Bill to Cut Power-Plant Emissions Languishes in Florida

Bill to Cut Power-Plant Emissions Languishes in Florida

St. Petersburg Times, Fla. -- April 22

Consumer groups had opposed the bill's plan to swap rate stability for pollution controls. Progress Energy says the legislation's dead.

Progress Energy Inc. chief executive Robert McGehee confirmed Wednesday what most Tallahassee legislators had already assumed: a bill that would freeze the company's electric rates in exchange for power-plant emissions reductions "will not make it to a vote . . . it is likely dead."

McGehee offered the assessment during a conference call with Wall Street analysts. But he left unanswered how the utility intends to resolve the environmental and rate issues the Florida legislation would have addressed.

The controversial bill would have required Progress and Florida Power & Light of Juno Beach to slash emissions, including those at Progress' sprawling power complex in Crystal River, in exchange for a rate freeze of five to seven years. The Department of Environmental Protection drafted the bill because of fears that population and industrial growth and increases in automotive emissions could cause Tampa Bay and Orlando area counties to run afoul of federal clean air standards in the next five to 10 years.

Now the utilities must find a way of addressing environmental concerns even as rate-reduction settlements with the state expire in 2005. Consumer advocates had opposed the bill in part because it would have helped Progress and FPL put off possible rate-reducing settlements or rate cases after their existing settlements expire.

Progress general counsel John McArthur acknowledged during Wednesday's conference call that consumer groups had been concerned about freezing rates at their current levels. He said that sharp reductions in emissions would require some way for the company to recover its costs.

"The concept continues to be a good one but it is really something that needs to be a general consensus," he said.

Public counsel Harold McLean, whose office represents the interests of Florida utility consumers before the Public Service Commission, said that if an amended version of the legislation isn't approved later this year, a negotiated settlement on Progress' rates is likely because of the significant legal costs involved in pursuing a rate case before the PSC.

Meanwhile, DEP spokeswoman Deena Wells said the department will continue to seek a mechanism to achieve power-plant emissions reductions acceptable to the two utilities, consumer groups and environmentalists.

"You have to provide incentives to all parties to buy into the process," she said.

--Louis Hau

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