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Released August 18, 2015 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Florida Power & Light Company (FPL) (Juno Beach, Florida), the utility subsidiary of NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida), wants to continue turning over its power-generating fleet by building a 1,622-megawatt (MW) natural gas generator in Okeechobee County, Florida. The proposed project, with total investment value (TIV) of about $1.2 billion, follows the recent completion of two large, gas-fired generators; the closure of two large, oil-fired generators; construction of utility-scale solar generation projects; and plans to buy and close a coal-fired power plant, company officials said.
The proposed Okeechobee Clean Energy Center needs the backing of the Florida Department of Environmental Protection (Tallahassee, Florida) and the Florida Public Service Commission (PSC) (Tallahassee), among other agencies. The utility believes the approval process should take 14 to 16 months. Later this year, it plans to issue a request for proposal (RFP) for an engineering, procurement and construction (EPC) firm. FPL plans to begin construction of the new power plant in early 2017 and have it operating in mid-2019.
"We're building on our successful strategy of phasing out older, inefficient facilities and replacing them with advanced, high-efficiency, clean-energy technology in a way that ensures we can meet the growing energy needs of Floridians while keeping their electric rates low," said Eric Silagy, president and chief executive of FPL, in a statement July 2. "The strategy is working: our system is among the cleanest and most fuel-efficient in the U.S., and our typical customer bills are about 30% lower than the national average."
A significant portion of FPL's generation used to be oil-fired, but since 2001 the utility said it has cut foreign oil use by more than 99%--from more than 40 million barrels per year to less than 1 million barrels per year. Since 2001, the utility said the effectiveness of these investments has saved its customers more than $7.5 billion on fuel costs and prevented more than 85 million tons of carbon emissions.
Earlier this year, FPL filed its 10-year forecast of future energy requirements with the Florida PSC. It projected significantly rising energy demand after 2019. The utility also advised regulators that two significant long-term agreements to purchase power from older natural gas and coal units, totaling more than 1,300 megawatts of capacity, are expected to expire before mid-2019. The plan noted the construction of its Port Everglades Next Generation Clean Energy Center was progressing well, with a scheduled completion of mid-2016. FPL demolished its 1,200-MW, fuel oil-fired plant at that site and is building a 1,250-MW, gas-fired plant at a cost of about $1.1 billion.
The utility also is building three utility-scale photovoltaic generating stations at a total cost of more than $1.2 billion. The utility expects those generators to be operating by yearend 2016.
Farther down the road, FPL is planning on building another large gas-fired plant, the Hendry County Power Station. That planned project will have generation capacity of about 1,429 MW, and it will have a TIV of about $1.5 billion. At this point, assuming regulatory approvals are received, FPL plans to begin turning dirt on this project in 2019, and have it operating by 2022.
FPL wants to spend about $520 million to buy a 250-MW cogeneration plant in Jacksonville, Florida, from The Carlyle Group (NASDAQ:CG) (Washington, D.C.). That plant, Cedar Bay Cogeneration, came online in 1994. If FPL succeeds at purchasing that plant, it plans to close it by yearend 2016, when the Port Everglades generation project is complete. FPL also could bank the emissions reductions that would come from closing Cedar Bay. The utility pays about $120 million per year for power from that plant. Environmental groups have supported FPL's plan. But in PSC hearings that began at the end of July, a group of large-energy users opposed it, saying FPL was over-paying for the Cedar Bay plant. These large-energy users felt the plant should be valued at $370 million or less, according to news reports.
FPL brought two large gas-fired power plants online in 2013 and 2014, as part of its embrace of natural gas. The 1,250-MW Riviera Beach Next Generation Clean Energy Center, built at a cost of about $1.25 billion, began generating electricity in 2014, while the Cape Canaveral Next Generation Clean Energy Center, a 1,295-MW plant, began operating in 2013. That plant was built at a cost of about $1.1 billion. The utility noted both projects were completed ahead of schedule and under budget.
To ensure there is sufficient natural gas to power all of FPL's new gas-fired generators, the utility's parent, NextEra Energy, owns 50% of a $3 billion interstate gas pipeline, Sabal Trail, which is scheduled to bring more natural gas to the Sunshine State. Construction of that project is scheduled to kick off in 2016, and it is scheduled to be operating in 2017. For more on the Sabal Trail Pipeline project, see February 5, 2014, article - Sabal Trail Pipeline to Help FPL Realize Big Bet on Gas-Fired Generation.
"FPL has been working diligently for several years to transform its generation portfolio, and low-priced gas has been a great help in that effort," said Brock Ramey, Industrial Info's North American Power specialist. "These investments in gas-fired generation also will help insulate FPL from the impact of tougher federal regulation of power-plant emissions. Low gas prices have helped FPL lower the cost of its electricity as well. The power market is very dynamic, but at this point, those investments look like a solid foundation for the next decade or more of power generation in Florida."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
The proposed Okeechobee Clean Energy Center needs the backing of the Florida Department of Environmental Protection (Tallahassee, Florida) and the Florida Public Service Commission (PSC) (Tallahassee), among other agencies. The utility believes the approval process should take 14 to 16 months. Later this year, it plans to issue a request for proposal (RFP) for an engineering, procurement and construction (EPC) firm. FPL plans to begin construction of the new power plant in early 2017 and have it operating in mid-2019.
"We're building on our successful strategy of phasing out older, inefficient facilities and replacing them with advanced, high-efficiency, clean-energy technology in a way that ensures we can meet the growing energy needs of Floridians while keeping their electric rates low," said Eric Silagy, president and chief executive of FPL, in a statement July 2. "The strategy is working: our system is among the cleanest and most fuel-efficient in the U.S., and our typical customer bills are about 30% lower than the national average."
A significant portion of FPL's generation used to be oil-fired, but since 2001 the utility said it has cut foreign oil use by more than 99%--from more than 40 million barrels per year to less than 1 million barrels per year. Since 2001, the utility said the effectiveness of these investments has saved its customers more than $7.5 billion on fuel costs and prevented more than 85 million tons of carbon emissions.
Earlier this year, FPL filed its 10-year forecast of future energy requirements with the Florida PSC. It projected significantly rising energy demand after 2019. The utility also advised regulators that two significant long-term agreements to purchase power from older natural gas and coal units, totaling more than 1,300 megawatts of capacity, are expected to expire before mid-2019. The plan noted the construction of its Port Everglades Next Generation Clean Energy Center was progressing well, with a scheduled completion of mid-2016. FPL demolished its 1,200-MW, fuel oil-fired plant at that site and is building a 1,250-MW, gas-fired plant at a cost of about $1.1 billion.
The utility also is building three utility-scale photovoltaic generating stations at a total cost of more than $1.2 billion. The utility expects those generators to be operating by yearend 2016.
Farther down the road, FPL is planning on building another large gas-fired plant, the Hendry County Power Station. That planned project will have generation capacity of about 1,429 MW, and it will have a TIV of about $1.5 billion. At this point, assuming regulatory approvals are received, FPL plans to begin turning dirt on this project in 2019, and have it operating by 2022.
FPL wants to spend about $520 million to buy a 250-MW cogeneration plant in Jacksonville, Florida, from The Carlyle Group (NASDAQ:CG) (Washington, D.C.). That plant, Cedar Bay Cogeneration, came online in 1994. If FPL succeeds at purchasing that plant, it plans to close it by yearend 2016, when the Port Everglades generation project is complete. FPL also could bank the emissions reductions that would come from closing Cedar Bay. The utility pays about $120 million per year for power from that plant. Environmental groups have supported FPL's plan. But in PSC hearings that began at the end of July, a group of large-energy users opposed it, saying FPL was over-paying for the Cedar Bay plant. These large-energy users felt the plant should be valued at $370 million or less, according to news reports.
FPL brought two large gas-fired power plants online in 2013 and 2014, as part of its embrace of natural gas. The 1,250-MW Riviera Beach Next Generation Clean Energy Center, built at a cost of about $1.25 billion, began generating electricity in 2014, while the Cape Canaveral Next Generation Clean Energy Center, a 1,295-MW plant, began operating in 2013. That plant was built at a cost of about $1.1 billion. The utility noted both projects were completed ahead of schedule and under budget.
To ensure there is sufficient natural gas to power all of FPL's new gas-fired generators, the utility's parent, NextEra Energy, owns 50% of a $3 billion interstate gas pipeline, Sabal Trail, which is scheduled to bring more natural gas to the Sunshine State. Construction of that project is scheduled to kick off in 2016, and it is scheduled to be operating in 2017. For more on the Sabal Trail Pipeline project, see February 5, 2014, article - Sabal Trail Pipeline to Help FPL Realize Big Bet on Gas-Fired Generation.
"FPL has been working diligently for several years to transform its generation portfolio, and low-priced gas has been a great help in that effort," said Brock Ramey, Industrial Info's North American Power specialist. "These investments in gas-fired generation also will help insulate FPL from the impact of tougher federal regulation of power-plant emissions. Low gas prices have helped FPL lower the cost of its electricity as well. The power market is very dynamic, but at this point, those investments look like a solid foundation for the next decade or more of power generation in Florida."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
