Inching Toward – But Not Reaching – Stronger Energy Efficiency in Florida

While many states around the country are taking giant steps forward toward greater energy efficiency, Florida is unfortunately just inching along.  Today, the Florida Public Service Commission (PSC) set energy efficiency goals of approximately 3.5% over ten years for the State's largest utilities.  This is about half of the level advocated by NRDC and Southern Alliance for Clean Energy, as well as the independent energy efficiency expert hired by the staff of the public service commission.  It's also far behind the fourteen leading states, which have approved goals between 15% and over 20% over ten years.  While the goals set by the PSC are a modest improvement over what the Florida utilities had requested, they leave a tremendous amount of customer savings, economic stimulus and greenhouse gas reductions on the table.

To highlight a positive outcome from this decision, the PSC based its goals on the right cost-effectiveness test - the total resource cost test (TRC). This test ensures that the total cost of energy efficiency measures are less than the total savings. This is a major improvement over the test that the PSC has been relying on for years, but finally discarded today- the rate impact measure (RIM) test. Perversely, the RIM test considers customer savings a bad thing - calling them "lost revenue to utilities" and preventing efficiency measures that will result in lower bills and less pollution.  

However, the PSC continued to use a second test that eliminates the most cost-effective energy efficiency measures. This test, called the two-year payback screen, simply defies logic and is a terrible energy efficiency policy for Florida. Why would you eliminate the most cost-effective measures from your goals? The evidence shows that customers still face barriers to adopting these measures and requiring utilities to help their customers overcome them - rather than more expensive measures - is the most cost-effective way to improve energy efficiency. 

Fortunately, it was clear during today's hearing that several of the Commissioners understand that this test makes no sense (one called it "arbitrary").  But when it came to voting on goals, the Commissioners only restored the top ten measures that had been eliminated. While this was a slight improvement, it left the goals at less than half of what they should be and still misses almost all of the best opportunities for achieving energy efficiency.  We are hopeful, however, that we can build on the skepticism exhibited by several of the Florida PSC's Commissioners and get Florida to join the leading states in making the leap toward greater energy efficiency.