Editor’s Note: Three-term Florida state Rep. John Wood (R-Winter Haven) chairs the Florida House Insurance and Banking Subcommittee and serves on the Appropriations Committee, the Civil Justice Subcommittee, the Joint Select Committee on Collective Bargaining, the Judiciary Committee, and the Regulatory Affairs Committee.
Burnett: Florida is one of 27 states challenging the Obama administration’s Clean Power Plan in court. Do you support Florida’s suit, and, if you do, why do you support it??
Wood: I strongly support Florida’s challenge to the Clean Power Plan. Whatever your views may be on “clean power” and “climate change,” we are a nation of laws. As the elected representatives of the people, the legislative branch establishes those laws based on policy judgments it alone makes, and executive branch agencies may act only within the authority granted by the legislative branch. In this case, the [Environmental Protection Agency] has taken the federal Clean Air Act well beyond the limits set by Congress. Congress never granted the executive branch the authority to regulate emissions on a system-wide basis in the overly broad manner of the Clean Power Plan.
Aside from the legal deficiencies, the Clean Power Plan is just bad policy for Florida and many other states. For all practical purposes, the EPA has set up a framework under which power currently produced from coal plants must be displaced by increased reliance on natural gas plants, renewables, and energy efficiency and conservation. Due to the inherent limitations of the latter, the CPP puts Florida in a situation where it must fuel its power plants almost exclusively with natural gas. For a state at the end of the pipeline, this creates serious concerns about electric system reliability and exposure to price volatility. You don’t need to go back far to see how a supply disruption like the one caused by Hurricane Katrina could affect the state or to see how volatile natural gas prices can dramatically impact our electric rates. A greater reliance on a single fuel can only exacerbate these concerns.
Burnett: There are two competing amendments to Florida’s state constitution concerning solar power sales in Florida, do you support one amendment over the other? If not, how should questions about solar power be handled in the state?
Wood: As things currently stand, it appears only one of the two amendments may make it to the ballot this year, and that amendment appears to maintain the status quo with respect to solar power in Florida. Like most states, Florida maintains a traditional regulatory scheme for electric utility services, under which vertically integrated electric utilities provide retail service at regulated rates to all who request it within a specified area. Florida also allows customers who have installed solar panels—either by purchase or lease—to interconnect with their local utility and receive credit at the full retail rate for any net amount supplied to the utility’s system.
Florida defines any entity supplying electricity to the public as a utility for regulatory purposes. The Florida Supreme Court has upheld our Public Service Commission’s application of this definition to determine a sale to even a single customer will subject the seller to the state’s regulatory jurisdiction. This ruling effectively prohibits direct sales from a solar provider to a retail customer. It has stood for over 25 years, and the legislature has chosen not to alter the existing regulatory scheme to accommodate such sales.
One of the proposed amendments would modify this regulatory scheme by expressly allowing electricity sales from non-utility solar facilities to customers on the same or adjacent properties. There is some merit in allowing, for example, a building owner the liberty to install solar panels on his or her own property and supply power for purchase by the tenants on that property. However, this should be done concurrent with the existing regulatory scheme, recognizing and accounting for impacts on the electric grid that will remain the backbone for the provision of electric service. These policy considerations are best made through the legislative process.
Burnett: What are your thoughts on legislation that recently passed the Florida House to prevent local governments from banning fracking?
Wood: In Florida, the Department of Environmental Protection oversees a comprehensive program for the permitting of oil and gas drilling, production, and exploration within the state. No Florida counties or municipalities currently operate oil and gas permitting programs. To implement its program, DEP must adopt rules and issue orders to ensure all precautions are taken to prevent the spillage of oil or any other pollutant in all phases of drilling and extraction.
After a well has been drilled, a person must obtain a separate operating permit and pay a fee before using the well for its intended purpose, such as producing oil, disposing of saltwater, or injecting fluids for pressure maintenance. An operating permit is valid for the life of the well, but both the well and permit must be recertified every five years. DEP monitors and inspects drilling operations, producing wells, or injecting wells. DEP’s rules require an operator to notify DEP before beginning any workover, including [for] hydraulic fracturing or other chemical treatment performed in a well to restore, sustain, or to increase production, disposal, or injection rates.
Given the extensive permitting, monitoring, and inspection programs operated by the state, it is reasonable oil and gas operations not be subjected to additional, unnecessary regulation by local government.
H. Sterling Burnett, Ph.D. ([email protected]) is a research fellow with The Heartland Institute.