BRADENTON, Fla. - In addition to pressures already taking their toll on Florida, such as the mortgage crisis and plummeting real estate sales, the state's economy could be further threatened by climate-change legislation, says a new report by Standard & Poor's.
Public utilities have struggled to keep pace with electricity demand from a fast-growing population and now state and federal legislation is expected to force Florida utilities to build more expensive generating facilities fueled by natural gas, according to the report by analyst Jeffrey Pangerreleased on Friday.
A number of cheaper coal-fired electric plants have been shelved since Gov. Charlie Cristlast year began an initiative to reduce greenhouse gas emissions and require more reliance on renewable energy sources.
"With other options limited, Florida's utilities will increasingly find themselves in a vicious cycle of cost pressures, all of which could threaten the state's economic growth," Panger said. "Florida is, and will increasingly become, a state dependent on natural gas for electric generation, exposing utilities and ratepayers to cost volatility and supply disruptions."
Crist has appointed an "Action Team on Energy and Climate Change" that currently is preparing a new state energy policy, including strategies to diversify fuels used to generate electricity that some believe could increase costs for municipal utilities that issue debt. The team's Web site is at www.flclimatechange.us.
"More than 70% of Florida's electricity is generated by fossil fuels which contribute to our state's carbon emissions," Crist has said. "By diversifying, we can reduce greenhouse gas emissions and protect consumers from volatile fuel prices."
In addition to developing a state energy policy, Crist is pushing a climate, energy, and economic development package through this year's session of the Legislature.
His package proposes establishing a renewable fuel standard of at least 5% by 2012 and 10% by 2015 or sooner. It would require utilities to obtain 20% of their annual energy growth through efficiency and conservation measures and it would direct the state Department of Environmental Protection to develop "cap and trade" rules that use markets to achieve greenhouse gas emission reductions.
Crist's energy package is under consideration in this year's legislative session, which began March 4 and runs through May 2.