- State regulators have allowed Florida Power & Light to boost its investments in natural gas, expanding on last year's decision to allow the utility to drill for gas in the Woodford Shale of Oklahoma and collect the cost from customers.
- The Florida Public Service Commission voted yesterday to allow FPL to invest up to $500 million in gas development, a decision regulators said was aimed at reducing fuel cost volatility and customer risk.
- Utilities making direct investments in natural gas production is an issue several states are considering, as prices remain low and the nation shifts away from coal, with Duke Energy and AGL Resources both showing interest.
State regulators have placed several conditions on the decision, including scheduled audits and limits on the amount of the gas which can be burned, but FPL will now be able to pass on the costs of gas investment to customers via a fuel charge on their bills. The PSC did decide, however, to reduce the amount of money FPL can spend without additional authorization. The utility had requested a $750 million cap on its gas development costs.
According to the Palm Beach Post, the regulators limited the amount of gas from its production projects that FPL will be allowed to burn. This year that amount is capped at 5% of its average daily gas use, rising to 10% next year, up to 20% in 2018.
The newspaper quoted PSC Commissioner Julie Brown saying "I know this is a discussion that many in the state are interested in, and many in the country as well. FPL has been a leader in the industry for many years. It often sets the trend rather than follows it.”
The commission issued a statement on the decision, citing the need to “reduce fuel cost volatility and the need to minimize risk for customers.”
“To ensure continued fuel savings and other customer protections, the commission will review the guidelines every three to five years,” the PSC said, adding “the commission strengthened the audit requirements to require detailed analysis of gas reserve performance throughout the company.”