Last month the Sunshine State’s largest power company, Florida Power & Light, won approval from the Public Service Commission (PSC) to sign a 50-year contract with Louisiana-based PetroQuest to conduct exploratory drilling -better known as fracking – for natural gas in southeastern Oklahoma, with the $191 million cost spread to customer bills. In March the PSC is scheduled to decide on whether or not to allow FPL to charge up to $750 million per year to expand the project.
Florida House Democrat Dwight Dudley thinks that stinks, and today he announced legislation that would prohibit FPL and other energy companies in Florida from charging their customers for fracking projects.
“If FPL’s joint venture were as much of a slam dunk as the company suggests, then why aren’t the shareholders putting up their money?” asks Dudley in a statement issued on Tuesday. “Perhaps the answer lies in the inherent number of variables associated with the oil and natural gas industry. Or, maybe it has something to do with the prominent credit rating agencies that have described PetroQuest as a speculative, below investment grade credit risk. It could also be the eleven pages of disclaimers in the company’s annual report.”
The St. Petersburg Democrat, whose signature issue since being elected in 2012 has been on energy policy, was easily reelected to his District 68 seat last November. He says that the investor-owned utilities aren’t interested in risk, and they’re certainly not interested in saving customers money. “They are interested in one thing and one thing only: profit,”he says. “If that means blowing billions of dollars of ratepayer money on a perilous gamble, like they did with nuclear cost recovery, then so be it.”
In fact, the decision by the PSC to allow FPL to charge customers for their ventures into Oklahoma is redolent of the nuclear cost recovery fee, the 2006 legislation passed in Tallahassee that has allowed the investor-owned utilities to charge their customers in advance to build nuclear power plants, legislation that has become loathed amongst ratepayers, especially in Pinellas County.
Dudley and other lawmakers have filed bills the past couple of years in Tallahassee to repeal those fees, but have not been successful.
In his press release, Dudley says that such policy decisions as allowing FPL to frack in Oklahoma for natural gas should be made by the legislature, not the PSC.
“It is up to us to stop another dangerous precedent from being set, and to prevent the people of Florida from being left holding the bag. If the utilities and their shareholders are attracted to speculative ventures, they can search for natural gas on the moon or anywhere else they please. However, leave ratepayers out of this folly.”
FPL has claimed the work will save customers $51.9 million through the life of the contract, as they would be paying for the production of the gas rather than paying an outside driller.
“First and foremost, this investment is projected to save our customers millions of dollars on their fuel costs,” says spokesperson Sarah Gatewood. “Through this innovative investment in natural gas production in Oklahoma, we are cutting out the middle man and reducing risk for customers by securing natural gas at low, stable production costs.”
The PSC staff estimated a 16-cent decrease in the monthly bill of an FPL residential customer who uses 1,000 kilowatt hours of electricity, starting in 2016.