Nikki Fried calls for end to utilities’ energy efficiency programs while endorsing their proposed goals of zero

Nikki Fried, the top statewide Democrat in Florida, endorsed utilities’ plans for eliminating their energy efficiency goals and called for an end to utility energy efficiency programs in a brief filed with Florida utility regulators on September 20, 2019. Facing public pressure, Fried reversed her posture and began calling for utility accountability and increased energy efficiency. However, her public statements contradict her office’s filing with state regulators, according to a review by the Energy and Policy Institute. 

Fried has accepted more than $50,000 from utilities in campaign contributions in 2019.

What is FEECA?

Fried, Florida’s Commissioner of Agriculture, leads the Florida Department of Agriculture and Consumer Services (FDACS). FDACS is required to intervene and advise on the Florida Energy Efficiency Conservation Act, also known as FEECA. FEECA, passed by the legislature in 1980, is a conservation goal-setting process that occurs in Florida every five years to reduce electricity consumption and fossil fuel use while increasing renewable energy. 

FEECA sets energy efficiency goals for seven major utilities; five investor-owned and two municipal utilities. The investor-owned-utilities (IOUs) are:

• Florida Power & Light Company (FPL)
• Duke Energy Florida
• Tampa Electric Company (TECO)
• Gulf Power Company
• Florida Public Utilities Company

The municipal utilities required to file energy efficiency plans are Orlando Utilities Commission and Jacksonville Electric Authority (JEA). 

Utilities’ proposed energy efficiency goals are subject to review by the Florida Public Service Commission (PSC). The PSC will make a final decision on the goals on November 5th, 2019. 

Utilities proposed canceling energy efficiency programs despite contrary analysis

All seven FEECA utilities proposed energy efficiency goals of zero, or close to zero, in filings to the PSC. Fried stated these goals were “satisfactory” in FDAC’s filing to the PSC, echoing talking points made by utilities, such as JEA, as reported by WJCT in Jacksonville. FPL argued that energy efficiency programs are not cost-effective and will make rates go up, according to testimony from Jouliet Rhoulac before the Broward County Commission on June 11, 2019. (Video 2:46:40)  

In South Florida, Broward County staff rebuffed utilities’ rate hike argument, stating that energy efficiency programs created a net benefit to customers when properly implemented. Florida consumers could save more than $1.7 billion, according to a cost-benefit analysis cited by Dr. Jennifer Jurado, Chief Resilience Officer and Director of Broward County Environmental Planning and Community Resilience Division. She found low- to middle-income customers could save as much as $108 a year, based on 2017 data. 

Fried’s brief praised utilities’ “successful” low-income programs and outreach despite Dr. Jurado’s analysis. Over the last 3 years, TECO reached 23.4% of eligible customers for its low-income weatherization program, Duke Energy reached 14.94%, and FPL reached a dismal 0.68% of its eligible low-income customers, according to Jurado’s statement. 

Fried endorsed controversial methodology, recommended elimination of FEECA

Fried condoned the continued use of the Ratepayer Impact Measure test, known as the “RIM” method, in calculating the cost of energy efficiency programs, despite the fact that Florida is the only remaining state to utilize this methodology. The RIM method is commonly rejected by regulators because it allows utilities to count lost revenue from energy efficiency as a “cost,” thereby prioritizing shareholder profit over customer savings when determining if a program is “cost-effective”. The Florida Office of Public Counsel filed a brief arguing that the RIM methodology is not a reliable test to apply to energy efficiency programs. The American Council for an Energy-Efficient Economy (ACEEE) recommended the RIM test be eliminated in its comments filed before the PSC.

Fried stated that while energy efficiency is important, utility programs are not impactful. The brief credited building codes, federal energy efficiency standards, and customer initiative as more effective at lowering energy consumption. Given the premise that utility programs are ineffective, Fried’s memo suggested the FEECA process should be scrapped altogether, as it is “outdated and ineffective”. 

In its place, Fried’s brief recommended the adoption of a “public benefits charge” to fund energy efficiency programs in the state. That would require an act of the Republican-controlled legislature, where utilities’ political power is notorious. Fried declined to provide details about the public benefits charge or how it would materially differ from utility energy efficiency programs required through the FEECA process. Fried’s brief was silent about how a public benefits charge is in ratepayers’ best interest but utility-sponsored energy efficiency is not.

While the FDACS office does not have the statutory authority to repeal FEECA, Fried’s recommendations, if implemented, would eliminate Florida’s utility-sponsored energy efficiency programs until replacement legislation could be passed at some undefined time in the future.

Fried under fire

Southern Alliance for Clean Energy attorney George Cavros called Fried’s brief “unhelpful”, stating that it “endorsed the utility goals and their flawed methodologies and even called for the end of utility-sponsored programs.” Cavros added, “This is particularly stunning coming from an agency led by Commissioner Nikki Fried, who claims that consumer protection and climate action are a priority for her.”

Fried, via her political committee, accepted $25,000 from FPL last month, according to a report from the Florida Phoenix. The Phoenix’s Mitch Perry reported, “the August 30 contribution came as the company was waiting to hear from a state regulatory agency regarding energy efficiency goals.” The Sunrise Movement challenged her to take the “No Fossil Fuel Money Pledge” on September 25, 2019. That pledge requires politicians to reject contributions from utilities which generate over 50 percent of their electricity from fossil fuels, which would cover the major Florida utilities. 

Fried accepted a $25,000 donation from TECO in the lead-up to the company’s July approval for its Big Bend gas-fired power plant, as reported by the Energy and Policy Institute. Fried serves on the Power Plant Siting Board responsible for approving the plant’s construction. Fried was the sole vote against on the expected approval of that plant. 

Fried’s office doubled down on its position on FEECA following the Florida Phoenix article. Fried emphasized her recommendation to eliminate the FEECA goal-setting process in a September 26 statement. 

“Despite 40 years of goal-setting, our current energy efficiency and conservation process has outlived its usefulness. FEECA no longer holds utilities accountable for failing to establish meaningful energy goals,” Fried said in the statement. 

Fried’s framing around utility accountability departs from the arguments her office laid out in its brief before the PSC. Fried’s public statements may call for future efficiency legislation but, in calling for the end to FEECA, she effectively recommended the complete elimination of all utility energy efficiency programs for the state in the interim. 

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