Conservation is a cheap equivalent of clean energy. Curbing demand saves people money, cuts emissions of global-warming greenhouse gases and reduces the need for utilities to build expensive new power plants at ratepayers' expense. That is why the Florida Public Service Commission should set the bar high today in enacting new conservation targets. The state's power companies need a push to wring more efficiencies from the system and to invest in cleaner technologies.
State law requires the PSC to review the energy efficiency targets of seven major Florida power utilities every five years. The goals are to keep conservation efforts on the power companies' radar screens and capitalize on energy-efficient technology as it emerges. But the commission has not pushed the limits. The utilities have largely met their goals since the efficiency law was enacted in 1980, and five of the seven utilities met or exceeded their targets in 2007. Clearly there is room to do more, especially as the Obama administration gears up to spend billions of dollars on new clean-energy technologies.
Yet instead of raising the bar, the PSC staff has recommended that the power companies be left to continue their current efforts until the state's next review in 2014. The staff says that more aggressive efforts could backfire on consumers if they force the power companies to recoup any losses through a rate increase. The industry says the more aggressive goals sought by environmentalists could cost billions over a 10-year period. Power companies say conservation programs need to be cost-effective, tailored to Florida's environment and sensitive to the constraints of low-income households.
There is no denying that it costs money to reward consumers for reducing their energy consumption. The utilities have fixed costs — power plants and other facilities — that they must recover over time. And there is never a good time to raise rates — especially during a recession. But the trick here is to balance the costs with the benefits of curbing demand. Efficiency incentives can drive down the need to add new power capacity. The commission's own hired witness testified the industry could set goals six to eight times as ambitious as what the power companies proposed.
The staff was wrong to reject strong conservation goals. Its call for "pilot projects" comes nowhere close to realizing the opportunities from new federal spending on efficiency projects. Today's debate will show whether the recent scandals at the agency have made it more sensitive to its public mission. Commissioners need to focus on the endgame: Changing public attitudes about consumption to the point where the state better manages the swings in peak demand. Florida cannot afford the status quo, and it does not make sense to wait another five years to bring meaningful efficiencies to the table.