Florida Utilities Balking at Efficiency Goals

Guest Blog | February 2, 2010 | Energy Efficiency, Energy Policy, Utilities
Click image to enlarge - More aggressive efficiency programs do not drive up rates

The Florida Public Service Commission (PSC) just set goals for electric energy efficiency well below targets set—and achieved—by other states, but not surprisingly, several FEECA utilities filed objections seeking still lower goals.

Earlier, we reviewed the goals and outlined why the PSC’s targets were as weak as they were—but still the utilities want to aim even lower.  Progress, FP&L, Gulf and JEA have all filed proposals for goals reduction, offering various rationales.

With Progress Energy Florida (PEF) leading the charge, and Florida Power & Light and Gulf Power chiming in (JEA filed for a data error correction), these utilities argue for reconsideration of the Florida Energy Efficiency & Conservation Act (FEECA) goals the PSC just set for 2010-2019.  The utilities claim in their various motions that:  surely there must be some mistake, “technical potential” values were considered not just “achievable potential”, some measures were double-counted, or customer bills will go up!

SACE and advocacy partner NRDC maintain that the PSC-set goals are way too low already.  The two-year payback screen  should not be employed at all – it’s arbitrary, doesn’t really limit free riders, and eliminates the most cost-effective energy efficiency measures.  Rather, the PSC should use the achievable potential results for the two-year payback screen, as identified by PSC staff consultant Richard Spellman of GDS , a widely well-regarded authority on electric utility energy efficiency.

Now more than ever, it is critically important that the Commission take advantage of all cost-effective energy efficiency measures in order to save customers money, avoid the need to build expensive new power plants, and improve system reliability.  – SACE/NRDC in motions before PSC, Jan-2010

As we see it:

Goals Order Will Not Raise Electricity Bills for Customers as a Whole

The efficiency goals are based on measures which pass the Total Resource Cost (TRC) test , by definition resulting in lower system costs, not an increase in monthly bills as PEF contends.  Further, the arbitrary two-year payback screen increases the costs of achieving energy efficiency savings, because it excludes the most cost-effective measures, which produce the greatest savings at the lowest cost.

PSC Approval of Additional Efficiency Savings Was Not Inadvertent Error

The record is clear:  Commissioners intended to increase the efficiency goals for the investor-owned utilities by using reference data on energy savings from a selection of measures excluded by the two-year payback, while not approving specific measures.

Progress Energy’s ten-year goals call for savings of only approximately 0.8 percent per year. The FEECA record shows that top utilities nationwide are achieving average annual kWh savings of 1.79 percent of sales and ten states have recently set annual efficiency goals of 2 percent or more.  – FEECA proceedings testimony and SACE/NRDC analysis.

NRDC’s and SACE’s Motion For Reconsideration

Skipping some detail in the motion, we maintain that Commissioners should reconsider the two-year payback screen in general, and not use it at all.  It eliminates a tremendous quantity of potential energy savings and the screen is not an effective means of addressing free riders. Without assistance from the utilities, a significant portion of customers will not adopt these early-payback measures.

What’s the bottom line?

Florida utilities are still not leading us to a better energy future.  These PSC legal motions are still 20th century thinking–we need a new utility paradigm.  We support healthy and stable electric utilities, but we need them to help us save energy, save money, reduce climate impacts and forge ahead into the 21st century.  Aggressive energy efficiency will get us much of the way there.  We need our utilities to pull the cart, not sit down on the job.

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