House advances bill allowing FPL to charge customers for out-of-state speculative investments
Gas pipeline in Wyoming

Gas pipeline

State lawmakers advanced a proposal Tuesday to allow Florida Power & Light to charge customers for speculative oil and gas investments.

After two and a half hours of debate, the Florida House Subcommittee on Energy and Utilities approved HB 1043, sponsored by Sanford Republican Jason Brodeur. The measure would authorize the Florida Public Service Commission (PSC) to approve utilities with at least 65 percent natural gas-fueled generation to charge customers for “prudent” investments in gas reserves and associated expenses.

Brodeur’s proposal arrives nearly a year after the Florida Supreme Court reversed a PSC decision allowing the utility to charge ratepayers for a fracking venture in Oklahoma.

Sam Forest, vice president of energy marketing and trading at FPL, said it was an extraction process, not an exploratory process. He added that it was definitely not “cost-recovery,” the controversial 2006 law that allowed utilities to charge in advance to pay for nuclear power plants, even though some of those never came online.

“All of the expenses that we would put out for a natural gas reserves investment would be recovered as the gas begins to flow or as it’s used,” said Forest.

Eric Eisnaugle, the vice-chair of the committee who was running the meeting, challenged Forest on that point. “Are you saying that FPL wouldn’t be able to charge ratepayers until the gas is actually flowing into their homes?” he asked.

“We do earn a little bit upfront in terms of the investment that we have made,” Forest admitted. “But the vast majority of the costs don’t occur until the gas is actually flowing.”

Eisnaugle later voted against the bill.

It would also be the first time in the nation that a utility company would be allowed to shift the risk of an exploratory drilling to customers, instead of shareholders, without determining whether the investment is prudent.

Susan Glickman with the Southeast Alliance for Clean Energy asked if consumers should have to fund the drilling operation and also pay for the fuel, or just buy the fuel?

Environmental groups weren’t the only people opposing the bill.

“There’s no guarantee that this gas will always come back to Florida, and we’re the ones paying for it,” said Melissa Rhamba with the Florida Retail Federation.

Forest criticized opponents for using terms like “speculative” regarding the legislation, saying it reflects “a serious lack of understanding of the bill itself and the science behind it.”

However, that’s the phrase used by Florida Supreme Court Justice Ricky Polston in the court’s 6-1 ruling against FLP last June. “Treating these activities as a hedge requires FPL’s end-user consumers to guarantee the capital investment and operations of a speculative oil and gas venture without the Florida Legislature’s authority,” Polston wrote.

The Office of Public Counsel went to court to challenge the project. J.R. Kelly, from the Office of Public Counsel, said that there is always risk involved in such endeavors that FPL is requesting. “That was an issue that we raised quite vehemently three years ago to the Supreme Court.”

But at the end of the hearing, FPL won the day.

Sarasota Republican Joe Gruters was conflicted on whether to support the bill, but he said he was won over by the fact that FPL has lowered rates over the past decade.

Jacksonville Republican Jason Fisher, who used to work at FPL, said that with many of his constituents on fixed incomes, he thought the proposal was a good one since he believed it would bring rates down.

I don’t want to do anything that is speculative, especially with those on fixed incomes,” countered Boynton Beach Democrat Lori Berman in opposing the bill.

Fernandina Republican Aaron Bean is sponsoring the companion in the bill (SB 1238) in the Senate.

 

Mitch Perry

Mitch Perry has been a reporter with Extensive Enterprises since November of 2014. Previously, he served five years as political editor of the alternative newsweekly Creative Loafing. Mitch also was assistant news director with WMNF 88.5 FM in Tampa from 2000-2009, and currently hosts MidPoint, a weekly talk show, on WMNF on Thursday afternoons. He began his reporting career at KPFA radio in Berkeley and is a San Francisco native who has lived in Tampa since 2000. Mitch can be reached at [email protected].



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