Duke, Southern, and NextEra Go Big on Wind and Solar – Just not in the Southeast

Guest Blog | November 18, 2015 | Energy Policy, Solar, Wind

Duke Energy, Southern Company, and NextEra Energy Inc. are reportedly planning to invest billions of dollars in solar and wind energy in the near future – only those investments will be outside their own Southeastern territories and will be carried out primarily by their unregulated subsidiaries. According to an article published last week by Kristi E. Swartz in the subscription service EnergyWire and available publicly here, even potential changes to federal investment tax credits for wind and solar aren’t expected to reduce the companies’ appetite to add these resources to their portfolios.

SACE, which has worked for years to get these companies to increase the amount of renewable energy on their electric systems that serve customers in our region, finds it ironic that they see the value of investing in these resources in subsidiaries that operate in a competitive marketplace when they have been resistant to doing so in their monopoly territories. But it’s not so difficult to understand when you consider that monopoly utilities make their money by investing in infrastructure – and the more capital they are able to deploy, the higher the returns to shareholders.

Right now, SACE is intervening in a proceeding in Florida to challenge NextEra’s wholly-owned subsidiary Florida Power & Light’s (FPL) plans to build a massive new 1,052 megawatt (MW) combined cycle natural gas plant. In our comments to the Florida Public Service Commission in June, we urged the Commission to require utilities to study solar as a supply-side resource in the resource planning process, since, as we stated, the current rule “effectively excludes any requirement for the utility to consider alternative configurations of technology that might be more cost-effective in the long-term.” FPL’s current long-term planning strategy puts most of its eggs in the natural gas basket – a risky choice, given the historical volatility in natural gas prices. According to a recent report by the Union of Concerned Scientists, Florida’s risk of over-reliance on natural gas is the highest in the country.

Because Florida’s 10-year Site Plan process does not provide the opportunities for stakeholder engagement that can be found in other Southeastern states’ Integrated Resource Planning (IRP) processes, there are few avenues for SACE and other advocates to promote alternatives like wind and solar energy development there, and the state now lags shamefully behind its neighbors. In Duke’s North Carolina territory, the Renewable Energy and Energy Efficiency Portfolio Standard (REPS) has required the utility to add significant renewable resources; in Georgia, a supportive Public Service Commission has leveraged the state’s IRP process to advance solar development on Georgia Power’s system. These two states are now the regional leaders for renewable energy.

Duke’s commercial renewable energy business plans to add more than 300 MW of renewables by the end of this year. NextEra Energy Resources, which prefers to build rather than buy its projects, recently signed some 600 MW of wind projects and 125 MW of solar ones. Southern Company instead tends to purchase projects through its subsidiary Southern Power, which will soon have more than $2 billion in renewable energy investments. Southern Power also just announced the issuance of $1 billion in Green Bonds, “becoming the first investment-grade electric utility in the United States to offer this type of security to support investment in sustainable generation.”

While these are important investments to bring more renewable energy resources online, these companies need to show a similar commitment to providing clean energy resources for their own customers by investing in their own backyards.

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