State Politics

Back to drawing board on rate hikes

TALLAHASSEE — Florida legislators had second thoughts Monday about a plan to allow Florida’s four largest utility companies to bypass the rate-setting process and raise customers’ electric rates by $772 million for renewable energy projects by 2013.

The provision was added Friday to a renewable energy bill being pushed by Republican leaders and the governor, but Rep. Steve Precourt, the bill’s sponsor, said he postponed a vote on the bill Monday to “come up with a lower price tag.”

Under the proposal, Florida Power & Light could raise up to $450 million from customers over three years about $2 a month for 30 years — without going through a rate hearing. In January, the Public Service Commission rejected nearly all of FPL’s request to raise rates $1.3 billion a year.

For Progress Energy, the increase would be $190 million over three years, less than half of the $500 million a year it sought in a rate increase the PSC rejected. Tampa Electric would be allowed an $86 million rate increase and Gulf Power would be allowed a $46 million increase.

Precourt, an Orlando Republican, said the amendment he hopes to propose Tuesday would cut those numbers in half, allowing the four utilities a total of about $386 million for renewable energy plants. He said the cost to customers is justified because it would help jump start the renewable fuels industry in Florida, particularly solar, making the state less dependent on fossil fuels and ultimately allowing Florida to become more energy self-sufficient.

Clean energy advocates are encouraged by the plan but others are balking at the cost to customers.

Environmentalists are convinced that the bill is a good start but imposing a renewable energy standard would be better for pumping up the renewables market in Florida and bringing cost down. But contrary to what some energy advocates have sought, the bill gives the incentives exclusively to utility companies.

The legislation allows utilities to ask the PSC for approval to build renewable energy power plants without having to prove they need it, without using the lowest cost energy sources, and without going through the rate-setting process. It would pass the costs on to customers in additional to their base rate.

The bill also requires that each utility give 20 percent of its renewable investment to energy sources other than solar, such as waste-to-energy and biomass, or plant and animal waste used as fuel.