PSC staff recommends utilities be allowed to drop conservation incentives

TALLAHASSEE — Despite pressure from both Gov. Charlie Crist and the Florida Legislature, state regulators on Thursday recommended that electric utilities not be required to give customers new incentives for saving energy and reducing electrical consumption.

Public Service Commission staffers also recommended that the added cost of encouraging customers to use solar power and other renewable forms of energy was too much for a broad-based incentive program. Instead, they recommended the commission adopt a series of pilot programs.

The staff said that if the PSC required utilities to reward customers for using less energy, such as installing energy-saving lights and buying energy-efficient appliances, utility companies would have less money to recover the cost of their power plants — and that "could trigger a request for a base rate increase in the near future."

Florida Power & Light and Progress Energy, however, are already in the midst of a base rate increase, with each of them asking the PSC to allow them to raise customer rates about 30 percent. The PSC can approve or reject the staff recommendation at its Oct. 27 meeting, and is scheduled to vote on the rate increases in November and December.

The Southern Alliance For Clean Energy, which argued before the commission to adopt more aggressive energy conservation goals, blasted the staff recommendation.

The alliance argued that if the PSC were to encourage energy conservation, it would offset the need for new nuclear power plants by FPL and Progress Energy and save customers billions in costs.

"There is no state anywhere else in the country that has proposed energy-efficiency goals this low," said John Wilson, research director for the southern alliance. "This maintains Florida's status as a minor player on the national energy-efficiency scene. It's a state that continues to build power plants at very high cost as opposed to focusing on energy efficiency."

Jeremy Susac of the Governor's Energy and Climate Commission was disappointed that the staff didn't follow the Legislature's order and require them to establish incentives for customers to use more renewable energy sources and reduce greenhouse gas emissions.

"Could the commission get overturned in the courts on that? Probably," Susac said.

By law, the PSC must set and review utility conservation goals every five years.

Wilson of the conservation alliance said utility companies in Florida have manipulated the PSC since 1994 by arguing that customer savings reduce company revenue.

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