July 30, 2008
State Shuts Down FPL’s Renewable Energy Program
By Julie Patel, South Florida Sun-Sentinel
Jul. 30--State regulators on Tuesday shut down a Florida Power & Light Co. green energy program after an audit revealed most of the money collected from customers was used to pay for administrative and marketing costs.
The Florida Public Service Commission voted unanimously to end the Sunshine Energy Program, in which approximately 39,000 customers voluntarily agreed to pay an extra $9.75 per month for renewable energy projects. The state will continue its investigation into handling of the money and will decide later if it should require FPL to issue refunds or invest it in renewable energy projects in the works.
Commissioners want breakdowns from FPL and its contractors showing how much of the money went to travel expenses, a public relations consultant, salaries, office expenses and marketing.
"It could all be profit," Commissioner Nathan Skop said. "It all boils down to lack of oversight by this commission, and our failure to review the contract."
FPL officials acknowledge that three quarters of the $11.4 million collected from customers since 2004 went to administrative, marketing and management expenses, according to a commission report. Much of the rest of the money went to buy renewable energy credits from companies outside Florida.
The credits often supplement the amount of renewable energy a utility produces, helping it meet goals related to reducing greenhouse gases.
"We're grateful to the ... customers who voluntarily contributed to the program and made it one of the best performing renewable energy programs in the nation," FPL spokesman Mayco Villafana wrote in an e-mail Tuesday.
The commission's decision comes weeks after FPL faced fury from customers over an 8 percent rate hike that will take effect next week and another 8 percent increase planned for January. FPL is expected to make a case in the next few months for passing an estimated $688 million in costs to customers for solar projects.
Some utilities with green energy programs in other states spend far less than FPL on marketing and administrative costs.
In California, about 15 percent of the money collected from customers enrolled in Silicon Valley Power's Green Power program goes to administrative and marketing costs, program spokesman Larry Owens said. For Georgia Power's green energy program, about 1 percent of the money collected is spent on marketing and about 14 percent on administration.
Sunshine Energy ranks in the Department of Energy's top five green energy programs by size. But it fell behind in a requirement that it develop 150 kilowatts of solar capacity for every 10,000 residential customers enrolled in the program. By the end of 2005, when more than 20,000 customers were enrolled, FPL did not have any new solar projects completed, according to a PSC report. By the end of 2007, it had 37,184 participants and projects with 319 kilowatts of solar energy -- enough to power 44 homes.
Green Mountain Energy Co., an Austin, Texas-based contractor hired by FPL to run Sunshine Energy, defended the program.
"We started with no customers and built the program to 38,000," Paul Markovich, senior vice president of Green Mountain, wrote in an e-mail. "Very few of those customers sought us out -- we had to present them with a compelling offer in an effective way."
Julie Patel can be reached at 954-356-4667 or .
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