Bill that would ban fracking in Florida passes Senate committee

A fracking operation in North Dakota is shown here.

The Senate Environmental Preservation and Conservation Committee unanimously passed landmark legislation Tuesday  that would permanently prohibit fracking in Florida.

Senate bill  442, which passed by a vote of 5 to 0,  already has  bipartisan support from 15 Senate co-sponsors. The bill would ban unconventional “well stimulation” techniques including acid fracking and matrix acidizing.

Fracking is a method that fractures rock apart with a high-pressure mixture of water, chemicals and sand so that gas and oil are more easily released. Environmental groups disdain it because of the need for large amounts of water, and what they claim is toxic impact.

Click here to read a Palm Beach Post story about a lawsuit seeking to stop oil exploration in the Big Cypress Preserve west of Miami.

Rani Gereige, MD, President of Physicians for Social Responsibility/Florida, said,  “The health effects of fracking are well understood, there are numerous peer-reviewed scientific and medical articles that find the fracking process harms health by polluting the air, water and the environment we live in. Many of the chemicals used are known to cause cancer, are toxic to the nervous system and interfere with the body’s normal hormone functions.”
Almost 90 counties and cities have passed measures against fracking including 16 counties that have passed full ordinances prohibiting fracking within their borders. Together, these municipalities represent over 75 percent  of Florida’s population.

Aliki Moncrief, Executive Director of Florida Conservation Voters, said, “Fracking is a raw deal for Floridians who will bear the brunt of fracking operations in their backyards and the extreme risks to their drinking water, the health of their families, and our shared tourism economy. Anything but a ban is asking Florida taxpayers to bear all the burden of risk,”

Advocates from across the state also plan to gather for a massive rally and advocacy day in Tallahassee on March 22 to support a ban on fracking and the protection of Florida’s water resources.
While state law permits fracking, companies employing the technique must get state approval. But in one instance, a company used fracking without the state’s permission, records show.
In 2014, the state cited the Dan A. Hughes Co. of Beeville, Texas, for conducting an unauthorized “enhanced extraction procedure,” which the Florida Department of Environmental Protection found met the EPA’s description of hydraulic fracturing. The company had a drilling permit but did not have permission specifically for the procedure, DEP said.
The company said it wasn’t fracking because it wasn’t using the usual chemicals, just an acidic solution. It was fined $25,000 and signed a consent order without admitting any wrongdoing.

DEP spokeswoman Dee Ann Miller said Wednesday companies permitted to explore, drill or produce in Florida  include: Breitburn Operating LP, Breitburn Florida LLC, Hendry Energy Services, LLC, Petro Operating Company, Cholla Petroleum, Inc., Burnett Oil Company, Inc. and Tocala, LLC.

The department has not received any workover notices regarding any current or proposed fracking operations, Miller said.

 

 

 

Proposed bill would allow FPL to charge customers for fracking ventures

A gas fracking operation is shown here.

Last May  in a win for Florida Power & Light customers, the Florida Supreme Court reversed a Florida Public Service Commission decision allowing FPL to charge ratepayers for an oil and gas exploration and drilling venture in Oklahoma.

Now two bills introduced in the Florida House and Senate on Tuesday would change the law to allow FPL to charge customers for what the court called a speculative venture that lacked legislative authority.

 SB 1238,  sponsored by Sen.  Aaron Bean, R-Fernandina Beach, HB 1043, sponsored by Rep. Jason Brodeur, R-Sanford,  if approved, would allow utilities which have at least 65 percent natural gas-fueled generation to charge customers for its “prudent” investments in gas reserves and associated expenses.

FPL is the only electric utility in Florida that uses that much natural gas.

Jon Moyle, an attorney representing the Florida Industrial Power Users Group said Wednesday, “FPL’s latest business venture of wildcatting for oil and natural gas in Oklahoma, Texas and other states should not be funded by FPL’s captive customers.  While other oil and gas companies must compete to earn a profit, this legislation guarantees monopolistic FPL a healthy profit on its oil and natural gas drilling ventures, regardless of whether or not FPL’s ventures save ratepayers money.  The oil and gas business is very competitive and risky, and not something for which the Legislature should force FPL’s ratepayers to pay as part of their monthly electric bill.”

The PSC would adopt a rule requiring that any such  investment is projected to generate savings for customers over the life of the investment.

In December 2014 the PSC approved FPL’s request to collect the cost of its $191 million fracking venture with PetroQuest in Oklahoma’s Woodford Shale region from its customers through fuel charges on their bills.

Then in June 2015, the PSC gave FPL the go-ahead to invest as much as $500 million a year in natural gas drilling operations, effectively making the utility and its customers partners in what can be a risky business. FPL uses natural gas to provide about 70 percent of the fuel to run its power plants.

FPL was ordered to refund customers $24.5 million it had spent on the Woodford project.

 

 

 

 

FPL has completed three new power plants, won’t need another until 2024

FPL commissioned its new Riviera Beach plant in 2014. Staff photo by Richard Graulich
FPL commissioned its new Riviera Beach plant in 2014.
Staff photo by Richard Graulich

Since 2013 Florida Power & Light Co. has built new combined-cycle gas-fired power plants at Cape Canaveral, Riviera Beach and Port Everglades at roughly $1 billion apiece,  and a similar plant in Okeechobee is slated to go into service in 2019.

The company won’t need another major new power plant until 2024, and that will also be a combined-cycle plant that uses natural gas to produce power,   FPL’s Steven Sim, senior manager of resource assessment & planning, told regulators Wednesday.

FPL also plans to add 300 megawatts of utility-scale solar power to its fleet by 2021. Locations for both the new solar and new natural gas plants have not been determined, Sim said.

Wednesday, Juno Beach-based FPL and the state’s other investor-owned utilities, Duke Energy Florida, Gulf Power and Tampa Electric Co., gave the Florida Public Service Commission an overview of their plans through 2025.

FPL, with 4.8 million residential and commercial accounts, projects it will have approximately 5.5 million accounts by 2025. The state’s population is forecast to grow by 3 million people to 23 million by then, FPL stated in a report filed with the PSC.

Statewide, natural gas, which is a fossil fuel,  is projected to remain steady as the fuel for  65 percent of electricity generation over the next 10  years, and renewable energy, such as solar and wind, will grow to 2 percent , said Stacy Dochoda, president and CEO of the Florida Reliability Coordinating Council.

FPL’s use of natural gas to power its plants is slightly higher at 68 percent this year. It’s projected to hit 70 percent in 2017, and remain close to that through 2025.

Combined-cycle plants, which produce energy by combustion of natural gas in a turbine and by using the turbine’s exhaust to make steam, and solar photovoltaic plants are viewed as the two most cost-effective options, Sim said.

“The more we study PV, the more we become convinced it is becoming increasingly competitive,” Sim said.

The cost of PV modules — a packaged, connected assembly of solar cells — is projected to continue to decline.

FPL is adding three new PV facilities of approximately 74.5 megawatts each this year.  As a result, FPL’s solar generation capacity will triple to 333 megawatts from 110 megawatts.

Federal and state energy efficiency, as well as savings from the use of compact fluorescent  bulbs and LEDs, are also impacting FPL’s forecasted future demand and energy requirements. By 2025 FPL’s forecasted summer peak load is projected to be reduced by more than 1,800 megawatts and its annual energy consumption by more than 8,700 gigawatt hours, FPL said in its report.

 

 

Florida SE Connection gas pipeline construction to begin, will supply FPL

This map shows the pipeline's route.
This map shows the pipeline’s route.

Federal regulators have given the go-ahead for construction to begin on the southern portion of a new $3.2 billion natural gas pipeline slated to supply Florida Power & Light Co.’s  South Florida plants.

Friday, the Federal Energy Regulatory Commission granted Florida Southeast Connection LLC’s request to commerce construction. The company is a subsidary of FPL’s parent company, NextEra Energy Inc., Juno Beach.

Florida Southeast Connection spokesman Dave McDermitt said, “Final approval of this vital underground natural gas pipeline is a significant milestone for Florida Southeast Connection, FPL customers and the Florida economy.

“This culminates a comprehensive, 2.5-year review by numerous federal, state and local government agencies to ensure the project meets or exceeds strict environmental and other regulatory requirements,” McDermitt said. “We look forward to beginning construction activities soon so that Florida can begin to benefit from an additional and necessary supply of clean, U.S.-produced natural gas.”

Florida Southeast Connection is the 126-mile southernmost portion of a 685-mile pipeline that originates in Alabama. It will go through Osceola, Polk, Okeechobee. St. Lucie and Martin counties and end at FPL’s Martin County plant near Indiantown.

FPL uses the fossil fuel to provide 71 percent of the fuel to run its power plants.

The northernmost 515 miles, known as Sabal Trail, is a joint venture of Houston-based Spectra Energy Partners, LP, FPL’s parent company NextEra Energy Inc., Juno Beach, and Duke Energy of Charlotte, N.C.

The project also includes Transcontinental Gas Pipe Line Co.’s 48-mile Hillabee Expansion Project and six new compressor stations.

Sabal Trail spokeswoman Andrea Grover said Friday that portion is expected to be under construction later this month.

It’s anticipated the entire pipeline will be in service by mid-2017.

On June 28 and August 10, FERC authorized Sabal Trail to mobilize its construction contractors and begin pre-construction activities at certain areas along the project in advance of construction, Grover said.

“We are currently performing the FERC authorized pre-construction activities including surveys and gopher tortoise trapping and relocation activities,” Grover said.

FPL uses the fossil fuel to provide 71 percent of the fuel to run its power plants.

The project has been widely opposed by environmental groups and residents of the communities along the route. They have raised concerns that the pipeline will harm the Floridan Aquifer, which supplies water to millions of people in Florida and Georgia, and could damage wetlands, scenic rivers and wildlife habitat and pose a safety threat.

In February FERC issued a certificate of public convenience and necessity for the pipeline.

Regulators required Florida Southeast Connection to purchase wetland mitigation credits.

 

 

 

 

 

Regulators allow utilities to continue but reduce natural gas hedging

Florida Power & LIght's Riviera Beach power plant runs on natural gas. Staff photo/Lannis Waters
Florida Power & Light’s Riviera Beach power plant runs on natural gas. Staff photo/Lannis Waters

Florida Power & Light Co. customers and those of the state’s other three investor-owned utilities will have lost more than $6.6 billion by the end of this year because the utilities have purchased much of their  natural gas through hedging since 2002 rather than on the open market.

Despite those massive losses, Thursday, the Florida Public Service Commission voted to allow hedging to continue but approved the utilities’ request to reduce the amount of fuel purchased through hedging by up to 25 percent this year and by 25 percent in 2017 and 2018.

The move  will reduce customers’ exposure and could ultimately result in less of a loss moving forward. Utilities pass on the cost of fuel to their customers.

Attorneys for  the Office of Public Counsel, which represents consumers,  and the Florida Industrial Power Users Group once again called  for the commission to stop allowing the utilities to hedge on natural gas purchases.

Hedging, which allows utilities to lock in prices in long-term contracts,  began in 2002 following volatile natural gas prices in 2000 and 2001. In December the commission voted to allow hedging to continue, but said they wanted to look at how potential losses to customers might be minimized.

FPL’s 4.8 million customers have borne the greatest share of the losses at more $4.2 billion, since the utility is much larger than Duke Energy Florida, Gulf Power and TECO.

FPL had been projected to incur hedging losses of $490 million in 2015, but instead lost $504 million. The company buys about 60 percent of its natural gas through hedging. It uses the fossil fuel to provide 71 percent of  the fuel to run its power plants.

FIPUG attorney Jon Moyle told the commission, “The facts today are much different than they were in 2001 and 2002. We think it’s time to do away with hedging. It is not working well for consumers. It’s a big loser for consumers.”

There’s an abundance of cheap natural gas available today. Moyle said that the plentiful supply plus the losses make a compeling argument as to why the commission should simply order natural gas hedging to stop.

Associate Public Counsel Erik Sayler said that this year  the four companies  are projected to lose another $560 million due to hedging, which will bring the losses to more than $6.6 billion.

Sayler reiterated the position the OPC took last year that hedging should be discontinued  due to the enormous losses the utilities have incurred and passed on to ratepayers.

Moyle said that in 2015 the utilities lost $820 million due to hedging, and if that had been reduced by 25 percent, losses would have been $615 million.

Commission chairwoman Julie Brown and Commissioners Art Graham and Ronald Brisé asked whether a 50 percent hedging reduction might work.

FPL attorney John Butler said, “I am not in a position to agree to 50 percent sitting here at counsel’s table. We are hedging now for 2017, and we are already pretty deeply into it.”

 

 

 

 

 

 

 

Florida Supreme Court says FPL can’t charge customers for gas drilling

 

Shale rigs similar to this one are used to drill for gas in Oklahoma.
Shale rigs similar to this one are used to drill for gas in Oklahoma.

In a win for Florida Power & Light customers, the Florida Supreme Court today reversed a Florida Public Service Commission decision that allowed FPL to charge ratepayers for an oil and gas exploration and drilling venture in Oklahoma.

The PSC exceeded its statutory authority when it approved recovery of FPL’s costs and investments in the Woodford Project in Oklahoma’s Woodford shale region,  the court said.

» Read the Florida Supreme Court’s decision

The court said in its decision that the PSC considered the  recovery of costs of the drilling venture through fuel charges paid by FPL customers to be a long-term physical hedge.

“Treating these activities as a hedge requires FPL’s end-user consumers to guarantee the capital investment and operations of a speculative oil and gas venture without the Florida Legislature’s Authority. Accordingly, we reverse,” the court wrote in its 20-page decision.

FPL officials did not immediately respond to a request for comment.

In December 2014 the PSC approved FPL’s request to collect the cost of its $191 million gas drilling venture with PetroQuest in Oklahoma’s Woodford Shale region from its 4.8 million customers through fuel charges on their bills.

Then in June 2015 the PSC gave FPL the go-ahead to invest as much as $500 million a year in natural gas drilling operations —effectively making the utility and its customers partners in what can be a risky business. FPL uses natural gas to provide 72 percent of the fuel to run its power plants.

Three of the PSC’s orders on the issue were appealed by the Office of Public Counsel, the Florida Retail Federation, and the Florida Industrial Power Users Group.

“It is a good day for FIPUG members and other consumers. They will not be forced to pay for risky oil and natural gas ventures in Oklahoma and elsewhere,” said Jon Moyle, a Tallahassee attorney who represents FIPUG.

The court also said that statutes allow utilities to charge customers only for costs arising from the “generation, transmission or distribution” of electricity, and the Woodford project falls outside of the purview of an electric utility.

Whether advance cost recovery of speculative capital investments in gas exploration by an electric utility is in the public interest is a policy determination that must be made by the Legislature, the court said.

In rendering the decision, six justices agreed with the reversal and Justice Charles Canady dissented.

 

 

 

 

 

Sabal Trail pipeline’s adverse impacts will be mitigated, agency says

The Withlacoochee River is among those the pipeline could affect.
The Withlacoochee River, which originates in Central Florida’s Green Swamp,  is among those the pipeline could affect.

A $3.2 billion natural gas pipeline slated to supply Florida Power & Light’s South Florida plants would have some adverse environmental impacts, but those impacts would be reduced to less-than-significant levels with proposed mitigation measures,  federal regulators said Friday.

The Federal Energy Regulatory Commission’s staff  released the final environmental impact statement for the Southeast Market Pipelines Project. If approved, the 685-mile pipeline will originate in Alabama and include the separate but connected  Hillabee Expansion, Sabal Trail and  Florida Southeast Connection projects. It will include six new compressor stations as well.

The project has been widely opposed by environmental groups and residents of the communities on the route. They have raised concerns that the pipeline will harm the Floridan Aquifer which supplies water to millions of people in Florida and Georgia, could damage wetlands, scenic rivers and wildlife habitat and poses a safety hazard to residents.

“The Sunshine State should not be relying on dangerous fossil fuel infrastructure.  No mitigation plan can truly account for the damage to a community if a hazardous incident occurs.  As of 2014 there were over 700 pipeline incidents that had been reported, and many more that have gone undocumented.  When will our agencies learn that our water, wetlands, and communities are not for sale to the highest bidder?”  said Johanna de Graffenreid, Coastal Campaign Organizer at Gulf Restoration Network, New Orleans.

Steven Caley, an Atlanta-based GreenLaw attorney representing Sierra Club and several River Keepers groups,  said of FERC, “They’ve never seen a pipeline they didn’t like.”

Caley questioned how the FERC staff can say the pipeline will be environmentally sound when it has not even seen the mitigation plans.

“They’ve had thousands of comments and have had several experts weigh in from the parties who have gone to the time and expense of giving them analysis on the effect the pipeline could have. They basically have ignored everything. They have not given any credence to anything anyone has said,” Caley said.

“But instead they have relied completely on everything Sabal Trail has given them. FERC has shown it is nothing but a lapdog. They get all their funding from the natural gas industry, so what do you expect?” Caley said.

Juno Beach-based FPL and parent company NextEra Energy officials have said they expect the pipeline to be in service by mid-2017. It will bring gas from a Central Florida hub to FPL’s Martin County plant, then to its plants in Rivera Beach and at Port Everglades.

A 480-mile portion of the pipeline, the Sabal Trail Transmission Project, is a joint venture of a subsidiary of Juno Beach-based FPL’s parent company, NextEra Energy Inc., and Houston-based Spectra Energy.
The southern 126-mile leg is proposed by Florida Southeast Connection, another NextEra subsidiary.

The conclusions and recommendations in the EIS are those of FERC staff, with input from the U.S. Army Corps of Engineers. The Army Corps will also present its own recommendations and conclusions.

FERC said the main reasons for its conclusions are:

    • each Applicant would minimize impacts on the natural and human environments during construction and operation of its facilities by implementing the numerous measures described in their respective construction and restoration plans;
    • the majority of the proposed facilities would be collocated within or adjacent to existing rights-of-way;
    • all of the proposed facilities would be constructed and operated in compliance with federal standards, requirements, and thresholds including U.S. Department of Transportation materials requirements and Environmental Protection Agency air emissions standards;
    • a high level of public participation was achieved during the pre-filing and post application review processes and helped inform our analysis;
    • environmental justice populations would not be disproportionately affected by the SMP Project;
    • the horizontal directional drilling crossing method would be utilized for most major and sensitive waterbodies, the majority of other waterbodies would be crossed using dry crossing methods, and the Applicants would be required to obtain applicable permits and provide mitigation for unavoidable impacts on waterbodies and wetlands through coordination with the USACE and state regulatory agencies;
    • we would complete Endangered Species Act consultations with the U.S Fish and Wildlife Service prior to allowing any construction to begin;
    • we would complete the process of complying with section 106 of the National Historic Preservation Act and implementing the regulations at 36 CFR 800 prior to allowing any construction to begin; and
  • environmental inspection and monitoring programs would ensure compliance with all construction and mitigation measures that become conditions of the FERC authorizations.

The FERC Commissioners will take into consideration staff’s recommendations when they make a decision on the Projects.

Here are links to the EIS documents: