Florida Power & Light's wholly owned subsidiary, the Florida Legislature, is moving toward allowing the state's largest electric utility to charge customers for its natural gas fracking projects in other states. This is nothing but a massive handout to a powerful monopoly at the expense of consumers who should not have to pay for this. If fracking is that promising, the utility's shareholders should shoulder the financial responsibility.
FPL sought permission from the Public Service Commission in 2014 to recoup its investment in a venture with an Oklahoma-based fracking company. The utility maintained that the project, which involved exploratory drilling for natural gas, acted as a long-term hedge against fuel prices. In 2015, the PSC approved the move, later expanding the ruling by giving FPL — under some conditions — the authority to participate in future gas projects without the commission's prior approval.
But the Florida Supreme Court reversed the PSC orders last year, finding the commission exceeded its authority in approving the FPL venture. So after it lost in court, FPL turned to a friendlier venue. The bill, SB 1238, approved Tuesday by the Senate Rules Committee and headed toward the full Senate, is designed to overturn the court's decision.
Sen. Jack Latvala, R-Clearwater, who opposes the bill, softened the blow by offering a series of amendments. They require FPL to invest in known gas reserves, reducing the risk of speculative drilling. Another requires that drilling companies show they are financially viable, while another amendment says such projects can take place only if a pipeline exists to move the gas to a utility's service area. The committee passed the bill 7-3, with no votes from Sens. Jeff Brandes, R-St. Petersburg; Tom Lee, R-Thonotosassa; and Bill Montford, D-Tallahassee.
But this bill still promotes a speculative venture between a regulated utility and its partners in other states — with ratepayers on the hook for the results. That responsibility belongs to FPL's shareholders, not to the captive market of its customer base. The measure is opposed by consumer groups, AARP, the Florida Retail Federation and others, who argue the policy will cost FPL customers millions and prompt the state's largest utility into an overreliance on fossil fuels. This is an unfair, anticompetitive energy policy. While the company predicted the effort would save customers millions in fuel costs, it resulted in a loss of $5.6 million in the first year.
If this is such a smart business deal, let FPL's shareholders take it on. And beyond this case, there is no reason for granting the PSC the discretion to approve new such ventures down the road. The commission has proved time and again to be a de facto agent of the utilities it is supposed to regulate. It's beyond a leap of faith to imagine the PSC would be more vigilant now in writing and policing the rules for a new revenue stream for the industry.
In Tallahassee, you get what you pay for. FPL has contributed at least $1.5 million to legislative political committees and $100,000 to Gov. Rick Scott's political committee since January. Now it wants its return on those investments. The changes made to the legislation this week shave away some of the hardest edges, but they aren't enough to justify sticking it to the ratepayers.