Duke Merchant Power Plant Breaking into Florida Market
Duke Energy Power Services and the Utility Commission of the
City of New Smyrna Beach in Florida filed plans with the Florida
Public Service Commission (FPSC) to build and operate a 500 MW
gas-fired merchant power plant in the city. In attempting to build
the first merchant power plant in the state, Duke will be running
the gauntlet of opposition from entrenched utilities.
Duke is targeting 2001 for the combined cycle plant to be
operational. It is expected to cost $160 million.
Responding to queries as to potential opposition and the
likelihood Duke would prevail, Mike Green, vice president of Duke
Power and general manager of the project, cited studies filed with
the FPSC that Florida would need 8,000 MW of new generating
capacity in the next decade. The study was supported by the Florida
Reliability Coordinating Council and based on the tremendous growth
being experienced in the state. "The construction of new power
plants is not keeping up," he said.
New Smyrna Beach Municipal Utility Commissioner Ronald Vaden
said the city would need 30 MW a year after its contracts with
other suppliers expire at the end of 1999. "We have not been able
to sign contracts at current price levels," Vaden said. The rest of
the power would be sold into the grid. Green pointed out there is
only limited transmission capacity coming into the state from
Georgia. Duke has been working with the municipality for the last
year on preparing project plans.
While a number of new merchant power plant projects have been
announced across the country, Green pointed out that Duke has
actually built one that went into service recently in Bridgeport,
CN, with initial production of 340 MW. In announcing the start-up
of that plant last week, Paula Rosput, president of Duke Power
Services, pointed out it was up and running within a year after it
was first announced. She said it was "an excellent example of what
can happen when industry, governments and communities work
Commenting earlier this year Rosput called Florida "a
fascinating market....with a lot of pent-up demand for power." Duke
is "attempting to pioneer a merchant plant there much to the
chagrin of our utility brethren." The key will be whether Duke is
able to get it permitted.
Questioned as to whether Duke's pipeline division might consider
building a natural gas pipeline into the state to supply the new
plant, Green said that was not on the agenda right now. Florida is
served by a single pipeline, Florida Gas Transmission (FGT), which
beat back attempts by other pipeline projects to break its monopoly
several years ago. Duke has a contract with FGT affiliate Citrus
Trading for gas supply via a 42-mile 16-inch lateral pipeline to be
connected to the mainline.
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