Bill Would Let FPL Charge Florida Customers Hundreds of Millions for Fracking
Two positions by Florida Power & Light don't quite add up. First, the electric monopoly contends it's leading the charge to invest in renewable energy in the Sunshine State.
But at the same time, the company is also backing a measure in Tallahassee that would let the multibillion-dollar firm charge its customers extra money to cover the cost of fracking investments around the country. Even more troubling, the measure stipulates that any utility taking advantage of that law would also have to generate 65 percent of its energy from natural gas — a fossil fuel that emits carbon dioxide.
In other words, the bill would force consumers to pay for climate-endangering fracking while also giving the state's four major utilities a gigantic incentive to keep pumping more greenhouse gases into the air. If passed, companies would have even less incentive to transition to renewable energy.
The bill comes after the state Supreme Court struck down an effort by FPL last year to get approval to charge Florida customers for a massive project in Oklahoma. The new bills would effectively reverse that court decision, at a time when local Florida municipalities are increasingly moving to ban fracking in their communities. Miami-Dade County banned fracking last year.
The senate bill advanced through its last committee this week, and is now in line for a full floor vote.
"We believe that investing in natural gas reserves is a smart, long-term investment that would help us continue to provide our customers with reliable electricity at low and stable prices,” FPL spokesperson Sarah Gatewood said in a statement to the Miami Herald last month.
But state and federal laws are already remarkably friendly to FPL. A separate law allows the company to add extra charges to customers' bills in order to recoup costs from building nuclear plants, for example. A study released in March also showed that FPL's parent company, NextEra Energy, received so many tax breaks from 2008 to 2015 that it did not pay a dime in federal income taxes, instead receiving $313 million in credits from the Internal Revenue Service.
NextEra made a $21 billion profit in that same time period.
Two companion bills in the Florida House of Representatives (HB 1043) and Senate (SB 1238) would give the Florida Public Service Commission — the state board tasked with approving public utilities' cost increases and other investment measures — the power to let the state's four private electricity monopolies (FPL, Gulf Power, Tampa Electric, and Duke Energy) charge its customers for random fracking "exploration" or "drilling" ventures around the country, even if those ventures don't return any actual gas.
The bills were proposed by State Sen. Aaron Bean and State Rep. Jason Brodeur. According to FollowTheMoney.org, Bean has taken $11,250 in donations from the oil and gas industry in the past, as well as $4,000 from the electricity industry. Brodeur has received $7,900 from the oil and gas industry, and $10,750 from electricity-tied donors.
FPL already has wide leeway to charge its customers for energy exploration projects.
In 2014, for example, FPL asked the PSC board to let it charge extra so the company could invest in an Oklahoma shale gas exploration by PetroQuest. FPL said the venture would save customers $100 million over 30 years, since the company could avoid buying natural gas on the open market. But it also admitted that the cost-savings analysis was a "hedge" with "a measure of variation and uncertainty in the overall level of incurred costs."
The PSC approved that project. In 2015, the commission then approved guidelines which stated that for projects under $500 million, FPL did not need to seek case-by-case approval to charge customers more. The Miami Herald noted that the PSC's decision would have let FPL charge consumers up to $750 million per year.
But the Office of Public Counsel, which serves as the public's advocate in PSC matters, and the Florida Industrial Power Users Group appealed the ruling, and in 2016, the state Supreme Court ruled 6-1 that the PSC couldn't just let FPL — a company that regularly earns more than $1 billion in profit per year — make its customers pay for random ventures into gas drilling.
“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,” Judge Ricky Polston wrote.
But now, the bills are steadily advancing in both chambers of the legislature. (This was partly thanks to then-State Sen. Frank Artiles, who advanced the measure in his committee after taking $2,000 in unreported gifts from FPL before resigning in disgrace over racist comments.) On Tuesday, the Senate Rules Committee advanced the bill, which will now go to a full floor vote. In the House, the bill passed through the Energy and Utilities Subcommittee on March 28, and made it to the chamber's Commerce Committee yesterday.
According to the Herald, powerful GOP Sen. Jack Latvala opposes the measure and has filed amendments that would require utilities to invest only in known gas wells, to prevent the public from fronting a totally wasted drilling venture. But those amendments don't address the larger fact that the bill encourages utilities to invest in fracking, a process linked to earthquakes and contaminated groundwater in states like Oklahoma. The fracking process also releases methane, a greenhouse gas that traps even more heat than carbon dioxide.
The stipulation that companies generate 65 percent of their electricity using gas is also short-sighted and dangerous. With that rule in place, no self-respecting utility would dare to try and replace even half of its gas-burning plants with solar or wind generators. And, as the state's utilities continue to burn natural gas, Florida will sink further underwater.
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