FPL Sees Solar Incentive, Even Without Mandate
Around the State
For years, proponents of renewable energy have lobbied for mandates to jump-start Florida's renewable market, but one investor-owned utility (IOU) sees a solar future, voluntarily.
Florida Power & Light Co., the state’s largest utility, sees solar-power generation as a way to expand its fuel mix and add stability in times of fossil-fuel price spikes.
"If there was no mandate, we would still be very supportive of this and try to build as much renewable energy as we possibly could," said Buck Martinez, senior director of development for FPL. "It's an incentive, because it allows us to diversify our portfolio and increase our security," he said.
Martinez says about 60 percent of the energy FPL produces today comes from natural gas. By the time the company finishes projects currently in the works, that figure will go up to about 76 percent. Statewide, Florida has a similar pattern of not just natural gas dependency but reliance on imported fuels. According to the University of Central Florida, 73 percent of Florida’s electricity is produced from imported fossil fuels -- either from out of the state or out of the country. Both of the pipelines that supply natural gas to FPL come from the Gulf of Mexico, which exposes the company, and in turn its customers, to a greater risk if something goes wrong or when fuel costs spike.
Sean Stafford, an energy consultant and lobbyist, says no smart investor would want that kind of an unbalanced portfolio and the state shouldn't either.
"The state's putting all its eggs in the natural-gas basket," said Stafford. "Natural gas is cheap because the economy is in the tank, but when the economy gets better, and demand rises, prices will rise again."
While there are a host of alternative-energy possibilities in Florida -- wind, biomass, underwater turbines -- solar is at the top of FPL's list. The company recently finished building three solar facilities that produce 110 megawatts of electricity and has plans to build at least 500 megawatts more, expanding the percentage of Florida's energy that comes from renewable sources, which currently stands at just 2 percent.
Beyond security through diversification, FPL says another incentive to develop solar is the long-term cost.
Solar facilities -- whether they use photovoltaic cells that convert sunlight into energy or solar thermal mirrors that concentrate the sun’s light and heat fluids to produce energy -- cost more to build than natural gas facilities, but over time the costs can be dramatically less. The price of natural gas, like other fossil fuels, is expected to rise as demand increases and resources diminish. Since 85 percent of the cost of energy production lies in the fuel price, Florida is currently exporting $30 billion to purchase those fossil fuels.
But with solar, there are no fuel costs. FPL estimates its customers could save $178 million in fuel costs over the 30-year life of its Martin County plant alone.
Some say solar also eliminates the worry over a possible added expense of an unpredictable carbon tax.
Mark Bubriski, an FPL spokesman, says all these factors translate to more stable energy costs over the long-term."It's a direct benefit to the customers," said Bubriski, "because utilities don't make money on fuel."
But just as there are real incentives for FPL to develop solar power, there is at least one potential sticking point: Somebody has to pay for the initial investment to build the facility.
Currently, FPL uses a cost recovery model to shift some of the burden of construction onto the ratepayer.
Nuclear cost recovery, used by FPL and Progress Energy Florida over the last several years, has left a bitter taste in the mouths of some who believe solar could go down the same road.
"Solar, as we found out in committee last week, is extremely expensive," said Sen. Mike Fasano, R-New Port Richey, member of the Energy and Utilities Committee. "An electric company has to find other ways to pay for it. They're a business … That's their responsibility."
While Martinez admits solar plants are more expensive than the traditional fossil-fuel facilities, he argues it's not a fair comparison with nuclear.
Building a nuclear facility can take 10-12 years, where a solar plant can be completed in about 12 months. Nuclear also has a mountain of state and federal regulations that wouldn't apply to solar projects.
Martinez says if the company can't recover the costs of solar by charging building expenses to customers, it doesn't make as much sense for them to do it.
"What we need is the ability to recover costs. If not, we wouldn't be able to recover the investment in these assets," he said. "Those capital costs are offset by the amount of fuel savings and low maintenance."
FPL contends it has found ways to lower solar construction costs since the implementation of its first three plants.
As part of Sunshine State News’ continuing series on Florida’s energy policy, next, we will explore the effects of energy production on economic development and whether the state can really be home to green-collar jobs.
Lane can be reached at email@example.com or (561) 247-1063.