Florida Court Shoots Down Merchant Plant Appeal

Merchant power plant developers attempting to get a foot in the door in Florida were thrown out again by the state Supreme Court. The court rejected Duke Energy's motion for rehearing of a decision handed down this spring that said the state's public service commission had no authority to approve a 514 MW merchant plant Duke planned to build in New Smyrna Beach.

The PSC in March 1999 approved Duke's petition to build the plant. But Florida Power & Light challenged the PSC ruling before the court, which concluded that state laws do not allow power plants whose output is not committed to retail customers.

The merchant plants, which are opposed by FPL and other local monopoly utilities, would sell power into the wholesale market and to other utilities in Florida. The court ruling effectively blocked a string of about 25 merchant power projects being planned by a number of companies, including Dynegy, Panda and Calpine Corp.

"While we were disappointed in the ruling, we are encouraged by the energy study commission that Gov. [Jeb] Bush has put in place," said Duke Energy spokesman Rick Rhodes.

The governor issued a mandate earlier this year to set up the Energy 2020 Study Commission to examine the state's future energy needs. At its first meeting recently, the commission decided to bring an interim report in January to the legislature on whether state laws need to be changed to allow the merchant power plants to be developed.

"We're encouraged by the first meeting this week in which they have agreed to develop interim recommendations that hopefully will go before next year's legislature," said Rhodes. "[The statute has to change] to allow combined cycle facilities with greater than 75 MW steam loads to be developed. I think [the legislature will change the statute]." He noted that the state of Florida will need another 7,000 to 8,000 MW of new base load generation by 2007.

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