Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,FPL Proposal for a Florida Renewable Portfolio Standard,FPSC Staff Workshop December 6,2007,FPL RPS Proposal More Analyses,In order to best ensure an optimal design and implementation of a Florida RPS,there is a need for more education,information,and analysis,RECs,Renewable availability,Renewable cost and impact on rates,Renewable effectiveness in reducing GHG emissions,2,FPL RPS Proposal Primary Objective,The primary objective should be to reduce GHG with a focus on solar and wind while increasing energy security,maintaining reliable electric service and reasonable electricity prices for customers.,Consistent with the Governors Executive Order 07-127,Requires reliance on clean resources and energy efficiency,An RPS should be a means to an end,not an end unto itself,3,FPL RPS Proposal Available Sources,Clean energy sources such as nuclear,wind,and solar,as well as carbon reductions due to energy efficiency,should be recognized and play prominent roles in meeting a Florida RPS,All sources that can contribute to the broad objective of an RPS should qualify towards meeting an RPS,4,FPL RPS Proposal Encourage Investment and Development,While all verifiable sources should be eligible to meet a Florida RPS,Florida RECs should be preferred,The price paid should be capped at 120%of the national market price produced by each technology and capped at an avoided cost of carbon of$20/MWh,5,FPL RPS Proposal Encourage Investment and Development(contd.),Allow a 2%ROE adjustment for investment in new clean/renewable resources,other than nuclear,The utility should be able to petition the FPSC for approval and cost recovery of an emerging technology that costs more than the avoided cost of carbon,but has significant potential to reduce GHG and provide benefits to customers,6,FPL RPS Proposal Encourage Investment and Development(contd.),Need up-front and expedited prudence determinations and cost recovery approvals with administrative finality,Cost Recovery can be accomplished through existing mechanisms,Contracts with developers of clean/renewable resources that go into default should be counted until a replacement facility can be contracted for and built.,7,FPL RPS Proposal Multiplier vs.Carve Outs or Set Asides,Use a multiplier of 3.5 for preferred technologies,not carve outs or set asides,Equalizes energy production for intermittent resources and allows the market to decide the best mix to meet an RPS,Costs of RECs are much higher in states with set asides,NJ Solar=$270*,National Voluntary Solar Offers=$17*,*Evolution Markets October 2007 REC Monthly Market Update,8,FPL RPS Proposal Multiplier vs.Carve Outs or Set Asides,At a Solar REC price of$200,FPL could achieve a 0.5%solar RPS under a 1%revenue cap,At a solar REC price of$20/MWh,FPL could achieve a 5%solar RPS under a 1%revenue cap,If there is a 2%set aside for solar and$200 Solar REC prices,the costs to FPL customers would be about$465 million per year,or about 4%of FPL revenue for solar alone,9,Compliance REC Prices in the USA 2002-2007,Data compiled by Berkley National Laboratories from Evolution Markets,10,FPL RPS Proposal Informing Customers,Electric customers should be informed of their contribution to meeting a Florida RPS through bill inserts or other mechanisms so customers can understand their contribution to clean/renewable energy,11,FPL RPS Proposal Targets,A thorough assessment should be conducted to facilitate the setting of appropriate targets,without interim targets,that could be met without imposing unacceptable costs or adversely impacting reliable and safe electric supply to Florida residents.,This assessment should be updated every three years,12,FPL RPS Proposal Targets(contd.),To avoid imposing unacceptable costs on customers,expenditures to meet an RPS should be capped initially at 1%of retail revenues from the sale of electricity,rising to 2%over 5 years,FPL suggests initial targets of 5%by 2021,10%by 2025 and 20%by 2030,Annual progress reports and analyses of cost and target attainability should be filed,Targets require long-term planning;interim targets should not be required,13,FPL RPS Proposal Harmonize With Federal Standard,A Florida RPS should be adjusted/harmonized with a Federal Standard should one become law,Isolationism will increase prices to FL customers,Utilities will be required to meet both state and Federal standards,14,FPL RPS Proposal Compliance,The methods and incentives for complying with a Florida RPS need to be consistent with the objective,Compliance can be met through the purchase or production of clean/renewable energy or the purchase of RECs.,In order to avoid price volatility“borrowing/banking of RECs should be allowed.,15,FPL RPS Proposal Compliance,If compliance is otherwise unachievabl