Florida’s largest electric utility is asking the state for permission to buy a coal-fired power plant that it had been purchasing electricity from for 17 years.
Florida Power & Light Company (FPL) petitioned the Florida Public Service Commission (PSC) today for approval to acquire the power plant that since 1988 has contracted with to purchase power.
Cedar Bay Generating Plant is a 250-megawatt coal-fired facility located in Jacksonville. If approved, FPL will end the contract, reducing the plant’s operations by 90 percent as the first step to phasing the plant out of service.
This plan will save FPL customers an estimated $70 million, as well as reducing carbon dioxide emissions by nearly 1 million tons annually.
In a statement, FPL CEO Eric Silagy said that the original plan to buy electricity from the plant made sense at one time, but times have changed. FPL has invested billions of dollars to improve efficiency, he continued, as well as to reduce fuel consumption, prevent emissions and cut costs to its 4.7 million customers.
“Now we’re in a position to take ownership of the facility and effectively buy out an outmoded contract with the goal of ultimately phasing the plant out of service,” Silagy said. “Which will mean reduced carbon emissions and millions of dollars in savings for our customers.”
The Nature Conservancy Florida chapter applauded FPL’s proposal, which executive director Temperince Morgan calls an “innovative approach to promote energy solutions that will help reduce emissions in Florida.”
In 1988, the PSC approved a long-term power-purchase agreement between FPL and the Cedar Bay Generating Co., which is the direct owner of the Cedar Bay plant. Terms of the contract were based on power costs at the time. Today, FPL can produce electricity at much lower costs.
Although Cedar Bay runs well, it emits high rates of CO2 compared with FPL’s current facilities, with an overall CO2 emissions rate lower than the national average.
The existing agreement totaled more than $120 million a year, with annual increases through 2024. In the filing, FPL plans to purchase CBAS Power Inc., the indirect owner of the plant, from CBAS Power Holdings for $520.5 million and terminate the current contract.
The U.S. Environmental Protection Agency calculates closing the plant would reduce carbon emissions equivalent to 100 million gallons of gasoline or switching more than 23 million incandescent light bulbs to energy-efficient compact fluorescent lights every year.
FPL is requesting PSC approval of the purchase by July 31 and expects to shutter the Cedar Bay plant permanently within the next two to three years.