Energy efficiency struggles to overcome inertia of the past in Florida

This blog was written by John D. Wilson, former Deputy Director for Regulatory Policy at the Southern Alliance for Clean Energy.

Guest Blog | September 14, 2010 | Energy Efficiency

It got U-G-L-Y in the Florida energy efficiency debate. Progress Energy attorney John Burnett literally maligned dozens of utilities across the country when he explained that the programs that other utilities operate are faking it – reporting bogus energy savings.

This remarkable attack took place while the Florida Public Service Commission considered proposed utility energy efficiency programs. Fortunately, cooler heads on the Commission prevailed.

Commission Chair Nancy Argenziano picked up on SACE’s recommendation to compare Florida utility programs to those in other states, with the Commission unanimously sending the utilities back for further work and dialogue with staff to provide better energy efficiency programs.

Even as the Commission was crafting the order, Progress Energy threatened to bring back to the Commission the same old #@$& (that’s not mud they’re throwing against the wall . . .), virtually demanding that its goals be reduced if it was to offer an improved plan.

Progress Energy’s attorney gave an example of a utility calling up a customer, advising them to install a clean air filter in their air conditioner, and then counting the savings – implying that such a utility was just making things up. Does Progress Energy really believe that the practice of energy efficiency measurement and verification is a fraud?

Two points of view clashed in the hearing. One perspective – expressed most forcefully by Progress Energy but quietly echoed by several other utility and industry speakers – was that Florida’s energy efficiency goals are unattainable at a reasonable cost. In fact, Progress Energy’s attorney has a track record of making dire, unfounded warnings of extreme rate impacts.

“With the right mindset, it is possible,” countered SACE Attorney George Cavros, describing the widely-accepted energy savings of utilities around the country.

In response to the utility claim that these programs aren’t cost-effective, Cavros pointed out that the issue of cost-effectiveness had already been determined by the commission, but that, “The utilities aren’t shopping around for the best deal, they’re just giving you these numbers.” In fact, energy efficiency programs are highly cost-effective. Florida and other Southeastern states lag the country on delivering energy efficiency impacts.

Initially, the Commission staff hewed a “follow the order” line very closely and did not express formal opinions on whether or not the costs proposed by utilities were appropriate. For example, the staff said it didn’t review the administrative costs proposed by the utilities for solar program. When Commissioner Argenziano asked the staff about the “escalation factor” used by Progress Energy in developing its cost estimates, they said that they hadn’t “formed an opinion” on that issue.

The tone of the Commission debate was set early by Commissioner Lisa Edgar, expressing her strong concern that there are “ethical, moral and legal reasons” to do more on energy efficiency, but to do it in the manner that achieves the greatest “bang for the buck.”

In response to these concerns, the staff began to open up. One staff member described the “technical potential program” submitted by Progress Energy Florida as “lets throw some money at it.” Staff members then began to explain that they are troubled by many of the assumptions made by Progress Energy, and cited “questionable” program costs.

When the staff commented that the “inertia of the past” should not “interfere with the innovation of the future,” the tone was set. Florida may not be moving yet to lead the nation on energy efficiency, but the Florida Public Service Commission is insisting that Florida is going to move forward.

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