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February 3, 2006 |
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Bush proposal aimed at diversifying energy sources
DAVID ROYSE
Associated Press
TALLAHASSEE, Fla. - Regulators should consider the need to have energy from different sources to reduce reliance on any one fuel type when they approve new power plants, Gov. Jeb Bush said Thursday in proposing legislation aimed at diversifying Florida's sources of energy.
Supply disruptions after recent hurricanes and spikes in natural gas and oil prices make it clear that Florida can't rely too much on any one fuel source, Bush said in unveiling the legislation. The governor has been saying for months that Florida needed to branch out and ensure it has enough energy from a variety of sources.
The centerpiece of the legislation, Bush said, is a proposal to change the way the Public Service Commission evaluates power companies' requests to build new electric generation plants. Currently, they generally consider the need for the plant, and cost issues. The bill Bush is pushing would let the PSC consider fuel diversity and reliability when deciding on a plant permit.
The measure, which will be sponsored by Rep. Adam Hasner, R-Delray Beach and Sen. Lee Constantine, R-Altamonte Springs, also aims to speed up the process for approving new plants. Bush specifically called for a faster process for approving nuclear plants, which can take a decade or more.
"That's unacceptable," Bush said.
Bush also has proposed putting $5 million into a program to provide rebates for people who buy certain energy efficient appliances, and rebates for homes and businesses that install solar panels.
"Florida is the Sunshine State and we should also be the solar state because of that," Bush said.
Bush's plan also includes tax incentives for companies that increase the availability of alternative renewable fuels such as biodiesel, ethanol or hydrogen.
He also proposed a $10 million grant program for research into alternative fuels.
Florida relies heavily for its electricity generation on natural gas, which has increased substantially in price in the last year. And oil, besides being a finite resource, has also spiked in price in the last couple years.
"With the prospect of oil and gas drilling looming off of our coast in the Gulf of Mexico, we have a vested interest in providing a viable alternative to meet our energy needs," Bush said. "In fact, I think it is essential for Florida to lead in the development of alternative fuels given our long-standing opposition to drilling off of our coast."
Bush said he hoped the legislation, which will be considered by lawmakers next month, would lead to a longterm commitment to alternative fuels.
"This is going to be a challenge of the next decade rather than the next few months," Bush said.
Group rallies against surging energy prices at FPL
By Kristi E. Swartz
Palm Beach Post Staff Writer
Friday, February 03, 2006
JUNO BEACH — They gathered on the neatly manicured strip of grass in front of FPL Group Inc.'s headquarters Thursday afternoon demanding justice and waiving signs:
"Honk if you can't pay your utility bills."
"Financing Powerful Lobbyists"
"Utilities are too high"
The 30 or so members of the Florida division of the Association of Community Organizations for Reform Now, or ACORN, were out protesting the parent of Florida Power & Light Co. demanding, among other things, for FPL to reduce what customers pay for fuel — an amount that jumped 19 percent in January.
They also want the utility to alter its income-assistance program and not tack on anymore hurricane surcharges.
"We want them to be a little more realistic with the problems that people are facing, with all of the other costs," said Aaron Pridgen, chairman of ACORN's Fort Lauderdale chapter.
Among the group was Josephine Edwards, 56, of Hallandale Beach, whose bill has jumped to $126 from $76. What's more, Edwards went for weeks without power after Hurricane Wilma, even though she said she sent Florida Power & Light Co. letters from her doctor saying she needed electricity to keep her insulin refrigerated.
"I live on Social Security, and it's hard on me," Edwards said.
Besides the recent fuel increase, consumers are also paying a $1.68 monthly surcharge for hurricane expenses from 2004. FPL, last month, said it wants to reduce the amount of the surcharge but include it in monthly bills for an additional 12 years to pay for storm costs from 2005 and beyond.
FPL officials did come outside to talk to the protesters, some of whom brought their utility bills.
"We'll look at the issues they are concerned with and sit down with them," said Rod Macon, FPL's regional manager.
FPL spokesman Mayco Villafaña said the company gave $1 million this year to its "Care to Share program," which helps customers who are in an emergency situation and can't pay their electric bill.
ACORN planned to hold a similar rally in Baltimore, the home of Constellation Energy, which FPL Group is buying for $11 million, but officials agreed to meet with protesters earlier in the day.
More Power
Progress Energy Dedicates a New Generator at Its Hines Complex
By Kyle Kennedy
The Ledger
Published Friday, February 3, 2006
HOMELAND The newest additions to Progress Energy's Hines complex were in the spotlight Thursday. The Hines Energy Complex is the fourth-largest power plant owned by St. Petersburg-based Progress and is the biggest plant in Polk County. Last November, Hines placed into operation a new, 500-megawatt natural gas-fueled combined-cycle electric generator.
That unit, the third of its kind at Hines, was dedicated Thursday. Progess officials also celebrated the recent start of construction on a fourth 500-MW unit, which should be complete in December 2007 and will provide power for about 365,000 homes. The project will cost about $230 million.
"I can't think of another site in Florida where we've had this kind of buildout," said Mike Hughes, a spokesman for Progress. "I think that's a testament to the kind of growth we have in Florida."
Hines' first 482-MW unit was placed into commercial service in 1999, followed by a second 500MW unit in December 2003.
Progess has been adding between 40,000 and 50,000 new customers per year in Florida, said Laura M. Boisvert, Progress' regional vice president for Polk, Highlands and Hardee counties.
"That's pretty significant growth. It's been ramping up," she said. "The Poinciana area is growing like crazy. And South Orlando through Haines City into Polk County has the highest growth rate of our regions in Florida."
The Central Florida area accounts for about 25,000 of Progress' new customers every year in Florida, Boisvert said.
Bill Habermeyer, president and chief executive officer of Progress Energy Florida, also said Thursday that the new and upcoming units at Hines were needed to accommodate Polk's growth, particularly in the eastern part of the county.
Progress officials announced last year that they would pursue the construction of a second nuclear power facility in Florida but a spokesman on Thursday said the site selection was still far off. Hines is one of many potential existing sites for the nuclear facility but Progress may also consider a new site.
In addition to Hines, which is located near Homeland, Progress Energy owns the Tiger Bay Plant near Fort Meade. The single-unit, combined-cycle plant is capable of producing 207 megawatts of power.
Kyle Kennedy can be reached at kyle.kennedy@theledger.com or 863-802-7584.
Possible energy merger troubles some lawmakers
Md. legislators question Constellation's devotion to helping poor pay their bills
By Andrew A. Green
sun reporter
Originally published February 3, 2006
Legislators said yesterday that they fear BGE's parent corporation will lower its commitment to local philanthropy -- especially to helping the poor pay their electric bills -- if it is allowed to merge with a Florida power company.
After a briefing on the proposed merger between Baltimore-based Constellation Energy and FPL Group Inc. of Juno Beach, three state senators said they are concerned that the new company would focus too much on its national energy trading business and not enough on its residential customers in Maryland.
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"The problem is [that] their customers, my constituents, are last in their priorities," said Sen. Leo E. Green, a Prince George's County Democrat. "It burns me that they haven't done anything to address the poor."
Green and others said the issue is of great importance because rate caps that have been in effect for several years will be lifted this summer, raising the prospect of a 70 percent increase or more in residential electric bills.
Constellation spokesman Rob Gould said the company has committed to maintaining its overall level of charitable giving in Maryland for at least 10 years, though the donations to particular programs might change.
He said the company is concerned about the effects of rising energy prices and, as a result, announced in November an extra $26 million this year for the Fuel Fund, which helps pay the bills of needy customers.
"There is a continuing commitment to focus on philanthropy, charitable giving," Gould said. "That is without question going to continue for 10 years at the same level, or more."
The two companies announced in December that they intended to merge in an $11.5 billion deal that would create the nation's second-largest energy company. The General Assembly does not have a direct say in the deal, but it cannot go forward without the approval of the state Public Service Commission and federal regulators. .
Company officials also briefed members of the House of Delegates yesterday. The legislators said they worry that customer service, particularly in the case of widespread power outages, would suffer in a combined company.
But Thomas F. Brady, Constellation's vice president for corporate strategy, said the new company would have more manpower to deal with such emergencies.
While the merger and the lifting of rate caps are not directly related, delegates said they expect constituents won't see the distinction.
"I understand as part of the merger, some very generous benefits are going to the executives, parachutes for lack of a better word," said Del. Carolyn J. Krysiak, a Baltimore Democrat. "How do we explain that to the public? ... Why [do] they have to raise our rates if they have so much money?"
Brady said the executives' compensation packages are in line with industry standards and low compared with other industries.
Legislators have no role in approving the merger, but Sen. Thomas M. "Mac" Middleton, a Charles County Democrat and chairman of the finance committee, said they will still have to deal with the perception among constituents that the new company does not care about them.
"People have to pay high property taxes as their assessments go through the roof. They're paying more at the pump for gas. Home heating oil and natural gas are going up out of control, and now electric prices are going up?" Middleton said. "There's an angry constituent out there. They're going to ask us, 'How did you let this happen?'"
andy.green@baltsun.com
Enron Ex-Official Says Skilling, Lay Misled Public About Key Unit
By GARY MCWILLIAMS and JOHN R. EMSHWILLER
Staff Reporters of THE WALL STREET JOURNAL
HOUSTON -- Former top Enron Corp. executives Kenneth Lay and Jeffrey Skilling were involved in providing false information to the public about the company's biggest business unit and about a huge loss at one of its highly touted operations, a former Enron executive vice president testified yesterday in the federal criminal trial of the two men.
Mark Koenig, Enron's former head of investor relations, completed his second day of measured and low-key testimony in which he has laid out a series of alleged misrepresentations to the public about the company's financial condition and business prospects. In each of the cases, Mr. Koenig said that Mr. Skilling or Mr. Lay either directly made the public representations or approved of them being made.
[Mark Koenig]
Mr. Skilling, Enron's former president, and Mr. Lay, its former chairman, face conspiracy and fraud charges in connection with the allegation that they led a years-long scheme to cook Enron's books and lie to the public about the financial condition of the onetime energy giant, which collapsed into bankruptcy court in December 2001.
Mr. Koenig, who has reached a plea and cooperation agreement with the government for a company-related crime, is the first of several such former Enron executives who are expected to testify.
Yesterday, Mr. Koenig testified that in the first quarter of 2001, the company's highly touted retail-energy operation, which sold energy and services to business customers, sustained $230 million in losses from problems in the business. To hide that loss, Enron made a last-minute reorganization that moved the loss over to the company's giant and highly profitable wholesale energy-trading unit, he said. This switch allowed Enron to inaccurately portray the retail unit as a thriving and profitable operation, he added. If the truth had been known, "it would have been a disaster with investors," Mr. Koenig said.
Mr. Koenig said he talked about this matter with Mr. Skilling. While he didn't say that he spoke directly with Mr. Lay, he said the loss came up at weekly meetings of top executives that Mr. Lay attended.
Defense attorneys haven't yet had a chance to question Mr. Koenig at the trial, which is scheduled to resume Monday. However, in remarks to the press after yesterday's court session, Mr. Skilling's lead attorney, Daniel Petrocelli, indicated that he would aggressively challenge Mr. Koenig's rendition. For instance, he argued that there actually weren't losses to hide at the retail unit in the first quarter of 2001.
Mr. Koenig also testified that he, Mr. Skilling and others routinely told investors that profits in Enron's crown-jewel operation, the wholesale trading unit, were derived from low-risk growth in trading volumes and didn't rely on riskier bets about the direction of commodity prices. As they did during the first two days, prosecutors used internal documents to challenge the accuracy of what executives had told investors. For example, they used a chart of daily profits presented to Enron directors to show that profits fluctuated wildly. The materials showed a one-day, $485 million profit in the wholesale unit followed a few days later by a $551 million one-day loss.
Mr. Koenig's testimony also raised the issue of whether Mr. Lay lied to the public about Mr. Skilling's surprise resignation from Enron in August 2001. He said that Mr. Lay told him he knew of Mr. Skilling's intentions before July 25. Prosecutors then submitted a copy of a news interview in which Mr. Lay indicated that he had learned about the resignation plan only days before the Aug. 14 public announcement.
Problems in Enron's high-speed telecommunications unit, another business heavily promoted by top executives, were known inside the company but shielded from investors, Mr. Koenig said. Revenue reported by the unit in late 2000 and early 2001 came largely from selling pieces of its telecommunications network or from investments by others, he said. But Mr. Koenig said he concealed the source of the revenue, telling investors that most revenue came from customers using the network. "The message I had from accounting and others was the details were not to be discussed publicly," Mr. Koenig said.
Write to Gary McWilliams at gary.mcwilliams@wsj.com and John R. Emshwiller at john.emshwiller@wsj.com
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