requiring new state buildings to meet energy efficiency guidelines, office space to
be rented in green buildings, state vehicles to be fuel efficient and using alternative fuels.
Legislators break with the governor, however, when it comes to setting timetables and tangible
goals for some of his most ambitious proposals, most notably in creating a so-called renewable
portfolio standard of 20 percent. That standard calls for utilities to generate at least 20 percent
of their power from renewable sources like solar energy..
The Senate proposal, SB 1544, chucks the 20 percent mandate, but does ask the state's utility
regulator, the Public Service Commission, to decide on a rule for the standard by Feb. 1. It also
carves out a role for itself in deciding whether the rule is implemented.
Some in the renewable energy sector said the move will drag out the process at a time when
the state should be moving as quickly as possible.
But Sen. Burt Saunders, R-Naples, said the Legislature wanted to ensure the standards are
"reasonable and achievable" and don't result in big utility rate hikes.
"We decided to be a little more cautious," Saunders said.
Requiring utilities to use renewable sources at a high rate could mean higher prices, mainly
because the utilities might have to pay dearly for still-scarce resources and technology needed
to meet the goal.
In 2002, the last time state regulators studied the issue, they found 2.4 percent of the summer
generating capacity came from renewable sources. A Senate staff analysis noted that the
percentage was possibility even lower now, because generating capacity has grown, while
renewables have not.
In a separate measure, the Senate bill also would require electric utilities to set off 20 percent of
new demand for power with conservation and improved efficiency. The House measure does not
include the demand.
Conservation groups have lauded the efficiency goal but believe it will be stripped out of the bill
eventually now that legislators have made their desire to ease into new standards known.
"Energy efficiency must be the first fuel of choice, so we need to set a strong target because
the cheapest kilowatt hour is one you do not use," said Melissa Meehan, Florida climate
organizer for the Southern Alliance for Clean Energy.

In what many consider one of the most forward-looking aspects of the legislation, both House and Senate bills call for creating a so-called cap-and-trade market in Florida. This is a system for buying and selling credits for conservation, creating a financial incentive for complying.

Cap-and-trade systems allow governments to cap the total amount of greenhouse gas emissions allowed among a group of polluters. That amount is then divvied into credits, or pollution allowances, and distributed to companies. As the companies reduce emissions, ideally through innovation, they can sell their unused allowances to others who have been less successful or less willing to comply with the caps.

"It allows the market to determine the best way for the state to meet its emission caps," said Sarah Williams, a spokeswoman for the state's Department of Environmental Protection.

DEP, she said, is already in the process of determining the caps.

The Senate bill again gives the Legislature the right to approve them. While SACE's Meehan said they don't oppose lawmakers ratifying the rules, approving the caps is of the essence.

"Within the next 18 to 24 months, we're going to have a federal cap-and-trade bill," Meehan said. "Florida needs to be poised to jump into that carbon market."

While the energy bill enjoys wide support, there are concerns about the ambitious program's cost. In a tight budget year, tax credits promoting the development of renewable fuel sources have been cut back. However, the bill expands the ways utilities can recover costs from consumers in the form of higher rates down the road.

One proposal allows electric utilities to recoup preconstruction costs of transmission lines that serve nuclear facilities, building on a similar 2006 law involving nuclear power plants.

Before that, utilities could recoup costs only after a power plant was built and operable. Early cost recovery is seen as an incentive in constructing nuclear plants, which are expensive and considered risky because they are subject to several layers of regulatory approval.

AARP lobbyist Michael Twomey said the measure is overreaching because transmission lines are "pretty much run-of-the mill technology and not especially risky in any fashion."

The measure indeed, shifts more risks onto the backs of rate payers, said J.R. Kelly, Public Counsel for the state of Florida, who represents citizens on issues before the PSC. State regulators would have to ensure that the costs passed on to consumers were at least reasonable.

In many respects, the whole bill required a balancing act, he said.

"We all want cleaner air. We all want more environmentally friendly industry. We have to realize it's going to cost us as Florida residents," Kelly said.