FPL Seeks to Acquire and Phase Out Coal-Fired Power Plant

Florida Power and Light (FPL) wants to buy a 250-MW coal-fired facility in Florida to shut it down.

The Juno Beach, Fla.–based company filed a petition with the Florida Public Service Commission (PSC) on Friday requesting approval to acquire the Cedar Bay Generating Plant for $520.5 million. FPL has had a long-term power purchase agreement (PPA) with Limited Partnership, the plant’s direct owner, for electricity from the Jacksonville, Fla., facility that began in 1988 and is slated to expire in 2024.

Once it acquires the plant—by August, as FPL anticipates in the PSC filing—the company will immediately terminate the PPA and reduce the plant’s operations by 90%. It then plans to permanently decommission the plant within the next two to three years.

“In 2017, when Florida’s access to clean natural gas is expected to be enhanced by the new interstate natural gas pipeline entering commercial operation, FPL believes that the Cedar Bay plant will no longer be economic to dispatch or needed for reliability, and therefore would be retired nearly eight years sooner than it otherwise would have been,” the company said in a statement on Friday.

According to FPL, the PPA was based on the cost of power at the time. “However, today FPL can generate electricity at a much lower cost,” said the company. FPL also said that while the Cedar Bay plant is “well-run,” it emits high rates of carbon dioxide compared with the company’s current generation fleet.

Under the existing PPA that was approved by state regulators in 1988, fixed payments for capacity and operating and maintenance—paid for by customers through their rates—total more than $120 million a year, FPL said. The payments are also set to increase annually until the contract’s expiration in 2024.

Though FPL claims to have a carbon dioxide emissions rate that is 35% better than the industry average, it hasn’t shunned carbon-emitting fuel sources entirely. About 70% of its fuel mix is sourced from natural gas, 5% from coal, and 0.38% from oil.

Last December, the PSC approved FPL’s request to begin investing in long-term natural gas supplies to reduce supply variability. The company is to partner in the development of gas-producing properties in the Woodford Shale region in southeastern Oklahoma.

The Cedar Bay facility was a 1995 POWER top plant. It operates three reheat circulating fluidized boilers fueled by low-sulfur coal.


Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)


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