PSC Study: Utilities Could Meet Energy Goals

TALLAHASSEE — Florida's utilities could feasibly increase the amount of renewable energy they produce by 20 percent by the year 2020, as called for by Gov. Charlie Crist and environmental groups, according to a study presented Wednesday to the Florida Public Service Commission.

Whether or not power companies will ultimately be forced to do so will not be determined by the PSC until early next year, but the commission heard the findings of a feasibility study that it requested from a consulting firm this summer when it began considering strengthening the standards for the state's publicly-regulated utilities.

The key findings of the study, conducted by Navigant Consulting, were that production increases in solar, wind and biomass energies were technologically possible in the shortened time frame favored by Crist and the environmental lobby.

The study found wind technology would the least economically viable – because it would require too much investment for too little return. It could only be made viable if a certain amount of state money is set aside to go specifically to wind technology.

But set-asides for any particular technology have drawn the ire of some utilities and consumer advocacy groups who would prefer that state money be spent on whatever technology proves to be most cost-effective.

The PSC study also found that of the major clean technology types, biomass, such as refined municipal waste, are the most readily available non-carbon producing energy sources, while solar energy drawn by panels have the biggest potential to produce large amounts of clean energy in Florida.

Supporters of a more aggressive environmental standard for utility companies hailed the PSC study as proof it can be done.

“We are heartened by the fact that this study shows that there is obviously enough potential to get to the goal” of a 20 percent increase in renewable energy use by 2020, Gwen Rose, a member of the Florida Solar Coalition, told the PSC. “This shows that not only is it technologically feasible, but it is economically feasible if it is supported by the right policies.”

Rose said the solar coalition disagreed with the study's finding that other energy sources would be cheaper than solar. More broadly though, she said, the study directly contrasted with common complaints made by opponents of aggressive renewable energy standards: that it cannot be produced fast or cheap enough.

“We keep hearing that it's too expensive or that there's not enough resources,” she said. “This says the resources are there and we can afford them if you design the right (standard).”

But supporters of a longer time frame for utilities producing 20 percent of their energy supply from renewable sources questioned the study's finding that the cost of renewable energy production would decline as their use became more common.

“The study shows that most renewable technologies have risen in cost in the short-term, but (it) has assumed the costs for most renewable technologies will decrease over time,” Susan Clark, a lawyer representing four electric companies, including Tampa Electric, wrote in questions submitted to the PSC in response to the study.

PSC Commissioner Nathan Skop said the study's findings were in line with his own thinking.

“Some renewables are inherently more expensive than others,” Skop said. “I wish that I could wave a wand and make the economics of solar better than they currently are, but I can't do that. It is what it is.”

Skop said he agreed with the study's finding that it would take multiple types of energy for utility companies to increase their renewable production by 20 percent by the year 2020.

“We need to recognize that those renewable types that balance a renewable portfolio standard are part of the equation since affordability is a key driving concern,” Skop said.

Skop echoed a suggestion made previously by fellow PSC Commissioner Nancy Argenziano, who suggested that commissioners present two renewable energy standard proposals to the Legislature: a really aggressive set of rules and a less aggressive measure. However, Argenziano, who was not present at Wednesday's meeting, argued before that both standards should be more stringent than original staff proposals.

Skop also put forth a proposal Wednesday that would achieve the 20 percent reduction by 2020, but through contracts with utility companies instead of mandates. Skop's alternative plan would still contain caps on costs to consumers, but would offer rebates for renewable energy production.

“It's a utilization of the existing framework that's well-understood by the current stakeholders and flexible,” Skop said. “I think it's an innovative way to….synthesize the many ideas my colleagues and I have heard over many hours.”

Skop's proposal was presented to the commission and the public for the first time Wednesday afternoon. It will be discussed fully at the PSC's next scheduled meeting on the renewable energy standard in January.

Wednesday was the PSC's second crack at renewable energy standards the panel could recommend to the Legislature next year. For the second time in as many months, the commission weighed complaints from environmentalists that previous proposals are too timid against the cost concerns of utility companies, who would have to implement any changes that are required by new rules.

The PSC began in October debating staff proposals for a 20 percent increase in the amount of renewable energy produced by Florida utilities by 2041.

In advance of Wednesday's meeting, several environmentalists joined forces to nudge the commission to be bold.

The resulting group, known as the Renewable Energy Alliance, released a set of five principles the organization will push for, including accomplishing the 20 percent renewable energy production standard by 2020 and not 2041. Additional principles outlined by the alliance include recognizing that renewable energy insulates customers from price spikes, leveling the playing field for non-utility renewable energy providers, and including meaningful enforcement mechanisms in any standard adopted by the PSC.

Although the PSC will not decide the renewable energy standard for utilities until January, environmentalists already won a victory Tuesday when another state panel approved a proposal to make Florida’s auto emission standards among the nation’s toughest by boosting state requirements to match standards enforced in California since the 1990s.

If the tougher car standard is approved by the Legislature next year, Florida would be the 13th state to voluntarily adopt automobile emission standards that are stricter than the existing federal requirements .It remains to be seen if the final utility standard will follow that precedent, but PSC chairman Matthew Carter said a decision would be finalized soon.

“The Legislature has given us a mandate and we will meet it,” Carter said. “We will stay on schedule, we'll stay on task and we will stay on budget.”

The PSC will next take up the renewable energy standard Jan. 9, when the commission plans to take a final vote on the recommendations it will make to the Legislature in February.