FPL backs arguments for Port Everglades plant repowering

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The gas-fired repowering of the currently shut Port Everglades plant is needed in part to maintain fuel diversity in Florida Power & Light’s generating fleet, FPL said in prehearing testimony filed Jan. 17 at the Florida Public Service Commission.

The repowered plant, to be known as the Port Everglades Next Generation Clean Energy Center (PEEC), will be fueled by natural gas, and to enhance fuel supply reliability, it will use light oil as a backup fuel. “Compared to returning to service the existing units at Port Everglades, adding PEEC will improve the plant’s heat rate by 35% and will improve FPL’s overall system heat rate by 1.3%,” said the Jan. 17 testimony. “The improved heat rate, in turn, will reduce FPL’s use of natural gas by about 90 million MMBtu and fuel oil by about 10.4 million barrels over a 30-year period.”

FPL proposes to build at the existing Port Everglades plant site a state-of-the-art combined cycle natural gas unit with about 1,277 MW (summer) of generation for commercial operation beginning in June 2016. This addition will replace the 1960s-era oil and natural gas steam units at the site that are currently in inactive reserve status.

Due to its efficient technology, PEEC is expected to save FPL’s customers as much as $83.8m cumulative present value revenue requirements (CPVRR) in electricity costs compared to other self-build alternatives and at least $900m compared to third party-build alternatives. Also, the rebuilt plant can meet existing and anticipated future environmental requirements and will substantially reduce CO2, NOx, SO2 and particulate emissions, FPL noted.

Also, having a generation site located in Broward County will allow FPL to serve its most concentrated load territory without the need to import large amounts of power over long distances and will avoid approximately $638m in costs for new transmission facilities that would otherwise be necessary, the utility said. PEEC avoids utilization of new land, new Florida water resources, and new rights-of-way for transmission and gas pipeline facilities that would be necessary to achieve the same generation capacity already available at Port Everglades.

After accounting for all projected Demand Side Management (DSM) from programs approved by the commission, FPL has future generating capacity needs starting at about 284 MW in 2016 and growing to 1,468 by 2021. PEEC will provide 1,277 MW of highly efficient capacity to help satisfy this need, FPL said. PEEC will be a highly reliable source of energy, with a projected equivalent availability factor of approximately 95.4%. PEEC will also be highly reliable in terms of fuel supply because its coastal location facilitates the receipt of light oil backup fuel via both truck delivery and waterborne transportation, and because enough light oil will be stored on site to allow PEEC to operate at full capacity for approximately 72 hours. PEEC is also favorable from a transmission reliability perspective because it reduces the load-to-generation imbalance in the Miami-Dade and Broward County area and also provides voltage support.

The estimated total installed cost for PEEC is nearly $1.2bn, in 2016 dollars. FPL’s analyses show that the resource plan that includes PEEC in 2016 will save customers $425m to $838m CPVRR as compared to the other available self-build alternatives, and at least $900m CPVRR compared to third party-build alternatives.

FPL’s economic analyses demonstrate that adding PEEC in 2016 will result in customer savings of $469m CPVRR when compared to returning to service the existing Port Everglades units, $838m CPVRR when compared to the adding a combined cycle unit at a greenfield site, and $425m CPVRR when compared to adding a combustion turbine unit at a greenfield site in 2016 and deferring PEEC to 2019.

Commission staff also filed Jan. 17 prehearing testimony that said staff is taking no position at this time on any of the issues in this case. A hearing in the case is scheduled for Feb. 20. FPL filed this case on Nov. 21, 2011.

FPL is the largest electric utility in Florida and one of the largest rate-regulated utilities in the United States. FPL serves approximately 4.5 million customer accounts in Florida and is a subsidiary of Juno Beach, Fla.-based NextEra Energy Inc. (NYSE:NEE).

Planned rate hike to help pay for prior repowering

In the meantime, FPL announced Jan. 17 that it had notified the Florida PSC that it expects to ask for an increase estimated at $6.80 monthly, or about 23 cents a day, on the base portion of a typical residential customer bill. The increase would not take effect until 2013.

The adjustment is needed to pay for increases in the cost of doing business and to begin paying for a new, high-efficiency natural gas power plant after it enters service in June 2013. The plant will use considerably less fuel to generate electricity, which in turn lowers customers' total bills.

The rate adjustment will repay the company's investment in the Cape Canaveral Next Generation Clean Energy Center after it goes into service in mid-2013. The new plant will use high-efficiency, combined-cycle natural gas technology to generate power with 33% less fuel per megawatt-hour and far fewer emissions than the former plant. Over its 30-year operational lifetime, the energy center is expected to provide FPL customers with fuel savings of about $600m over and above the cost to build it. The repowered plant will be capable of producing 1,250 MW.

Over the three-year period from 2011 to 2013, FPL said it plans to invest approximately $9bn to strengthen and improve Florida's electric generation and delivery system, which spans more than 27,000 square miles.

Barry Cassell
About the Author

Barry Cassell

Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 26 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.

Barry can be reached at barryc@pennwell.com.

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