FPL to Buy and Phase Out Another Florida Coal Power Plant

Florida Light and Power (FPL) wants to buy and phase out another coal-fired power plant in Florida, a move it says will save its customers an estimated $129 million when new gas-fired infrastructure is built in the state.

The NextEra subsidiary on June 20 filed a petition for the Florida Public Service Commission’s (PSC’s) approval to buy the 330-MW Indiantown Cogeneration facility, which is currently owned by Calypso Energy Holdings, in a deal valued at about $451 million (including existing debt).

The coal-fired plant is equipped with advanced pollution controls, including selective catalytic reduction technology and a zero-discharge water treatment system. It also sells steam to Louis Dreyfus Citrus, a nearby food processing plant, under an energy services agreement. It is unclear how the deal will affect that contract.

The state regulator approved a power purchase agreement between FPL and the cogeneration facility in 1991 that does not expire until 2025. If the PSC approves the proposal, FPL estimates it will save customers $129 million over the remaining life of the contract, approximately nine years.

“The contract was based on the cost of power at the time; however, today, FPL can generate electricity at a much lower cost,” the company said in a statement. “Also, while the Indiantown Cogeneration plant is well-run, it nonetheless emits very high rates of carbon dioxide compared with FPL’s current generation fleet, which has an overall carbon emissions rate far lower than the national average,” it added.

The proposed phase-out may prevent more than 657,000 tons of carbon dioxide emissions annually for FPL, which “is already cleaner today than the carbon emissions rate goal set by the U.S. Environmental Protection Agency’s (EPA) Clean Power Plan for Florida to meet by 2030,” it said.

FPL confirmed that it might run the facility minimally through the end of 2018 as needed. However, it believes that the plant may no longer be economic after the expected addition of a new natural gas pipeline system in Florida during 2017, and startup of FPL’s natural gas–fired Okeechobee Clean Energy Center in 2019.

It also said that while no plans for future use of the site had been made, “the property’s close proximity to the existing Martin Next Generation Clean Energy Center’s solar and natural gas infrastructure provides the opportunity for future solar or natural gas generation.”

This is the second coal plant in two years that FPL has sought to buy in order to phase it out. The company received approval from the PSC to acquire and phase out the 250-MW Cedar Bay Generating Plant in August 2015. FPL had been buying power from that coal-fired facility in Jacksonville, Fla., under a long-term contract since 1998. While the power purchase agreement wasn’t set to expire until 2024, by taking ownership of the plant and terminating the contract, FPL said it saved its customers more than $70 million because it can generate power at a much lower cost that what was agreed to in the contract.

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