Florida Commission Rejects Claim Higher Energy Costs Save Money

Published November 1, 2009

The Florida Energy and Climate Commission has rejected a proposal by environmental activists to claim higher-priced renewable power actually saves consumers money.

By a 6-2 vote, the commission, which is bound by Florida law to operate under a “least-cost strategy,” rejected the activists’ argument that high prices should be counted as consumer cost savings because they force consumers to forgo using electricity because it is too costly, and thus would satisfy the “least-cost” legal requirement.

Testifying before the commission, environmentalists acknowledged utility rates would increase as a result of conservation measures, but they countered electric consumers’ bills ultimately would fall because they would use less energy.

Charging for Carbon Emissions

While the Florida Energy and Climate Commission rejected the assertion high prices save consumers money, it nevertheless caved in to other activist demands. For the first time, the commission recommended assigning a cost to carbon emissions and recommended utilities give incentives to induce consumers to purchase more-expensive renewable power.

“After much debate and deliberation, the Florida Energy and Climate Commission reached a very balanced decision that for the first time recognized greenhouse gas as a ‘cost’ in setting efficiency goals,” Jeremy Susac, the commission’s executive director and author of its recommendations, told the press after the vote. “This decision resulted in significantly increased availability of energy efficiency solutions, including the use of solar energy, while still complying with the ‘least-cost strategy’ mandated by Florida law.”

Objecting to Higher Prices

Bob McClure, president and CEO of the James Madison Institute in Tallahassee, Florida, expressed displeasure with the commission’s recommendations and Florida’s energy policy decisions in general.

“Soon after Florida Gov. Charlie Crist (R) took office in 2007, he appointed his commission on energy and climate change and staged a Miami conference headlined by self-appointed environmentalists such as Robert Kennedy Jr. and California Gov. Arnold Schwarzenegger,” McClure said.

“The Florida Legislature was rightly concerned, and it wisely intervened to insist that the commission take into account the economic consequences of any energy mandates it recommended,” McClure explained. “That was a reality check because so-called ‘alternative’ energy sources such as wind power and solar power are not yet economically feasible in Florida, and may never be.

“Should Florida’s government force the premature abandonment of cost-efficient energy sources, such as oil and natural gas, in favor of less-efficient energy sources like wind turbines and solar panels, the resultant spike in energy prices would be likely to cost far more jobs than the so-called ‘green economy’ would create,” McClure added. “Therefore, in any calculations of the economic costs and benefits, the economic benefits from, say, allowing more drilling for oil and gas in the Gulf far outweigh the fanciful estimates of the benefits from ‘green’ jobs such as installing solar panels or removing the dead birds and bats killed by wind turbines.”

Drew Thornley ([email protected]) writes from Texas.