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Just as Flagler County Resolves Against Fracking, Ratepayers Will Underwrite FPL’s Fracking Bills

| June 18, 2015

natural gas fracking florida power and light FPL

Fracking’s colors. (Cliff Muller)

Florida utility regulators gave approval Thursday for the state’s largest power company to further invest ratepayer money in natural-gas production.

But unlike a decision late last year to approve Florida Power & Light’s investment in a controversial Oklahoma fracking operation, future exploratory ventures for natural gas won’t have to earn regulatory approval on a case-by-case basis to determine if the spending is prudent.

That means FPL can invest in fracking ventures at ratepayers’ expense, making it the first utility in the nation–according to an analysis by the Public Service Commission–to spend ratepayers dollars on “non-regulated risk,” the Miami Herald reports.

The state Public Service Commission, however, agreed to revisit the new investment program for FPL in five years to determine if it should continue. Also, the regulators capped the amount that FPL, which serves roughly 4.7 million customers in Florida, can annually invest at $500 million.

The overwhelming majority of Flagler County’s power customers–56,000 of them–are customers of FPL. Just last month, the Flagler County Commission approved a resolution opposing fracking, at least in Florida. The resolution was aimed at potential state legislation that would open the door to fracking in the state. The Palm Coast City Council declined to follow suit. FPL’s investments are expected to be in the Great Plains.

While critics argue the program increases financial risks for customers, Commissioner Julie Brown contended the goal is to provide customers protection, help stabilize rates and encourage innovation.

“I think this type of program is worthy of our consideration,” Brown said. “If there was a time limit or duration on this program, just three to five years, it would allow us an opportunity to gather enough meaningful data to assess if customers are benefiting from the program.”

The Juno Beach-based FPL wanted to be able to invest up to $750 million a year. But the utility considered the regulators’ decision favorable as it can now move forward with the investment program, which it says will save customers money.

“The U.S. natural gas market is growing, it’s fast-paced, and potential partners are unwilling to wait through a lengthy regulatory process before moving forward,” FPL spokesman Mark Bubriski said after the hearing. “We can now seek out potential future projects to benefit our customers.”

PSC staff had recommended a cap of $250 million. The proposed cap would have been more than the $191 million that FPL is paying this year — the money coming through customers’ monthly fuel charges — for a joint venture with Louisiana-based PetroQuest Energy to drill for natural gas from the Woodford Shale in southeastern Oklahoma.

Fracking is a controversial process that involves injecting water, sand and chemicals underground to create fractures in rock formations, which allows the release of natural gas and oil.

PSC staff had also proposed that each proposed investment be reviewed on a case-by-case basis similar to the PetroQuest Energy venture, which is expected at its peak production to generate 2.7 percent of FPL’s overall fuel use.

The Florida Industrial Power Users Group, which represents businesses that use large amounts of electricity, was among those expressing disappointment that the commission didn’t follow recommendations to review each project on a case-by-case basis.

“This puts nearly half of Florida’s businesses and residents, who are FPL’s customers, in the risky natural-gas business in places like Texas and Oklahoma,” said Jon Moyle, an attorney for the Florida Industrial Power Users Group.

Moyle said no decision has been made about a possible challenge to the latest FPL decision. The industrial power-users group and the state Office of Public Counsel, which represents consumers in utility cases, have challenged the PetroQuest Energy deal. The appeal awaits a decision from the Florida Supreme Court.

Florida already depends on natural gas for about 65 percent of its energy. FPL believes fuel savings from future drilling projects will offset production costs.

Bubriski said the company doesn’t have additional investments lined up, as the opportunities, such as the PetroQuest project, quickly arise.

One criteria for any deal is that a “transportation path” for the gas must be readily available, which currently limits future projects to Texas, Louisiana, Oklahoma, Arkansas, Mississippi, Alabama, West Virginia, Ohio, and Pennsylvania, according to PSC records.

–Jim Turner, News Service of Florida, and FlaglerLive

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5 Responses for “Just as Flagler County Resolves Against Fracking, Ratepayers Will Underwrite FPL’s Fracking Bills”

  1. Tom Jacks says:

    If we’re stuck paying for fracking, then we should reap the benefits of fracking.

  2. Sherry E says:

    The “benefits” of Fracking include, environmental pollution and earthquakes. . . NO thanks!

    • Tom Jacks says:

      I have lived in Texas and Oklahoma where fracking is prominent. There have been minor earthquakes which have NOT been scientifically attributed to the fracking. As far as environmental pollution, that has not occurred with recent drilling advancements. Do some research using factual science before making up your obviously closed and narrow mind please. You are just spouting typical scaremongering talking points to cover your fear of scientific advancements.

  3. Sherry E says:

    This from yesterday. . . there are many, many more (scientifically proven) stories of huge problems with fracking. . . want them too?

    SALTY, CHEMICAL-LADEN FLUID leaked for two hours before anyone from Vantage Energy let Arlington city officials knew there had been an accident at the hydraulic fracturing well next to the Baptist church. It would be another 22 hours before they plugged the leak. In that time, 42,800 gallons of polluted liquid would flow into the sewers and streams of this suburban city wedged between Dallas and Fort Worth.

    That was two months ago, and this week Arlington officials announced their investigation into the accident—caused by equipment failure—was complete. After taking water and soil samples, they announced that the waste water spewed from the well did not cause any significant damage to the environment. Vantage Energy’s biggest sin was not notifying the city of the accident when it first occurred. Even with this conclusion, the spill has raised concerns in frack-friendly Texas and beyond.

    Natural gas has been touted as the bridge fuel—the climate-friendly alternative that will fuel society until green energy gets up to scale. Then faucets started catching fire in Pennsylvania. And earthquakes started shaking Oklahoma City. And evidence started accumulating that indicates the gas itself is a bigger threat to the climate than coal.

    But all these problems tie back to the processes used to produce natural gas. The question is, could these processes be fixed so natural gas fulfills its promise as a climate change panacea?

    Fracking, or hydraulic fracturing, uses high-pressure slugs of chemicals, water, and sand to crack shale formations deep underground, unlocking methane gas trapped therein. America has been fracking since the ’40s, but production didn’t really take off until 2005. That year, the Bush Administration’s EPA exempted fracking from the Safe Drinking Water Act. This opened the fracking floodgates. “Half of shale gas produced in history has been produced in the last 4 years or so,” says Robert Howarth, an environmental scientist at Cornell University.

    The EPA’s 2005 decision was based on the notion that fracking’s chemical-laden water would stay deep in the earth. About 20 to 40 percent of the fluid used to crack open a shale play comes back to the surface. Drillers typically inject it into old, dried out wells, or other deep sites. “The disposal of the fracking return fluids remains a big challenge,” says Howarth.

  4. My thoughts says:

    And since my house in Florida is basically built on organic soils… get the picture. Wonder if he Home Builders and insurance companies in Florida will think when our houses crack.

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