The Honorable Jeff Atwater

The Honorable Jeff Atwater

President, Florida Senate

Etc.

Re: CS for HB 7229

President Atwater:

The disturbing ignorance reflected by the House in the passage of CS for H 7229, or the misprision by House leadership, prompts me to write, in the diminishing hope that there still exist legislators who give a damn about the impact of their actions on the people they ostensibly represent.

In its alleged consideration of the matter, House leadership sought neither advice nor analysis, in fact, sought no input, from the PSC Economic Regulatory Division. This is the only body in the state qualified by expertise, competence, experience and professionalism to calculate the economic impact of proposed regulated utility legislation on the ratepaying public. Had that occurred, House members could have understood that:

- ratepayers would subsidize renewable energy from both utility and non-utility sources;

- IOUs have sole discretion to select renewables for cost recovery, with no requirement to select the most cost effective alternative;

- costs to be paid by ratepayers include avoided costs plus 2% of total revenues from 2009 retail sales;

- ratepayers are obligated to pay 100% of the costs and subsidy, but are required to give stockholders 25% of the revenues for the privilege of so paying;

- costs are to be recovered via the ECRC, but by a specified recovery mechanism inconsistent with ECRC practices;

- a provision grants a return on equity 50 basis points higher than that currently authorized, which translates into a return 150 points greater than that for a project allowed under the ECRC;

- the FPSC will not be able to verify that the majority value standard is met, in that it does not have access to the books and records of manufacturers or assemblers of renewable generating facilities;

- IOUs have the sole discretion to determine whether to construct new renewable facilities, convert existing fossil fuel generation, or contract to purchase renewable energy projects;

- IOUs have the discretion to give preference to renewable energy projects developed by an IOU affiliate;

- the extent of benefit, or allowed participation, if any, to customers constructing solar projects is unclear;

- the IOU need not actually complete and generate power from a project, but only act in good faith, if there occur reasons beyond control of the IOU for its failure, with the ratepayer still obligated for costs, to qualify for the 20% non-solar requirement;

- costs are deemed prudent if 1) the IOU uses reasonable and customary industry practices in design, procurement and construction, and 2) the life cycle cost of the facility does not exceed 75% of any of the same type constructed in Florida in the preceding 24 months, unless purchased from an affiliate.

- no competitive bidding is required;

- the bill permits double recovery of depreciation;

- there is no pass through of renewable credits to ratepayers if the facility does not exceed 2 megawatts of power, although the ratepayers will pay for the cost of the renewable energy purchases;

The above points, and others, were provided, if gratuitously, by the PSC, to House leadership, with any intelligent and informed discussion waylaid by Representative Precourt’s plea on the House floor to pass the bill as a personal favor to him. In cursory description of the bill’s provisions, he either 1) intentionally misrepresented them, or, 2) more charitably, simply just did not understand the legislation.

I do not wish the Senate to act in as uninformed a fashion as the House; thus this letter. I recall the pre-construction nuclear cost recovery amendment to the energy bill in 2006, the lack of disclosure by the sponsor on the floor, and the eventual deserved outcry by ratepayers. I believe that such a betrayal of duty should not be repeated.

I would like to believe that there are others beside the Governor who will stand up to the leadership cabal of chronic, conniving, policy selling hacks masquerading as public servants.

Responsibility for this letter is mine. I have had no consultation with my colleagues, in view of the time critical aspect introduced by session. Therefore, excuse them from revenge for any perceived slight.

Nancy Argenziano

Chair, FPSC