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Bills aim to reduce Progress pollution

LOUIS HAU
Published March 9, 2004

Twin House and Senate bills introduced last week in the Florida Legislature would sharply reduce air-pollution emissions from Progress Energy Florida power plants in west-central Florida.

But critics say consumers could be stuck with excessively high electricity rates to pay for the improvements.

The bills were introduced by Sen. Nancy Argenziano, R-Crystal River, and Rep. Charles Dean Sr., R-Inverness, at the request of the state Department of Environmental Protection, which wrote the legislation. They would require Progress to halve nitrogen-oxide and sulfur-dioxide emissions at four coal-fired generators at its Crystal River complex in Citrus County. That complex is one of the state's largest and most polluting power-generation sites.

The legislation also would require Progress to cut nitrogen-oxide emissions by about 20 percent from oil and natural gas generators at its Bartow power plant in St. Petersburg and its Anclote plant in Holiday. In addition, Florida Power & Light of Juno Beach would be required to cut emissions at more than half a dozen power plants.

The DEP drafted the bill in consultation with Progress and FPL. TECO Energy Inc. of Tampa and Gulf Power Co. of Pensacola wouldn't be affected because they already have cut emissions through arrangements reached with federal and state regulators.

"If legislators want reduced emissions and the environmental benefits that go with them, we believe this is the best way to achieve that goal," said Progress spokesman Aaron Perlut, emphasizing that accelerating pollution-control improvements won't increase customer bills.

But critics counter that customers may still end up paying more for their electricity than they otherwise would because the pollution cleanup rules out rate reductions.

The legislation would freeze base electricity rates for Progress and FPL for at least five years. It also would freeze customer charges for the cost of fuel, environmental compliance and conservation programs at 2004 levels for seven years, unless the total cost of those items swings by more than 10 percent in one year. If that happened, the Public Service Commission would have a cost-adjustment hearing to get the utilities to refund or collect those amounts.

The provisions worry consumer advocates, who say rates might well decline if not for the legislation.

The cost of fuel is expected to go down in coming years, and those savings would normally be passed along to consumers through rate reductions. Also, the PSC might pressure Progress and FPL to reduce their base rates after current agreements with the state expire in 2005, according to Tallahassee attorney Mike Twomey, who heads the consumer-advocacy group Florida Utility Watch.

"I appreciate and believe the motivations of the sponsors to achieve a higher quality of clean air, but I'm suspicious of the utilities' (motives)," he said.

John McWhirter, a Tampa attorney representing the Florida Industrial Power Users Group, said, "It looks like a cornucopia of benefits for utilities that will prove costly to customers."

The DEP drafted the legislation out of concern that population and industrial growth and increasing motor vehicle emissions could cause Tampa Bay and Orlando area counties to fall short of federal clean air standards in the next five to 10 years, according to Allan Bedwell, DEP deputy secretary for regulatory programs and energy.

Violation of clean-air standards would force local governments and businesses to pay for expensive pollution-control measures, Bedwell said.

Argenziano said she was open to amending the legislation to strengthen consumer protections if necessary. She said she plans to meet with PSC staff members soon to discuss the bills' ramifications for ratepayers.

- Louis Hau can be reached at hau@sptimes.com or 813226-3404.

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