The latest battle in utility deregulation was waged last weekwhen the Electric Power Supply Association (EPSA) published aletter urging Florida’s Public Service Commission (FPSC) to rejectFlorida Power Corp.’s petition to forgo competitive bidding forconstruction of Hines 2, a second gas-fired generation plant at itsHines Energy Complex in Polk County, FL.

Attempting to accelerate the construction of the Hines plant,Florida Power filed a petition in late October to skip the biddingprocess. In the announcement of the filing, the company said, “PSCrules state that the Commission may forgo the requirement forutilities to solicit bids for new generating capacity if theproposal, like the one for the Hines 2 plant, would likely ‘resultin lower-cost supply of electricity, increase the reliable supplyof electricity, or is otherwise in the public interest.’ FloridaPower Corp. believes that this proposal meets these criteria.” Thenew plant will generate 500 MW and, when combined with the Hinesplant that already exists on the site, will utilize 70-80 MMcf/d ofgas depending on weather. Upon completion, Florida Power expectsthe site to generate up to 3,000 MW.

The Hines site is one of several new gas-fired generation plantsbeing proposed for the state. A Florida Reliability CoordinatingCouncil study claims that the state will need over 10,000 MW in thenext decade. In order to take advantage of this growth, newderegulation rules in Florida require utilities to bid on projectswith merchant power plants. Earlier this year Duke Energy PowerServices challenged the local utility by filing plans with the FPSCto build a new $160 million, 500 MW plant in the city of New SmyrnaBeach, FL. Hearings begin on Wednesday, Dec. 2.

If Florida Power’s request is granted, merchant power companies,like Duke, would not be given the chance to compete forconstruction of the second Hines site. The EPSA, which representsdevelopers of independent power plants and marketers of competitivepower, is fighting the proposal. Mark Stultz, an associationspokesman said, “We are not necessarily opposed to Florida Powerbuilding the plant. We just want to make sure the commission has achance to evaluate the other options as well.” In the letter to thePSC, they argued that forgoing the bidding process would not ensureratepayers the best possible rates or allow alternative suppliers achance in a deregulating industry. “The petition before you fromFlorida Power represents, at best, a throw-back to the old ways ofdoing business,” the letter said.

The FPSC is scheduled to rule on the petition Dec. 22. Floridapower said that if the filing is rejected, construction of theplant will be delayed by at least six months.

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