Florida industrial group appeals approval of FPL natural gas investment

The Florida Industrial Power Users Group (FlPUG) filed a Feb. 10 notice with the Florida Public Service Commission that it has appealed to the state Supreme Court a Jan. 12 PSC order allowing Florida Power & Light to buy natural gas reserves in Oklahoma as a hedge against the prices of a fuel that the utility is increasingly reliant on for power generation.

In June 2014, Florida Power & Light (FPL) filed a petition requesting a prudence determination on FPL’s proposal to acquire an interest in a natural gas reserve project and to allow the revenue requirements associated with investing in and operating the gas reserves be recovered through the PSC-administered Fuel Clause. USG Properties Woodford I LLC (USG), an FPL affiliate, entered into a series of agreements with PetroQuest Energy, under which USG will pay a share of the costs for developing and operating natural gas production wells and will receive a portion of PetroQuest’s working interest in those wells in the Woodford Shale Gas Region in Oklahoma. The commission approved the request in December, then issued its final order on Jan. 12.

The Feb. 10 appeal notice doesn’t give the basis for this appeal. FIPUG and the state Office of Public Counsel had argued during the commission’s review of this case: that the proposed recovery of costs associated with the PetroQuest joint venture did not satisfy the criteria for Fuel Clause recovery; that its costs were not capital costs normally recovered through base rates; that these projected costs went beyond PSC policy for dealing with fossil fuel-related costs normally recovered through base rates that will result in fuel savings to customers; and that recovery of these costs is contractually precluded by a 2012 stipulated agreement.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.