Public Power - January/February 2008 - (Page 27) projects. The first to fall was a 1,600-MW project proposed by Florida Power & Light on the edge of Lake Okechobee in the Everglades. Most would admit that it was not an ideal location for such a plant in the first place, but the ultra-supercritical plant would have been the cleanest of its kind in the world, with extremely low emissions. And the jobs it would have brought to the rural county were welcomed locally. During FPL’s need certification process before the Florida Public Service Commission, the commission found that the plant was not the most cost-effective, considering the likelihood and cost of future carbon regulation. The Taylor Energy Center was next. The 800-MW municipal project, jointly proposed by the Florida Municipal Power Agency, JEA, Reedy Creek Improvement District and the city of Tallahassee, already had its need hearing before the PSC. Commission staff recommended approving the plant. But the Taylor partners saw the handwriting on the wall – the rejected FPL coal plant – and, after talking with the governor’s staff, withdrew their application before PSC commissioners could vote on it. There was a press conference in the governor’s office, and municipal electric utilities were champions for a day. The third supercritical coal project is still on life support, and loudly wheezing. A plant proposed by Seminole Electric, the principal generation and transmission agency for Florida’s electric cooperatives, had already been approved by the Public Service Commission. Under previous Gov. Jeb Bush, the plant had received its site certification from the Florida Department of Environmental Protection. Seminole Electric had already settled with the Sierra Club on objections to the project. Specifically, it had agreed to add pollution control equipment to existing units to completely offset additional emissions, to plant 100,000 trees to mitigate CO 2 and to leave adequate space in the plant design to provide for future carbon-capture technology. All systems were go except for the signature from the new environment secretary appointed by Gov. Crist. You can guess the rest of the story. The secretary found one issue that required a return to an administrative law www.APPAnet.org judge reviewing the project. Legal briefs ensued on both sides, and the project now is languishing. Seminole Electric officially has not yet pulled the plug, and there’s a chance the plant may yet get approved, but only by the courts. If we were in Vegas, however, I’d take the governor’s odds. The fourth and fifth coal plants to pull the plug were integrated gasification combined-cycle (IGCC) facilities proposed, separately, by Tampa Electric and Southern Co./Orlando Utilities Commission. Both plants were slated to receive hundreds of millions of dollars in co-funding from the federal government. In an era of increasingly likely carbon regulation, however, the utilities just could not take the risk. The bottom line is that the state is firmly sending the message – when it comes to new coal plants, Florida is closed for business. As expected, environmentalists are thrilled. Initially, they were not sure what to make of the governor’s proposals and actions, since such activity was a departure from the historical energy path taken by Florida. They are clearly warming up to him. The governor held a climate summit in July 2007 that included a visit from California Governor Arnold Schwarzenegger, to unveil Gov. Crist’s three executive orders and generally promote climate change action. The event kicked off a new direction for Florida energy policy. The Florida Municipal Electric Association took the governor’s proposals seriously. Members convened and developed a “green energy” portfolio standard proposal that would designate 1 percent of electric utility revenues for renewable and energy efficiency projects. Statewide, $200 million would be spent each year, significantly more than today’s level of funding. The proposal is still on the table and being seriously considered by the state Public Service Commission. For new generation options, utilities are now officially confused. When planning a multi-hundred-million-dollar project, the last thing a utility wants is uncertainty. That’s also the last thing investors want. Nevertheless, the governor and state regulators have created a cloud of regulatory confusion where no one can determine if even something as simple as a gas-fired combined-cycle power plant has a chance of receiving approval from the governor and regulators. Up for grabs is whether all the carbon emitted by a proposed power plant would be required to be offset by reduction elsewhere, such as through energy efficiency, conservation and renewable energy at whatever price the market may bear. Or, will the emphasis be on economically unavailable carbon capture and storage, or a long time-frame investment in nuclear energy that disadvantages public power by its smaller size compared to investor-owned utilities? Nearly all of the state’s utilities have either implemented or are planning aggressive efficiency and renewable energy programs. Now the Florida debate will focus on the economic feasibility of the governor’s proposals. The Florida Chamber of Commerce released a study in mid-November suggesting that the governor’s greenhouse gas reduction goals would raise costs for the average household by $1,026 in 2020 and $2,270 in 2050 (2007 dollars, adjusted for inflation). You can see the study at www.flchamber.com. We’re just beginning to absorb the meaning and impact of their analysis and how it will affect policy development. On the other side, Environmental Defense released a study indicating that while the cost of action will be “nontrivial,” the cost of inaction will be greater. The next chapter will come from the Florida Legislature, which has the task of taking the recommendations of the governor’s climate advisory team and debating the legislation that may be proposed. Since the governor holds the veto pen, he clearly controls how it all turns out. In the meantime, Florida’s electric utilities are concerned that regulation imposed too quickly and without cost-effective options to comply will force high prices and poor reliability on the public. On the other hand, climate regulation done well, with a reasonable phase-in period, can expand new markets for renewables, efficiency and nuclear, have a positive impact on carbon emissions, and control costs for consumers. There’s no question that it’s a challenge to find the best path on the low-carbon road ahead. ❚ Barry Moline is executive director of the Florida Municipal Electric Association. JANUARY-FEBRUARY 2008 27 http://www.flchamber.com http://www.APPAnet.org
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