Florida Power seeks gas generation as demand grows

OREANDA-NEWS. March 24, 2015. Florida's largest utility is seeking 1,052MW of new natural gas generating capacity in mid-2019 to meet growing need and a 20pc reserve margin.

NextEra Energy-owned Florida Power & Light (FPL) expects its 4.7mn customer base to grow to 5mn in 2019, a level the utility had projected to reach last year. But the 2008 financial and housing crisis slowed the state's rapid population growth, while increased reliance on energy efficiency, and load management stunted FPL's average customer demand for electricity.

Florida surpassed New York last year as the nation's third largest state with 19.9mn residents, behind California and Texas, the US Census Bureau said.

FPL, which serves about half the state's population, said its average residential customer used 16pc less electricity last year than the utility had projected before the recession hit.

FPL plans to add capacity from gas-fired generation, but will consider proposals for system sales that include units fueled by coal or petroleum coke.

Florida utilities rely heavily on demand-side programs to meet the region's 20pc reserve margin. FPL said half its total reserve margin, or 2,650MW, needs to come from generating resources to better meet statewide reliability needs.

Load management programs through 2013 have cut FPL's summer peak by 4,700MW, the utility said in its 10-year generation plan filed last year.

Bids are due in mid-May with a final selection expected by late July.

Responses to the solicitation will be analyzed and compared with FPL's self-build proposal for a 1,600MW combined-cycle gas plant to be built at a greenfield site in Okeechobee County in central Florida.

FPL said it will not consider buying an existing or new power plant, which regulators found to be the lowest-cost option for Duke Energy Florida in its recent solicitation.

Duke Energy Florida filed last week to buy Calpine's 590MW Osprey Energy Center as merchant generators work to leave the market.

In January, NRG Energy mothballed its 463MW Osceola plant in St. Cloud, Florida, after a 10-year contract expired. The company is considering dismantling and relocating the plant to another market.

Calpine said it would likely shut the Osprey plant if the Duke sale is not approved.

FPL retired 498MW at the two-unit Putnam County oil and gas-fired plant in December and next year expects to complete transformation of its 1960s' era Port Everglades power plant in Broward County into a 1,200MW combined cycle plant.

Since 2001, FPL has invested billions of dollars to replace aging oil and gas-fired generation and now produces power from efficient gas plants and zero-emission nuclear and solar energy.

FPL is also underwriting construction of the third interstate gas pipeline system in Florida, expected to enter service in 2017, as it relies more on gas.