If the Florida Public Service Commission wants to give electric utilities unprecedented permission to explore for natural gas or gold or other riches, it ought to at least require the utilities' shareholders to assume the financial risk. Utility customers should not pay all of the costs while the monopolies keep all of the profits, which is exactly what Florida Power & Light wants the PSC to approve.
FPL asked the PSC this week to let it charge its customers up to $750 million a year to get into natural gas fracking. It's questionable whether the PSC has the authority to grant such a deal, but the commissioners rarely pass up an opportunity to give the utilities exactly what they want. After just voting to let the electric utilities reduce energy efficiency goals by 90 percent and stop offering incentives for solar power, approving an FPL partnership with an Oklahoma oil and gas company to jump into natural gas exploration must seem like a small leap of faith.
The deck is already stacked in favor of the electric utilities. Customers pay for the construction of power plants. They even pay up front for the cost of nuclear plant projects. They pay for all of the fuel costs to run the power plants. They pay for the electricity they use in their homes and businesses. And the utilities are guaranteed a reasonable rate of return on their investments. Yet that is not enough for the utilities, who see renewable energy advances as threats to their monopolies and want other ways to make more money.
Like other utilities, FPL buys natural gas to run its electric plants and passes that fuel cost to its customers without making any money from it. The fracking proposal considered by the PSC would permit the utility to extract natural gas itself rather than buying all of it and make a profit on that investment in exploration. For FPL, it would be a win, win, win. It would buy less natural gas, explore for its own natural gas with its customers taking on all of the risk — and make a profit on the deal. As one critic suggests, that sounds more like socialism than free enterprise.
FPL officials told the PSC this week that investing in natural gas exploration is just smart business. They said it could stabilize costs, avoid fluctuation in market prices and protect customers in the long run. Opponents such as big industrial power users and the public counsel, who represents ratepayers before the PSC, called it just another way for FPL to expand the company and make more money for shareholders while customers assume the risk. They're right.
If Florida is going to allow utilities to get into the natural gas fracking business, that should be a policy decision for the Legislature rather than decided in obscure PSC hearings. The Legislature is not exactly a level playing field, either. After all, it was the Legislature that voted for the 2006 law that enabled Duke Energy to bill customers more than $3 billion for nuclear plants that are broken or never will be built. But at least the issue would be debated in a larger public arena and subject to more voter scrutiny.
If the PSC allows FPL to start exploring for natural gas at ratepayer expense, you can bet Duke Energy will be next in line to seek the same permission. The ever-compliant PSC should at least require the utilities to create subsidiaries for natural gas exploration and put the financial risk on the company's shareholders who stand to make the profits instead of on the customers who have everything to lose and nothing to gain.