Florida Utility Looks To Buy (… & Then Shut Down) Coal Plant

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Florida Power & Light filed with the Public Service Commission last week for approval to purchase the 250-MW coal-fired Cedar Bay Generating Plant (near Jacksonville, Florida) for $520.5 million. Cedar Bay comprises three reheat circulating fluidized boilers fueled by low-sulfur coal.

Cedar Bay coal-fired electric generating plant, near Jacksonville, Florida (dep.state.fl.us)
Cedar Bay coal-fired electric generating plant, near Jacksonville, Florida (dep.state.fl.us)

With 4.7 million customers, FPL is the nation’s third-largest electric utility and the state’s largest investor-owned utility. FPL has had a long-term power purchase agreement with the Cedar Bay plant’s direct owner, Limited Partnership, that began in 1988 and will expire in 2024. The purchase, expected in August, will enable the company to terminate the PPA immediately, which will reduce the plant’s operations by 90%. FPL will then permanently decommission Cedar Bay within the next several years. Says the utility:

“In 2017, when Florida’s access to clean natural gas is expected to be enhanced by the new interstate natural gas pipeline entering commercial operation, FPL believes that the Cedar Bay plant will no longer be economic to dispatch or needed for reliability, and therefore would be retired nearly eight years sooner than it otherwise would have been.”

In today’s market, FPL says it can generate electricity at a much lower cost than was anticipated in the PPA. Conceding that the Cedar Bay plant is managed efficiently, the company says that the facility nonetheless emits more carbon dioxide than the other current company generators. FPL expects to make up the slack when the company’s anticipated natural gas pipeline system (Sabal Trail Transmission and a Florida Southeast Connection), slated to begin construction in spring 2016, goes into operation a year later. The company filed its request for proposals for this new gas transportation infrastructure in December 2012.

According to Electric Light & Power, “FPL is well-positioned to meet the EPA’s Clean Power Plan targets for reductions in CO2 emissions—with no expected additional costs — unlike many electric utilities across the country. Likewise, by lowering the state’s overall emissions rate, the plan filed today will help Florida meet the EPA’s proposed statewide CO2 emissions reduction goals.”

The Sunshine State has relatively cheap historical utility rates, no renewable energy standard or goal, no solar leasing, and policies that actively discourage rooftop panels. The state’s cumulative installed solar capacity ranks only 13th in the nation. Nevertheless, Floridians for Solar Choice (a motley coalition of tea party and Christian Coalition conservatives, solid liberals, environmentalists, and retailers) is working hard on a ballot initiative that will support residential solar PV. Efforts like this could decrease the need for large-scale natural gas generation.

Florida boasts 85% of the maximum PV resource of all locations in the country (7.2 kWh/day out of a maximum of 8.5 kWh/day). Also, the costs of solar PV have continued to plummet since FPL’s pipeline RFP, and at least three new large-scale solar farms will be set to go by the end of 2016. The state has good potential for small-scale and offshore wind energy development, especially on the east coast, as well as nearshore tidal and wave energy capture and biofuels production.

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