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Withlacoochee River Electric customers in Pasco, Hernando could see higher bills under proposed emissions standards

Published Sep. 11, 2014

DADE CITY — Withlacoochee River Electric Cooperative members could see higher energy bills under proposed emissions standards aimed at reducing carbon levels at coal-fired power plants.

The cooperative has already invested millions of dollars to lower carbon levels at a coal plant in Palatka that produces most of its electricity, but the stricter federal standards likely will force it to spend even more and pass those costs on to its 220,000 members, co-op officials say.

Unlike investor-owned utilities, Withlacoochee Electric is owned solely by its ratepayers, or members, as they're known. Many live in rural areas and earn below-average incomes, the utility says. About 80 percent of its members live in Pasco and Hernando counties, with the rest in Citrus, Polk and Sumter counties.

"This will hurt our members. We have a lot of seniors on fixed incomes," Withlacoochee manager of member relations David Lambert said.

It's too early to tell exactly how much more Withlacoochee members will pay for electricity. The proposed U.S. Environmental Protection Agency standards could change before they're adopted in 2016.

Even so, Withlacoochee could be forced to invest in a new natural-gas-powered plant to adjust to the standards. By one estimate, customer bills could climb by as much as $15 to $20 a month. The average monthly bill for a Withlacoochee customer is $148.

Withlacoochee isn't the only Tampa Bay utility grappling with potentially higher bills. Duke Energy, with 142,000 Pasco and Hernando customers, says it might be looking at higher costs because of the rule change, as well. And Tampa Electric says its 700,000 customers, including 20,000 in Pasco, will likely pay more.

While too early to say how much more, "it's reasonable to assume the new regulations will increase the cost of electricity for our customers," Tampa Electric spokesperson Cherie Jacobs said. The utility does not serve Hernando.

The EPA rolled out the emissions proposal in June to help curb pollutants blamed for climate change. The rules, outlined in a 645-page document, are currently under review. The proposal's overall aim is to cut power plants' carbon emissions by 30 percent by 2030 from 2005 levels.

States have flexibility in reaching that target and some may enact smaller cuts than others. Florida would be expected to cut emissions by 38 percent.

A study by the Georgetown Climate Center at the Georgetown University Law School in Washington, D.C., shows the Sunshine State has already lowered emissions as large investor-owned utilities shifted to natural gas.

Carbon emissions were down 15 percent between 2005 and 2012, and currently about 60 percent of Florida's electricity is produced from natural gas, which still emits carbon, but at lower levels than coal plants.

Withlacoochee, however, has been slow to convert from coal. Thirty-five percent of the utility's electricity came from natural gas last year, up from 21 percent in 2005, but its dependence on coal remained at roughly the same level during that time frame, close to 57 percent.

The company and eight other cooperatives nonetheless made significant investments to cut emissions, banding together in 2006 to fund a $230 million upgrade at two coal-fired generators at the Seminole Electric Cooperative in Palatka.

Lambert said the EPA's proposed emissions standards amount to an abandoning of coal in favor of natural gas, which could prove devastating during hurricanes. He warned that with so much invested in natural gas, Florida could see severe energy shortages if a hurricane ever knocked out its Louisiana-based suppliers. Even during fair weather, ratepayers would be tied to whims of the natural gas market.

"If we rely only on one fuel source, then we're stuck with any increase in those prices," Lambert said. "This is a really big deal for us. We serve a lot of rural areas, and in rural areas the earning capacity is about 15 percent less than in other areas."

Some environmental groups, meanwhile, are cheering the new rule as one way to help tackle greenhouse gases.

"The program being proposed now is something the Sierra Club supports across the nation," said Tom Larson, a member of the environmental group's executive committee in Florida. "We need to change our practices. We need to embrace energy efficiency. We need to invest in renewable energy."

Ted Kury, director of energy studies at the University of Florida's Public Utility Research Center, who has reviewed the proposed rule, said challenges from utilities and some states are likely to emerge in coming months and, in the end, the emissions rules could appear vastly different from those proposed now.

"This is a proposed rule from the EPA. It is not in any way, shape or form the final rule," he said.

The EPA is seeking public comment until Oct. 16. Kury recommended citizens visit the EPA website to learn more and to comment on the proposed rule.

"All interested parties should take advantage of this to have their concerns heard," he said.

Contact Rich Shopes at rshopes@tampabay.com or (727) 869-6236. Follow @richshopes.