James Call
Rep. Dwight Dudley Thursday called a deal approved by the Public Service Commission allowing Florida Power & Light to pass on the cost of gas exploration the “most anti-consumer” agreement he has seen.
In December the utility received permission to collect $191 million from customers to explore for natural gas and oil in Oklahoma. FP&L is partnering with PetroQuest Energy in a hydraulic fracturing — also known as “fracking” — venture.
FP&L says the project could end up savings consumers tens of millions of dollars over the long run. Dudley, a St. Petersburg Democrat, says the PSC allowed FP&L to shield investors from the risks involved in exploring for fossil fuels by shifting the cost to customers.
Dudley spent five minutes with us, explaining why he is sponsoring HB 399, which would prohibit the PSC from approving any other requests from a utility for the recovery of costs associated with the exploration, drilling, or production of oil or natural gas by utilities.
Q: The PSC allows FP&L to bill ratepayers for the cost of exploration and production.
Dudley: Presently, the $191 million pertains to funding the production of natural gas and NGLs — non-gas liquids. There’s another way to spell non-gas liquids, it’s called O.I.L. That puts ratepayers in the natural gas and oil business — both the exploration and the production. Is that what ratepayers who want to flip the switch and get electricity, is that what they want?
Q: What happens if they don’t find a gas well?
Dudley: Consumers pay. … Consumers have the risk and they hit a dry patch.
Look at PetroQuest’s annual report, 11 pages of disclaimers. That’s the company they are partnering. They are rated as below an investment grade company. And that’s by Standards & Poor’s and Moody and Fitch’s.
What jurisdiction does Florida have to control anything that happens in Oklahoma in the Woodford Shale? Last I saw, Florida law pertains to Florida. They’re in Oklahoma. Sorry, we don’t have powers to go there.
Q: You referred to it as a historic rip-off of consumers.
Dudley: It is more than a rip-off. … You are incentivizing them to do something that may not be consistent with a better energy policy if you incentivize use of natural gas or whatever; if you are giving free money for this fuel source the whole argument of fuel diversity goes out the window.
Q: You said other energy companies are watching how the PSC’s decision will play out.
Dudley: The other companies have not weighed in but they are circling like buzzards. They are very interested in it. I’m not going to speak too specifically, but I can tell you that they are very interested. I can tell you that you can look at articles in Bloomberg News that will show that companies — investor-run utilities here in Florida — are explicitly expressing interests in this wonderful funding source, this largess from ratepayers.
Q: So what can be done?
Dudley: Consumers have no alternative. It’s not like they can stop paying the bill (FP&L) or their lights go off. The PSC is a legislatively created body. It exceeded its authority when it allowed this. I believe this Legislature needs to take this issue on.
