Bioenergy, Energy Efficiency, Geothermal, Hydropower, Solar, Wind Power

FARE Files Florida PSC Comments Calling for Feed-in Tariffs

Tradable credits are the renewable equivalent of the Alaskan bridge to nowhere says a recent filing made with the Florida Public Service Commision (PSC). The Florida Alliance for Renewable Energy (FARE) filed comments with the Public PSC on August 26, 2008 suggesting that the state move towards a system of feed-in tariffs rather than going down its present path.

The Alliance is a coalition of leading Florida solar companies and the Alliance for Renewable Energy, a group formed to promote Renewable Energy Payments (feed-in tariffs) in North America.

FARE’s filing was in response to a PSC docket on the state’s proposed Renewable Portfolio Standard (RPS) using a system of Renewable Energy Credits (RECs) as the development mechanism. While many RPS policies do not use tradable credits as the sole implementing mechanism, some do.

Prepared by Florida investment banker John Burges, the filing argued that the proposed REC program, “will benefit a few large companies at the expense of many small and mid-sized” firms and do little to advance the Governor’s renewable economic and industrial development objectives. Burges contrasted the success of Germany’s feed-in tariffs in creating 250,000 jobs with the PSC’s timid proposal.

The filing goes on to suggest that a REC trading system will not achieve the goals set out by the Governor nor will it allow equitable opportunity to all in developing the state’s renewable resources. RECs are also a poor value to ratepayers in comparison to Renewable Energy Payments, Burges argued in the filing, citing several independent studies that reached that conclusion.

The proposed RECs trading market, “as currently drafted in the PSC rule are a more expensive policy and [will be] less successful in generating investments in renewables–they are the renewable equivalent of the Alaskan bridge to nowhere,” the filing said.

Internationally, feed-in tariffs have become the mechanism of choice for increasing the uptake of solar, wind, biomass and other forms of renewable energy, according to FARE.

The Alliance urged the PSC to replace the proposed credit trading system with a system of feed-in tariffs. It also argued that the RECs trading system does not work well for renewables such as solar and biomass, that predominate in Florida.

The draft PSC rule has taken heavy criticism from other groups. Leading newspapers and NGO’s have been especially critical of the draft PSC rule. The St. Petersburg Times said the “Public Service Commission’s targets for renewable energy [are] far below [Governor] Crist’s” while the Miami Herald stated that the “Public Service Commission is recommending an extremely slow buildup in the use of renewable energy.”

“The (PSC) targets aren’t ambitious enough to drive any kind of investment in renewable energy technology in Florida,” said George Cavros of the Southern Alliance for Clean Energy in a letter to the Miami Herald. The targets were “the weakest in the nation. Dead last,” he added. “Governor Crist would be 94 before his proposed 20 percent target is realized.”

“We were just flabbergasted by the one percent cost cap,” said Sean Stafford, who represents Florida Crystals, the sugar producer that operates the state’s largest renewable energy plant, in reference to another clause that would cap all renewable costs at one percent of utility revenues.

Environmental Defense Fund (EDF)
was also highly critical. Gerald Karnas, EDF’s Florida Director, has called for the introduction of feed-in tariffs as the best way to achieve the Governor’s renewable objectives.