New Energy Bill Moves Florida Towards Energy Independence

— Energy Bill 2006 Florida Legislature SB 888

On May 5, 2006, the Florida Legislature enacted a comprehensive energy bill, Senate Bill 888.

The sweeping legislation establishes the nine-member Florida Energy Commission, provides matching grants to stimulate economic development, designates Energy Efficient Week with a sales tax holiday on energy-efficient appliances and other products, and establishes the Renewable Energy Technologies Grants program to encourage the purchase of photovoltaic and solar thermal systems.

The bill also provides tax exemptions for equipment, machinery, and other materials for alternative energy technologies, creates a renewable energy technologies investment tax credit, and establishes tax credits to encourage development and expansion of facilities that produce renewable energy in Florida.

The bill amends the statutory requirements for review of the 10-year site plans for electrical power plants submitted by utilities, provides for a study of Florida’s electric transmission grid by the Public Service Commission, and designates the Department of Environmental Protection to administer a water quality improvement grant program.

Additionally, the bill addresses hardening of infrastructure to ensure the reliable provision of electrical service, revamps the requirements and procedures for electrical power plant siting—including nuclear—and amends the electric transmission line siting process.

The bill also requires a report by the Department of Environmental Protection detailing state government’s leadership by example in energy conservation and energy efficiency. The provisions of Senate Bill 888 move Florida towards energy independence.

Florida Energy Commission
The bill creates the nine-member Florida Energy Commission which will make recommendations to the legislature for establishing a state energy policy, based on principles of reliability, efficiency, affordability and diversity. The commission, to be located within the Office of Legislative Services, will meet at least twice each year and will continually review the state energy policy and recommend to the Legislature any policy changes or improvements.

Members will be appointed by the President of the Senate and the Speaker of the House of Representatives. Each member must be an expert in a specified field such as energy, natural resource conservation, economics or engineering. The commission is to file an annual report by December 31 each year beginning in 2007. The initial report must identify incentives for research, development, or deployment projects involving the goals and issues set forth in the bill; present policy recommendations for conservation of all forms of energy and set forth a plan of action, together with a timetable, for addressing additional issues. The commission's initial report will also recommend consensus-based public-involvement processes to evaluate greenhouse gas emissions in Florida, including transportation and land use; power generation; residential, business and industrial activities; waste management; agriculture and forestry; emissions-reporting systems and public education.

The Solar Energy System Incentives Program
The bill establishes the Solar Energy System Incentives Program to provide financial incentives for the purchase and installation of photovoltaic and solar thermal systems. Any resident of the state who purchases and installs a new photovoltaic system of 2 kilowatts or larger, a solar thermal system that provides at least 50 percent of a building's hot water consumption, or a solar thermal pool heater, from July 1, 2006, through June 30, 2010, is eligible for a rebate on a portion of the purchase price of that solar energy system.

To qualify for rebates, systems must be installed by state-licensees and must comply with pertinent codes. Rebate amounts for photovoltaic systems will be $4 per watt, not to exceed $20,000 for a residence or $100,000 for a business, publicly owned facility or one owned by a not-for-profit organization, including condominiums or apartment buildings.

Rebates for solar thermal systems for a residence will be $500. For a place of business, publicly owned facility or one owned by a not-for-profit organization, including condominiums or apartment buildings, the rebate will be $15 per 1,000 Btu, with a maximum of $5,000. For a solar thermal pool heater, the rebate will be $100 per installation.

Renewable Energy Technologies Grants
The Renewable Energy Technologies Grants program is designed to provide matching grants to stimulate capital investment in the state and to enhance the market for renewable energy technologies. It will also encourage the use of other incentives such as tax exemptions and regulatory certainty to attract additional renewable energy technology producers, developers, and users to Florida.

Matching grants for renewable energy technology demonstration, commercialization, research, and development projects may be made to any of the following entities:

Municipalities and county governments
Established for-profit companies licensed to do business in the state
Universities and colleges in the state
Utilities located and operating within the state
Not-for-profit organizations
Other qualified persons

The Department of Environmental Protection will administer this program. Factors to be considered in awarding grants include:

The degree to which the project stimulates in-state capital investment and economic development
The extent to which the proposed project has been demonstrated to be technically feasible based on pilot project demonstrations and laboratory testing
The degree to which a project generates thermal, mechanical, or electrical energy by means of a renewable energy resource that has substantial long-term production potential
The ability to administer a complete project

Renewable energy technology is defined as any technology that generates or utilizes a renewable energy resource, defined to include electrical, mechanical, or thermal energy produced from a method that uses one or more of the following fuels or energy sources: hydrogen, biomass, solar energy, geothermal energy, wind energy, ocean energy, waste heat, or hydroelectric power

Energy Efficient Week
The bill designates October 5-11, 2006, as Energy Efficient Week. During this week, sales tax will not be collected on the sale of new energy-efficient appliances and other energy-efficient products priced at $1,500 or less. The term "energy-efficient product" means a dishwasher, clothes washer, air conditioner, ceiling fan, incandescent or florescent light bulb, dehumidifier, programmable thermostat, or refrigerator that meets or exceeds the requirements of the Energy Star Program.

Other Renewable Energy Technologies Incentives
Tax exemptions include purchases of equipment, machinery, and other materials for renewable energy technologies, including hydrogen-powered vehicles, commercial stationary fuel cells, and materials used in the distribution of biodiesel and ethanol fuels. The bill creates a corporate investment tax credit for renewable energy technologies. Also, it creates the Florida renewable energy production tax credit for expanded or new facilities producing renewable energy.

Public Service Commission
The Florida Public Service Commission will direct a study on the electric transmission grid in Florida, considering fuel diversity, safety standards, and reliability including an examination of the hardening of infrastructure to address issues arising from the 2004 and 2005 hurricane seasons.

The bill also requires the PSC to conduct a review to determine methods to enhance the reliability of Florida's transmission and distribution grids during extreme weather events, including the strengthening of distribution and transmission facilities. Considerations may include promoting and encouraging underground electric distribution for new service, promoting and encouraging the conversion of existing overhead distribution facilities to underground facilities, including any recommended incentives to local governments for local-government-sponsored conversions; and promoting and encouraging the use of road rights-of-way for the location of underground facilities in any local-government-sponsored conversion project, provided the customers of the public utility do not incur increased liability and future relocation costs.

The bill authorizes the siting of nuclear power plants and provides for an alternative cost-recovery mechanism for nuclear power plants.

The bill also directs the PSC to consider fuel diversity in reviewing 10-year site plans.

The bill streamlines both the Power Plant Siting Act and the Transmission Line Siting Act.

Funding
Funding for programs and projects follows:

$2.5 million to fund commercial and consumer solar incentives
For photovoltaic installation: a maximum of $20,000 for a residence; $100,000 for a place of business, condominiums or apartments
For solar thermal system installation: $500 for a residence; $15.00 per 1,000 Btu up to a maximum of $5,000 for a place of business
For solar thermal pool heating system installation:
- $100 per installation
- $15,000,000 for funding the Renewable Energy Technologies Grants program, plus an additional $5,000,000 for grants to entities working on bioenergy projects.
- $61,379 for the energy-efficient products sales tax holiday.

View the Bill
The 161-page Energy Bill, in its entirety, may be viewed in html format or downloaded in pdf
( pdf 275 KB).