- FPL reduced solar plans by over 500 MW, apparently moving some proposed projects to Gulf Power’s service territory in the Florida panhandle.
- FPL’s solar reductions come despite its parent company’s statements to investors about the cost-effectiveness of solar plus storage.
- Gulf is also adding costly, inefficient gas capacity and upgrades.
Florida Power & Light, after making promises to install 30 million solar panels by 2030 with a “30-by-30” campaign, is shifting the details on its initial solar commitments to customers in South and Central Florida, according to filings the utility has made with the Florida Public Service Commission. In 2019, Florida Power and Light (FPL) told regulators at the Public Service Commission (PSC) that it planned to add 8,128 MW of solar by 2028, but in a 2020 filing, despite only installing 298 MW in 2019, FPL had a lower projection of 7,300 MW of new solar by 2029, resulting in an overall reduction of over 500 MW for FPL’s solar plans. In 2019, solar was projected to be 14.5% of FPL’s total fuel mix by 2028.
FPL integrated its projections with Gulf Power projections in a combined TYSP for 2020, resulting in an overall increase of about 800 MW of solar for the combined companies through 2028 compared to the total solar capacity in the 2019 resource plans for FPL and Gulf. The combined companies projected that solar’s total contribution to their 2028 fuel mix would be 11.8%, with an additional 2.4% of the fuel mix being contributed by the utilities’ SolarTogether program. FPL did not explain the loss of over 500 MW from FPL’s service territory in the regulatory filings. The two utilities are projected to be connected via new transmission lines in the next couple of years, which an FPL spokesperson said would allow FPL customers to take advantage of solar resources in Gulf service territory later into the evening.
FPL spokesperson Jeff Ostermayer provided the following statement after the original publication of this article: “Our commitment to increasing solar energy in Florida has strengthened as the recently filed joint FPL and Gulf Power Ten Year Site Plan for the combined system projects an increase of about 800 MW of solar by 2028 compared to the 2019 resource plans. It also includes an additional 700 MW of battery storage and removes two previously planned natural gas plants. Any statement to the contrary is simply not true and we will let the facts speak for themselves on our commitment to solar energy.”
FPL customers, over 10 million in South and Central Florida, have been inundated about solar in the company’s advertisements in the last couple of years. Social media, radio, TV, and customer communications promote the company’s current 30 million solar panels by 2030 campaign, often referred to as 30-by-30. The public relations campaign, however, lacks concrete details such as the capacity and location of the 30 million panels.
NextEra, the parent company of FPL and Gulf Power, has also emphasized its investments in solar, praising renewable energy as cost effective. In the midst of the COVID pandemic, with thousands of customers facing unprecedented financial struggles, it has continued its pro-solar energy position publicly. John W. Ketchum, NextEra Energy Resources, President & CEO said in a recent earnings call: “Knowing that even if we are in a recessionary environment, being able to pivot to renewables not only brings a clean energy story but it also makes their economies more competitive and lowers bills for customers at a time they need it most.” Ketchum did not indicate why NextEra’s “clean energy story” included reduced solar projections for customers in the FPL service territory.
Moving goalposts on solar and gas
NextEra has repeatedly told investors that solar plus storage is displacing the need for new gas plants from a financial perspective. In 2019 it specifically stated that they see solar plus storage killing gas peaker plants because those plants are no longer competitive with the cost of solar + storage.
Rebecca J. Kujawa, NextEra Executive VP of Finance & CFO, reiterated that solar plus storage is the least-cost option in the company’s Q1 2020 call, though she neglected to mention the company’s plans for new combustion turbine gas plants or the gas conversion it was planning at Plant Crist by Gulf Power. FPL and Gulf’s 2020 TYSP did remove one previously projected combined-cycle gas plant from each utility’s current service area; the combined utility still projects to derive over 60% of its fuel mix from gas in 2029. Presumptive Democratic presidential nominee Joe Biden on July 14 released a plan calling for the country to transition away from fossil fuels and onto 100% clean energy (including nuclear power) by 2035, six years later.
NextEra acquired Gulf Power from Southern Company in 2019 for $4.35 billion, after FPL had announced its 30-by-30 solar pledge that January. Gulf and FPL are currently in the process of a merger, scheduled to be completed by late 2022, and they say they will file a joint rate case to the PSC in early 2021. The 2020 ten-year site plan (TYSP) filings were the first integrated site plans submitted for the two utilities. Gulf Power, under the previous ownership of Southern Company, was heavily invested in coal, with forecasts to generate over 65% of its electricity from coal in Gulf’s 2019 TYSP. NextEra plans to shift Gulf away from coal, but the utility will continue Gulf’s reliance on fossil fuels, with 938 MW of new gas capacity via combustion turbines (CT) and 600 MW of gas upgrades planned. In the combined 2020 TYSP for FPL and Gulf Power, Gulf Power told regulators that it plans to add 1,560 MW of solar power by 2024.
FPL passes the bill on to customers with minimal regulatory oversight
The approval of new power generation in Florida is governed by the Power Plant Siting Act (PPSA), which outlines the lengthy process that must be completed prior to new power plants being built. The process requires regulatory approval that the new power generation is “the most cost-effective alternative available” (403.519, Florida Statutes). Gas upgrades and combustion turbines, such as those proposed in FPL and Gulf’s TYSP, are exempt from the PPSA, meaning there is no regulatory burden for the utilities to prove that the gas additions are cost effective. Solar projects under 75 MW are also exempt.
FPL recovers its capital costs on solar by building them into its rate base and passing the charges on to its customers, plus a profit. FPL utilizes what is referred to as the Solar Base Rate Adjustment (SoBRA) or its new base rate plus tariff (“participant contributions”) model as laid out in its SolarTogether program that the PSC approved this year, to determine the costs to ratepayers. Because the utility sized all of its solar farms at just under 75 MW, circumventing the PPSA, FPL does not currently have a competitive bidding bid process for its solar projects.
Both of these methods – SoBRA and SolarTogether – allow FPL, and now Gulf, to control the entire solar project process and pass the cost onto their customers, guaranteeing an additional profit to the utility. The cost caps in that pricing scheme, while nominally protective for customers, do not provide any guarantee that they are getting the best price possible for the capital investments being made. The SoBRA model, as approved by the Florida PSC in a 2016 settlement agreement, was challenged in the Florida Supreme Court by the Florida Industrial Power Users Group in 2019 on the basis that it was not cost-effective. The Florida Supreme Court sided with FPL, reaffirming the utility’s ability to recover its costs for solar installations as long as the total costs were capped at $1,750 per kilowatt alternating current (kWac). The end result is passed along to ratepayers, even if the cost is higher than it potentially needs to be.
NextEra is the largest utility company in the country and remains one of the few without an absolute carbon reduction target, despite its claim to be a leader in renewable energy. NextEra is also heavily invested in gas pipelines throughout the country and acquired Florida City Gas, a natural gas distribution company serving Southeast Florida, in the Gulf Power acquisition.
Updated 7/14/2020 to include information about new transmission lines to connect FPL and Gulf service territory.
Updated 7/16/2020 to include:
- Comment from FPL.
- An additional sentence to clarify that the changes to the combined companies’ projections in the 2020 TYSP result in an overall increase of solar through 2028 compared to the 2019 separate TYSP plans for FPL and Gulf.
- Altered headline, which could have been misinterpreted to imply that FPL’s 2020 plan included more gas additions than the 2019 plan.
- Additional context on the companies’ removal of two gas plants from its planning projections.
- Updated context about Democratic presidential contender Joseph Biden’s clean energy standard proposal and how it compares to FPL’s projections for gas.
- A correction to language that had described the companies’ proportion of solar energy in 2028 as capacity values, when they were in fact percentages of the company’s fuel mix.