Commentary: Florida needs to update its energy efficiency rules

The Florida Energy Efficiency and Conservation Act (FEECA) calls on Florida’s Public Service Commission (PSC) to set goals every five years for Florida’s largest electric utilities to ensure that Florida is reducing electricity consumption and fossil fuel pollution while increasing clean energy. 

FEECA is meant to drive utilities’ investments in energy efficiency, conservation and customer-sited renewable energy for seven major utilities in the state, including five investor-owned-utilities (IOUs). The Legislature gives them this power, and it urges the PSC “to utilize the most efficient and cost-effective demand-side renewable energy systems and conservation systems in order to protect the health, prosperity, and general welfare of the state and its citizens.” Section 366.81, Florida Statutes. 

Despite this clear charge from the Legislature, the rules that govern these energy-efficiency goals have not been updated for 30 years. To demonstrate why this matters, consider two facts: 

105,000 Floridians wake up every morning and go to work in the energy efficiency industry. Ten percent of those workers are veterans. Efficiency jobs are a boon for economic growth — powering labor-intensive work, keeping energy dollars in state and giving consumers more money in their pockets. But this labor force has taken a big hit during COVID. Now more than ever, we need to strengthen our commitment to investing in renewable energy to bring back good jobs for more Floridians.

The next fact is even more distressing. Families in one working-class fishing village, Carrabelle, are paying an average of $374 per month in energy bills. That’s the average in a city where 34% of households live below the poverty line. People all across the state are suffering similarly. This is completely unsustainable, especially given that ACEEE recommends households spend no more than 6% of their income on energy bills. 

In order to bring more jobs into the state and relieve Florida families of onerous utility bills, the PSC will have to modernize energy-efficiency rules under FEECA. We have the tools we need to do that effectively. There is no shortage of technology to solve these problems: next-generation efficiency, rooftop solar, smart thermostats, smart appliances, demand-side management offerings, electric vehicles and battery storage, to name a few. And these technologies are even more powerful in combination than they are separately. We’re starting to see innovative pilot offerings from utilities, but we need the right foundation to bring them to scale.

Vote Solar identified three major concerns with the current draft. We urge the PSC to address at least these core issues: the utilities’ profit-making interests, the cost-effectiveness tests being used, and the need to help hard-to-reach customer groups.

First: Change how utilities make money. Efficiency may be the cheapest energy source out there, but utilities are rational economic actors. They owe a fiduciary duty to their shareholders to maximize returns. If we don’t design FEECA in a way that levels the playing field compared to traditional investment options, we will never change the dynamic that we see played out every five years. Only when utility financial value is aligned with customer benefits through financial incentives will we break the logjam. 

Second: Rationalize cost-effectiveness tests. A utility could propose a program where they hire contractors to rip insulation out of an elderly person’s home, and it would pass the Ratepayer Impact Measure (RIM) test, which the PSC currently relies on to weed out efficiency investments. This is clearly not the intention of the statute, and it needs to be fixed. It turns out that 49 other states agree. At the very least, we should be allowing a balancing of tests that only disqualifies programs that fail more than one cost-effectiveness test. 

Third: Focus on neediest customers. We need to be talking about how to structure FEECA to ensure we’re reaching hard-to-reach customer groups. Mobile home owners, rural customers, multifamily renters, small businesses and customers on fixed incomes are examples of groups who frequently don’t have access to energy-saving programs but who desperately need relief from high electric bills. This will require a shift to a more innovative approach where we can combine technologies and offerings with customer needs at the center. 

If Florida can bring its FEECA rule into the 21st century, the possibilities for this state are endless. Now is the moment for the PSC to put Floridians first by reducing their energy bills, creating job security for hundreds of thousands of people and addressing the climate crisis, which is already harming Floridians more than every other state. Contact the PSC today to submit your comments!