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The Impacts of a Cap-and-Trade System
UTILITIES: Ted Kury, director of energy studies at UF’s Public Utility Research Center, says the big utility winners in a cap-and-trade future will be those who generate more of their power from nuclear, which runs with no carbon emissions. The losers: Those with the most coal.
Among the utilities likely to gain a competitive advantage from a cap-and-trade system is Florida Power & Light. FPL gets 64% of its power from natural gas, which has half the emissions of coal, and 25% from nuclear. As a result, FP&L’s carbon dioxide emissions per megawatt hour are half the national average. "We think our customers are very well positioned relative to coal-based utilities," says spokesman Randy Clerihue.
Progress Energy, which is altering its energy mix, also could come out ahead. The company will decommission two older coal-burning units at Crystal River when it completes a new nuclear unit in Levy County. It is also installing scrubbers on two other coal-burning plants by 2010 and just finished repowering its Bartow plant in St. Petersburg from fuel oil to natural gas.
Company | Coal | Oil | Gas | Nuclear | Renewable | Petroleum Coke |
Orlando Utilities Commission | 82% | 0% | 10% | 8% | 0% | 0% |
Gulf Power Co. | 76 | 1 | 23 | 0 | 0 | 0 |
Gainesville Regional Utilities | 74 | 0.5 | 20 | 6 | 0 | 0 |
Tampa Electric Co. | 60 | 0 | 40 | 0 | 0 | 0 |
Seminole Electric Coop Inc. | 57 | 1 | 37 | 1 | 4 | 0 |
Progress Energy Florida | 42 | 16 | 24 | 18 | 0 | 0 |
JEA | 32 | 11 | 42 | 0 | 0 | 15 |
Florida Municipal Power Agency | 28 | 0 | 61 | 11 | 0.5 | 0 |
Florida Power & Light Co. | 7 | 4 | 64 | 25 | 0 | 0 |
City of Tallahassee Utilities | 0 | 0 | 99 | 0 | 1% (hydro) |
0 |
CONSUMERS: Most agree a cap-and-trade system will impose additional costs. Some believe consumers will negate increased energy prices, for example, by consuming less. Others like Barry Moline, executive director of the Florida Municipal Electric Association, the trade association for the state’s municipally owned utility companies, believe that consumers will still pay more. His most optimistic scenario — assuming effective technologies to capture and store carbon emissions, abundant nuclear power and plenty of tree planting — sees an increase in power bills of about 7%. At the other end of the range of possibilities, consumers could pay as much as 134% more for electricity. That transfers into annual consumer household cost increases in 2012 of $98 to $315 and in 2030 of $557 to $1,788. Based on a DEP analysis, Moline says, "We ballpark it at a 25% increase."