Florida Future of Renewable Energy

1. FloridaFuture of Renewable Energy Tom Flowers, CMI Florida Chapter IAAO Personal Property Conference Thursday January 15, 2009

2. Agenda – Presentation Topics • Florida’s Current Fuel Mix • Governor Crist’s Renewable Energy Involvement • Energy Bill 2008 – Renewable Highlights • National Renewable Portfolio Standards • Florida’s Push for Renewable Portfolio Standards • Florida Power & Light’s Involvement • Various Technologies Being Considered • Renewable Energy Valuation – Regulated Utilities

3. United States vs. Florida – Fuel Mix • Source: U.S. Department of Energy, Energy Information Administration, Electric Power Monthly, March 2006 taken from Presentation to House Energy Committee, March 21, 2007, Jim Dean, Florida Public Service Commission

4. Florida’s Renewable Capacity - 2005(1,115 megawatts) No Climate Benefit • Total Florida Renewable Capacity: 1,115 MW • Total Florida Electric Generation Capacity: 53,120 megawatts • Source: FPSC, Review of 2006 Ten-Year Site Plans for Florida’s Electric Utilities, December 2006 taken from Presentation to House Energy Committee, March 21, 2007, Jim Dean, Florida Public Service Commission

5. Governor Crist’s Initiatives • Signed 3 Executive Orders in 2007 to Reduce Greenhouse Gases • “Serve to Preserve Florida Summits on Global Climate Change” • Promote Solar and Wind Energy in Florida • Signed into law HB 7135 (2008 Comprehensive Energy Bill) – Unanimous Legislative Support • By February 1, 2009, Florida to have Renewable Portfolio Standard

6. Comprehensive Energy Bill - 2008 • Far Reaching Impact of Energy Bill • Florida Utilities • Construction and Transportation Industries • Renewable Energy Developers • Biofuel Companies • Solid Waste and Recycling Companies • Local Governments

7. Comprehensive Energy Bill - 2008 • Power Plant Siting Act – Allow for Siting of Low Carbon-Emitting Plants • Government to Lead by Example • State Contracts have “Green” Bias/Preference • Cap & Trade – Renewable Energy Credits • RPS for Regulated Utilities • Beef Up Energy Efficiency Code for Builders • Fuels to Contain 10% Ethanol by 2010 • Dissolved the Florida Energy Commission – Created 12 Member FL Energy & Climate Comm.

8. Renewable Portfolio Standards • Regulatory Policy “encourages” development of Solar, Wind, Biofuels, Biomass, & Geothermal • 29 States Currently have a Portfolio Standard • Mandatory vs. Voluntary • Majority of States Have “Firm Policy” • Approximately 10 States Have “Firm Standards”

9. RPS Example - Oregon Source: ICF International • RPS table notes: • Base demand GWh from historical EIA data; projection assumes an average growth rate of 1.48% • RPS applies only to utilities with generation greater than 3% of the total state generation. Calculation only includes • utilities that match the criteria. • Bill Text: http://www.leg.state.or.us/07reg/measpdf/sb0800.dir/sb0838.en.pdf

10. Florida – Future of Renewable Energy • Florida [State Renewable Goal] – • On June 25, 2008, Governor Charlie Crist signed into law House Bill 7135, which requires the Public Service Commission to develop a Renewable Portfolio Standard (RPS) by February 1, 2009. Each electricity provider, except municipal utilities and rural cooperatives, must supply an as-yet unspecified amount of renewable energy to its customers. Although HB 7135 does not specify the RPS target, Governor Crist’s Executive Order 07-127 from July 13, 2007 requires utilities to produce at least 20 percent of their electricity from renewable resources. Press ReleaseHB 7135

11. Florida – Future of Renewable Energy Mandatory RPS – 29 States Renewable Goal – 5 States Florida Currently has a goal of 20% renewable energy, but no mandatory time frame. • Source: Pew Center on Global Climate Change

12. FPSC Workshops - RPS • Florida Public Service Commission Recommends: • Cost Recovery of Reasonable & Prudent Purchase of In-State Generated REC’s Through Clause • Cost Recovery of Renewable Power Plant Expenses Through Rate Making Model • Loopholes for Utilities if Costs to Meet RPS are too High • Renewable Development Incentives Offered on a cCse-by-case Basis • Review of RPS Targets Every 5 Years

13. FPSC Workshops - RPS • Florida Public Service Commission Recommends: • Annual Renewable Sales Must Meet Following: • By 2010, 2% of previous year’s retail sales • By 2017, 3.75% • By 2025, 6% • By 2050, 20% (Big Jump for someone else to worry about) • All Utilities get same treatment • Use FL Stat. Sec. 366.92 (2) to define qualifying renewables • Hydrogen, Biomass, Solar, Geothermal, Ocean, Waste Heat, and Hydro

14. FPL Perspective - RPS • Florida Power & Light Recommends: • Recovery of Costs using the following: • Energy efficiency measures ECRC • Clean resources Capacity Cost Recovery Clause with an equity adder of 2% • RECs Fuel clause • Research & Development Capacity Cost Recovery • Higher Capital Recovery Maximums – Tighten Loopholes • Renewable Development Incentives Offered to all Entities with a Preference to Wind & Solar • Review of RPS targets every 3 Years

15. FPL Perspective - RPS • Florida Public Service Commission Recommends: • Annual Renewable Sales Must Meet Following: • By 2010, No Requirement – Building Takes Time • By 2017, 5% • By 2025, 10% • By 2030, 20% (20 Years ahead of FPSC target) • All Utilities get same treatment • Include All Defined Fuel Sources Below as Renewable, Except for Biomass (Not Clean Technology) • Hydrogen, Biomass, Solar, Geothermal, Ocean, Waste Heat, and Hydro

16. Recent Renewable Technologies • Concentrating Solar Power (CSP) • Uses Mirrors to Reflect and Concentrate Sunlight • Converts Solar Energy to Heat (Superheats Fluid in Pipes Suspended Above Mirrors) • Produce Electricity Via a Steam Turbine • Technology Mimics Traditional Energy Generation Process • FPL Building This Technology at Martin Plant

17. Diagram – CSP Arrangement

18. Photo – CSP Arrangement

19. Photo – CSP Arrangement Heat Exchanger

20. Recent Renewable Technologies • Photovoltaic Arrangement (PV) • Solar Energy is Captured using Silicon Microchip Technology • No Heat Exchange Process Involved • Most Familiar Form of Solar Technology • FPL Building This Technology at Cape Canaveral Plant & in Desoto County

21. Diagram – PV Arrangement

22. Rendition – PV Arrangement Rendition of Cape Canaveral PV Facility

23. Diagram – Wind Energy

24. Rendition – Wind Energy St. Lucie Nuclear Power Plant Wind Turbines

25. Valuation of Renewable Technologies Within the Energy Bill Signed by Governor Crist, ALL Renewable Energy Equipment Installed After January 1, 2009 is Considered EXEMPT from Taxation…….

26. Valuation of Renewable Technologies • No Current Exemptions Granted for Renewable Energy Generation (Commercial Scale) • Incentives Provided for Residential Solar Heating (Pools Being Carved Out) • Property Tax Assessments for Renewables Will be Identical to Traditional Plants • Costs Will be Capitalized and Will Flow Through FERC Accounts • Rate Payers Will Pay for “Prudent” Costs of Renewables as Approved by FPSC • Benefit to Everyone is Cleaner Energy

27. Conclusion Questions