Dive Brief:

• Florida Power & Light has proposed purchasing a 330-MW coal-fired plant it has contracts with for the next nine years, shutting it down and saving customers $129 million in the process, SNL Energy reports. 
• FPL filed its plan this week with the Public Service Commission. Last summer, regulators approved a similar plan at another coal-fired plant the utility wants to mothball.
• Closing down the Indiantown Cogeneration facility, which is currently owned by Calypso Energy Holdings, would halt more than 657,000 tons of carbon dioxide emissions annually, FPL said.

Dive Insight:

Purchasing a coal plant just to shutter it appears counter-intuitive, but FPL seems to find the approach working. 

FPL credits its clean energy strategy and the declining cost of gas as the driver behind its plan to shutter the Indiantown plant, with which it signed long-term agreements to purchase power in 1991.

"We are delivering power to our customers that is cleaner and more reliable than ever before at a price that is lower than it was 10 years ago and among the lowest in the nation," FPL President and CEO Eric Silagy said in a statement. "While many years ago it made sense to buy this plant's power to serve our customers, we're now able to purchase the facility and phase it out of service, preventing potentially harmful carbon emissions while saving our customers millions of dollars."

Silagy said it was the utility's "forward-looking strategy of smart investments that improve the efficiency of our system, reduce our fuel consumption, prevent emissions and cut costs for our customers," that enabled FPL to push the plan forward. It is the second time in less than two years the utility has floated such a plan; regulators signed off an earlier deal last August.

FPL is proposed purchasing the ownership interest for $451 million, including existing debt, making it the owner of the facility. The utility requested PSC approval by December, "so that the purchase can be completed as soon as possible to maximize customer savings." Customer savings could reach almost $130 million.

The utility said it would immediately decrease operations at the plant, so that it operates no more than 5% of the time. FPL said it expects to operate the plant "minimally" through the end of 2018. The plant is no longer expected to be economical, after new gas supplies reach Florida next year and the gas-fired Okeechobee Clean Energy Center enters service in 2019.

"Reducing emissions of greenhouse gas pollutants is critical to addressing the risks posed by climate change. Transitioning to a clean energy economy is something that Floridians want and deserve — and retiring coal-fired facilities is an important step toward a lower-carbon future," said Temperince Morgan, executive director of the Florida Chapter of The Nature Conservancy.

FPL said it has not made a decision on the site's future use, but said the property's close proximity to the existing Martin Next Generation Clean Energy Center's solar and natural gas infrastructure "provides the opportunity for future solar or natural gas generation."

In August of last year, the PSC approved FPL's plan to purchase the 250-MW Cedar Bay Generating Plant from CBAS Power Inc. for more than $520 million, avoiding fixed payments and ultimately shuttering the plant. That deal is expected to save consumers about $70 million and prevent nearly 1 million tons of carbon dioxide emissions annually.