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    Critics: FPL's extreme winter plan 'unnecessary'


    June 28, 2022 - Palm Beach Post

     

      The state's largest electricity producer is getting pushback from consumer advocates over a plan to charge customers extra money on each bill to weatherize its power production network against a severe winter freeze.

      Florida Power & Light's plan to brace its facilities for extreme winter weather doesn't factor in the actual probability that such a storm would occur and instead result in an overbuilt grid and higher costs for customers, the Office of Public Counsel and environmental advocates have warned.

      The state's largest utility, motivated by the deadly Texas winter storm in 2021 to review its own preparedness, gauged its risk using data from Florida freezes in 1989 and 2010.

      If state regulators find the plan suitable, and FPL moves forward with the preparations, the utility's 12 million-plus customer accounts may be charged for a plan to address potential instances of extreme winter weather by expanding its battery storage, increasing capacity at some of its fossil-fuel power plants and keeping those electric generators scheduled for retirement on tap for use only during the winter.

      The winterization follows a more than decade-long effort across Florida by FPL to harden its grid against hurricanes. Those efforts, costing billions of dollars charged to ratepayers included, for example, replacing wooden power line poles with concrete ones.

      But critics of FPL's winter plan, laid out in the company's 10-year outlook submitted to the Florida Public Service Commission each year, said the utility didn't make a convincing case for extreme cold-weather safeguards.

      "This fear-evoking scenario would only be realistic if there was some evidence that the actual weather threat was real, and that evidence is not there," Deputy Public Counsel Charles Rehwinkel, who represents utility consumers, told PSC commissioners at a workshop this month.

      Rehwinkel added that the Office of Public Counsel "rarely participates in this process," but noted "there is something new in the process, and it is one that today might look like a ripple, but it's actually the beginning of a tsunami, we fear."

      Each year, utilities are required by law to submit a nonbinding, decade-long outlook of where it sees its operations going and what it might need to plan for in the future. These plans can include historical and projected electricity use data to intentions to build not-yet-approved power plants. The PSC finds these plans either "suitable" or "unsuitable."

      Key issue: How likely is a hard, prolonged freeze across Florida?

      Florida's extensive peninsula stretches nearly 800 miles between Pensacola and Key West. That distance denotes a significant difference in winter weather; the northwestern panhandle is vulnerable to freezes while the southern half of the peninsula is not.

      But a Christmas Arctic blast 33 years ago brought hard freezes across the Florida peninsula. FPL customers faced several rotating blackouts and were urged to conserve energy. The case was not the same for Gulf Power, now owned by FPL's parent company NextEra Energy. In a post-storm review of the 1989 freeze, the PSC reported that Gulf Power had sufficient capacity, issued no rolling blackouts during Christmas weekend and fewer than 5% of its customers faced outages.

      The argument against the FPL's proposal now by one of the top consumer advocates before the PSC was not based on climate and geography, but rather on mathematics and probability.

      The deputy public counsel and others referred to FPL's request to alter the way it and other utilities currently predict the peak amount of energy needed in winter.

      The utility and others, he said, use a standard that suggests there is a 50% chance that the peak demand for electricity will be higher or lower than forecast every month of the year. FPL's proposed extreme winter weather forecast uses the same standard for 11 months out of the year and anticipates extreme weather in January, according to its submitted 10-year outlook.

      Under questioning, Tom Ballinger, engineering director at the PSC, asked a FPL representative during the workshop whether Florida was more likely to be impacted by a hurricane moreso than an extreme winter weather event. The FPL official replied "it's kind of hard to compare" because the utility had not studied the probability of an extreme winter weather event.

      "We have serious concerns about the proposed abrupt and unsubstantiated hypothetical change to the winter peak load forecast assumptions," Rehwinkel said, noting that supporting it could impact other decisions before the PSC as well as customers' bills.

      In a letter to the PSC submitted after the workshop, FPL said it expected the plan "would likely result in only a modest estimated bill impact for its customers," translating to $1 or less more on a typical 1,000 kilowatt hour monthly bill by 2031. There would be no base rate impact until 2025, when the existing rate case expires, but the letter does not contemplate any other costs.

      Other consumer advocates skeptical of FPL argument

      Consumer advocates agreed with the public counsel and voiced skepticism over the need for FPL to charge customers extra for winter weather proofing.

      "Their proposal, which really is just one scenario, could potentially lead to the construction of unneeded, one-day-in-30-years power plants and unnecessary costs to the consumer," said James Wilson, an independent consultant representing Southern Alliance for Clean Energy and Vote Solar.

      Another group - Floridians Against Increased Rates, which asked the state Supreme Court to overturn FPL's most recent rate hike - said FPL's plan doesn't outline costs for proposed solar and battery improvements, and therefore the PSC should deem this plan as "unsuitable."

      "My fear is this is the tip of the iceberg, that these aren't the only costs," added Bradley Marshall, an attorney with environmental law nonprofit Earthjustice, which represented Florida Rising and the Environmental Confederation of Southwest Florida.

      Marshall noted that FPL currently has enough generating capacity that the risk of blackouts as a result of insufficient power generation is once every million years, raising concerns from critics as to the actual need for more generating power.

      Additionally, the PSC review following the 1989 storm reported that all of Florida's utilities had more capacity than the forecasted winter peak, but some of the plants were on extended reserve cold standby, required maintenance and faced other issues that curbed overall capacity. Still, the PSC didn't expressly recommend that utilities build more capacity.

      "We ask you to expressly reject the proposal to adopt the unrealistic and unsubstantiated effort to reach decades back in time to justify overbuilding of the generation and transmission system," Rehwinkel said to PSC commissioners.

      Northwest Florida residents like Christian Wagley wouldn't take a hint of a potential bill increase lightly. NextEra Energy took over the Gulf Power footprint this year, causing the average customer's monthly bill to increase by nearly $30. The city of Pensacola has petitioned the PSC to review the most recent rate case, according to the Pensacola News Journal.

      "When we look at something that's going to raise our rates, the people just can't handle this and they've been very upset about this for months," said Wagley, a Pensacola resident who is the Florida/Alabama coastal organizer with Healthy Gulf.

      FPL acknowledged the opposition but doubled down on its plans, saying in post-workshop written comments that the utility "always is sensitive to impacts of its expenditures on its customers' electric rates and bills, but this proposed winterization initiative would result in only a minimal impact on customers when considering the impacts that could result from an extreme winter event like FPL's customers experienced in 1989."

      "The bottom line, without the adjustments laid out in our recommended Ten-Year Site Plan, we aren't confident we could continuously meet customer demand in an extreme winter weather event," FPL spokesperson Chris McGrath said.

      Hannah Morse covers consumer issues for The Palm Beach Post. Drop a line at hmorse@pbpost.com, call 561-820-4833 or follow her on Twitter @mannahhorse.

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