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Ontario: keeping Florida’s fossil-fuel power bills low

Florida: plenty of natural gas-fired power. No wind
Florida: plenty of natural gas-fired power. No wind

Florida Power & Light Company (FPL), the largest subsidiary in NextEra Energy Inc’s portfolio with 4.7 million customers, is doing a fantastic job of keeping their rates low.  In fact they have had declining rates for a few years as noted in this post from one of their webpages:  “Bills Are Decreasing – Again!  Since 2009, FPL’s typical 1,000-kWh customer bill has decreased by 7 percent. And in January 2015, FPL expects to decrease the typical residential customer bill by nearly $2 a month.”

While the FPL customers can currently consume 1,000 kWh a month at an all-in price of 10.2 cents/kWh, rates in Ontario have been increasing at about 10% annually.   That 1,000 kWh purchased from Toronto Hydro will set you back $169.00 (65% higher) versus $102.00 from FPL.   The natural and first inclination is to believe that it is probably due to their sources of electricity and perhaps their efficiency levels; while the latter is probably true (they claim 8,900 employees versus the 20,000 plus we have in Ontario) their sources of electricity only include a passing nod at renewables and then only “solar” which seems reasonable in the Sunshine State!  The pie chart showing FPL’s “Fuel mix & purchased power” indicates at least 75% of electricity supplied to their ratepayers is fossil fuel-based.  Solar provides just over a half of 1%!

NextEra power sources: barely a nod to renewables in the U.S.
NextEra power sources: barely a nod to renewables in the U.S.

Look at the parent company, NextEra: it generates electricity from wind turbines where the company can find subsidies.  They rushed to Ontario to snap up at least six Ontario Power Authority (OPA) contracts with a rated capacity of just over 482 MW (megawatts).  A quick calculation of that rated capacity discloses Ontario’s ratepayers will pay a lot of money to NextEra over the next 20 years, which NextEra can use to either pay dividends to their shareholders, or allow some of the revenue used to keep rates low in the Sunshine State for Canadian “Snowbirds.”

The 482 MW of rated capacity should produce power at 29% of capacity, which means they should generate about 1.2 million MWh (megawatt hours).  The equation therefore is as follows:  482 MW @ 29% X 8760 hours in a year X $135 per MWh x 20 years = $3.2 billion.  That means revenue per FPL customer of about $35 per year. If only $2 finds its way to FPL’s customers, it will help to keep the rates down.

Ironically, Ontario’s Snowbirds pay much higher rates at home; no wonder Canadians own more property in Florida than citizens from the next five nationalities combined! Too bad their winter electricity bills will be waiting for them when they get back home.

©Parker Gallant

October 23, 2014

The views expressed are those of the author.

Reposted from Wind Concerns Ontario http://www.windconcernsontario.ca

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