Environmentalists support keeping energy rates locked at current highs, but business interests say that would threaten their profitability.
By JONI JAMES
Published March 31, 2004
TALLAHASSEE - A controversial plan to freeze electricity rates for Progress Energy customers in order to fund pollution controls on power plants was approved by a Florida Senate committee Tuesday, but final passage appears doubtful.
Despite strong support from environmentalists, Republican Sen. Nancy Argenziano of Dunnellon, the bill's sponsor, said it could take another year to pass because of staunch opposition from business interests and lawmakers worried that freezing rates would be no bargain.
Retailers, mining interests, restaurateurs and hotel and motel operators say a rate freeze threatens their profitability because current rates are near or at all-time highs. If fuel costs decline as expected, energy customers would see electric bills reduced.
"The way this bill is written now, it isn't going to go, I know that," Argenziano told the Senate Natural Resources Committee. She said she will try to craft a compromise.
It was the third committee to express significant reservations about the bill, which also would freeze rates for Florida Power and Light in South Florida.
"I've got significant concerns about locking the residents of South Florida down at a set rate when they saw their bills increase 19 percent last year," Rep. Julio Robaina, R-Miami, said Monday during a House Energy subcommittee hearing.
The two companies' aging power plants are not covered by state and federal clear air regulations. The state Department of Environmental Protection proposed the rate freeze to the companies to clean up the plants, winning accolades from Audubon of Florida, Sierra Club and Florida Public Interest Research Group.
Under the plan, Progress Energy and FP&L would enjoy a seven-year rate freeze in exchange for agreeing to use excess money to install environmental controls on some of the state's most polluting plants.
The deal, expected to provide as much as $4.6-billion in excess capital, would also help finance some future plant construction already approved by the Public Services Commission. The PSC would have the authority to adjust rates during the seven-year period if fuel prices fluctuated more than 10 percent. Any capital not used in the seven-year period would be returned to consumers.
But Byran Stone told lawmakers Tuesday that seven years might be too long. Stone, a superintendent for PCS Phosphate in White Springs, said the mining operation's Progress Engergy bill rose 25 percent in the past year.
"If this passes, I'll have serious concerns about our viability in Florida," Stone said.
