The chairwoman of the House Energy & Utilities subcommittee might need to invest in a hard hat. Her members might want to do that, too.
During the panel’s first meeting Wednesday, Kathleen Peters said she planned to conduct as many visits as possible to facilities operated by the utilities regulated by the Florida Public Service Commission, which the committee oversees.
“I strongly encourage you to contact your local utilities — whether its energy, whether its water, whether its telecommunications — and start setting up some site visits,” Peters said.
The St. Petersburg Republican said she’d be happy to accompany them on such outings and offered: “I hope you will join me on a lot of the tours I plan on taking this year and next.”
The committee convened for a briefing by representatives of the PSC and two major public utilities about the rate-setting process, by which the companies propose and the commission vets rates the public will pay.
Peters billed the session as a way for members — many of them new to utilities regulation — to find their footing.
You can find a document detailing the PSC’s ratemaking process here.
Toward the end of the meeting, Peters asked the industry and regulatory representatives about their conservation goals.
Cayce Hinton, director of industry development and market analysis for the PSC, replied that the commission sets five-year conservation goals for utilities and requires them to update their plans every year.
Javier Portuondo, director for rates and regulatory strategy for Duke Energy, said his company sees growing momentum in that direction.
Carlos Aldazabal, managing director for regulatory affairs at Tampa Electric Co., said vendors bring new products all the time that promise to help the utility exceed its goals.
“Take me 20 years from now: What do you look like?” Peters asked. “When we look at technology and how things are changing, what’s going to have to be in place for Florida to be the best that there is when it comes to energy?”
The future will include apps that let customers monitor their energy use in real time and control household appliances, Aldazabal said.
“In order to do that, it’s going to require quite a bit of infrastructure improvement on utilities’ part” — including smart meters that feed consumption data to consumers.
Portuondo sees an end to energy delivery exclusively from large generating plants.
“It was built as a one-way road from the station to the customers,” he said. “That’s changing. The dynamics of our grid needs to be more two-way,” to accommodate customers’ roof-top solar arrays and other technology.
Systems in the offing will allow utilities to respond better to outages — redirecting distribution to restrict them to as few customers as possible using “intelligent” and “self-healing” grids.
That will change the ways utilities approach the PSC, Portuondo continued.
“In the past, you went along and then you had this big power plant, and that’s what drove your rate case. Now the financial need will be more frequent, but maybe of lesser impact, in order to accommodate that expanding modernization of the grid,” he said.
“Our systems weren’t built for the world of apps and that type of information flow to our customers. That will drive a significant round of investments by the utilities.”
Asked whether conservation would be a priority for her subcommittee, Peters described her question as “just a start and an introduction.”
She has not yet settled on her priorities for the next two years.
“We’re interested in economy. We’re interested in performance. We want to make sure we’re getting the best we can for our customers in this state. We want to be efficient. We’re going to look at a whole lot of things,” she said.
“Conservation isn’t something that’s been a hot topic lately, so I think it’s time we just introduce it and get people acclimated to the conversation of it. Each utility does things differently. I think some do a better job than others.”
The incentives are not always clear for conservation, Peters said.
“Often, the return on investment is in a completely different area than where you would think,” she said.
“If you’re serving low-income, and that’s one less stressor within that family, what’s the return on investment there? A little less stress in their economics, and what other stressors are relieved?” she said
“I do big view. I’m not honed in, and I kind of went on a tangent. But it’s important. There’s a ripple effect when it comes to conservation. There’s a ripple effect within the environment. There’s a ripple effect within the community.”
Susan Glickman, Florida director for the Southern Alliance for Clean Energy, welcomed the mention of conservation — a topic she said the PSC has been lax about.
“We’ve pretty much gutted conservation goals in the state of Florida,” Glickman said.
“We could do so much more about helping customers save energy, and the utilities are on the front lines communicating with consumers regularly. They are best suited to help implement those kinds of programs,” she said.
“And yet, because demand has gone down naturally with more efficient products, they want to build new infrastructure that they put into the rate base. There is a disincentive for utilities to help consumers use less energy. In fact, they would like to sell more energy, because that’s their business model.”