Florida PSC staff pushes approval of FPL gas plant over opposition

Dive Brief:

Florida Power & Light’s proposed 1,163 MW gas-fired plant in Dania Beach appears poised for approval despite opposition, S&P Global reports.
Florida’s Office of Public Counsel (OPC) and the Sierra Club argued that a renewable power plant should be considered over a gas-fired plant. They also say the capacity is not needed and the new plant would move FPL’s reserve margin higher than required.
PSC staff overrode those objections and said Dania Beach is the least expensive option in recommending the project for approval at the PSC’s upcoming March 1 meeting.

Dive Insight:

In its 2017-2026 Ten Year Power Plant Site Plan, FPL said it would retire two 442 combined-cycle units at the Fort Lauderdale site. The units were last updated 25 years ago.

FPL’s proposal before the PSC calls for replacing these older units with a modern combined-cycle plant that would result in a net addition of 279 MW of capacity. FPL justified the plan in part because, it said, it would maintain its PSC approved 20% reserve margin and defer the need for future capacity additions.

FPL also argued that the new plant would result in $337 million in net cost savings for customers because it is more efficient and would burn less gas. The utility said the plant would slash primary air emissions by 70%. FPL’s plans call for having the new plant online by June 2022.

PSC staff noted that replacing the retiring capacity with 1,033 MW of solar PV and 755 MW of battery storage would cost around $1.3 billion more than building a new gas plant. Even using a more conservative approach, adding just 433 MW of solar and storage, would cost $370 million more than building a new plant, staff said.

In a filing with the PSC, the Sierra Club countered that FPL’s projections indicate that 2022 is two years before any projected reserve margin shortfall, three years before any projected system balance issue and five years before the full 1,163 MW of new capacity would be needed to preserve the utility’s reserve margin.

The Sierra Club went on to say that FPL has consistently over forecast load growth, especially when looking five years into the future.

According to FPL’s projections, its reserve margin does not fall below 21% until 2024 when it drops to 19.8%. In 2026, its projected reserve margin falls to 16.3%. In the PSC recommendation, the staff noted that all parties agreed on the need to retire the old units at Dania Beach and replace that capacity by 2024.

One of the Sierra Club’s arguments is that FPL customers would be better served if FPL were to add capacity commensurate with the timing and size of the projected reserve margin deficit. Locking in the new plant, a decade before the projected shortfall, would “rob customers of wide-ranging benefits of investing in alternatives,” the Sierra Club said in the filing.

Sierra Club’s argument against FPL’s approach is that the utility’s plan is “arbitrarily and unreasonably constrained by a megawatt to megawatt match” of the capacity of the new gas plant.

“This is not a final decision; it’s just a recommendation by the staff,” Susannah Randolph, Sierra Club’s senior campaign representative in Florida, told Utility Dive via email.

She noted that Gov. Rick Scott (R) still has the ability to step in and influence the outcome, adding that the Sierra Club will continue to urge the governor to tell the PSC “to protect our pocketbooks, air, climate and communities by rejecting the expansion of fracked gas burning power in Dania Beach.”