Dive Brief:
- Florida Power & Light Co. wants to acquire a coal-fired plant with which it has a long-term power purchase contract, just so the utility can shut down the plant.
- FPL has asked state regulators to approve the plan, which it says will save consumers about $70 million and prevent nearly 1 million tons of carbon dioxide emissions annually.
- If allowed to purchase the 250-MW Cedar Bay Generating Plant, the utility said it would immediately terminate the contract and reduce the plant's operations by 90%.
Dive Insight:
It seems like a lot of money for something you just want to shut down.
In its filing with the Public Service Commission, FPL proposed to purchase CBAS Power Inc., the indirect owner of the plant, from CBAS Power Holdings for $520.5 million. FPL said it would then terminate the purchased-power contract, avoiding the fixed payments that customers would otherwise pay through their rates over the remaining life of the contract.
"Although years ago it made sense to buy this plant's power to serve our customers, times have changed. We have invested billions of dollars to improve the efficiency of our system, reduce our fuel consumption, prevent emissions and cut costs for our customers," said Eric Silagy, president and CEO of FPL. "Now we're in a position to take ownership of the facility and effectively buy out an outmoded contract with the goal of ultimately phasing the plant out of service, which will mean reduced carbon emissions and millions of dollars in savings for our customers."
Based on the company's current analysis of operational needs, FPL said it anticipates permanently decommission the Cedar Bay plant within the next two to three years. FPL explained that it expects enhanced natural gas access in 2017 to leave the Cedar Bay plant uneconomical and therefore would be retired nearly eight years sooner than it otherwise would have been.
The plan has support from some environmental activists. Temperince Morgan, executive director of the Florida Chapter of The Nature Conservancy, called the proposal an "innovative approach to promote energy solutions that will help reduce emissions in Florida."
