The Florida Public Service Commission (PSC) Tuesday voted to deny a Florida Power & Light Co. (FP&L) proposal to construct a 280-mile intrastate pipeline to move natural gas north to Bradford County from Palm Beach County and ordered the project to be rebid.

By a 4-0 vote the PSC approved an alternative staff recommendation that FP&L had not demonstrated that the proposed $1.53 billion Florida EnergySecure Line was the most cost-effective and reliable source of natural gas supply, transport and delivery — though commissioners agreed that there is a need for 400 MMcf/d for two FP&L plants the pipeline would serve.

“We understand the need for supply diversity and long-term natural gas reliability, but it must be accomplished in a cost-effective manner,” said Chairman Matthew Carter.

FP&L filed its proposal for the Florida EnergySecure Line in April (see Daily GPI, April 8). The 30-inch diameter pipeline’s initial capacity would be 600 MMcf/d. About two-thirds of that capacity would be used by the FP&L Next Generation Clean Energy Centers at Cape Canaveral and Riviera Beach, where existing facilities are being retrofitted from fuel oil to natural gas to reduce emissions, the utility said. The remaining capacity would allow for a reserve margin to deliver fuel to FP&L or others in the state, the utility said.

FP&L had proposed recovering costs associated with the pipeline through its electric utility rate base and had said during hearings that it would not build the pipeline without rate based financing. The utility “didn’t want to be in the natural gas transmission pipeline business,” according to PSC staffer Martha Brown. “There would be administrative expenses to setting up a separate subsidiary and it’s primary intention was to serve the needs of its power plants.”

Last month a PSC staff report on FP&L’s proposal included both a primary recommendation to approve the application and an alternative recommendation to deny it (see Daily GPI, Sept. 28). Commission staff issued opposing recommendations on seven issues, including the question of whether the pipeline is needed to improve or maintain gas delivery reliability and integrity within the state. Florida Gas Transmission (FGT), which had filed to intervene in the case, has said existing pipelines in the state, almost all of them owned by FGT, provide sufficient capacity to meet projected demand for approximately eight to 10 years.

On the eve of the vote, FP&L said a recent FGT request for increased transportation rates proved that the state needs increased competition (see Daily GPI, Oct. 6).

Prior to its decision, the PSC denied a petition from FGT to terminate the pipeline proposal. FGT, the state’s largest natural gas transmission provider, had requested that the PSC dismiss the pipeline case “because of the appearance of impropriety and identified prejudice of some commission staff members.” The PSC said it denied FGT’s request because it was based on a recent inspector general’s report that found no staff bias at the PSC.

Critics have said FP&L has too much influence over the PSC. Last month alleged ethics lapses forced the resignation of two PSC staffers and two others were placed on administrative leave (see Power Market Today, Sept. 15). The Florida Department of Law Enforcement had been reviewing actions at the PSC after a commission lobbyist admitted that he attended a party at the home of an FP&L executive (see Power Market Today, Sept. 4).

A fifth seat at the dais, usually occupied by commissioner Katrina McMurrian, was empty Tuesday. Gov. Charlie Crist had requested that the commission postpone votes on major cases, including the FP&L case, until after two newly appointed commissioners take office. Last week Crist said he would not reappoint Carter or McMurrian, and named two new commissioners whose terms are set to begin Jan. 2. McMurrian submitted her resignation on Monday.

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