Florida power battle: regulators clash with feds over emission-cutting proposal

by | Aug 2, 2023



  • Florida utility regulators and industry officials object to a federal proposal on reducing greenhouse gas emissions from power plants, citing potential cost increases and reliability issues.
  • The proposed rule could require shifts to cleaner technology, including green hydrogen, which Florida officials argue may not be feasible in the given timeline.
  • The Florida Public Service Commission is concerned about overreach by the EPA and uncertainties about the costs that could be passed on to consumers.

TALLAHASSEE — Florida utility regulators and other industry officials are objecting to a federal proposal aimed at reducing greenhouse-gas emissions from power plants, arguing the changes could drive up costs for consumers and hurt the reliability of the state’s electric system.

The Florida Public Service Commission on Tuesday approved sending a document to the U.S. Environmental Protection Agency raising concerns that the proposed rule could “result in unjust, unreasonable, and excessively costly carbon emissions performance standards that would risk the safety, reliability and affordability of electric service in Florida.”

Officials from the Florida Municipal Power Agency, an electricity wholesaler for municipal utilities, and the Florida Reliability Coordinating Council, which works on energy planning, said their organizations also have sent concerns to the EPA.

“This (EPA) rule goes to the heart of whether we can meet the needs of the customers,” Jacob Williams, chairman of the Florida Reliability Coordinating Council board, told the Public Service Commission.

The EPA released the wide-ranging proposal in May, saying it would dramatically reduce carbon emissions over the next two decades while helping protect public health. A news release from the agency said the proposal would “require ambitious reductions in carbon pollution based on proven and cost-effective control technologies that can be applied directly to power plants.”

“By proposing new standards for fossil fuel-fired power plants, EPA is delivering on its mission to reduce harmful pollution that threatens people’s health and well-being,” EPA Administrator Michael Regan said in a prepared statement. “EPA’s proposal relies on proven, readily available technologies to limit carbon pollution and seizes the momentum already underway in the power sector to move toward a cleaner future.”

During Tuesday’s Public Service Commission meeting, however, Commissioner Gary Clark expressed concern about “overreach” by the federal agency.

“The last thing we want to see is unnecessary expenses falling back on our customers,” Commissioner Mike La Rosa said.

The proposal, in part, would set new pollution standards for power plants fueled by natural gas and coal, while taking steps to shift toward cleaner technology such as a type of fuel known as green hydrogen.

Florida receives relatively little electricity generated with coal, but it relies heavily on natural gas. About 70 percent of the state’s power generation in 2021 came from gas, according to the document the Public Service Commission approved Tuesday.

As an example of the Florida officials’ concerns about the proposed rule, Williams and Navid Nowakhtar, asset and strategic planning director at the Florida Municipal Power Agency, pointed to a potential requirement for use of green hydrogen. If a green hydrogen threshold is not met by 2032, the proposed rule would require scaling back generation at large gas-fired power plants, they said.

The Public Service Commission document said “no Florida utility has demonstrated the capability to co-fire the volume of low-GHG (greenhouse gas) hydrogen required to comply with the proposed rule. Due to Florida’s unique circumstances, the FPSC (Public Service Commission) is concerned that Florida’s EGUs (electric generating units) will face substantial obstacles in implementing grid-scale hydrogen co-firing capabilities.”

The commission primarily regulates Florida Power & Light, Duke Energy Florida, Tampa Electric Co. and Florida Public Utilities Co., which are able to pass along environmental-compliance costs to customers. But the document approved Tuesday said the costs of the proposed rule remain unclear.

“Utility recovery of compliance costs associated with the proposed rule, as required by Florida law, will … have a near-immediate impact on the retail rates of electric service paid by all ratepayers in Florida,” the document said. “However, due to some of the uncertainties surrounding the proposed rule … the FPSC is unable to accurately estimate the potential costs that would be passed on to customers.”

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