TECO Exec Blueprints Florida Electric Competition
Florida is on its way toward a competitive power market, and
Tampa-based TECO Energy has some suggestions for a successful
The recent formation of a Florida regional transmission
organization (RTO) and heavy merger and acquisition activity in the
state are signs that competition has arrived on the scene, said
Richard Lehfeldt, TECO Energy's senior vice president at a recent
meeting of the Florida 2020 Commission.
As evidence of thriving competition, the executive also pointed
toward indicators such as competing proposals from natural gas
pipelines to supply the state, and the "fierce competition" for
building new power plants to serve growing demand.
"The question before this commission is not whether to embark on
a competitive model for the state, but what structural changes are
necessary to accommodate the competition that has already arrived,"
To accomplish this task, Lehfeldt focused his testimony on the
topics of RTO development, generation issues and fiscal concerns.
"The heart of a viable wholesale market is its transmission
system," said the executive. "Without an open-access, independent,
market responsive transmission system that facilitates the delivery
of accurate market signals to market participants, the rest of the
structure is virtually irrelevant, and merchant plants will die on
the vine." To get past the "natural monopoly" on transmission, a
fair system with rules and pricing signals governing its use and an
incentive system to help its maintenance an expansion are
necessary, he said.
Whereas Lehfeldt believes the Oct. 16 joint-filing for RTO
status was important, he forecasts a difficult, yet obtainable road
to implementing a PJM-style, fully competitive wholesale market.
Other recommendations include:
State legislation mandating 100% RTO participation once
implemented; guaranteeing the state's capacity needs including
reserve margins will be met; establishing an environmental ceiling
to avoid over-utilization of Florida's natural habitat; moving
existing generation out of regulatory scheme to enhance
competition; ensuring the state does not suffer from a revenue
shortfall through restructuring; and guaranteeing all competitors
are treated equally in the new market.
"We applaud the Commission's efforts in moving Florida toward a
wholesale competitive market, and we believe that if properly
designed, this market structure will comfortably meet the
substantial supply and economic needs of Florida's consumers," said
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