SCIENTECH: Enron Continues Florida Power Plant Push

Despite a "go slow" approach toward electric competition in Florida that has already turned away Duke Energy, Enron Corp. appears to be making headway in the quest to enter the tightly guarded state, according to a recent SCIENTECH IssueAlert by Will McNamara. The community of Deerfield Beach, FL recently gave Enron approval to build a natural gas-fired power plant one mile north of a site it abandoned last week "amid fierce opposition."

In mid-June, Enron decided to scuttle its proposed 500 MW power plant in Pompano Beach, FL (see NGI, June 18), a decision that company spokesperson Eric Thode said is in keeping with Enron's overall practice of going into a state with plans to build more plants than the company actually intends to construct. Thode emphasized that the move had nothing to do with public opposition to the facility.

Even with the approval of Deerfield Beach, Enron still may have to do battle with the recently imposed 11-month moratorium on the construction of new power plants in Broward County. In late June, Thode said the Florida Department of Environmental Protection (DEP) has already issued a letter to the Broward County Commission pointing out that a moratorium would be contrary to several "duly passed" statutes.

Although the Deerfield approval is considered a win for Enron, McNamara said the "energy powerhouse" continues to face an uphill battle to bring this new power plant into the state. The company still needs to obtain a state air quality permit, something that McNamara said nearby cities have promised to fight. Assuming Enron receives all of its approvals, Thode said the company would begin construction within the next year.

In addition to the Deerfield plant, Enron is attempting to make other surges into the state with a similar power plant projects in Saint Lucie County, where Enron's project has already been approved, and a project similar to the Deerfield proposal in South Miami-Dade County. McNamara said these proposals mark a "fairly aggressive attempt to establish itself in Florida in anticipation of the state becoming more competitive."

Enron is not the only company attempting to cash in on the opportunity of a deregulated Florida. Duke Energy attempted to gain approval from the state for its New Smyrna Beach power plant project for years, but was continually rejected. The Florida Supreme Court in October rejected Duke Energy's motion for rehearing of a decision that stated the state's public service commission had no authority to approve the company's 514 MW merchant plant (see NGI, Oct. 9, 2000). Duke has since given up on the project.

El Paso Corp. also has aspirations to enter the state. The company has reported that it has interests in building gas-fired plants in Deerfield Beach and Belle Grande (see NGI, July 2). El Paso's proposed Deerfield Beach project is a 250 MW, combined-cycle baseload power plant. Aaron Woods, an El Paso spokesperson, said late last month that the company has applied for an air permit related to the plant, which is pending approval. El Paso also will need to get a construction permit from the county for the plant, he said. Prior to the moratorium passing, Woods commented on the moratorium's implications. "We will continue on schedule with our project," Woods told NGI. "The moratorium will not affect our procedures as far as obtaining appropriate permits, and we're going to continue to be on schedule to hopefully be in operation by 2004."

North Carolina-based Progress Energy also reported on Monday that it is planning to build a 320 MW natural gas-fired plant in DeSoto County, FL by June 2002. The company, through its subsidiary, Desoto County Generating Co., recently acquired a 30-acre site from Entergy Wholesale Operations, on which it will place two 160 MW combustion turbines. Progress said environmental and zoning permits have already been approved for the site, which is located approximately 50 miles east of Sarasota.

McNamara said that public resistance to new plants continues to remain high despite recent new reports that show the state faces an "imminent power supply problem." A recent study done by Florida's Energy 2020 Study Commission showed that the electric reserve in the state is 7%, not including interruptible loads (disruption to customers). If something is not done to increase power supply in the state, some analysts fear Florida could enter California-like energy troubles down the road.

"Once again, Enron seems to be in the middle of a controversial debate as it pushes the competitive boundaries in a state that is slowly making accommodations for a deregulated market," McNamara said in the IssueAlert. "The mixed bag of public opposition, attempts by incumbent utilities to hold onto their market base, and state legal restrictions may create a bumpy road for Enron (or other out-of-state companies) that attempt to penetrate the Florida market. For now, however, Enron appears to be one step closer to adding Florida to its large market base."

Delaware-based SCIENTECH is a worldwide provider of expert services to the energy, technical security and telecommunication markets, serving the needs of government and industry. The company also offers consultation, services and products that enable and enhance client operations by reducing risks, improving performance, minimizing costs and facilitating change.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.