State utility regulators this week terminated a Florida Power & Light Co. renewable-energy program after an audit found that only 20 percent of the $11.4 million collected from customer donations was spent developing renewable-energy plants.
The Sunshine Energy program asked customers to voluntarily tack on an extra $9.75 monthly fee to their power bill.
In return for each customer's payment, the utility would oversee the purchase of 1,000 kilowatt-hours of renewable-energy credits. And for every 10,000 residential customers who signed up for the program, the Florida utility promised to develop or purchase an additional 150 kilowatts of solar power in the state.
More than 38,000 customers have contributed to the program, which began as a pilot project in 2003 and became a supposedly permanent program in 2006.
But the program ended Tuesday when it turned out that the majority of the money budgeted for the program had allegedly been spent on marketing and administrative costs.
Similar green-energy programs, such as those by Silicon Valley Power and Georgia Power, spend about 15 percent of their budgets for administrative and marketing costs, according to the Sun-Sentinel.
The commission said that all future customer contributions to the Florida Power & Light program would be placed into an escrow account. It also directed its staff to investigate how Green Mountain Energy Co., which supplied renewable power for the program, as well as marketing and sales services, spent its part of the program money.
Florida Power & Light had submitted a plan to modify the program, but it wasn't enough to keep it alive.
A state-run review of the program published in June concluded that the energy program didn't serve the interest of the program's participants or the state's renewable-energy policies. The review also said the program didn’t give the commission enough monitoring and oversight capabilities.
The termination did not come as a surprise to Paul Fenn, CEO of Local Power, which helps government agencies set up renewable-energy programs. Fenn called utility-run programs without vigilant oversight and transparency “inherently problematic.”
"[Utilities] are financial black boxes," he said.
The Florida Power & Light situation is “a classic case of acting as though a huge energy corporation is the appropriate agent for a public purpose," he added.
The commission's decision to nix Florida Power & Light's Sunshine Energy program comes as a black mark on the utility's green reputation.
The utility had the fourth-largest green-power program in the United States in December, with 42.6 megawatts of annual sales, according to the U.S. Department of Energy.
But Fenn worries about the larger impact of Florida's Sunshine Energy program debacle.
"The headline will come out that the program was not cost effective and that customers' money was wasted," he said.
That might scare potential customers away from signing up for other renewable-energy programs, and could stop folks who have previously joined green programs from signing up again, he said.