The Florida Municipal Power Agency (FMPA) is waging a campaign to increase monthly fixed fees to as high as $50 in an attempt to block the growth of solar, according to records obtained by the Energy and Policy Institute. FMPA is a wholesale power agency owned by Florida’s municipal electric utilities; it sells electricity to the municipal utilities, which serve 2.3 million Floridians in 31 cities across the state.
FMPA leadership has not publicly advertised its plan, which is likely to generate controversy, though it has not kept it a tight secret either.
Jacob Williams, the FMPA’s general manager and CEO, gave a keynote addressing the FMPA board of directors, streamed July 18 via Facebook Live, in which he claimed utility customers’ monthly fixed fee “should be $50.” Williams is a former coal executive from the bankrupt coal company Peabody Energy.
He said his municipal utility members should be “playing the game smart” by implementing the changes in the summer so customers’ bills would appear to go down, even though in the winter they will be “a bit higher”.
FMPA appears to be heavily influencing decisions by munis to raise fixed fees
The FMPA cannot set rates for each of the municipal utilities that are members. The utilities do that for themselves and are overseen by their own city governments. But FMPA has a strong influence on its members.
According to a draft white paper prepared by the Winter Park Utilities Advisory Board, the average monthly fixed fee for the municipal power companies is $9.18. FMPA’s requested changes would add $40.82 to the average monthly fixed fee in Winter Park for an annual increase totaling $489.84. Winter Park is an FMPA member, and FMPA presented the Winter Park Utilities Advisory Board with options on how to raise fixed fees, according to the same Winter Park white paper. The Winter Park Utilities Advisory Council recommended an increase of their fixed fees of 10-20% over the next 5-10 years.
A South Florida FMPA member, Lake Worth Beach, is currently coordinating with the agency, according to a July 2019 utility update at a city commission meeting. Lake Worth Beach utility general manager Ed Liberty discussed his work with the FMPA consultant on rate changes. The communications strategy Lake Worth Beach discussed is similar to the one promoted by FMPA.
CEO: FMPA plan would also make rooftop solar customers “go away.”
Another effect of higher fixed fees is that they can dramatically worsen the economics of rooftop solar, since customers cannot reduce those fees no matter how much of their own power they generate.
Note: An earlier version of this post briefly said that Lake Worth had a current fixed fee of $31.40 per month. That is actually the utility’s minimum bill that customers must pay per month.
A Duke Energy spokesperson last week claimed that the growth of solar energy is increasing nitrous oxide (NOx) emissions in North Carolina, and that more solar could even “reverse” a trend of reduced carbon emissions if added to the grid.
Duke spokesperson Kim Crawford’s allegation came as Duke seeks modifications to the air quality permit for its gas-powered Rockingham County Combustion Turbine Facility from the NC Department of Environmental Quality (DEQ). Such “peaker plants” only operate when demand is highest, and can be used in concert with intermittent resources like solar, ramping up and down in response to solar’s variable output. The utility applied in March to more than double the number of hours per year the gas plants could operate. Duke is proposing similar changes for three other facilities.
Conservative media and serial deniers of climate science seized on Crawford’s comments. The North State Journal, a Raleigh-based conservative outlet, quoted Crawford alongside the Heartland Institute’s Steve Goreham, the Institute for Energy Research’s Dan Kish, and Donald van der Vaart, who is former Secretary of the NC DEQ and energy advisor to past Republican Governor Pat McCrory.
On its face, Duke’s claims that solar could increase overall emissions are patently false. A study by the National Renewable Energy Laboratory found that cycling gas generation to accommodate the addition of solar and wind to the grid still results in both NOx and CO2 emissions reductions. Duke attempted this week to walk back the erroneous claims in a blog post, writing “[T]o say solar is causing more air pollution? That may be some faulty logic.”
“If someone buys a Tesla but keeps their Lexus idling in the garage ‘just in case,’ then emissions would indeed be higher than necessary,” said Bryan Jacob, Solar Program Director at Southern Alliance for Clean Energy, further illustrating the farce of Duke’s original misrepresentation.
Behind solar myths, Duke gas expansion looms
Duke’s original claims, and subsequent retraction of them, raises the question of why the company’s public statements on alleged solar emissions impacts have been so confused. The utility’s deep investment in gas may offer a clue: Duke may feel compelled to justify its reliance on fossil fuel infrastructure, or even to tarnish renewable alternatives. Duke has signaled its intention to build over 9,500 MW of gas capacity in the Carolinas alone by 2033, nearly three times its planned solar capacity additions on that same timeline. It is a partner in the bedeviled $7.5 billion Atlantic Coast Pipeline, which would transport gas from West Virginia to Virginia and North Carolina, and possibly further south.
Duke’s greenwashing of natural gas, on display in its blog response, is consistent with coordinated industry messaging. In a 2016 internal memo, the Edison Electric Institute – the trade association representing investor-owned electric utilities – outlined a strategy to “articulate and educate stakeholders that natural gas plants (or sunshine peakers) go hand-in-hand with renewable energy” (emphasis added).
In its DEQ filings seeking approval to further pollute, Duke raises a limited set of alternatives to increasing use of its peaker plants, such as curtailing solar or nuclear output. Grid experts say those aren’t the only options.
“It’s all a business model issue…We saw this with Colorado utilities claiming they’d need natural gas plants to integrate wind. But no one talks about that anymore because they figured out how to run their system with renewables,” said Ric O’Connell, Executive Director of Gridlab, a group that provides technical analysis in support of a low-carbon electrical system. “Other utilities have had no problems integrating large amounts of solar. What’s Duke’s issue?”
Duke’s DEQ filings even present storage as a viable solution to burning more gas – but admit it has barely built any; the utility has deployed 15 MW of storage to date. Recent North Carolina Sustainable Energy Association testimony to the state utility commission, borrowing from a North Carolina State University study, demonstrates how storage significantly reduces the need for gas-powered ramping.
The Southeast lacks an independent grid operator, clearing the way for utility monopolies like Duke to run their gas-burning plants as long as that is profitable. California, to which North Carolina is frequently compared as the state with the second-most solar, instead uses an Independent System Operator to address grid needs in real time – dispatching capacity hourly, or with even greater frequency. “In California, the older plants go out of business because they cost too much, and they aren’t dispatched because they aren’t flexible enough,” Michael Wara, Director of the Climate and Energy Policy Program at Stanford University’s Woods Institute for the Environment, told E&E News.
Meanwhile, Duke’s dedication to gas expansion only exacerbates the current grid deficiencies that lead to ramping, at the expense of investing in a modernized energy system. An E3 study commissioned by FirstSolar and the Tampa Electric Company showed that at higher penetration, flexible solar resources can supplant the function of gas peaker plants – all at lower emissions and lower cost.
Prominent players in the fossil fuel industry are involved in the ongoing nomination process for the open seats on the Federal Energy Regulatory Commission (FERC), recent congressional disclosures show.
With the pending departure of Commissioner Cheryl LaFleur in August, FERC – which permits interstate gas pipelines and LNG facilities and regulates electricity markets – will be left with only three commissioners. Though it will still have a quorum for considering projects and issuing orders, a bare-bones FERC has raised “anxiety” levels among energy companies, as billions of dollars in energy investments hang in the balance.
A changed FERC might also impact the looming decisions on mid-Atlantic’s grid operator PJM Interconnection’s capacity market proposals. Though FERC this week delayed PJM’s August auction, a shifting political imbalance on the commission concerns clean energy advocates who are afraid PJM’s proposals to disadvantage state-incentivized renewable resources in the capacity market may become a central part of a new tariff.
Federal lobbying disclosures reviewed by the Energy and Policy Institute indicate that the fossil fuel industry is not sitting idly by.
Houston-based Calpine, one of the nation’s largest power generating companies, has been lobbying for FERC nominations since mid last year. It is joined by the utility Exelon, which has been lobbying for its own nominees in the past several months. LNG and pipeline company Tellurian has also been involved in the first half of this year in the effort to shape FERC’s composition.
Fossil fuel and utilities-backed industry trade groups have taken an active role as well. The National Association of Manufacturers (NAM) – whose members include include such fossil fuel powerhouses as ExxonMobil, ConocoPhillips,Koch Industries, Phillips 66, Southern Company, Continental Resources, Marathon Petroleum, Dominion, Energy Transfer, and Devon Energy – has been lobbying the White House on FERC nominations since late last year.
The Interstate Natural Gas Association of America (INGAA), which includes the likes of Enbridge, Dominion, ConEdison, Cheniere, Kinder Morgan, National Grid, and PG&E, has similarly lobbied for the commission’s appointments.
Additionally, disclosures show that the Nuclear Energy Institute (NEI), the nuclear industry’s lobbying arm, and Chicago-based power producer Invenergy, which has a mixed portfolio of gas and renewable energy, had each lobbied for FERC nominations late last year.
Recent reports indicate that other major players are stirring the pot behind the scenes.
As E&E News revealed, coal executive Bob Murray is putting pressure on President Trump to, in his words, “fix feckless FERC.” In an interview following a fundraiser he held for the president, the Murray Energy CEO told E&E that he argued to Trump that FERC has failed to press states to buy coal power and that while Trump didn’t respond, Murray was confident Trump was listening and, “Anything that gets to him, he gets it quick and he deals with it.”
Murray has an open score to settle with FERC, which in a 5-0 vote denied a proposal to bail out struggling coal plants in January 2018. But three of those voting commissioners are no longer at FERC: Kevin McIntyre, Robert Powelson, and soon Cherly LaFleur.
And while Commissioner Chatterjee voted against the DOE bailout proposal, Greentech Media noted that his written statement concurring with the rejection of DOE’s proposal detailed his concerns with “bulk power system resilience” and that he called for a process to learn if “interim measures may be needed.” In fact, Politico recently reported that Chatterjee “will aim to resolve a longstanding impasse over state energy subsidies in the PJM power market; increase payments for coal, nuclear and oil power plants using so-called ‘fuel security’ reforms.” Chatterjee also reportedly played a role in preventing the nomination of Republican David Hill, NRG Energy’s general counsel, to join FERC earlier this year. Hill was vocal against plant bailout plans.
One of the next commissioners to replace LaFleur and to fill the current vacancy could be the deciding vote in any tariffs that benefit Murray Energy and other coal companies.
It’s not clear the degree to which Trump is personally monitoring the decision, if at all. Ari Peskoe, Director of the Electricity Law Initiative at the Harvard Law School Environmental and Energy Law Program and a close watcher of FERC, wrote on Twitter that he received a note from an investment analyst suggesting that Trump was “personally interviewing” potential candidates.
Featured Image: “FERC Commission meeting” by FERC.gov is licensed under CC BY 2.0
Tampa Electric (TECO), and its law firm have made political contributions to members of the Florida Power Plant Siting Board in the lead-up to tomorrow’s vote to approve the company’s controversial new natural gas plant. The Power Plant Siting Board is responsible for the final approval of TECO’s gas plant.
TECO plans to switch its Big Bend Power Station from coal to natural gas and begin operation in 2023. The project features a seawall to protect the fossil fuel plant from the effects of climate change, caused by the burning of fossil fuels.
TECO and its law firm, Holland & Knight, have contributed $60,000 to members of the Power Plant Siting Board in 2019. The Board is made up of Gov. Ron DeSantis, Attorney General Ashley Moody, State Chief Financial Officer Jimmy Patronis, and Commissioner of Agriculture Nikki Fried.
The governor’s vote is weighted; his vote plus just one other vote will approve the project. TECO contributed $25,000 to DeSantis two months ago.
Contributions to Siting Board Members in 2019
Recipient
Date
Contributor
Amount
Friends of Ashley Moody (PAC)
01/02/2019
HOLLAND & KNIGHT, LLP
$10,000
Florida Consumers First (PAC) (Note: Associated with Commissioner Nikki Fried)
01/14/2019
TECO ENERGY, INC.
$25,000
Friends of Ron DeSantis (PAC)
05/22/2019
TECO ENERGY, INC.
$25,000
Source: Florida Division of Elections
TECO and Holland & Knight also contributed $235,000 to the political parties and their allied campaign funds. The vast majority of TECO’s party-related contributions have gone to Republicans.
Recipient
Date
Contributor
Amount
Florida Democratic Party
1/4/19
$10,000
HOLLAND & KNIGHT
Republican Party of Florida
1/2/19
$25,000
TECO ENERGY, INC.
Florida Republican Senatorial Campaign Committee
1/24/19
$25,000
TECO ENERGY, INC.
Florida Democratic Party
1/24/19
$5,000
TECO ENERGY, INC.
Republican Party of Florida
1/25/19
$25,000
TECO ENERGY, INC.
Florida Democratic Party
2/5/19
$5,000
TECO ENERGY, INC.
Republican Party of Florida
2/8/19
$25,000
TECO ENERGY, INC.
Florida Republican Senatorial Campaign Committee
2/19/19
$25,000
TECO ENERGY, INC.
Florida Republican Senatorial Campaign Committee
2/19/19
$25,000
TECO ENERGY, INC.
Florida Democratic Legislative Campaign
2/20/19
$15,000
TECO ENERGY, INC.
Florida Republican Senatorial Campaign Committee
6/13/19
$20,000
TECO ENERGY, INC.
Republican Party of Florida
6/28/19
$30,000
TECO ENERGY, INC.
Source: Florida Division of Elections
TECO has claimed that it must build the new gas plant in order to accommodate new solar energy. In an interview with WMNF, TECO Vice President Tom Hernandez said, “I will tell you if we were not doing the Big Bend modernization project we could not add more solar to our system. There’s a point where you start bumping up into operating constraints …”
In 2018, only 0.6% of TECO’s energy came from solar while 78% came from natural gas. The new plant will further increase TECO’s overreliance on natural gas.
The Sierra Club and other local groups have opposed the plant. TECO has avoided a review of its plan by the Florida Public Service Commission, which traditionally has the authority to approve or deny new power plants, by arguing that because the site had previously burnt coal, the plant is not “new.” “Their [TECO] position is that no one should review whether that’s even needed,” Sierra Club representative Diana Csank said to the Tampa Bay Times.
U.S. Representative Kathy Castor wrote a letter to the Power Plant Siting Board on July 19, urging DeSantis and the other members to weigh all considerations, especially whether the plant was needed at all. She cited two examples in other states with Republican governors and utility regulators, Northern Indiana Public Service Company and the Georgia Public Service Commission, as pathways for Florida to increase renewable energy and reduce the use of fossil fuels.
Castor is the chair of the Select Committee on Climate Crisis.
The Power Plant Siting Board meeting will be live-streamed as part of the Governor’s cabinet meeting tomorrow, July 25. It can be viewed live on the Florida Channel at 9:00 AM Eastern.
A Colorado utility’s attempts to avoid oversight by state regulators appears to be backfiring.
At a Colorado Public Utilities Commission hearing this week, Commissioner Frances Koncilja said she has “some serious questions about whether or not Tri-State has been candid with us,” and reminded the attorneys for electric utilities that “everyone who appears before a tribunal has an obligation of candor to the tribunal.”
Commissioner asked Tri-State in February if it planned to “run off to FERC”
The commissioner’s comments came during a July 15 hearing concerning the dispute between Delta-Montrose Electric Association (DMEA), an electric cooperative in western Colorado, and Tri-State Generation and Transmission Association, a wholesale power provider headquartered near Denver. DMEA has been seeking to end its contract with Tri-State, which requires the co-op to purchase wholesale power from Tri-State, in order to pursue more local renewable energy projects and reduce its wholesale power costs. The Colorado PUC has been holding hearings since the beginning of 2019 to determine the “exit fee” that DMEA will have to pay to Tri-State in order to end its contract.
But last month, Tri-State moved to become rate-regulated by the Federal Energy Regulatory Commission (FERC), which could preempt the Colorado PUC’s jurisdiction over the DMEA dispute and derail the case just as the PUC neared a decision in August. That forum shopping is what incited Commissioner Koncilja’s questioning of Tri-State’s candor with the PUC; she had asked Tri-State months earlier if Tri-State planned to try and move the case to FERC, and did not receive a direct answer.
During a hearing on February 6, Commissioner Koncilja directly asked Tri-State attorney Thomas Dougherty, “Is any FERC jurisdiction implicated in this dispute?”
Dougherty responded: “I’m not sure I understand your question Commissioner.”
Koncilja asked again: “Is somebody going to run off to FERC at some point?”
Dougherty again dodged the question: “Umm… at some point in the future or during the pendency of this case?”
Commissioner Koncilja questioned this week whether Dougherty had failed in his obligation to be candid to the PUC as an attorney, or whether the failure was Tri-State’s.
“We expect candor. And I am not saying that it is Mr. Dougherty who was not candid. It might well have been his client,” said Koncilja.
Koncilja also raised the possibility of public hearings to question Tri-State executives about the company’s conduct before the commission, and requested that Tri-State provide the commission with its communications regarding its pursuit of FERC rate regulation.
Colorado PUC Chairman Jeff Ackermann agreed with Commissioner Koncilja’s request for Tri-State’s communications, and on Thursday the commission ordered Tri-State to “file a summary of all actions” it took to pursue FERC rate regulation.
Tri-State’s pursuit of FERC rate regulation has raised a variety of concerns, including that it could make it harder for other co-ops to end their contracts with Tri-State.
In accordance with Supreme Court precedent, FERC applies this much higher burden of proof to requests to modify or abrogate bilateral contracts. The late Justice Scalia once called the public interest standard “practically insurmountable.” 2/3 https://t.co/SUWM5m45BZ
Chairman Ackermann echoed those concerns during Monday’s hearing: “I think it’s clear that they will be captive as soon as that submission happens, or that sequence into jurisdiction, that you have captive members there and it’s a different path than the path through the Colorado PUC, clearly.”
Legislators are also concerned that FERC rate regulation of Tri-State could hamper the Colorado PUC’s oversight of Tri-State’s resource planning process, which was clarified in legislation that Colorado Governor Jared Polis signed in May.
Tri-State says it will comply with Colorado’s new climate policy, as well as New Mexico’s recently expanded renewable portfolio standard. But environmental advocates and some Colorado legislators are concerned that without oversight of Tri-State’s rates, the Colorado PUC could face challenges in enforcing its oversight of Tri-State’s resource planning.
Tri-State also eroded trust with top Colorado legislators
Key Colorado legislators highlighted those concerns in a July 3 letter to Tri-State CEO Duane Highley and Chairman of the Board Rick Gordon: “Given the connection between rates and resource planning, we are concerned that Tri-State was not more transparent about the possibility of transitioning to FERC oversight” during negotiations earlier this year.
The letter was signed by the leadership of the Colorado Senate and Assembly, including Speaker of the House KC Becker, Senate President Leroy Garcia, House Majority Leader Alec Garnett, and Senate Majority Leader Stephen Fenberg, as well as the chairs of energy committees: Representative Dominique Jackson, Chairwoman of the House Energy and Environment Committee, Senator Faith Winter, Chairwoman of the Senate Energy and Transportation Committee, and Representative Chris Hansen, Chairman of the Interim Energy Legislation Review Committee, which will begin hearings this month to consider energy policy ideas for the 2020 legislative session.
The legislators left no doubt of their intent to respond in the next legislative session to Tri-State’s latest moves:
“The General Assembly looks forward to making clarifications through legislative initiatives in the coming session focused on cooperative governance, transparency, and accountability to the public interest.”
Several of Tri-State’s largest member co-ops also wrote to Tri-State requesting more information about the implications of FERC rate regulation before the Tri-State board voted on the matter.
Despite those requests by legislative leaders and some of its major member co-ops, Tri-State approved a resolution during its July board meeting to move toward FERC rate regulation.
Southern Company unveiled a new greenhouse gas reduction bonus package for CEO Tom Fanning, worth as much as $2 million this year, according to its 2019 proxy statement filed with the Securities and Exchange Commission. The Southern Company board of directors set the greenhouse gas (GHG) reduction goal low enough to ensure that Fanning would receive the bonus without any changes in plans from Southern Company. In fact, Fanning has likely already secured his bonus, according to filings and announcements made by the company at or around the time of the bonus plan becoming public.
The bonus package claims to align Fanning’s compensation to the company’s move to be “low- to no-carbon” by 2050, but Fanning will receive credit for the development of Southern’s liquified natural gas business. The transportation and combustion of natural gas emits greenhouse gases.
The company has continued touting its “low- to no-carbon” pledge, even in light of conflicting testimony from its subsidiaries to regulators. As Southern’s CEO, Fanning has denied that carbon dioxide is a primary contributor to global warming.
How Fanning’s Bonus Works
The incentive plan lays out two pathways for Fanning, a quantitative and qualitative pathway.
Quantitatively, Fanning can receive his bonus by either adding zero-carbon capacity to the Southern Company system or by removing coal. The quantitative section makes no mention of natural gas. Qualitatively, Fanning can earn a “modifier” on his quantitative payout from items such as research and development, national leadership in energy policy, and venture capital spending.
Quantitative Scoring and Payout
Qualitative Modifier
In short, Fanning will receive at least part of his bonus for greenhouse gas emissions as long as Southern Company either eliminates enough coal capacity or adds enough zero-carbon capacity to total 2,641 megawatts (MW) or more.
Coal Closures and Zero-Carbon Additions
Southern Company has already announced the closure of three coal plants representing 2,548 megawatts (MW). The Georgia Power integrated resource plan (IRP) proposed settlement calls for 1,650 MW of new solar, as of the time of publication. Current GHG reduction announcements by the company total 4,198 MW compared to Fanning’s bonus goal of 3,080 MW. Fanning’s quantitative bonus potential caps at 3,518 MW, well below Southern’s already planned actions.
That makes Southern’s proxy statement description of the bonus program as an “incentive,” a misnomer, since it is not incenting any new actions from Fanning. The program does not indicate if Fanning will receive credit toward his bonus upon announcement or when a plant is added or removed from service.
In addition to announced actions, Fanning could receive credit for the construction of the Vogtle Unit 3 nuclear plant or the closure of the coal-fired Plant Bowen Units 1 and 2. Southern Company reaffirmed a November 2021 in-service date for the over-budget Vogtle Unit 3 on its 1st quarter 2019 earning call. Plant Bowen Units 1 and 2 have not been slated for closure but the Georgia IRP settlement proposal limits Southern’s capital investments in the plant, signaling an impending closure.
Fanning’s favorable terms have him scheduled to max out his GHG reduction bonus, even if Southern Company struggles to bring Vogtle Unit 3 online, continues to operate Plant Bowen Units 1 and 2, and the company continues to grow its natural gas business with no real change in direction toward faster decarbonization.
