Florida Power & Light seeks new natural gas pipeline

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With utilities relying heavily on natural gas to fuel power plants, Florida Power & Light is pursuing a plan to add a major new pipeline that would stretch across hundreds of miles of the state.

FPL this month expects to issue what are known as “requests for proposals” to companies interested in building the pipeline, which would be slated to begin operating in 2017. The company says, in part, the pipeline would allow Florida to become less-reliant on natural gas from the Gulf of Mexico region and bring in supplies from other parts of the country.

“Florida needs to continue to grow,” Mike Sole, an FPL vice president, said Friday. “We need to continue to provide reliable electricity for that growth. This is one component of that.”

FPL made a presentation Nov. 26 about the plan to staff members of the Florida Public Service Commission and to companies that might seek to take part in the project.

The exact route remains unclear, but the project would involve two segments. A northern segment would stretch from a natural-gas supply hub in western Alabama across part of north Florida and then southeast into the Orlando area, where it would connect with other pipelines.

A southern segment would go from the Orlando area to an FPL power plant in Martin County. While other utilities could tap into gas in the northern segment and in the Orlando area, the southern segment would be targeted to FPL’s needs.

FPL would not own the northern segment but could decide to build the southern segment itself, possibly through an affiliated company. The exact cost also remains unclear, though it could stretch into the billions of dollars. FPL officials say any resulting costs would not be passed along to customers until after the pipeline goes into service in 2017.

Florida relies on two major pipelines, operated by Gulfstream Natural Gas System and Florida Gas Transmission, to carry natural gas into the state. Utilities such as FPL pay the pipeline companies for transporting the gas, and those costs later show up as part of customers’ monthly electricity bills.

Utilities have increasingly shifted in recent years to natural gas from burning coal and oil. Powering plants with natural gas is cleaner, which helps utilities meet environmental standards, but gas also has been relatively inexpensive — a situation that utilities expect to continue with the extraction of gas from shale formations in various parts of the country.

FPL says Gulfstream and Florida Gas Transmission bring in gas from the Gulf of Mexico region but that the new pipeline would allow the state to receive supplies from more-inland areas.

As a sign of the industry’s reliance on natural gas, FPL is slated in 2013 to bring online a natural-gas plant at Cape Canaveral and also is expected during the next four years to start operating similar projects at Riviera Beach and Port Everglades. Sole said growing electricity demand will require increasing the amount of natural gas coming into the state in 2017.

The Public Service Commission in 2009 blocked an earlier attempt by FPL to add a pipeline that was proposed for a different route down the eastern part of the state. Regulators said FPL had not proven the cost-effectiveness of the proposal and ordered that a new bidding process take place.

“The PSC determined that FPL did not prove that its EnergySecure Pipeline (the name of the project at the time) is the most cost-effective alternative and is in the best interest of Florida’s ratepayers,” Matthew Carter, who was then the PSC’s chairman, said in a 2009 news release. “We understand the need for supply diversity and long-term natural gas reliability, but it must be accomplished in a cost-effective manner.”

Sole said issuing the new requests for proposals — similar to a bidding process — was designed to address the PSC’s earlier concerns.

“The need and demand has not gone away since 2009,” said Sole, a former secretary of the Florida Department of Environmental Protection.

Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.