My article is reprinted from Creative Loafing.
It has been long understood that the best way to combat climate change and reduce CO2 emissions is to become a more efficient community with our energy use. Average Americans have the ability to take action by creating an environment in their home that will use the least amount of energy in order to create a comfortable setting. And business owners have the same opportunity through the buildings that house their businesses.
Not only can we reduce the CO2 emissions that we put into the atmosphere, we can also help our monthly expenses when it comes to paying for the electricity that we purchase from our utility company. But when we decide to do this, where do we turn for help?
The utilities are truly the best people to evaluate your efficiency because they are the most familiar with how you use your electricity. They essentially have the inside scoop on what makes you happy in your home and office. But if your utility is an Investor Owned Utility (IOU), the problem is also just as plain as the answers on a cheat sheet. It is in their best interest not to be too efficient with their evaluation because they, like many other businesses, have a profit margin figured into their business plan. Promoting energy efficiency encourages you, their customers, to use less energy. With less electricity being purchased, their profit margin will also decrease.
That is why our legislature passed the Florida Energy Efficiency and Conservation Act (FEECA). It mandates the Public Service Commission (PSC) to hold hearings to develop meaningful energy efficiency goals to be put in place over the next 10 years. FEECA utilities include both IOUs and municipal owned utilities. The IOUs are: FPL, PEF, TECO, Gulf, FPUC; and the Municipals are: JEA and OUC.
The Southern Alliance for Clean Energy (SACE) and the National Resource Defense Council (NRDC) are advocating for the target level of 1 percent of energy efficiency to be reached by the utility companies annually. They, along with the PSC’s own expert who has agreed on this percentage level, are standing up to what the utilities are calling a “radical” proposal.
What the utilities have recommended is very different. JEA and OUC have proposed “zero” as their 10-year goal and the other IOUs recommend a variety of goals — with the highest coming in at 1.7 percent over 10 years.
Based on the Energy Information Administration (EIA), Florida’s largest utilities have been reporting an insignificant amount of .2-percent energy savings per year. Leading utilities in other states are capturing significantly more — five times more in some states. In fact, there are 17 states right now that require their utility companies to reach at least a 1-percent efficiency savings goal every year. Why is Florida so different?
To understand it better, you have to know that the goals have been kept low by the use of the Rate Impact Measure (RIM) cost-effectiveness test. This test includes the utility’s lost revenue from the use of an efficiency measure and takes it into consideration when it determines its recommendations. Even if there is a small rate impact, such as 1 percent over a 20-year period, it will screen out that measure from further consideration. Critics say that this test does not take into consideration that the increase will be outdone by the customer’s bill reductions through lower usage. They say Florida is the only state in the nation that uses this antiquated test to exclusively set goals.
Another way valuable efficiency measures are screened out is by the use of 2-year payback scheme. If measures provide a customer payback of 2 years or less, they don’t make the final cut. That seems to make sense except that many of these measures aren’t being widely adopted by customers and could benefit from utility promotion.
The utility companies are already granted a rate of return on the value of power plants. They continue to advocate for the construction of costly power plants. Without meaningful efficiency, Florida customers will be ensnared in a trap of fuel spikes and soaring power plant construction costs. What the utilities have recommended is a very small pool of efficiency measures that do not significantly reduce the use of electricity.
This October, the PSC staff will issue a recommendation to the PSC commissioners. The commissioners will then issue a final order by the end of October on the proposed efficiency goals. This will be the last time the PSC considers efficiency over the next five years. You should contact the PSC and let them know how you feel.
We, as consumers, have little control over the rates that we are charged for our electricity. However, we do have control over how much electricity we use. And if you have been following the news over the summer, you will know that two of the large utilities in Florida have asked for a rate increase — FPL (30 percent) and PEF (31 percent). At a time when we are all feeling a pinch by our wallets, it is important to let the PSC know that we expect them to put our best interest first.
To have your opinions be heard, you can contact Nancy Argenziano at her email or call her at 850-413-6038 or any other commissioners at the PSC. Your comments are being posted to the docket for consideration.
