Energy Rates And Policies Hang On Outcome Of Governor’s Race

Sep 30, 2014 No Comments by

The outcome of the governor’s race could have a significant impact on state energy policy and utility rates for millions of Floridians.

On one side is a former governor, Charlie Crist, who had a reputation for appointing consumer-friendly members to the Public Service Commission — often much to the chagrin of Florida’s major utilities and powerful lawmakers. On the other side is Rick Scott, the incumbent, who emphasizes his pro-business policies and has been rewarded with strong financial backing from Florida’s utility companies in this year’s campaign.

The current majority of the PSC was appointed by Crist, but Scott named his first appointment, state Rep. Jimmy Patronis, R-Panama City, and reappointed Julie Brown, who was originally named to the commission by Crist. In his announcement, Scott said he expected the PSC members “to put Florida families first,” and he said he’ll work with the entire regulatory panel “to keep the cost of living low in the Sunshine State.”

The major utility companies are supporting Scott and the Republican Party in this election cycle, to the tune of $3.7 million in contributions through August. They have also given the Democratic Party more than $400,000, with no direct major contributions to Crist.

Duke Energy has given Scott‘s “Let‘s Get to Work” political committee some $600,000 since 2012 and Sterling Ivey, a company spokesman, said this was because the utility supports Scott’s overall policies for the state. “Like many businesses, Duke Energy Florida participates in the political process supporting candidates and committees with similar businesslike goals for Florida,“ Ivey said. “Lower taxes, high quality of life for our residents (employees and retirees) and encouraging new development and growth are a few of the primary issues we advocate for. We support Gov. Rick Scott because we believe Governor Scott has a better plan for Florida.”

But Scott’s critics say PSC decisions have tilted toward the major utility companies since Crist left office in early 2011. For instance, the three largest utilities — Florida Power & Light, Duke Energy and Tampa Electric — have received rate increases in the last two years. Under Crist, the PSC blocked increases. But four of the commission members who voted against higher rates either failed to win reappointment, which is a process that involves a legislative nominating council, or were rejected in a confirmation vote by the Florida Senate.

Among them, former state Sen. Nancy Argenziano failed to win renomination, and former Bradenton newspaper editor David Klement was rejected in a Senate vote. Former state Sen. Mike Fasano, now the Pasco County tax collector, said the rejection of the PSC members “tells you right off the bat” about the the regulatory panel’s direction since Crist left and Scott took over. “You can’t put these types of increases on people who are struggling,” said Fasano, a Republican who is giving his support to Republican-turned-Democrat Crist. “There’s a problem out there with these huge electric companies . . . and (Scott) does nothing. He says nothing. He could care less.”

Scott’s supporters say the governor has helped reduce utility rates, while pointing to an issue that they say shows Crist helped the utilities shift more costs to consumers.

Crist approved expanding a law passed under Gov. Jeb Bush that allows utility companies to recoup advanced costs for building nuclear plants — even if they are never constructed. The 2008 bill expanded the recovery cost to transmission lines associated with the nuclear plants. Last year, Scott approved a bill that placed new limits on the cost recovery law, including requiring that the companies begin building the plants within 10 years of receiving approval from the federal government.

“The truth is, Charlie Crist was the governor who signed a law to raise utility costs by expanding the nuclear cost recovery statute,” said Matt Moon, a spokesman for Scott’s campaign. “Charlie Crist doesn’t want Floridians to know that Rick Scott is the only governor in Florida history who signed a bill approving changes to this law that limited risk and therefore helps reduce costs to ratepayers.”

The nuclear cost recovery issue shows the complex interplay of the PSC, the governor and the Legislature when it comes to deciding policies affecting utility rates. Susan Glickman, state director for the Southern Alliance for Clean Energy, said Scott could have taken a more aggressive stance against the nuclear recovery law. “They could have repealed that law entirely,” Glickman said. “They made a little tweak.”

Glickman also said the PSC members could have been more skeptical of the advanced costs the utilities were seeking under the law. “The PSC is culpable for fleecing consumers’ pocketbooks because they have not denied Duke Energy and the big utilities even one single dollar of cost recovery,” she said. “They have rubber-stamped everything the utilities have asked for.” Crist now says he wants to repeal the cost recovery law, while Scott has remained silent on that issue.

The PSC will have a critical role in another major energy issue facing Florida in coming years. The federal government is calling for Florida to reduce its carbon emissions by 38 percent by 2030. How that policy will be carried out is a matter that will involve the PSC, the Legislature, the governor and the state Department of Environmental Protection.

Glickman said the fundamental issue will come down to how much the state tries to meet that goal by building costly power plants with lower carbon emissions, like natural gas or nuclear ones, or how much the state emphasizes lower-cost energy efficiency and renewable-energy sources like solar power.

In 2013, Florida was ranked third in the nation as a potential market for solar energy, but was only 18th in solar installations. “Does the PSC let them build new power plants that we don’t need?” Glickman asked. “Or do they make them capture the cost-effective energy efficiencies?” In a related issue, the PSC is weighing a request from the major electric utility companies to dramatically slash their energy conservation goals over the next five years, including eliminating programs such as rebates for consumers who install solar units.

Glickman and other advocates say gutting the goals will increase the demand for costly new power plants and result in higher electric bills for ratepayers. But the utilities say energy efficiency is occurring through other means, including stricter building codes and higher efficiency standards for appliances. They say the energy conservation programs, which include things like home energy audits or solar rebates, cost all ratepayers money.

The energy conservation debate illustrates the central role that the PSC plays, and how it will continue to affect consumers in coming years. “Regulatory agencies are something that people just don’t really key into too much and they don’t understand how important the role of regulator is in a monopoly situation,” Glickman said.

 

Source: Herald Tribune Politics

Environment, Utilities

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