How are the country's utility regulators responding to the pending finalization of U.S. EPA's Clean Power Plan? During today's OnPoint, from the National Association of Regulatory Utility Commissioners' winter meetings, Lisa Edgar, president of NARUC and a commissioner on the Florida Public Service Commission, discusses her strategy for leading NARUC during one of the most dynamic times for utility regulators. She talks about how her power plan concerns as a Florida commissioner are shaping her role as NARUC president and explains why she believes a regional approach would have limited success in her state.
Monica Trauzzi: Hello and welcome to OnPoint from the NARUC winter meetings in Washington, D.C. I'm Monica Trauzzi. Joining me today is Lisa Edgar, president of the National Association of Regulatory Utility Commissioners and a commissioner with the Florida Public Service Commission. Commissioner Edgar, thank you for joining me.
Lisa Edgar: Thank you, Monica.
Monica Trauzzi: Commissioner Edgar, EPA's Clean Power Plan proposal is a major point of discussion here at the winter meetings this week. What are the primary reliability and rate concerns you're hearing from regulators?
Lisa Edgar: Our regulators as you know are a very diverse group and have strong opinions on all pieces, all parts, all angles, but two areas that are as you mentioned of particular concern to many state utility regulators includes affordability, potential cost impacts and of course the potential impacts on reliability. As you well know, for the grid, for the electricity to be stable, to be affordable, is so important for all of our economies, for our public health, for public welfare, public safety, and we do want to make sure that we do all we can to make sure that that service is reliable.
Monica Trauzzi: How much of an exchange of ideas do you see happening between regulators who are for the rule and regulators who have strong concerns about it?
Lisa Edgar: Oh, I would say we have a great exchange that goes on, lots and lots of conversations. Occasionally they even become a little heated, sometimes a little emotional. People are very passionate on all sides of this issue, and I'm very pleased with the agenda that we've had and the role that NARUC has to encourage diverse and vibrant discussions.
Monica Trauzzi: And you have become president of NARUC at arguably one of the most significant and dynamic times for regulators. What's your strategy for guiding the process?
Lisa Edgar: Well I do believe that change is all around us in many areas with the grid, with distributing generation, with of course federal rules, federal requirements, some would say federal mandates, that to have the diversity of opinion and the robust discussions is something that makes it all so exciting for me and why I'm so pleased to be in this role right now.
Monica Trauzzi: And how do your views as a Florida commissioner color your work as president of NARUC?
Lisa Edgar: Well I often say that I'm wearing three hats right now, certainly as a Florida commissioner, which is my day job and something I'm very proud of and my responsibility as one of five commissioners from Florida to weigh all of the issues and try to reach consensus on what's best for our ratepayers in our state, and then also this year to serve as president of NARUC and try to help this organization as we move forward with the discussions. And then I guess my third hat in addition of course to wife and mother would be a utility regulator that's been around the block once or twice and has seen some of the discussions change and evolve, and I try to bring each of those hats to the meetings that I have the opportunity to participate in.
Monica Trauzzi: So Florida has been assigned an emissions reduction rate of 38 percent by 2030. Your commission has concerns with the power plan. What will Florida's compliance plan look like?
Lisa Edgar: Well that's one of those unknowns. That's one of the uncertainties that we're facing. Florida did put in comments. I was very pleased that our commission was able to reach consensus on behalf of us as an independent regulatory agency. Also from Florida our sister agency the Florida Department of Environmental Protection contributed comments as did I believe our state attorney general, Office of Public Council, and also our State Energy Office, which is in a separate state agency.
Again coming back to your question, the uncertainties of an implementation plan is one of the things that we're struggling with. As you know it's kind of a chicken and the egg. What is the ultimate final rule going to look like? How do we get ready to put together an implementation plan? And then of course, what will the cost be?
Monica Trauzzi: And what are you doing right now to start to get ready for that final rule?
Lisa Edgar: Well of course the implementation plan will be written by our Florida Department of Environmental Protection. One of the things that we have done is to have more both formal and informal discussions with the experts over in that agency who work with the Clean Air Act and with EPA on a regular basis. They've been educating us. We've been working with them to talk more about those reliability issues and also how the cost allocation works in the ratemaking process, which is not something that they as environmental regulators generally work with.
Monica Trauzzi: Could linking into a regional plan be a successful option for Florida?
Lisa Edgar: I think that that is very much an option for states in some regions. I'm not sure that that's the right path forward for Florida at this point in time. Some of that is of course just based on our geography being down there as a peninsular state that is not tied into the grid with the other states around us as much as some other states or some other regions are.
Monica Trauzzi: But is that something that you would be interested, are you having discussions about it?
Lisa Edgar: There have been some discussions perhaps in the Panhandle area, because of course our Panhandle area is generally served by Gulf Power being part of the Southern network and then the other utilities in Alabama, Georgia, right around that area, that potentially could be more of an option for that portion of our state, but of course that's one of those issues that we're all still trying to understand. Can you have a plan that wraps in part of a state but a different plan for other parts of the state?
Monica Trauzzi: FERC is holding its D.C. technical conference this week on the Clean Power Plan. How involved do you believe FERC should be in the implementation of EPA's plan?
Lisa Edgar: I think it's very important that FERC engage at the federal level. Of course they have responsibility for reliability, which is not the responsibility of EPA. So for FERC with their expertise I think it's absolutely critical that they're involved in the discussions, helping again to bring information in and to educate others.
Monica Trauzzi: One of the topics of discussion here also is the surge in natural gas production and some of the challenges to integrating natural gas and electricity systems. How is the use of natural gas helping Florida meet its energy demands and how is system integration affecting your state?
Lisa Edgar: Certainly Florida is becoming more and more dependent on natural gas as part of our generation portfolio. Natural gas of course can sometimes be easier to site a new generation facility and of course is lower in carbon emissions. So the increase of natural gas is in many ways a good thing especially now that those natural gas prices have stabilized and are lower than they were just a few years ago. But yet I as one regulator do have concerns about the minimalization of the diversity of our fuel portfolio as we begin to depend more and more on natural gas.
Monica Trauzzi: All right. We'll end it there. Thank you for your time. I appreciate it.
Lisa Edgar: Thank you so much.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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