Florida is among the fastest growing states in the country, and the state’s electricity demand is growing even faster than the state’s population. To sustain this rapid economic and population growth, Florida needs to take action to meet the resulting increases in energy needs. A particular challenge is peak demand (those times when extreme heat or extreme cold crank up air conditioners and heaters), which is growing slightly faster in recent years than regular day-to-day electricity demand, and is the most expensive type of electricity.

Florida’s unique energy vulnerabilities have also become apparent during the past several years. Florida is one of the most natural-gas-dependent states in the country, with more than a third of its electricity generated by natural gas. In December 2005, the natural gas “crisis” drove utility prices from less than $3 per thousand cubic foot to over $14, a price that hurt Floridians’ pocketbooks. The pain intensified when Hurricane Katrina disrupted natural gas supplies and jeopardized electricity generation. While the price of natural gas has fallen over the past year, it still costs over two and a half times more than it did when many of the state’s new natural gas power plants were planned. It is not the bargain we once thought. To meet the growing electricity needs, Florida’s utilities project the need for both more natural-gas- and coal-powered plants.

Opportunities for Energy Efficiency and Renewable Energy

Fortunately, another suite of energy resource options is available—slowing energy demand growth with energy efficiency resources and demand response, and diversifying the supply resources with renewables. This report explores the magnitude of the efficiency and renewable resources that are available to the state, and suggests some specific policies that could be implemented to reduce future energy demands. If all the policies we recommend were implemented, the state could reduce its projected future use of electricity from conventional sources (i.e., natural gas, coal, oil, and nuclear fuels) by about 29% in the next 15 years. Energy efficiency accounts for about two-thirds of the 2023 total 102,513 million kWh electricity reductions, with the renewable energy provisions accounting for the balance.

To make these energy efficiency and renewable energy resources a reality, we recommend eleven specific policies that the state should consider adopting: