FLORIDA PUBLIC SERVICE COMMISSION WORKSHOP ON RENEWABLE ENEGY

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FLORIDA PUBLIC SERVICE COMMISSIONWORKSHOP ON
RENEWABLE ENEGY

• On Behalf of
• The Sierra Club, Inc.
• PRESENTED BY
• E. Leon Jacobs, Jr.
• Williams Jacobs
• January 19, 2007

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FLORIDA ENERGY POLICY

• ? Driven More Prominently By Externalities
• ? Vast Scope Undefined Relative to Needs
• ? Challenged by Phenomenal Growth in Demand
• ? Highly Vulnerable to Global
• Markets In Disarray

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FLORIDAS ENERGY MARKET

• ? Explosive Growth in Consumption As of 1/04
• 48,000 MW - Summer
• 51,000 MW - Winter
• ?Annual Growth rate 900 MW - 1,500 MW per year
• ? At Present Pace, Projected to Build
• 45 New 500 MW Plants by 2020

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FLORIDAS ENERGY MARKET

• Transmission Constraints
• US Department of Energy Transmission Congestion
  Study
• Finds High Probability for Congestion Due To
  Projected Influx of New Power from
• Nuclear ( 2 proposed plants)
• - Coal ( 7 proposed plants)

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FLORIDAS ENERGY POLICY

• Regulators and Policy-makers Challenged By
• Uncertainties in
• fuel prices
• fuel transportation
• capital costs
• OM expenses
• emission constraints and
• decommissioning
• Risks in
• (i) reliability
• (ii) financing
• (iii) technology and
• (iv) markets

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FLORIDAS RENEWABLES

• Florida Policymakers Must Engage In A Systematic
  Process To Plan Reliable Service At Reasonable
  Rates
• This Process Must Deal With Uncertainty and Risk
  In A Transparent and Objective Fashion
• The Sierra Club Recommends That The Florida
  Public Service Commission Address Renewables In
  the Context of an integrated portfolio management
  initiative

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FLORIDAS RENEWABLES

• PORTFOLIO MANAGEMENT
• - energy resource planning utilizing a diverse,
  cost-effective mix of energy resources, including
  
• . supply-side (traditional and renewable) and,
• . demand-side (DSM, efficiency) options
• for integrated resource planning in vertically
  integrated, regulated utilities, and in
  deregulated markets where they exist.
• US Environmental
• Protection Agency

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FLORIDAS RENEWABLES

• PORTFOLIO MANAGEMENT
• CRITICAL DIFFERENCE
• Portfolio Management provides for real
  assessment, balancing and management of long-term
  issues to minimize costs and risks.
• RESULTS
• Optimized mix of resources that stabilize prices
  to ratepayers, and manage uncertainties, risks
  and costs.

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RENEWABLES INTERNATIONALLY

• Electric Production From Renewables is Emerging
  Around the World,
• But Still Low in the US, Even With Dramatic
  Reductions in Price of Wind
• Nonhydro renewables, percentage share of
  electricity production, 2000.
• By regional grouping
• OECD total 2.0
• North America 2.0
• Europe 2.1
• Pacific 1.6
• Selected countries
• Iceland 17.2
• Denmark 16.7
• Finland 12.3
• New Zealand 8.9
• Germany 2.5
• United Kingdom 1.3
• United States 2.1

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FLORIDAS RENEWABLES

• Renewables Bring Important Benefits, and, as With
  All Energy Resources, Pose Externalities,
  Uncertainty and Risk
• EX
• JEA Biomass Project
• Offshore Wind Project
• Emissions
• Transmission

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FLORIDAS RENEWABLES

• Most Prominent Strategies to Stimulate Renewables
• Feed-In Laws
• Specifies a guaranteed price via tariff, coupled
  with a utility purchase obligation and planned
  interconnection.
• Popular in Europe Similar to PURPA Standard
  Offer
• Renewable Portfolio Standards (RPS)
• Specifies a target mix of renewable energy
  resources for inclusion in a utilitys generation
  mix growing popularity in US little emphasis
  on price of renewables.

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FLORIDAS RENEWABLES

• Twenty three States (40 of US sales) have
  enacted RPS

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FLORIDAS RENEWABLES

• It Is Vitally Important That There Be A More
  Complete Analysis of the True Costs, Risks and
  Benefits Of Energy Resources Used To Meet the
  Demand In Florida
• Portfolio Management Is This Tool

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FLORIDAS ENERGY MARKET

• ? MOST SIGNIFICANT OPPORTUNITIES
• - Integrated Planning
• - Development of Demand-Side Strategies
• - Innovation in Energy Efficiency
• - Cultivation of Renewables and Distributed
  Generation

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FLORIDAS ENERGY MARKET

• MARGINALIZES
• PORTFOLIO MANAGEMENT STRATEGIES
• Alliance to Save Energy reports
• Hundreds of untapped MW savings as a result of
  underutilization of energy efficiency and
  renewables

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BUSINESS CASE FOR PORTFOLIO MANAGEMENT STRATEGIES
IN FLORIDA

• ? Demand Rapidly Outstripping Capacity of
  Supply
• ? Emergence of EE Technology
• ? Growing Adoption of Renewables Strategies
  Around the Country ( economies of scale)
• ? Governmental Agencies and Other Large Users
  Must Reduce Energy Costs
• ? Environmental Benefits Are Valuable
• ? High Priority for Reliability After Hurricanes

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GROWING PUBLIC DEMAND FOR ENERGY ALTERNATIVES IN
FLORIDA

• ? Public Outcry Regarding Outages After
  Hurricanes
• ? Chapter 2006-280, Laws of Florida (SB 888)
• ? Controversy Over Coal Plants
• ? Governors Hydrogen Initiative
• ? 2006 Florida Energy Plan
• ? National Energy Plan