Setting Energy Efficiency Goals: A Message to Florida Public Service Commission ... by gimleteye

In this economy, it’s more important than ever to try to reduce expenses. The Florida Public Service Commission can help by setting robust energy efficiency goals for the state’s big power companies on December 1st. Such goals will help Florida consumers save money on their electric bills, at the same time that they also help create jobs and reduce greenhouse gas emissions. (Click 'read more' and to send an email today to the PSC.)

Earlier this month, the Commission rightly rejected the staff’s weak recommendations that would have maintained the status quo - only 1.5% savings over ten years. That’s not good enough when 14 states have set goals of at least 1.5% energy saving per year – about ten times more energy efficiency.

These states have embraced meaningful efficiency programs because they save customers money and reduce emissions. Robust efficiency programs provide measures that can begin lowering bills by reducing fuel costs and deferring expensive new power plant construction – avoiding rate increases in future years. Commissioner Nathan Skop was on target when he stated that too little efficiency spending today would “actually expose consumers to rate increases later.”

At a time when the state’s largest power companies are seeking big rate increases, the status quo simply isn’t acceptable. At a recent meeting Commissioner Nancy Argenziano asked, “How far behind other states are we really?” The Commission staff didn’t really deliver the embarrassing answer. According to the American Council for an Energy Efficient Economy, Florida ranks 30th in the country for utility energy efficiency programs.

While the Commissioners are asking the right questions, they seem to believe that the Legislature limited their ability to help consumers access efficiency programs. Not so. The Legislature amended the Florida Energy Efficiency and Conservation Act (FEECA) in 2008 precisely to direct the Commission to use new standards and set higher efficiency goals.

The Legislature mandated that the Commission consider any efficiency measure that will meet demand at a lower cost than new power plant construction. Such measures are as basic as compact fluorescent light-bulbs, water heater blankets and low flow showerheads.

Unfortunately, the big power companies and Commission staff continue to perpetuate the myth that meaningful conservation is bad for consumers. They argue for several practices that underpin Florida’s abysmal performance in efficiency.

First, they argue for the practice of rejecting efficiency measures that reduce the utility’s revenue under a test known as RIM or “rate impact measure.” Of course, declining utility revenue means consumer savings. RIM is not a “cost-effectiveness” test at all. It’s a barrier to savings and the Commission should stop using it.

The only real cost-effectiveness test used in these proceedings is the TRC or “total resource cost test.” This test guarantees that the total benefits of measures are always greater than the total costs. All of the measures that pass this test result in reduced costs for consumers and also minimize the overall costs for delivering electricity to all consumers.

During the proceeding, Commissioner Skop inquired, “How do we get value to the entire class of ratepayers?” Experience in other states demonstrates that if utilities make efficiency programs widely available, everyone can participate and reap the individual and collective cost savings.

Second, the utilities and staff continue to argue for the elimination of the most cost-effective energy efficiency programs. If your interest is helping Floridians lower energy costs then it makes absolutely no sense to eliminate the most cost-effective efficiency options. The record shows that these measures will not be adopted in any significant numbers without encouragement from utilities.

Other states have long abandoned these narrow and industry-serving approaches and Florida should do the same. Rigorous efficiency measures protects both ratepayers and Florida's fragile environment where natural resources, like the Everglades, are under continuous threat.

The efficiency expert hired by the Commission staff proposed goals that followed the Legislature’s direction, as did the experts for clean energy groups. They agreed on roughly similar goals of about 1% saving per year, about 8 times greater than those suggested by the utilities. Commissioner Skop said it plainly, “We’re not going to set the goals so low that an ant could climb over them.”

If the Commissioners want achievable but strong goal, they should look to this 1% annual saving level as a strarting point. These goals appear modest when compared to the 1.5% annual savings set by the leading states. However, a minimum 1% annual goal would be a good step for Florida and move us toward achieving the Legislature’s mandate of higher energy efficiency goals that will lower customer bills, create jobs, and reduce greenhouse gas emissions.

Write today to:

Nancy Argenziano

Phone: (850) 413-6038
Email: Commissioner.Argenziano@psc.state.fl.us

Lisa Edgar

Phone: (850) 413-6044
Email: Commissioner.Edgar@psc.state.fl.us

Matthew Carter (Chairman)

Phone: (850) 413-6046
Email: Chairman@psc.state.fl.us

Katrina McMurrian

Phone: (850) 413-6040
E-mail: Commissioner.McMurrian@psc.state.fl.us

Nathan Skop

Phone: (850) 413-6042
E-mail: commissioner.skop@psc.state.fl.us

Charlie.Crist@myflorida.com