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Duke Merchant Power Plant Breaking into Florida Market

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 together."

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.

Ellen Beswick

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