http://www.cleanenergy.org/2012/11/05/november-2012/

SACE | Southern Alliance for Clean Energy

November 2012

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1. Questions About TVA CEO

2. SACE Protects Florida Consumers

3. Be a Voice for Clean Energy!

4. Offshore Wind Report

5. Alabama Getaway, Getaway


1. TVA Appoints New CEO
Clean energy groups question Bill Johnson as their choiceTennessee Valley Authority’s (TVA) recent appointment of former Progress Energy CEO William Johnson as its new CEO is raising the eyebrows of clean energy advocates across the region, including here at SACE. Though willing to maintain an open mind, we’re surprised that TVA’s Board would hire Mr. Johnson with his controversial past. Of course, we are referring to the sudden removal of Johnson by the Duke Energy Board in July just hours after his appointment as CEO of the company following the merger with Progress Energy. While we may never know the full story of why Johnson was so abruptly dismissed, there are some known facts which would make one question whether or not he is the best fit to lead TVA: 1) His handling of the Crystal River 3 nuclear reactor in Tampa, FL.
Under Johnson’s leadership, Progress Energy Florida (PEF) chose to self-manage an upgrade project at its troubled Crystal River 3 (CR3) nuclear reactor located north of Tampa, FL as opposed to bringing in outside experts. However, their attempts to repair the cracks have led to further damage to the containment structure. Duke Energy had such a lack of confidence in the numbers that Progress Energy reported, the utility commissioned an independent report itself to evaluate the costs, which was recently released to the Florida Public Service Commission: You can find the full report here.The “Humpty Dumpty” reactor has been offline since September 2009 and, if successfully repaired, will cost at least $1.5 billion to repair and won’t be back in service until 2016. Johnson oversaw the company’s failed decision to “self-manage” the steam generator upgrade, and has been accused of failing to communicate the seriousness of the reactor’s problems leading up to the Duke-Progress merger, low balling the cost to make needed repairs and doggedly wanting to repair the reactor despite mounting evidence that shutting it down may be the better fiscal decision for ratepayers in Florida. 2) The questionable management of the proposed Levy County, FL nuclear reactors.
Moreover, Progress Energy has spent over $1 billion on developing the proposed Levy County nuclear reactors in Florida that may never be built. Delays in construction and spiking cost estimates forced the company into a recent settlement agreement that allows Progress Energy to charge customers $3.45 per month through 2017 to cover the cancellation costs of its engineering and procurement contract for the development of the reactor project. To get the full extent of the nuclear problems at Progress Energy Florida under Johnson’s leadership, all one has to do is search the Tampa Bay Times for some hard-hitting reporting on these issues.3) Johnson’s history with energy efficiency and renewable energy in the Southeast.
Progress Energy Florida’s energy savings in 2011 through its energy efficiency programs trails leading utilities in the Southeast. For instance, Duke Energy saved 0.70 percent of its sales in 2011 through energy efficiency while Progress Energy Florida saved less than half that amount – only 0.30 percent of its sales through efficiency programs in that same year. Additionally, Progress Energy Florida’s cost (cents per lifetime kWh saved) for achieving its tepid energy savings is significantly higher than peer utilities in the Southeast. Based on the above mismanagement of its energy portfolio, it should come as no surprise that Progress Energy Florida ranks dead last in the latest JD Power and Associates Residential Customer Satisfaction Survey of large utilities in the South. SACE has had extensive experience with Progress Energy under Johnson’s leadership in regulatory proceedings in North and South Carolina and Florida, and has generally found Progress Energy is not a leader on energy efficiency nor is eager to embrace renewable energy in those proceedings. And TVA needs a CEO that can lead the agency into the 21st century, bringing an open, clear-headed approach to TVA’s significant nuclear troubles. The new CEO must work successfully with many stakeholders with diverse interests and needs. But based on our past experiences with companies under his direction, we have real concerns about whether he will support TVA’s efforts to grow energy efficiency and clean renewable energy and if he can work effectively with stakeholders across the Valley. For more information on our concerns about Johnson’s past, please visit our blog.

2. SACE Protects Florida Consumers
Challenges Nuclear Tax before FL Supreme CourtIn early October, SACE appeared before the Florida Supreme Court to support our argument that Florida’s “Nuclear Tax” is not only extremely unfair to Florida Power & Light (FPL) and Progress Energy of Florida (PEF) customers, but more importantly that this early cost recovery statute is unconstitutional because it has allowed the Florida Public Service Commission (PSC) to exercise unbridled discretion in applying the law. Because of significant public and media attention paid to this issue, the Court considered this a “high profile case.” We know that this is truly a David and Goliath battle, but SACE has taken a stand to protect Florida ratepayers. As the basis for our constitutional challenge, we argued that:

  • The nuclear cost recovery statute fails to set out sufficient standards and criteria to guide the PSC as they review the annual nuclear cost recovery docket. Therefore, it is an unconstitutional delegation of legislative power to the PSC.
  • The PSC has been exercising unbridled discretion in applying the law, as evidenced by the fact that the PSC has not yet rejected a single penny of requested cost recovery from either FPL or PEF, which now totals well over $1 billion and there is no end in sight. All of these costs are being passed directly on to the ratepayers, with no meaningful oversight by the PSC.
  • In order to ensure that the charges for these new nuclear projects being incurred by ratepayers are fair, just and reasonable, as required by law, there should be specific, objective standards and criteria contained in the nuclear cost recovery statute. This is not a typical utility ratemaking case, because the utilities are being awarded costs in advance of these proposed projects producing electricity.
  • Astonishingly, FPL and PEF concede that they haven’t actually decided to build the reactors (two at FPL’s Turkey Point near Miami and two for PEF in Levy County), yet insist that their consumers should cover the up-front costs. Ratepayers are footing the bill for something that may never be built!

Of course, FPL and PEF disagree with our arguments but they are unable to direct the Court to any cases that present a situation such as the one at hand, where traditional principles of utility ratemaking have been turned on their head, and all of the financial risk for siting, designing, licensing and constructing new nuclear reactors been shifted to a utility ratepayers through advanced nuclear cost recovery. If the utilities ultimately decide not to build the reactors, ratepayers will not receive a refund. In these tough economic times, the PSC needs to look at protecting the hard earned money of ratepayers, not just the bottom-line of big power companies. But that’s not what the PSC has been doing. In fact, the utilities continuously fail to demonstrate the long-term feasibility of these expensive, risky nuclear reactor projects as project costs continue to rise while costs of natural gas and alternative energy sources continue to fall, and all along the PSC turns a blind eye.SACE believes that it is simply unfair for the PSC to continue allowing FPL and PEF to pick the pockets of Florida ratepayers seeking billions of dollars for these proposed new nuclear reactors, when the utilities themselves have not demonstrated that they actually intend to build the reactors. All Floridians should be troubled by state legislators who are unwilling to revisit this unfair nuclear tax and a PSC that is willing to help big power companies by heaping more costs and risk on customers. Floridians would be better served if the state instituted a transparent utility planning process that truly allows consideration of lower cost and lower-risk energy resource choices. SACE will continue to fight for this idea to become a reality.


3. Be a Voice for Clean Energy!
SACE Fall Membership Campaign gets underwayTHANK YOU for your commitment to clean energy. SACE’s Fall Membership campaign, Voices For Clean Energy, kicked off on October 15th. We are just about half way through the campaign and already 34 supporters across the region have become a voice for clean energy by joining SACE! Help us reach our campaign goal of 100 Voices for Clean Energy. Extreme weather events like Hurricane Sandy remind us how critical our work in advocating for a clean, safe, and healthy future is; they remind us that the work we do would not be possible without you. Thank You. Throughout this month we have been celebrating you – our friends, supporters and partners – because without your voice we cannot create the awareness necessary to achieve a clean energy future. Through November 9th, we will be offering a $5 discounted membership, as well as a free clean energy tote to express our appreciation of your dedication to improving quality of life in our region.
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For just $5 you can join SACE today and strengthen the call for responsible clean energy choices on a local, state and federal level. Together, we will continue to work to ensure clean, safe and healthy communities throughout the Southeast. Thanks to each of you who have participated in this campaign so far and we encourage those of you who haven’t to please take advantage of this limited time offer. Join SACE today by visiting the Donate page at, cleanenergy.org. You can also contact us directly by emailing membership@cleanenergy.org or calling 828-254-6776 ext. 4. Use your voice and state your choice for a clean energy future by joining SACE today!

4. Offshore Wind Report
It’s all politicsoffshore windIn October, the American Wind Energy Association (AWEA) and the Offshore Wind Development Coalition hosted their annual Offshore Wind Conference and Expo in Virginia Beach, Virginia. Much of the conference was focused on the influence of state and federal policymakers efforts to get offshore wind farms installed. For example, the United States Department of Energy has previously announced it will be running a new $180 million research and development program to substantially reduce the cost of offshore wind deployment. Even though the DOE has gone through an extensive vetting process, and largely knows which companies and universities will be receiving the competitively awarded grants, the decision to make those announcements has been postponed – at least until after the election. Similarly, the production tax credit and investment tax credit (two hugely important incentives for onshore and offshore wind energy) are stalled in Congress until after the election despite widespread bipartisan support.The Southern Alliance for Clean Energy strongly supports the DOE offshore wind program and the production and investment tax credits for the wind industry. To that end, we convene regional stakeholders, meet with policy makers and encourage proactive solutions to wind energy development. Aside from the clean energy value of wind power, studies show that the Southeast benefits economically from the wind industry as well. A recent Clemson University wind industry census reports that South Carolina currently has 33 firms, employing 1,134 workers in the wind industry in the state. These businesses generate an estimated $530 million dollars and contribute $50 million to state and local government. The industry also supports an additional 1,797 indirect and induced South Carolina jobs. But without clear, predictable support, these wind jobs are at risk.Yet again the future of America’s wind industry hinges on this month’s political election, further illustrating why renewable energy industries, in general, need longer-term policy support (like coal, oil and nuclear power have received), instead of being cast into the political wind. Contact your elected official today and tell them to save wind energy jobs.

5. Alabama Getaway, Getaway
State rejects over $540,000 in federal efficiency fundingalabama getaway album coverAlabama getaway, getaway.
Only way to please me
Turn around and leave
and walk away.
Alabama turned around and walked away from over $540,000 in federal funds earmarked for energy efficiency in the state. After all, being ranked 40th in the nation in energy efficiency and having the third highest bills in the country is good enough, right? Earlier this year the Alabama Department of Economic and Community Affairs (ADECA) identified and applied for a grant from the Department of Energy (DOE)’s State Energy Program (SEP). Alabama was eligible for the grant because of its below average performance in the American Council for an Energy Efficient Economy‘s State Energy Efficiency Scorecard in 2009. In this year’s scorecard, ACEEE ranked Alabama 40th. The purpose of the DOE grant was to “assist states in generating the necessary policy and program frameworks to support investment in cost-effective energy efficiency and establish or increase a statewide energy savings goal by calendar year 2015.” Additionally, DOE encourages state energy offices to establish a 1% annual energy savings goal. ADECA was successful with its grant application, and they were awarded a grant of $541,089! No matching funds were required, so the state government didn’t even have to come up with any money. Then, a few weeks ago, on the brink of ADECA accepting the award, things changed. According to ADECA, “one of the largest utilities in the state and the Alabama Public Service Commission” were hesitant or unwilling to participate in the process. As there are not too many utilities in Alabama, it isn’t hard to deduce which utility was unwilling – Alabama Power. About that same time, Alabama Power stated their position on energy efficiency: Alabama Power does not support arbitrary energy reduction targets. Energy efficiency is not using less kilowatt-hours, but the reduction of customers’ total energy cost. Alabama Power works with customers to assist them in becoming as efficient as possible.“Putting aside that Alabama Power is creating a new definition of energy efficiency, the utility’s actions still don’t align with their words. Alabama Power customers have the third highest electricity bills in the United States. It seems the assistance that Alabama Power is offering their customers may be insufficient. Perhaps they should consider a new form of assistance – like working in a stakeholder process to identify what the gaps in their energy efficiency offerings are and put real action towards saving customers money on their energy bills. Alabama Power does not provide any public information about their energy efficiency program plans or measurement and verification reports, and very little about savings through Energy Information Administration filings. From our perspective, this means that Alabama Power is not interested in energy efficiency, or in helping their customers lower their energy bills. Disappointingly, Alabama Power and the Public Service Commission won’t be helping their consumers out with any way to getaway from their high energy bills this year.