Will the Florida PSC Take This Opportunity to Reform Outdated Efficiency Practices?

The Florida PSC could miss a unique opportunity to modernize its outdated practices for setting energy efficiency goals. The outcome of the current rulemaking process is of critical importance for families, businesses, and local communities.

George Cavros | December 22, 2020 | Energy Efficiency, Energy Justice, Florida

If you find yourself in a hole, stop digging. – Will Rogers

The Florida Public Service Commission (PSC) staff would do well to heed the advice of Will Rogers as it moves forward on revising the state’s energy efficiency goals setting rule. That’s because its draft rule is already headed in the wrong direction by failing to reform decades-old outdated economic screening practices that have landed Florida at the bottom of the pack among states for capturing energy savings for customers through utility efficiency programs. Merely streamlining badly outdated practices, as PSC staff proposes, will surely lock-in higher bills for Florida’s families and businesses.

We all know that using energy smarter is the cheapest, quickest and cleanest way to meet our energy needs and reduce power bills for all customers. Of course, the need today for meaningful programs couldn’t be more pronounced – as the economic fallout from the COVID-19 crisis has laid bare that too many Florida households shoulder unaffordable high-energy burdens. Yet, Staff’s proposal would do nothing to address high power bills in Florida – now the 11th highest in the nation.

Energy efficiency is critical to our local communities as well. The money saved on power bills is kept in our neighborhoods driving economic growth rather than being diverted out of state to pay for fuel to run polluting power plants. Additionally, helping homes, offices, and industry save money on power bills is a job creator, currently employing over 120,000 Floridians. Moreover, a more efficient, safe, and secure home is a more resilient home – helping local governments meet clean energy and resilience goals.

So why do we invest so little in cutting energy waste in Florida?

The answer lies, in large part, in the outdated economic screens the state relies upon when establishing energy savings goals. The practices were developed in the early ’90s and are close to 30 years old. So, what is Florida doing so wrong?

First, when setting annual savings targets the PSC relies on the Rate Impact Measure (RIM), a test that fails to properly account for customer energy savings as a benefit.  The RIM test actually considers your bill savings as a cost, rather than a benefit – because the utility company receives less revenue. Isn’t the whole idea behind energy savings to cut energy waste and reduce your utility power bill?

It’s important to note that no other utility resource decision is subjected to this archaic standard.

The second problem is that the PSC allows Florida utilities to automatically and arbitrarily eliminate any efficiency measure with a payback of fewer than two years, thereby eliminating the most cost-effective and impactful efficiency measures for customers. Why do we penalize common-sense efficiency measures that can improve people’s lives?

In 2019 Florida utilities used these same flawed screening practices to argue for efficiency goals of zero – that’s right, zero. Other states have long moved away from using these practices in setting goals – Florida is the outlier.  In fact, several commissioners expressed concern about the outcome these practices produced at last year’s goals setting proceeding, which makes staff’s recent actions a real head-scratcher. Clearly, Florida’s goal-setting process isn’t working.

Let’s resolve to modernize our practices in 2021

The PSC staff should acknowledge the need to modernize and adopt proven best practices for setting energy efficiency goals. There is abundant information nationally from which to draw. In fact, Southern Alliance for Clean Energy, its allies, and several thousand customers have called on the PSC to convene a scoping workshop prior to drafting a new rule – to bring stakeholders, the public, and experts together to discuss best practices in other jurisdictions and how they might be adapted for Florida. The PSC staff instead opted to move ahead on a  proposal that merely streamlines the use of the same outdated practices to presumably reach the same abysmal outcomes. That won’t move us forward on capturing the many economic benefits of using energy smarter.

A lot has changed since the ’90s. Technology changes over time, as does customer behavior. So let’s resolve to finally modernize Florida’s energy efficiency goal setting practices in 2021.

The PSC staff is holding a workshop on its draft rule on January 14that 1:00 pm. It must be the first of several workshops that provide meaningful opportunities for stakeholders and the public to engage in updating current practices. The PSC staff will ultimately propose a rule for adoption to the commissioners – likely in mid-summer.

Public comment is a critical part of the rule making process. Take action and send a customizable letter to the Public Service Commission and help Floridians use energy smarter.

Send a Letter to the PSC

George Cavros
This blog was written by a former staff member of the Southern Alliance for Clean Energy.
My Posts