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Progress Energy, Florida Power & Light no longer required to expand energy conservation programs

TALLAHASSEE — State regulators set the clock back on energy conservation in Florida on Tuesday by reversing a rule that would have required Progress Energy Florida and Florida Power & Light to encourage customers to use less electricity.

Their argument: Saving money for some was going to require higher bills for everyone.

The Public Service Commission agreed, so they voted to ignore a 2008 law that required utilities to expand their existing conservation programs.

Under the 2009 rules, all customers would pay more for the additional energy conservation programs. Progress Energy customers would pay an estimated $6.24 more per month this year and up to $16.52 more in 2014. FPL customers would have paid an additional $3.70 a month this year and up to $4.11 in 2014, according to PSC staff estimates based on average residential usage.

The commission adopted the standards in 2009, but Progress Energy and other companies had challenged them in the past year.

The commission's decision to roll back conservation programs follows the wishes of Gov. Rick Scott, whose staff recently weighed in on the energy debate. At a meeting of electric company lobbyists and energy industry representatives in late June, the governor's former policy director, Mary Anne Carter, said the governor wanted the state to soften the energy efficiency goals to lower the cost of electricity in Florida to attract new business.

"Conservation is a good thing, but the cost of it doesn't have to be this high,'' she said.

Consumer advocates challenged the cost projections and the governor's assumption that the program is too expensive.

Consultants for the Southern Alliance for Clean Energy, a nonprofit advocate for energy conservation, said the estimates were inflated to make the programs look more expensive than necessary. They said they reflected only the short-term implementation cost without considering the long-term savings. And they chided the Public Service Commission for not demanding more accurate numbers, saying the decision essentially ignores the mandates of the 2008 Legislature.

Lawmakers that year ordered the commission to set more aggressive energy efficiency standards as part of an energy bill designed to promote renewable energy and reduce dependence on fossil fuels.

"What I heard today is efficiency hurts,'' said Leon Jacobs, a former PSC commissioner who is now with SACE. "That's not what I heard the Legislature say. The Legislature said efficiency is a good option we should rely on."

According to SACE, when consumers reduce energy consumption, they save, because it defers the need to build power plants and reduces greenhouse gas emissions.

But Commissioner Eduardo Balbis said he was not persuaded. PSC staff estimates Progress Energy will not need a new power plant until 2016, and the more aggressive energy conservation programs would not do enough to offset the need, especially since the company now has the capacity to produce 25 percent more electricity than is demanded by today's customers.

The commission left open the possibility that it could revive the debate over efficiency goals in the future. At the recommendation of Commissioner Julie Brown, regulators voted to ask the utility companies to update the cost of meeting more aggressive energy efficiency goals in light of advances in technology and stagnant growth.

Commissioners Ron Brise and Lisa Edgar supported that suggestion. They said the downturn in the economy and the need to keep consumer costs down has forced them to reconsider the short-term costs of implementing energy efficiency incentives.

Only Edgar was on the commission when the original efficiency goals were voted on in 2009.

Meanwhile, Balbis persuaded other commissioners to vote to approve the status quo — allowing both companies to continue their existing conservation programs but only requiring FPL to continue its solar energy incentives.

The average customer in Florida now pays $2 a month to finance conservation programs, Balbis said. In 2011, the existing programs will cost Progress Energy customers $2.99 a month.

Mary Ellen Klas can be reached at meklas@miamiherald.com.

Progress Energy, Florida Power & Light no longer required to expand energy conservation programs 07/26/11 [Last modified: Tuesday, July 26, 2011 10:08pm]
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