CLIMATE

Fla. utilities cite geography, fuel diversity in criticizing EPA rule

Correction appended.

Florida's electric utilities have rather profound thoughts about U.S. EPA's proposed rule to cut carbon emissions from existing power plants, a survey of documents submitted to state utility regulators shows.

Mostly, the utilities think EPA's rule as it pertains to Florida is unfair, unachievable and costly.

"The level of reductions projected by the EPA in Florida is unreasonably burdensome and potentially costly to Florida consumers, given the resources mix and the balance of cost, fuel diversity and practical limitations for use of renewable resources," Duke Energy Florida wrote in response to Florida Public Service Commission staff questions about EPA's Clean Power Plan.

The PSC staff solicited comments for regulators to consider and submit to EPA by Dec. 1, the new public comment deadline for the proposed rule. The state's investor-owned electric utilities as well as some municipal utilities and electric cooperatives submitted comments.

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Also responding to the PSC staff were environmental and public interest groups as well as NextGen Climate America, the non-partisan policy shop affiliated with political group NextGen Climate Action; and the industry group American Coalition for Clean Coal Electricity (ACCCE).

ACCCE, which includes Associated Industries of Florida as a member, challenged EPA's authority over the proposed carbon rule and says the agency should not be picking electricity sources for each state.

Broadly, EPA is asking states to meet carbon emission targets that would result in a 30 percent CO2 reduction nationwide compared with 2005 levels by 2030. For Florida, that means slashing emissions by 34 percent in 2020 and by 38 percent in 2030.

Florida has the 11th-most-stringent targets, angering industry groups that have already criticized the rule. They argue it will be too difficult and costly for Florida to meet those goals because of the state's geography and an existing overreliance on natural gas.

The peninsula state gets more than half its electricity from natural gas. Under EPA's proposal, the state likely would have to close its coal-fired plants and add renewables.

This means EPA's proposal would make the state's electricity mix less diverse, threatening reliability and driving up customer bills, many of the electric companies argued.

"Forcing existing coal-fired power plants to retire early will lead to increased costs for consumers and will jeopardize the reliability of Florida's electric grid unless sufficient time is allowed to build new generation," wrote the Florida Electric Cooperatives Association.

Then there's Florida Power & Light Co., the state's largest investor-owned electric utility. FPL is taking the stance that it will be in a good place to meet the EPA requirements to curb carbon emissions.

FPL "expects to be well positioned to meet the compliance requirements of the rule considering the low CO2 emission rate of our existing electric generating fleet and our current plans for future generation," the company said in a filing with the Florida PSC.

This is different from the typical arguments from the electric utility industry, which is grappling with meeting other environmental rules and trying to adapt to adding distributed forms of generation such as solar.

EPA has four suggestions, or "building blocks," to help states figure out the best way to meet their targets. These areas include improving the heat rate at coal-fired plants, dispatching more natural gas, adding renewable energy and nuclear generation, and curbing energy use through energy efficiency and demand-side management.

FPL says it is taking steps to meet the first three of those.

The utility wants to build two nuclear reactors and add utility-scale solar and is part of a massive natural gas pipeline project. It also has taken steps to make its power plants more efficient.

"They've gone through significant modernizations in the past five years ago -- to their natural gas plants," said Andrew Bischof, a Morningstar Inc. analyst who follows FPL and its parent company, NextEra Energy Inc.

Nuclear timing

Consumer advocates have criticized the utility for dragging out the process to add twin reactors at its Turkey Point unit in South Florida, but now FPL may benefit from taking its time. The reactors are expected to start up in 2022 and 2023, according to the company, which means they will start producing emission-free electricity in the time frame EPA wants.

Other utilities in the Southeast currently are building nuclear reactors but say they will not receive credit from EPA for doing so. Utilities also want credit for their renewable energy efforts (EnergyWire, July 30).

According to a July 31 emailed statement from EPA, states that already have infrastructure in place will have an easier time meeting their goals.

States also can get credit for energy efficiency and renewable energy programs already in place as long as they continue to cut carbon emissions through the compliance period of 2020-29, an agency spokeswoman said.

It's unclear how much solar FPL will add down the road. Renewable energy advocates have attacked FPL for not doing more with solar, especially because Florida's nickname is the Sunshine State and FPL's sister company, NextEra Energy Resources, is one of the world's largest generators of wind energy and the nation's largest generator of solar.

In its comments supplied to the PSC, FPL says the utility and NextEra Energy Resources have built solar in Florida and elsewhere, and "we are prepared to extend this experience and construct additional renewable energy in Florida to achieve compliance with the Clean Power Plan."

"Renewables have always been a heavy focus for them," Bischof said.

Correction: An earlier version of this story misidentified NextGen Climate America.

Twitter: @BizWriterKristi | Email: kswartz@eenews.net

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