Wednesday, June 20, 2018
Business

Q&A: Florida utility watchdog J.R. Kelly talks shop and his one beef with solar

Florida Public Counsel James Ray "J.R." Kelly is the irritating itch that the state's investor-owned utilities can't seem to satisfactorily scratch. In his watchdog role at the chief of the Office of Public Counsel, Kelly's agency represents consumer interests before the Florida Public Service Commission. With critics of the PSC continually arguing its commissioners give utilities nearly anything they want, it is often Kelly's roll to help stop the steamroller.

His office was the primary catalyst in slowing, and perhaps ending the utility practice of hedging the price of natural gas, a policy that led to more than $6 billion in customer losses since 2002. Kelly's office also fought a $1.3 billion rate hike by the state's largest utility, Florida Power & Light, an increase later scaled back to $811 million.

Kelly, 59, talked to Tampa Bay Times about his job, his continuing battles with utilities and his one pet peeve about solar energy. Here are excerpts:

In the age of Donald Trump, do you worry that the public and lawmakers may start to lose sight of the critical role an office such as yours plays in protecting consumer interests?

Well, it wouldn't be true to say I sit up and worry about it at night. There's always a little bit of concern. But I think when we have the opportunity to sit with the Legislature members and tell them what we bring to the table, I think they do see the value in our office. And I think the utilities, by and large, even thought we're adversarial with them and we fight them tooth and nail on certain issues, I think that they would tell you we serve a very important purpose of making the rate-making mechanism better. Would they not like to have our office challenging them on certain issues? Absolutely. They would rather muzzle us and not have us here. But overall, I think, if you ask the utilities, they say we bring a lot of value in making the rate-making mechanism work better.

In hedging, a utility buys an amount of fuel at a fixed price at a future date. If market prices climb above the hedged price, the utilities and their customers save money. If prices fall, as they have done with natural gas in recent years, consumers lose big. Florida's got a moratorium on new hedging so the issue can be studied. What does the future hold for hedging in Florida?

Well, the utilities have so far, most of them, have argued to retain hedging. Duke Energy has been the least resistant to terminating hedging. I don't know, I haven't seen anything that leaves me to believe the utilities are going to change their posture.

What's in it for the utilities, who argue hedging prevents volatility in customer bills?

I'm not 100 percent sure. However, under the old hedging rules, if the utility is ordered to hedge say a certain percentage of their natural gas purchases, that takes a lot of the risk out of their making imprudent purchases. They can go in and enter into a hedging contract for a certain percentage of their sales and they don't necessarily have to prove up that it was a prudent hedge or not because they will argue they were simply following their hedging plan, which was approved by the commission.

Has the state become too reliant on natural gas for electricity generation?

Absolutely. That's always a concern. A perfect world would be where you'd have a balanced generation mix of natural gas, coal, maybe some nuclear. And when I say coal, I mean reduced-emission coal, whether it'd be a plant that reduces the emissions or it's a less emission type coal. My greatest hope is that there would be a technological breakthrough for coal that would allow it to come back into the mix so that we therefore wouldn't be so reliant on natural gas.

Utilities have all gotten into the solar farm business, building large arrays of solar panels over acres of land. Is this all public relations? What do you think that is about?

The utilities are in business to make money. So if they can build solar that would deter or prevent a consumer from buying solar on their house, then obviously they would be incentivized to build big solar farms. Solar is something that we've got to do more in Florida. But I do have a concern. I'm a native Floridian and I grew up with green Florida. We've got grass. We've got farmlands. And we've got trees. And it takes a tremendous amount of space to build a solar farm for what is relatively a few megawatts of energy.

I'm a big proponent of rooftop solar, whether it be commercial rooftop or residential rooftop. I'm glad to see prices coming down and a lot of consumers that were not able in past are now able to invest and put it on homes and businesses. While solar farms are a reality, being a native Floridians, it bothers me that you're going to go cut down 300 acres of trees and build 300 acres of solar panels where you can't have any grass growing, you can't have any vegetation, you can't have any trees because that is not the native Florida that I grew up in.

FPL sought a big rate hike last year. Now Gulf Power is doing the same, even amid cheap natural gas prices. Are utilities getting more aggressive in seeking rate increases?

I see no change. They've always been aggressive. Yes, sir. Yes they have.

Contact William R. Levesque at [email protected] Follow @Times_Levesque.

Comments
What historically high lumber prices mean for Florida home buyers

What historically high lumber prices mean for Florida home buyers

Blame a lack of rail cars in Canada or not enough semi trucks in the United States. Forest fires didnít help. Tariffs played a big role, too.Even the buoyant economy takes part of the rap for frothy lumber prices, which hit all-time highs last month....
Published: 06/20/18
As Tesla races to meet Model 3 deadline, factory pressures and suspicions grow

As Tesla races to meet Model 3 deadline, factory pressures and suspicions grow

Tesla chief Elon Musk said last week that the companyís layoffs of 9 percent of its workforce wouldnít affect production as the all-electric automaker races to build thousands of new Model 3 sedans a week.But documents the company filed days later wi...
Updated: 8 hours ago
Tech Data sending a record 700 employees to march in Pride Parade

Tech Data sending a record 700 employees to march in Pride Parade

Among the marching bands and twirlers at Saturdayís St. Pete Pride Parade, one major sponsor, Tech Data, is sending by far a record number of employees ó more than 700 at last count ó to march in Floridaís largest gay pride parade.The parade, which d...
Published: 06/19/18
A valet at this South Tampa Publix will park your car as you shop

A valet at this South Tampa Publix will park your car as you shop

TAMPA ó Publix shoppers in South Tampa who hate circling the lot for parking can now toss their keys to a valet.The Publix at Dale Mabry and Neptune started testing a free valet service last week that could expand to more stores. Spokesman Brian West...
Published: 06/19/18
Sign to report employees not speaking English at doughnut shop creates a stir

Sign to report employees not speaking English at doughnut shop creates a stir

A sign asking customers at a Dunkiní Donuts store in Baltimore to report employees who were heard not speaking English has set off a controversy.The sign, according tothe Baltimore Sun, would offer coupons to customers who reported workers at a dough...
Published: 06/19/18
Florida Bankers Association recognizes Bill Klich with award

Florida Bankers Association recognizes Bill Klich with award

Former Tampa Bay banking executive Bill Klich was presented the Lifetime Achievement Award from the Florida Bankers Association last week at an annual meeting in Palm Coast.Klich, 73, has a strong reputation with more than four decades of commercial ...
Published: 06/19/18
Jeff Vinik-backed construction material firm headed to Port Tampa Bay

Jeff Vinik-backed construction material firm headed to Port Tampa Bay

TAMPA ó With $3 billion in construction on the boards, Water Street Tampa will need a lot of concrete, so a company whose largest investor is Jeff Vinik is moving to Port Tampa Bay to begin importing fly ash, a component of concrete.Spartan Materials...
Published: 06/19/18
Drugs at your doorstep: CVS will deliver prescriptions to your home

Drugs at your doorstep: CVS will deliver prescriptions to your home

CVS Health will make prescription deliveries nationwide to accommodate the heightened expectations of convenience from consumers. The nationís second-largest drugstore chain says it also will make home deliveries of other items, like allergy medicine...
Published: 06/19/18
St. Petersburg residents will see higher water, sanitation bills

St. Petersburg residents will see higher water, sanitation bills

ST. PETERSBURG ó Residents can expect their water and sanitation bills to increase between $7 and $11 starting in October.That represents an average of a 7-percent increase. Customers who use an average of 4,000 gallons a month, including reclaimed w...
Published: 06/19/18
Spectrumís new service will eventually increase the cost for TV

Spectrumís new service will eventually increase the cost for TV

Spectrumís new all-digital service is set to bring more high definition, faster internet speeds and expanded on-demand offerings ó but it also comes with higher costs for some of its TV customers in Tampa Bay. Each TV that receives service from Spect...
Published: 06/19/18