Florida Legislature Sending Message on Federal Energy Regs

It is commonplace for stalemates to keep policymakers from getting important things done. That is why, when it comes to crucial issues like energy policy, state legislators often need to step up to protect their states and send the federal government a message. The Florida legislature is doing just that.

Last year, President Obama directed the U.S. Environmental Protection Agency to begin a rulemaking process for limits on carbon emissions for new and modified power plants. The agenda behind this directive has never been a secret. The Obama administration wants to use the EPA to create rules that force the closure of coal-fired generation.

The reality is that EPA’s new rule creates an emissions threshold under which natural gas plants can operate, but coal-fired plants cannot. Now EPA has turned its sights toward existing coal-fired plants. As a result, hundreds of coal plants have already closed, thousands of jobs have been lost, and the future reliability of the electricity grid remains very much in question.

A memorial, known as a resolution in many states, is currently moving through the Florida House that would declare EPA’s carbon regulations a threat to the affordability and reliability of electricity in Florida. The measure, titled HB 1027, would also urge Congress to provide flexibility to Florida in reducing carbon emissions. Its sponsor, Rep. John Wood (R-Winter Haven) said, “God gave us this resource. Until we have better technology at some point in the future we need to use it to keep our economy going.”

So far, the memorial has passed through two committee stops and has one remaining before it would be sent to the floor for a vote. The Florida Senate has introduced a similar memorial, SB 1174, that passed through its first committee stop with a 9-0 vote.

Although the votes on the Florida memorials have been mainly along party lines, two Democratic legislators have broken ranks and supported them. It is expected that more will follow as legislators consider the costs to consumers in their districts if EPA regulations continue. We certainly hope they will, as bipartisan action on this important issue is a key solution to gaining an outcome that consumers can live with.

The Florida Legislature is sending an important message to Washington, DC. They’re telling federal policy makers to slow down and consider the consequences of far-reaching energy regulations. It’s time for consumers in Florida – and in all states – to get behind that message and tell their lawmakers that reliable and affordable power are worth fighting for.


Save the Date for Gulf Coast Energy Forum!

On June 5th, PACE will team with the Consumer Energy Alliance to host the first ever Gulf Coast Energy Forum in Mobile, Alabama. The event is an opportunity for energy stakeholders, elected officials, organizations, trade groups, and members of the public to discuss the importance of smart energy for the gulf coast states of Mississippi, Alabama, and Florida.

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The Gulf Coast Energy Forum will take place at the Renaissance Mobile Riverview Plaza, featuring keynote addresses from leaders such as U.S. Representative Bradley Byrne, perspective from policy makers in Mississippi and Florida, and panel discussions on important energy issues. The forum will also include an Executives Roundtable of utility leaders from across the three-state region.

A full-day event, the Gulf Coast Energy Forum is being held with the participation of the Mobile Chamber of Commerce, Baldwin County Economic Development Authority, Manufacture Alabama, Alabama Municipal Electric Authority, Alabama Rural Electric Association, and the Coalition of Alabama Waterways Associations. Sponsorship opportunities remain available for companies and organizations that would like to support this effort.

Registration and other details for this exciting event will be forthcoming shortly from PACE and other partners. Save the date today and join us for this unique event!


A Winter Warning

In recent years, a combination of aggressive EPA regulation and low natural gas prices has driven a greater reliance on natural gas for U.S. utilities, with natural gas now being used to generate more than a quarter of America’s power. While the glut of natural gas is clearly a good thing, what happens when extreme weather puts pressure on demand? That was the topic of a report from Bloomberg News last week, and the news isn’t good.

From coast to coast, chilly winter temperatures caused record demand for natural gas, creating unprecedented price signals for natural gas. As author Naureen Malik points out, the market price of power in New York from December through March rose to $165.24 per megawatt-hour, an increase of 91% from this time last year. The story was nearly identical in Boston, where market prices for power were up 86% from a year ago. Part of the problem is that almost half of New England’s power now comes from natural gas, when that fuel source represented less than a third of the region’s electricity portfolio just a decade ago. Combine that increased reliance on natural gas with the fact that New England has not added a major gas pipeline in forty years and it’s easy to see why power planners in the Northeast should be worried.

Of course, the same thing is happening in other places. In the mid-Atlantic region, spot power prices have nearly tripled. They’ve doubled in Texas. Now for the bad news. It’s probably going to get worse. Maybe much worse.

With seventy-nine coal-fired power plants due to close before next winter due to stricter environmental rules and as many as thirteen nuclear reactors that may be mothballed or retired early, the supply of U.S. baseload power is under immense pressure.

“The market is basically looking at this situation as a weather anomaly,” said Angie Storozynski of New York-based utility analyst Macquarie Capital USA Inc. “They aren’t pricing in the tightness of power generation supply sources. A number of these plants won’t be around soon.”

The closure of coal and nuclear plants likely means the portfolios of U.S. utilities will continue shifting toward natural gas. Some analysts expect natural gas to add as much as 410,000 megawatts of capacity by 2016, coming to account for as much as 40% of America’s power generation. What does this mean for the future price of natural gas and for the consumers that pay the cost?

“For those willing to write off nuclear and coal, this winter should raise a red flag,” said Stephen Schork, president of Schork Group Inc., a Pennsylvania consulting group. “We are setting ourselves up for a massive rally in natural gas.”

Hopefully the lessons from this winter will have a chilling effect on the current trajectory of U.S. energy policy. New regulations are painting us into a corner, leaving customers exposed and their utilities searching for answers. Policy makers can reverse this trend, pointing the U.S. toward diversity and a more secure and predictable future for families and businesses.