However, “You are buying energy from fracking [hydraulic fracturing] that is powering your computer right at this moment”, Clemens writes. [FYI: Senator Clemens is scheduled to give a Legislative Update at the Lake Worth City Commission on May 16th.]
The message follows with emphasis added:
First, let me say that I am not infallible and it is entirely possible that I voted poorly on this issue. If you feel that way after reading this explanation, I ask for your forgiveness. Hopefully, it is some measure of comfort that I helped prevent the bill from coming to the floor in the Senate in the end.
But it is important that everyone actually understand what the bill does, what it doesn’t do, where we as a state currently sit, and where I stand on the issue that is most important to all of you: fracking in Florida.
Let me state that I am 100% opposed to fracking in Florida and have repeatedly been a co-sponsor of the bill that bans fracking here. So that is where I stand on that issue.
Now for the bill itself.
Here’s what SB1238 actually does, as opposed to the reports that have labeled it as simply a bill to allow fracking:
It
allows power companies to petition the Public Service Commission to
invest in energy exploration operations in order to smooth rates, and
requires evidence of such ability to either keep rates steady, or reduce
increases.
But there are some misconceptions that need clearing up first.
If you are an FPL customer, about 65–70% of your current energy comes from natural gas. I don’t know for sure, but I have been told by those that do know that almost all of that comes from fracking, mostly in Texas and the Plains states. So, in other words, the vast majority of your energy right now comes from fracking. You are buying energy from fracking that is powering your computer right at this moment.
This bill would not have increased that. If allowed by the PSC, it would’ve given a company the ability to pre-purchase, through an investment, the gas that is in the ground now, before it is brought up. So in other words, the gas is going to be purchased by FPL either way, the question is do they do so by purchasing a piece of the exploration and get a cheaper rate, or by purchasing it after it’s out of the ground at a higher rate.
As someone who once was responsible† for setting the rates of tens of thousands of residential and commercial utility customers in Lake Worth, I believe there is a rate benefit to allowing companies to prospectively buy energy sources, as opposed to buying it after it is produced. As an example, ratepayers also paid for the construction of large FPL solar farms, thus paying for that future energy production before it actually produced any energy.
But there are some misconceptions that need clearing up first.
If you are an FPL customer, about 65–70% of your current energy comes from natural gas. I don’t know for sure, but I have been told by those that do know that almost all of that comes from fracking, mostly in Texas and the Plains states. So, in other words, the vast majority of your energy right now comes from fracking. You are buying energy from fracking that is powering your computer right at this moment.
This bill would not have increased that. If allowed by the PSC, it would’ve given a company the ability to pre-purchase, through an investment, the gas that is in the ground now, before it is brought up. So in other words, the gas is going to be purchased by FPL either way, the question is do they do so by purchasing a piece of the exploration and get a cheaper rate, or by purchasing it after it’s out of the ground at a higher rate.
As someone who once was responsible† for setting the rates of tens of thousands of residential and commercial utility customers in Lake Worth, I believe there is a rate benefit to allowing companies to prospectively buy energy sources, as opposed to buying it after it is produced. As an example, ratepayers also paid for the construction of large FPL solar farms, thus paying for that future energy production before it actually produced any energy.
Yes, the
investments are in natural gas, which is obtained by fracking. So
perhaps I should have done a better job of thinking about what that
means, in terms of optics and a potential endorsement of fracking in our
Plains states. But I believe it is inaccurate to simply call this bill a
fracking bill.
The other argument against the bill is that it put the burden to pay for these operations on the rate payers, as opposed to the shareholders. This one, I have trouble understanding. How, exactly, does any publicly held company charge shareholders for its expenses, no matter what they are? I’m not wealthy, but I’ve owned a couple of stocks in the past. I’ve never received a bill from a company that I own shares in, charging me for expenses, or construction, or anything.
I suppose a non-publicly held company could benefit from this clause, but all of our Investor Owned Utilities in Florida are publicly traded. So the rate payers pay the bill either way, whether you are buying the gas before or after extraction. There is no mechanism that I am aware of (although it may exist) for charging stockholders of a company.
As more and more questions and concerns arose about the bill, I asked the representatives of the proponents to pull the bill from consideration, and I believe others did the same thing. Perhaps it was too little, too late, and that is something I will have to bear. But I do believe you all deserved an explanation of the bill, my thought process and what happened. The bill is dead.
Thanks for listening.
*To learn more about State Senator Jeff Clemens, including contact information for his staff in Tallahassee and office in the City of Lake Worth, use this link.
†If you didn’t know, Clemens was a former mayor of Lake Worth prior to being elected to the State House.
From Wikipedia: “Jeff Clemens is a Democratic member of the Florida Senate, representing parts of Palm Beach County since 2012. He currently represents the 31st district, which includes Lake Worth, Boynton Beach, Delray Beach, and Greenacres. He previously served one term in the Florida House of Representatives, representing the 89th district from 2010 to 2012.”
The other argument against the bill is that it put the burden to pay for these operations on the rate payers, as opposed to the shareholders. This one, I have trouble understanding. How, exactly, does any publicly held company charge shareholders for its expenses, no matter what they are? I’m not wealthy, but I’ve owned a couple of stocks in the past. I’ve never received a bill from a company that I own shares in, charging me for expenses, or construction, or anything.
I suppose a non-publicly held company could benefit from this clause, but all of our Investor Owned Utilities in Florida are publicly traded. So the rate payers pay the bill either way, whether you are buying the gas before or after extraction. There is no mechanism that I am aware of (although it may exist) for charging stockholders of a company.
As more and more questions and concerns arose about the bill, I asked the representatives of the proponents to pull the bill from consideration, and I believe others did the same thing. Perhaps it was too little, too late, and that is something I will have to bear. But I do believe you all deserved an explanation of the bill, my thought process and what happened. The bill is dead.
Thanks for listening.
*To learn more about State Senator Jeff Clemens, including contact information for his staff in Tallahassee and office in the City of Lake Worth, use this link.
†If you didn’t know, Clemens was a former mayor of Lake Worth prior to being elected to the State House.
From Wikipedia: “Jeff Clemens is a Democratic member of the Florida Senate, representing parts of Palm Beach County since 2012. He currently represents the 31st district, which includes Lake Worth, Boynton Beach, Delray Beach, and Greenacres. He previously served one term in the Florida House of Representatives, representing the 89th district from 2010 to 2012.”
![Dr. W. H. Cotton’s ode: “Oh, My Lake Worth, Florida!” [circa 1920].](http://1.bp.blogspot.com/-yhHyCn84ZIQ/WezjlEL-0tI/AAAAAAAAPZ4/CzkhriK6zpEJJ3d9Je1495d49gIhnMlxACK4BGAYYCw/s1600/LakeWorthPioneers.JPG)
