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PSC Picks New Chair, Sets Conservation Goals

On a busy day at the Florida Public Service Commission, the panel selected its chair for 2010-2012 and set energy conservation plan and fuel recovery costs for the investor owned utilities.

In a widely expected move, the PSC chose Commissioner Nancy Argenziano to lead the panel when beleaguered current PSC Chairman Matthew Carter is replaced next month. The PSC also lowered the fuel recovery costs for customers of the state’s third largest power company and hiked the fees for customers of another large company, though bills for customers of both companies will increase because of other charges.

The commission also completed a review of conservation plans required by the Florida Energy Efficiency and Conservation Act.

The panel also approved a Progress Energy contract for buying biomass energy.

Argenziano, who will chair the PSC for a two-year term beginning Jan. 2, downplayed her ascension and cast herself as equal to the other members of the PSC.

“I appreciate the challenge and realize that the chairmanship is purely an administrative charge,” she said in a statement. “All PSC Commissioners are equal and independent appointees. Now, let’s get to work on the important decisions that lie ahead.”

Argenziano’s nomination was led by Carter, who has headed the panel since 2006 but was passed over for re-appointment this year by Gov. Charlie Crist when scandal rocked the PSC this fall.

Also, weeks after deciding that staff recommendations on the conservation goals of utilities were not stringent enough, the PSC completed on Tuesday its every-five-year review of those goals, which FEECA requires the panel to do.

Created by the Legislature in 1980 to guard against weather-related increases in electricity demand and reduce overall statewide consumption, FEECA applies to the four major publicly-regulated power companies - Florida Power & Light, Progress Energy, Gulf Power and Tampa Electric - as well as the Florida Public Utilities Company, Orlando Utilities Commission and JEA.

The original staff recommendation took issue with proposals from both the utility companies and several environmental groups to minimize the use of expensive resources like petroleum fuels and control the growth rates of electric consumption and weather-sensitive peak demand, saying that the utilities' suggestions had an "inconsistent inclusion of costs for unregulated greenhouse gas emissions" and used "inconsistent cost estimates."

But Tuesday, the PSC leaned more toward the robust goals favored by environmentalists, choosing an aggressive Enhanced Total Resource Cost test for measuring conservation over an Enhanced - Rate Impact Measure test, which focuses on the price of electricity by measuring savings from avoided use, but ignores related benefits to society at large. The panel also encouraged the utility companies to expand their conservation education and authorized up to $24.5 million dollars in incentives for customers who adopt solar water heaters and other energy efficient equipment.

Outgoing PSC chairman Carter hailed the decision for threading the needle between not costing customers too much money and not being tough enough on utilities.

“Energy efficiency is an effective conservation resource in Florida and should play a key role in meeting our growing electric energy needs,” Carter said in a statement after Tuesday’s meeting. “The goals we approved today are achievable, and customers who implement the programs will save on their energy bills by reducing utilities’ fuel costs and their need to build more power plants.”

Elsewhere on its meeting agenda conference Tuesday, the PSC voted to lower the fuel recovery cost for Gulf Power, which provides electricity to most of the western Panhandle, by $3.86. The panel simultaneously raised fuel recovery costs for the Florida Public Utilities Company’s Marianna Division by $18.34 and by $1.77 for the company’s Fernandina Beach Division.

However, the reductions to Gulf Power’s fuel recovery will be offset by other recoveries, so that companies average monthly bill for 1,000 kilowatts of electricity will increase from $121.47 to $126.17. The FPUC bill for the same amount of power will increase from $136.71 to $155.54 in the Marianna division and from $129.99 to $131.83 in the Fernandina Beach division.

The changes were made based on comparisons between the company’s projected 2010 fuel usage and their actual usage in 2008 and 2009.

The PSC also approved renewable energy contracts for the state's second largest power company, Progress Energy Florida. The company contracted with Florida Biomass Energy to burn waste wood and vegetation grown to produce electricity in Manatee County.

The deal, set to last 20 years, will produce 60 megawatts of electricity when it takes effect in January 2013. The company says it will save customers $34 million.

A separate contract between Progress Energy and Vision to use sweet sorghum bagasse to generate up to 40 megawatts of electricity to save more than $28 million was also approved. That plan, a 25 year agreement, takes effect in January 2011.

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