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Florida P&L Decides to Build 2,400 MW Gas-Fired Plant

Florida Power & Light Co. (FP&L) said that its West County Energy Center proposal is the best and most cost-effective option to provide additional electricity for FP&L customers beginning in 2009. Under FP&L's proposal, a new power plant, featuring two natural gas-fired units of approximately 1,200 MW each, would be built on a 220-acre site in western Palm Beach County.

FP&L initiated a two-part request for proposals (RFP) in the summer of 2005 as part of its 10-year plan to meet the growing need for power and maintain a balanced fuel supply. Part one of the RFP identified the best option to meet the power requirements needed between 2009 and 2011.

As described in the RFP, in order to identify the best option for meeting customer's needs, the utility develops a self-build proposal and then uses a competitive bidding process to solicit proposals from other companies. The utility received proposals from three other companies to provide power generation including Progress Energy Florida, Progress Energy Ventures and Southern Power Co.

FP&L said that a comprehensive economic evaluation determined that the West County Energy Center proposal would provide significant savings to FP&L customers over the 25-year project life when compared to all the other alternatives.

The comprehensive bidding process and evaluation of alternative proposals was conducted in full compliance with the rules established by the Florida Public Service Commission (FPSC) to determine the most cost-effective alternative to meet the need for added generation capacity, the utility added.

Based on FP&L's growth forecast, the new plant will meet the increasing demand for electricity from existing and new customers throughout FP&L's service territory, but particularly in Palm Beach and surrounding counties. The population in Palm Beach County has increased 30% in the last decade and the number of customer accounts has grown from under 487,000 in 1990 to more than 675,000 in 2005.

Since the year 2000, FP&L is adding about 15,000 new customer accounts in Palm Beach County each year. In neighboring Martin and St. Lucie counties, the number of customers has increased by 21% since 2000.

In the first quarter of 2006, FP&L will file a determination of need petition with the FPSC. If the FPSC approves the petition, a decision may be rendered by mid-2006. The next steps are a number of environmental permitting approvals followed by a review before the governor and the Florida Cabinet Siting Board. The first generating unit at the West Palm Beach County site is expected to be completed by 2009 and the second unit by June 2010. The cost of the total project is nearly $1.2 billion.

With the selection of the West County Energy Center, the first part of the two-part RFP process is concluded. The second part of the RFP focuses on additional generation to meet growth demands for the period between 2012 and 2014.

An RFP supplement will be issued later in 2006 soliciting proposals to compete with FP&L's proposed coal generation additions. FP&L will restrict interested bidders to coal projects as part of the company's long-term plan to maintain and expand its fuel diversity, which today includes nuclear, oil, gas, coal and purchased power.

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