Shining a bright light on Florida utility savings

Blog Post | July 15, 2014 - 11:12 am
By Annie Gilleo, Senior Manager, State Policy

Every 5 years, the Florida Public Service Commission is required by the Florida Energy Efficiency Conservation Act to evaluate its energy savings goals and select programs for inclusion in its next 10-year plan. These reviews offer an opportunity for Florida to look back at the past, and forward to the future, and determine just how much energy their programs can save. In recent years, states all over the country have bulked up their energy savings goals, planning for affordable, reliable, clean energy. But Florida seems to be sliding in the opposite direction, as the state’s four primary investor-owned utilities have pushed to significantly scale back their energy savings goals.

All together, Florida utilities propose saving about 480 GWh of electricity over a ten-year period. That’s compared to the more than 6800 GWh of savings they said were cost-effective during the last planning period. If that seems like a dramatic drop in energy efficiency offerings, it’s because it is. The new savings targets are a mere 7% of the old targets. But utilities say it’s all they can do. Well, we here at ACEEE think the future can be brighter for Florida. Here are the arguments for scaling back energy efficiency in the Sunshine State. Look how they shrink when you shine a bright light on them:

"The most significant energy efficiency gains have already been made, so additional improvements will be more difficult and expensive."

If you’ve heard that energy efficiency is the low-hanging fruit of the energy world, you heard right. And the great thing about low-hanging fruit is that it grows back. As technologies improve and marketing techniques are refined, there’s always more to be done. In Florida, utilities have only scratched the surface when it comes to energy efficiency. In last year’s State Scorecard, two-thirds of states saved more energy than Florida. While Florida utilities reported annual savings equivalent to 0.25% of electricity sold, states that truly prioritized energy efficiency saved at least six times as much energy (between 1.5% and 2% of total electricity sold). And more than half of states spent larger portions of their utility revenue on increasing customer’s access to energy efficiency programs than Florida. States across the country – from California to Minnesota to Massachusetts – continue to find that high levels of savings are possible year after year. By reaching out to new customer bases and expanding their energy efficiency offerings, these states are saving more and more energy each year.

"The goal of efficiency programs is to delay the construction of additional power plants, which is already being accomplished by reduced customer electricity consumption."

True, one touted goal of energy efficiency is to offset the need for expensive new power plants. But even as demand growth slows, there are significant benefits to continuing to invest in energy efficiency. Most importantly, it’s a cheap resource. A recent ACEEE report finds that energy efficiency programs cost utilities only about three cents per kilowatt-hour, while generating the same amount of electricity from fossil fuels can cost two to three times more. It’s also clean and reliable. And customers feel good about utilities that help them invest in energy efficiency. The utility of the future is going to have to care about the service it provides to its customers, and efficiency is one of the most important services it can provide.

"As natural gas-fired power becomes less expensive, costly efficiency improvements make less sense."

Natural gas prices are undoubtedly low right now, but historically they’ve also proven volatile, and some industry experts are suggesting that higher prices will be needed to sustain growth. To protect both consumers and utilities from price fluctuations, utility portfolios should be balanced. That means not just relying on our current supplies of natural gas to meet customer needs. The bottom line looks good now, but when storms and natural disasters disrupt delivery lines, where will utilities turn to meet demand? By contrast, once an investment in energy efficiency is made, utilities can count on those savings to help meet customer demand no matter the weather. Let’s also take a look at where all that natural gas is coming from. In Florida, FP&L wants to purchase it from wells in Oklahoma . Investing in energy efficiency would instead spur economic growth within Florida.

Looking Forward

The bottom line is that utilities in Florida are looking backward. If they turn instead toward the horizon, they’ll see that utilities can play an important role in helping states meet tightened clean air standards , and that customer satisfaction will be key to turning a profit in an era of declining energy consumption. States and utilities should lean into energy efficiency opportunities rather than run away from them. Utility-level programs have enormous savings potential and will enable Florida, and other states, to meet the growing expectations for responsible energy production and consumption. Harnessing clean energy opportunities will mean a brighter, more sustainable future for the Sunshine State.

Mary Shoemaker contributed to the research and writing of this blog.