A new battle in utility deregulation gained momentum last weekwhen the Electric Power Supply Association (EPSA) published aletter urging the Florida Public Service Commission (FPSC) toreject Florida Power Corp.’s petition to forgo competitive biddingfor construction of Hines 2, a second gas-fired generation plant atits Hines Energy Complex in Polk County, FL.

Attempting to accelerate the construction of the Hines plant,Florida Power filed a petition in late October to skip the biddingprocess, saying the PSC could forgo the requirement for utilitiesto solicit bids for new generating capacity if the proposal, likethe one for the Hines 2 plant, would likely “result in lower-costsupply of electricity, increase the reliable supply of electricity,or is otherwise in the public interest.” Florida Power claimed itsproposal qualified. The new plant will generate 500 MW and, whencombined with the Hines plant that already exists on the site, willutilize 70-80 MMcf/d of gas depending on weather. Upon completion,Florida Power expects the site to generate up to 3,000 MW.

The EPSA, which represents developers of independent powerplants and marketers of competitive power, is fighting theproposal. Mark Stultz, an association spokesman said, “We are notnecessarily opposed to Florida Power building the plant. We justwant to make sure the commission has a chance to evaluate the otheroptions as well.” In the letter to the PSC, they argued thatforgoing the bidding process would not ensure ratepayers the bestpossible rates or allow alternative suppliers a chance in aderegulating industry. “The petition before you from Florida Powerrepresents, at best, a throw-back to the old ways of doingbusiness,” the letter said.

The Hines site is one of several new gas-fired generation plantsbeing proposed for the state. A Florida Reliability CoordinatingCouncil study claims that the state will need over 10,000 MW ofadditional power in the next decade. In order to take advantage ofthis growth, new deregulation rules in Florida require utilities tobid on projects with merchant power plants.

The FPSC is scheduled to rule on the petition Dec. 22. Floridapower said that if the filing is rejected, construction of theplant will be delayed by at least six months.

Meanwhile, Florida Power, along with two other utilities in thestate, Tampa Electric (TECO), and Florida Power &amp Light, areopposing Duke Energy’s proposal to build a merchant power plant inNew Smyrna Beach, FL, saying the proposal is against the state’sPower Plant Siting Act. Mike Mahoney, a TECO spokesman, contendedif Duke built the proposed $160 million, 500 MW plant, “Theywouldn’t be subject to PSC oversight, and there is no obligationfor them to serve emergency orders.”

Duke is confident the PSC will rule in its favor. “The stateneeds all the electric generation it can get,” said Duke SpokesmanRandy Wheeless, “We’re going to put up our own money to build theplant, and our agreement with New Smyrna will allow their residentsa net decline in payments.” Duke has agreed to sell the city 30 MWeach year, saving the residents an estimated $3 million.

Hearings concerning the New Smyrna plant began on Wednesday andlasted until Friday. A decision is not expected until Feb. 2. Dukesaid the plant would not be functioning until 2000. John Norris

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