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Florida PSC: Gas the 'Default Fuel of Choice'

Florida's 11 electric utilities plan to add a net summer capacity of 10,225 MW over the next 10 years, approximately 4,000 MW less than they had planned on adding just a year ago, and they will depend more than ever on natural gas, according to 10-year site plans the utilities have filed with the Florida Public Service Commission (PSC).

The cut in planned capacity growth was attributed to customer losses in a state that has experienced a recent population decline.

"It is unclear at this time whether this decline is a short-term phenomenon based on current economic conditions in Florida and the nation as a whole or is a portent of a longer-term downturn in population growth and energy usage in the state," the PSC said in its review of the site plans.

According to site plans filed by Florida Power & Light Co. (FP&L), Progress Energy Florida (PEF), Tampa Electric Co., Gulf Power Co., Florida Municipal Power Agency, Orlando Utilities Commission, City of Lakeland, City of Tallahassee, JEA (formerly Jacksonville Electric Authority), Gainesville Regional Utilities and Seminole Electric Cooperative, a majority of the planned capacity to be added over the next decade is expected to come from natural gas-fired units, with nuclear generation representing the next largest fuel source.

But the long permitting and construction periods involved with nuclear plants and the cancellation of most of Florida's coal-fired generation has made gas-fired generation "the default fuel of choice," according to the PSC. Florida's dependence on natural gas is projected to increase from 40.4% last year to 46.7% by 2018. The PSC advised utilities to "continue to evaluate diversity within a fuel type, such as liquefied natural gas and gas storage, as options to traditional sources and delivery methods for natural gas."

The utilities' site plans include the net addition of approximately 11,000 MW of gas-fired generation. That's down from about 15,500 MW in last year's site plans, a decline attributed in part to the reduction in load forecasts and the inclusion of the nuclear units in the newest site plans.

Of Florida's approximately 55,000 MW of utility-owned generation, only about 1,170 MW comes from renewable sources, with another 750 MW of new renewable projects planned. While the planned increase is "significant" compared with the existing level of renewable generation, "the contribution toward fuel diversification from renewable energy remains relatively small," the PSC said.

More than 3,500 MW of coal-fired generation which had been included in previous 10-year site plans has been canceled, the PSC said. Seminole Electric Cooperative's 750 MW Seminole Unit 3, which was approved by the PSC more than three years ago and has an expected in-service date of May 2016, is the only planned addition to Florida's coal-fired generating capacity.

Each generating electric utility in Florida must submit to the PSC each year a 10-year site plan estimating the utility's power generating needs and the general location of its proposed power plant sites over the 10-year planning horizon. The projects of load growth in the site plans "appear reasonable," according to the PSC, which said the plans are suitable for planning purposes but are subject to modification due to changes to fuel cost, energy use projects, evolving technology and shifting energy policy.

The site plans and PSC review are available at www.floridapsc.com.

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