Fla. utility rejected calls to plan for warming, citing cost

By Benjamin Storrow | 09/13/2017 08:37 AM EDT

In May 2016, the parent company of Florida’s largest utility gathered in Oklahoma City for its annual shareholders meeting. Among the topics on the agenda was a resolution calling for an annual report on climate change’s impact on Florida Power & Light Co. (FPL).

In May 2016, the parent company of Florida’s largest utility gathered in Oklahoma City for its annual shareholders meeting. Among the topics on the agenda was a resolution calling for an annual report on climate change’s impact on Florida Power & Light Co. (FPL).

The meeting was brief — the Miami Herald reported that it took 17 minutes in total — and the resolution offered by shareholders was defeated. NextEra Energy Inc., FPL’s parent company, explained that the proposed climate report would be a waste of money, in documents submitted later to the Securities and Exchange Commission.

"The proposal calls for a report that would require the Company to speculate on events and the operations of the Company more than 80 years in the future," NextEra officials wrote. "A report that purports to estimate the impact of events occurring that far in the future would not contribute to understanding the Company’s business, operations or assets or assist the Company in planning for the future. A proposal that asks the Company to speculate on a single aspect of global climate change nearly a century into the future would be a waste of time and money."


Few states, and their electricity systems, are as vulnerable to the impacts of climate change as Florida. A 2015 report by the Union of Concerned Scientists found that 37 substations and two power plants in southeast Florida alone were at risk from storm surge during a Category 3 hurricane, exactly what Irma was when it came ashore Sunday.

But as last year’s resolution shows, FPL maintains a fraught grip on climate change. The term does not appear in the company’s annual storm preparedness report submitted to state regulators last year.

Some experts downplay the concern, pointing to the extensive investments by the power company to steel its system against storms like Hurricane Irma. Others say FPL is inviting disaster, potentially squandering ratepayer money on infrastructure ill-equipped to withstand the storms that climate scientists say could become increasingly intense.

"When states and utilities are investing money from ratepayers to deal with these issues, they need to be looking down the road in the future," said Steve Clemmer, director of energy research and analysis at the Union of Concerned Scientists. "You need to know those adaptation measures are going to work 50 to 100 years from now."

After Superstorm Sandy made landfall in 2012, he noted, many Northeastern states began to incorporate future climate projections into their hazard plans to help guide adaptation strategies.

"As far as I know, the utilities in Florida are not preparing for that," Clemmer said.

The question stands to gather importance in the wake of a storm that left millions without power. In South Florida, signs of progress clashed with reminders of how much work remained.

Police retreated from major intersections as traffic lights came back to life. But drivers tuned to local radio stations heard pleas from people in dire need of power. Frustrated with FPL’s piecemeal repairs, they appealed to fellow listeners to bring fuel to those who needed it most.

North Miami Beach’s Hampton Court Nursing and Rehabilitation Center put out a call for diesel, saying they only had enough fuel to power ventilators until the morning. A nurse from the facility said they were desperate for FPL to restore power so they could run air conditioning.

"[We have patients] on oxygen, and when you’re on oxygen, warm air really makes it harder to breathe. … We really need power," said the nurse, named Kelly, giving out the facility’s address and noting that a nearby car dealership seemed to be fully powered up.

Preliminary assessments suggest debris on power lines was responsible for much of the outages. FPL officials reported minimal damage to the utility’s power plants and substations, likely spared by a last minute tack in the storm’s direction that limited the size of the storm surge.

FPL officials did not respond to multiple requests for comment, but company representatives provided an update on the damage during a televised press conference yesterday.

"We’re seeing that the system is performing well," FPL spokesman Rob Gould said, before hastening to note that that was of little consolation to the people without power.

The lack of damage to the utility’s major infrastructure reflects a decade of investments designed to steel FPL’s system against major storms. The company spent $3 billion replacing wooden utility poles with concrete ones and installing 223 flood monitors at substations and smart meters better able to identify outages.

Gould said the company has seen fewer downed poles than it anticipated and noted that storm-hardened feeders — the lines coming out of substations — were performing 30 percent better than non-hardened feeders. The utility reported having plenty of power generation. Three of the company’s four nuclear units were shut down during the storm, while one natural gas plant temporarily closed after its water intake valve became clogged with debris from the hurricane.

"We are seeing the benefits of our investment," Gould said. "The length of the restoration will actually be far less than what it would have been had we not invested in the system."

FPL is hardly unique. Utilities nationwide are increasingly focused on preparing for extreme weather events, said Scott Aaronson, who leads the security and business team at the Edison Electric Institute, a trade group. Resilience is the common theme, he said.

"What is guiding the investments and posture of the industry is this need to be resilient against all hazards," Aaronson said.

Florida utilities have been planning for extreme events since the state was lashed by four storms in 2005. Each spring, power companies convene to discuss hurricane preparedness, sharing ideas about how to bolster their systems and improve cooperation, said Ted Kury, a lecturer at the University of Florida’s Public Utility Research Center.

Cost is a common challenge faced by power companies and regulators when considering storm preparedness, he noted, saying that "it’s balancing the idea of safe and reliable service with just and reasonable rates."

State efforts are nevertheless lacking, critics say. A recent study by Lawrence Berkeley National Laboratory suggested Florida regulators make little distinction between reliability (keeping the lights on) and resilience (preparing for and recovering from a storm) when evaluating the economics of utility investments.

There are other reasons for concern. FPL’s two nuclear facilities, Turkey Point and St. Lucie, hug the shoreline, prompting concern that they may be susceptible to sea-level rise. The utility has largely dismissed those arguments, noting that it is in compliance with all Nuclear Regulatory Commission rules.

Yet there is disagreement. The NRC largely relies on historic storm data, rather than future projections, said Dave Lochbaum, who specializes in nuclear security at the Union of Concerned Scientists.

The arguments over the nuclear plants hint at Florida’s wider approach toward climate, critics say.

"Although everyone thinks this is a 1,000-year storm, this is the future, I’m afraid," said Leonard Berry, a professor emeritus of geosciences at Florida Atlantic University. "They’re doing the right things, but they’re not doing them in a broad enough context, and without enough urgency."

Adam Aton contributed from Miami.