Hearing on Petition for Determination of Need for the Taylor Energy Center (TEC) at the Florida Public Service Commission, 2540 Shumard Oak Blvd, Tallahassee |
BACKGROUND: The utilities that are proposing to build a coal-burning power plant in Taylor County (the Taylor Energy Center) have to take many steps. Among those steps, they have to buy the land for the plant, get the land zoned for industrial use, and get permission from the Florida Public Service Commission (PSC) to build the plant. For PSC permission, they have to submit a “petition for determination of need,” and demonstrate before the PSC that the plant is necessary to provide electricity for their customers.
The hearing is available on audio, and related documents can be viewed on the PSC website in "Docket Number 060635EU": http://floridapsc.com/dockets/cms/docketdetails.aspx?docket=060635
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| Viegbesie petiton |
Mr. Anthony Viegbesie asserts that he is entitled to intervene in this matter on the following bases:
(2) the plant is unlikely to be modified to eliminate carbon dioxide emissions, thus recipients of energy from the plant will be assessed a “carbon tax” or other such fees if and when implemented, and such assessments will increase the rates and charges that Viegbesie will be forced to pay Tallahassee for his energy needs; and (3) construction of the plant further will adversely affect the health of Viegbesie and his family as well as the environment in which they live. |
| Natural Resources Defense Council (NRDC) petition |
Petitioner Natural Resources Defense Council, Inc., (“NRDC”) disputes whether JEA, the City of Tallahassee, FMPA, or RCID (collectively the “Owners”) have demonstrated the need for a new 765 MW pulverized coal and petroleum coke electric generating plant to be located in Taylor County, Florida. We specifically raise the following disputed issues:
a. Whether the Owners analysis was sufficient to conclude that there are no reasonably available conservation or DSM measures, which would mitigate the need for the proposed plant. b. Whether the Owners, independently or collectively, have adequately evaluated conservation and DSM opportunities, including identification and evaluation of all possible options. c. Whether the Owners, independently or collectively, have appropriately evaluated conservation and DSC opportunities, including consideration of actual costs to rate payers. Position: Owners have not met their affirmative obligation to demonstrate a need for the proposed additional generating capacity in the area(s) that will be served by the TEC because they have not adequately or appropriately evaluated DSM opportunities. Issue: Whether JEA, the City of Tallahassee, FMPA, or RCID, independently or collectively, have met their affirmative obligation to demonstrate that the proposed TEC is the most cost-effective and lowest risk alternative to provide needed capacity in each area that will be served by the proposed plant. a. Whether the regulation of CO2 is sufficiently likely to warrant formal consideration in the needs determination for the TEC. b. Whether the Owners’ assessment of the proposed plant as the most cost-effective alternative adequately and appropriately accounts for the cost of complying with future CO2 regulation, including whether the application adequately discusses and evaluates potential CO2 cost and identifies an appropriate range of likely CO2 costs. c. Whether the failure to formally and adequately consider CO2 in connection with the needs determination for the TEC is a breach of the Owners’ obligations and of the obligation of the FPSC to protect the interests of Florida’s electricity consumers. Position: The future regulation of CO2 is sufficiently certain that in order to protect consumers the FPSC should require formal consideration of CO2 costs in connection with any need determination for a coal-fired power plant; and because the Owners have not adequately or appropriately accounted for the cost of complying with future CO2 regulation, they have not adequately demonstrated that the proposed plant is the most cost-effective and lowest-risk alternative to provide needed capacity in each area that will be served by the proposed plant. Issue: Whether Owners adequately and appropriately valued conservation and DSM in connection with assessing the need for and appropriateness of a new 765 MW coal-fired electric generating plant, including whether Owners appropriately identified the relative benefits of conservation and DSM in light of all the costs and risks associated with construction of a pulverized coal plant (including costs related to complying with future CO2 regulations). Position: Owners have undervalued the relative benefits of conservation and DSM. Issue: Whether the Owners adequately and appropriately considered alternative new capacity options such as renewable energy sources, natural gas, and IGCC. Position: Owners have not adequately or appropriately considered alternative new-capacity options, including for example IGCC, especially in light of likely CO2 costs associated with coal-fired power production. Conclusion
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| Sierra Club petition |
Petitioners The Sierra Club, John Hedrick, Barry and Brian Lupiani (“Petitioners”), by and through their undersigned counsel, hereby submit their proposed issues of fact and positions which the Florida Public Service Commission should resolve in determining the need for the Taylor Energy Center (TEC”), as proposed by applicants. . . .
Position 1: The co-owners have not included objective and reasonable inputs, assumptions and projections as to their capital, O&M or fuel costs in their requests for proposals or application for determination of need. Issue 2: Whether the projections by the co-owners of the Taylor Energy Center in their respective request for proposals, and in the application for determination of need adequately adjusted for recent volatility in the capital costs for building pulverized coal plants, volatility in the market prices of coal to supply the TEC, and the volatility of transportation costs for coal delivered to the TEC. Position 2: The co-owners have not adequately adjusted their projections to account for the degree of volatility the electric industry is presently experiencing in the capital costs to build coal plant, nor have they accounted for true volatility in the commodity prices of coal to supply the plant, or the transportations costs to deliver fuel to the plant. Issue 3: Whether the co-owners have information, documentation or reasonable expectation of difficulties in the delivery logistics and infrastructure for delivery of coal to fuel the TEC? Position 3: The co-owners have overwhelming information, documentation and should have more than reasonable expectations that there will be difficulties experienced in the logistics and infrastructure improvements to ensure adequate delivery of coal to the TEC site. Issue 4: Whether the projections by the co-owners of the Taylor Energy Center in their respective request for proposals, and in the application for determination of need adequately addressed the cost impact of disruptions in coal delivery which result from existing dysfunction in the rail delivery operations in the US, or from delayed or inadequate upgrades and improvements to infrastructure, or from severe weather events? Position 4: The co-owners have severely underestimated the cost impacts to O&M expenses that will result from dysfunctions experienced in the delivery of coal to the TEC site. Issue 5: Whether the least-cost analyses conducted by each of the co-owners of TEC included reasonable inputs, assumptions and projections? Position 5: The least-cost analysis conducted by the co-owners of TEC consisted of the request for proposals. To the extent that the inputs, assumptions and projections included in the RFP underestimated, and are not truly reflective of the costs the co-owners will incur if they build the TEC, the results were biased in the co-owners’ favor, and thus, the analysis is inadequate. Issue 6: Whether the co-owners conducted modeling of alternative sources of supply, demand-side management, conservation, energy efficiency or demand-side management initiatives to determine if they provided lower cost alternatives, individually or as a portfolio, to serve the load to be served by the TEC, and to defer TEC? Position 6: Information made available from the co-owners does not indicate that modeling of alternative sources of supply, demand-side management, conservation, energy efficiency or demand-side management initiatives was conducted to assess whether a portfolio would result in a lower cost to serve the load to be served by the TEC. Issue 7: If the answer to issue 6 is “Yes”, whether reasonable and adequate inputs, variables and assumptions were used in these models? Position 7: See Position 6. Issue 8: If the answer to issue 6 is “no”, whether the request(s) for proposal conducted by the co-owners adequately evaluated alternative sources of supply, demand-side management, conservation, energy efficiency or demand-side management initiatives as lower cost alternatives? Position 8: Because the co-owners determined that no resources were available, it does not appear that the RFP proposed or allowed vendors to consider these alternatives at all. Issue 9: Whether the petition for determination of need adequately accounts for external costs of emissions compliance for the proposed pulverized coal plant? Position 9: The co-owners have grossly understated the compliance obligations that the TEC will face, and thus severely underestimated the external costs that it will face. Issue 10: Whether the petition for determination of need recognizes social and regulatory compliance costs imposed by SB 888? Position 10: The information provided by co-owners does not indicate that SB 888 was given any consideration in their application. Issue 11: Whether the least-cost analysis conducted by the co-owners attributes value to alternative sources of supply, to energy efficiency, to conservation and to DSM for avoidance of emissions and other compliance costs? Position 11: The information provided by co-owners does not indicate that these initiatives were attributed value because they would allow the co-owners to avoid compliance costs. Issue 12: Whether the least-cost analysis conducted by the co-owners attributes value to alternative sources of supply, to energy efficiency, to conservation and to DSM for avoidance of transmission, distribution and coal transportation costs for the TEC? Position 12: The information provided by co-owners does not indicate that the least cost analysis or the RFP process attributed value to these initiatives because they would allow the co-owners to avoid transmission, distribution and coal transportation costs for the TEC. Issue 13: Whether the co-owners have information, documentation or reasonable expectation of enhanced regulation of green-house gas (GHG) to impact the operating costs of TEC, before or at the time TEC becomes operational? Position 13: The co-owners have overwhelming information, documentation and should have more than reasonable expectations that the TEC will face substantially greater regulation of GHGs well before the time TEC becomes operational. Issue 14: Whether the co-owners have adequately estimated and quantified the impact of enhanced GHG regulation on the operating costs of TEC? Position 14: The co-owners have dramatically understated the full economic, and direct cost impact of enhanced GHG regulation on the operating costs of TEC. |
| Towles-Ezell petition |
| . . . Ms. Towles-Ezell has a vital interest in the manner in which new fossil plants are approved in Florida because this process is also the essential forum in which the economic viability of alternative energy resources are determined. In effect, if renewable and alternative energy sources can not be shown to be a reasonably available alternative to the power plant proposed, under section 403.519, Florida Statutes, then these resources, for all intents and purposes, fall out of the state’s energy portfolio. . . . |
| Deevey testimony |
Q. Please state your name and business address.
1. The participants have not evaluated generators that woody biomass, an alternative fuel with many environmental and cost advantages, or compared them to the other fossil fuel-based generators they have considered. Their consultants have wrongly assumed that woody biomass supplies are too limited in the locations of interest to support more than about 50 MW of capacity in any suitable location.
Hill and Associates based their estimates on the McCain-Lieberman Climate Stewardship Act of 2005, which provides for reducing the emissions of all covered entities in the United States to the levels emitted by the US in 2000. (These entities account for an estimated 85% of US annual greenhouse gas emissions.) Compared to other legislative initiatives, this bill is extremely industry-friendly and in its present from will achieve very few reductions in total US emissions.
I could find no estimate of the proportion of energy production accounted for by these EGUs, or their greenhouse gas emissions. The basic idea that some utilities will experience reduced demand growth, while the Participants and other Florida utilities experience very significant demand growth seems illogical and should be substantiated. At the very least, one needs detailed data to determine how this assumption affects the outcome of the allocation price analysis. 2. Electric utilities in states which do not currently have any renewable energy standards were projected to produce an average of 12% of their energy from carbon-free (“non-emitting”) sources within two years (2009), and to increase their percentage of carbon-free energy production by 0.5% per year thereafter until they have achieved a total of 20% renewable energy sources. It is not clear how this is to be achieved, or whether the Participants themselves plan to assume the burden of this conversion, as all are EGU’s in a state that presently has no renewable energy portfolio standards. 3. Hill and Associates assume that 12 nuclear plants will come on line between 2016 and 2020, and that these will be considered non-emitters. Some analysts have recently challenged the notion that nuclear power is carbon-free, on the grounds that building and fueling them entails very significant carbon dioxide emissions equal to about one third of the greenhouse gas released by natural gas-fueled combined cycle generators with an equivalent capacity release. (Other life cycle considerations suggest that nuclear generation is not the solution to greenhouse gas reduction needs that many have assumed it to be.) 4. Hill and Associates also assume that other US industries covered by S 1105 will achieve more than their proportionate share of greenhouse gas reductions, which reduce the cost of tradable emission credits, and will relieve the participant’s need to make genuine CO2 emission reductions, or even to purchase expensive allocations. 5. The final very questionable assumption is that political pressure on the credits, federal government will force it to give the EGU’s relief in the form of special offset credits in order to buffer electricity customers from higher electricity costs. Given the reliance on a notoriously industry-friendly legislation, the large number of additional questionable assumptions made by Hill and Associates, and the lack of data on the impact of each of these curious assumptions, I find it impossible to have any confidence in the forecast of costs of compliance with future greenhouse gas emission reduction legislation. Q. Do you favor other estimates of compliance costs?
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| Urse testimony on behalf of Intervenor Rebecca Armstrong |
Q: Please state your name and address.
On August 23, 2006, the city commission voted to acquire the least cost Demand Side Management programs identified by the city’s experts, which I will refer to as the “least cost DSM”. According to the city’s calculations, acquiring the first 100 MW of this least cost DSM meets the city’s need for additional capacity until 2016. . . .
The city has not provided a calculation to show how much longer this biomass energy acquisition will defer the city’s need for additional capacity when considered as an addition to the previously described DSM programs.
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