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State Energy Efficiency Policy Database

Florida

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Summary

Florida utilities with sales of 2,000 GWh or more are subject to the Florida Energy Efficiency and Conservation Act (FEECA). This act requires each utility to implement cost-effective energy efficiency programs and to conduct energy audits. It also includes improving the efficiency of generation, transmission and distribution systems.

FEECA was amended in 2008 and now requires the state to conduct energy efficiency potential studies. ITRON completed a study in 2008 and reported a technical potential savings of ~34%. This includes both photovoltaic solar technology and energy efficiency. In December 2009, the The Florida Public Service Commission (FPSC) set energy efficiency goals based on this study. Some of these goals have since been adjusted.

The FPSC reviews and approves utilities’ energy efficiency plans. According to FEECA, the FPSC may allow investor-owned utilities to earn an additional return on equity of up to 50 basis points for saving 20 percent or more of their annual load-growth via energy efficiency . The FPSC may also assess penalties if utilities do not meet the goals.

Since 1980, when FEECA was approved, utility programs have deferred the need for eleven 500 MW power plants. According to the Energy Information Administration (EIA), Florida electric utilities saved 364,599 MWh in 2009.  The Consortium for Energy Efficiency reports 2010 electric program budgets totaling $123.2 million and natural gas budgets of $6.5 million. The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found from the tables on the left.

Natural gas programs are available for residential and commercial customers in Florida and are required by both orders and legislation. These programs are approved by the FPSC and are implemented by the utilities.

Florida has considered implementing decoupling, which reduces the financial disincentive for utilities to support energy efficiency by separating utilities’ profits from their levels of sales. In 2008, the FPSC decided that existing annual cost recovery clauses made it unnecessary to introduce decoupling. In December 2009, the Florida Public Utility Commission set goals for its electric utilities at 3.5% energy savings over 10 years. This rule was rolled back in July 2011. 

In 2007, ACEEE researched Florida’s energy efficiency potential. ACEEE reported that energy efficiency improvements could offset the majority of Florida’s predicted load growth over the next 15 years, leading to impressive savings for Florida residents and businesses.  That report can be found here.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Customer Energy Efficiency Programs

The 1980 Florida Energy Efficiency and Conservation Act requires utilities to implement cost-effective energy efficiency programs. Florida utilities establish demand-side management (DSM) conservation goals for summer and winter demand (MW) and annual energy sales (GWh). The Florida Public Service Commission reviews DSM goals for each utility at least once every five years and sets demand and energy sales goals that extend 10 years into the future. Within 90 days after the Commission issues its order approving a utility’s DSM goals, that utility must file a plan with the commission for approval. The utilities are also required to file annual reports on their DSM programs.

Most of these DSM plans include residential, commercial, and industrial sectors. The utilities provide conservation education programs to their customers. They also typically offer incentives to encourage customers to install more efficient equipment. The utilities distribute the costs of the programs by adding a surcharge for all customers. The surcharge varies by utility.

Natural gas programs are available for residential and commercial customers in Florida and are required by both legislation and orders. Natural gas energy efficiency is required by the Florida Statutes (Section 366.81-82). It is also required by FPSC Rule 25-17.009.

Investor-owned electric utilities may recover reasonable expenses, including customer incentive costs, forDSM programs approved by the Florida Public Service Commission. The utilities recover these costs by adding surcharges to customer bills. Also, the FPSC conducts Energy Conservation Cost Recovery (ECCR) proceedings each November and determines an energy conservation cost recovery factor to be applied to bills during the next year. This factor is based on each utility’s estimated conservation costs for the next year.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Energy Efficiency Resource Standards

Summary: Due to insufficient funding, energy reduction targets cannot be implemented

The Florida Energy Efficiency and Conservation Act (FEECA -- Sections 366.80-85 and 403.519 of the Florida Statutes) established the authority for the Florida Public Service Commission to set targets for energy and peak demand savings, and to require each affected utility to develop and implement energy efficiency programs.  The Public Service Commission must revisit the goals at least every five years.  Specific electricity and peak demand savings goals were set for each of the seven "FEECA utilities" most recently in 2009 and revised (for Florida Power & Light and Jacksonville Electric Authority) in 2010. The Commission established absolute annual savings targets that, taken together, amount to 572 GWh of savings in 2010, ramp up to 843 GWh in 2015, and fall again to 661 GWh in 2019.  This is equivalent to cumulative savings of 7425 GWh over the 10-year period. The Commission also set summer and winter peak demand savings goals.

In 2011, the Commission declined to approve the DSM plans submitted by Florida Light & Power and Progress Energy Florida, and required the submission of modified plans. In both cases, these modified plans were also not approved, and the Commission ordered that these two utilities continue to run programs established under DSM plans from 2004, as these programs were still estimated to attain the goals established by FEECA.  


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August 12, 2013


Alternative Business Models

Florida does not have decoupling or lost revenue adjustment mechanisms in place for electric or natural gas utilities. HB 7135 instructed the Public Service Commission to analyze utility revenue decoupling and provide a report and recommendations to the governor and the legislature in December 2008. In 2008, the FPSC decided that existing annual cost recovery clauses made it unnecessary to introduce decoupling, though gas utilities could still request decoupling in a rate case. In 2009 the FPSC concluded that utilities may request an increase in rates in order to maintain a reasonable rate of return when efficiency programs reduce revenues, but none have been authorized (See Final Order PSC-09-0855-FOF-EG).


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August 9, 2013


Reward Structures for Successful Energy Efficiency Programs

HB 7135 authorized the commission to provide financial rewards and penalties and to allow gas and electric investor-owned utility to earn an additional return on equity for exceeding energy efficiency and conservation goals. Specifically the FPSC may allow utilities to earn an additional return on equity of up to 50 basis points for exceeding 20 percent of their annual load-growth through energy efficiency measures. The FPSC may also assess penalties if utilities do not meet the goals. No utilities have yet requested the additional return.


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August 9, 2013


Energy Efficiency as a Resource

In December 2006, the FPSC endorsed the National Action Plan for Energy Efficiency, which recommends making energy efficiency a high-priority resource. 

Florida does not have an integrated resource planning (IRP) statute or rule, but it does have a filing requirement for long-term energy plans.

For more information on energy efficiency as a resource, click here.


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August 12, 2013


Evaluation, Measurement & Verification
  • Cost-effectiveness test(s) used: TRC, PCT, RIM
  • Uses a deemed savings database: no

The evaluation of ratepayer-funded energy efficiency programs in Florida relies on both legislative mandates (Florida Statutes Sections 366.82(10)and 377.703(2)(f)) and regulatory orders (Rule 25-17.0021). Evaluations are administered by each utility. Florida has established formal rules and procedures for evaluation, which are stated in Rule 25-17.0021. Florida uses three of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC), Participant (PCT), and Ratepayer Impact Measure (RIM). The rules for benefit-cost tests are stated in Rule 25-17.008. Florida specifies the TRC to be its primary cost-effectiveness test. These benefit-cost tests are required for total program level screening.


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August 9, 2013