Review of 2008 Ten-Year Site Plans - Public Service Commission

Overall, demand and energy savings from utility-sponsored conservation programs are
expected to surpass current goals by as much as 60 percent. Although total demand is slated to outgrow
DSM and energy efficiency efforts, as summarized in Table 4 below, current projections
indicate that savings from DSM and energy efficiency efforts will increase at a rate greater than total
demand. Furthermore, the projected average annual growth rate of DSM program savings has
increased annually since goals were set in 2004, reflecting the effectiveness and success of current
programs.
Table 4. DSM and Energy Efficiency Growth Rate
DSM and Energy efficiency Total Demand
Summer 3.14% 2.24%
Winter 2.51% 2.12%
Energy Conservation Cost Recovery
IOUs have the opportunity to recover prudently incurred expenditures associated with
Commission-approved DSM programs through the Energy Conservation Cost Recovery Clause
(ECCR). Since 1981, Florida’s IOUs have collected more than $4.5 billion through the ECCR clause,
with more than $2.4 billion of that amount recovered in the last 10 years. As illustrated in Figure 8,
annual ECCR expenditures for 2004 through 2006 stabilized at just under $230 million per year for
two primary reasons: certain DSM programs have reached saturation in participation levels, and DSM
program cost-effectiveness declined due to the relatively lower cost of new generating units.
However, expenditures in 2007 exceeded $250 million, and 2008 expenditures are projected to exceed
$285 million. This trend may be evidence of the implementation of new programs approved by the
Commission in 2006 and 2007.
Conservation Expenses ($ Millions)
300
200
100
0
Figure 8. Conservation Expenses for IOUs
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Projected
Review of 2008 Ten-Year Site Plans - 14 -