Duke Energy Power Services and the Utility Commission of theCity of New Smyrna Beach in Florida filed plans with the FloridaPublic Service Commission (FPSC) to build and operate a 500 MWgas-fired merchant power plant in the city. In attempting to buildthe first merchant power plant in the state, Duke will be runningthe gauntlet of opposition from entrenched utilities.

Duke is targeting 2001 for the combined cycle plant to beoperational. It is expected to cost $160 million.

Responding to queries as to potential opposition and thelikelihood Duke would prevail, Mike Green, vice president of DukePower and general manager of the project, cited studies filed withthe FPSC that Florida would need 8,000 MW of new generatingcapacity in the next decade. The study was supported by the FloridaReliability Coordinating Council and based on the tremendous growthbeing experienced in the state. “The construction of new powerplants is not keeping up,” he said.

New Smyrna Beach Municipal Utility Commissioner Ronald Vadensaid the city would need 30 MW a year after its contracts withother suppliers expire at the end of 1999. “We have not been ableto sign contracts at current price levels,” Vaden said. The rest ofthe power would be sold into the grid. Green pointed out there isonly limited transmission capacity coming into the state fromGeorgia. Duke has been working with the municipality for the lastyear on preparing project plans.

While a number of new merchant power plant projects have beenannounced across the country, Green pointed out that Duke hasactually built one that went into service recently in Bridgeport,CN, with initial production of 340 MW. In announcing the start-upof that plant last week, Paula Rosput, president of Duke PowerServices, pointed out it was up and running within a year after itwas first announced. She said it was “an excellent example of whatcan happen when industry, governments and communities worktogether.”

Commenting earlier this year Rosput called Florida “afascinating market….with a lot of pent-up demand for power.” Dukeis “attempting to pioneer a merchant plant there much to thechagrin of our utility brethren.” The key will be whether Duke isable to get it permitted.

Questioned as to whether Duke’s pipeline division might considerbuilding a natural gas pipeline into the state to supply the newplant, Green said that was not on the agenda right now. Florida isserved by a single pipeline, Florida Gas Transmission (FGT), whichbeat back attempts by other pipeline projects to break its monopolyseveral years ago. Duke has a contract with FGT affiliate CitrusTrading for gas supply via a 42-mile 16-inch lateral pipeline to beconnected to the mainline.

Ellen Beswick

©Copyright 1998 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.