Climate

Utility Company To Buy Coal Plant Just To Shut It Down

CREDIT: AP Photo/Phil Sandlin, File

This June 27, 2013 file photo shows Duke Energy's Crystal River nuclear power plant in Citrus County, Fla.

State utility Florida Power and Light (FPL) wants to buy an old coal plant in Florida just to shut it down, a move that it says would prevent nearly 1 million tons of carbon dioxide from entering the atmosphere each year.

FPL filed a petition with the state’s Public Service Commission last week to acquire the Cedar Bay Generating Plant in Jacksonville, which went into service in 1994. Upon buying the coal plant, FPL plans to immediately reduce the plant’s operations by 90 percent, and then phase it out of service completely over the next two to three years.

The reason it’s doing this, FPL has said, is simple: the plant is outdated, and shutting it down will save customers money — $70 million a year to be exact, according to the utility.

“Although years ago it made sense to buy this plant’s power to serve our customers, times have changed. We have invested billions of dollars to improve the efficiency of our system, reduce our fuel consumption, prevent emissions and cut costs for our customers,” Eric Silagy, president and CEO of FPL said in a statement. “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.”

Sarah Gatewood, a spokesperson for FPL, told ThinkProgress that the utility had never purchased a power plant just to shut it down before. But, she said, FPL will “certainly keep eye out for any opportunity to save customers money,” even if it means making a similar move in the future.

Other facilities will make up for the loss of the coal plant, and FPL says that more pipeline infrastructure will help increase Florida’s access to natural gas in the next few years, making the Cedar Bay plant less economically viable.

Some environmental groups praised the utility’s move. The Nature Conservancy said buying and shuttering the coal plant was an “innovative approach” in a statement for FPL, and the Southern Alliance for Clean Energy (SACE) also issued a statement in support of FPL’s plan.

“Any time you retire a coal plant, that’s a good thing from a customer perspective and an environmental perspective,” George Cavros, Florida Energy Policy Attorney for SACE, told ThinkProgress.

But though the group praised FPL’s move as an environmentally-friendly one, its also concerned about Florida’s increasing reliance on natural gas. According to a report published this week by the Union of Concerned Scientists, the share of Florida’s electricity that comes from natural gas plants increased from 44 percent to 62 since 2007. If the state replaces all its coal plants with natural gas plants, that share could increase to almost 90 percent.

“Our concern has been and continues to be that there isn’t enough diversification in Florida’s energy resource mix, and particularly FPL’s energy resource mix,” Cavros said, though he noted that he thought all Florida utilities needed to do better in diversifying their energy mixes. Cavros also criticized the state’s utitlies’ proposal last year to reduce their energy efficiency targets, a motion that was approved by Florida’s Public Service Commission in December.

SACE would rather see Florida invest more in renewable energy, a goal that’s being fought by conservatives in the state as well as environmental groups. Solar in particular has become a hot-button energy issue in Florida. Florida, as a whole, has been slow to embrace solar power — the state ranks 13th in the nation for installed solar energy capacity, according to the Solar Energy Industries Association.

Earlier this year, Floridians for Solar Choice — which is led by Tory Perfetti, who also is in charge of the Florida Chapter of Conservatives for Energy Freedom — started a petition for a ballot initiative that seeks to “encourage and promote local small-scale solar-generated electricity production and to enhance the availability of solar power to customers.” The petition needs 683,149 signatures from Floridians in at least seven congressional districts in order to get a initiative on Florida’s 2016 ballot, and volunteers for the pro-solar group say they secured 100,000 in their first month.

FPL has taken steps to increase the amount of solar energy in its energy mix: in January, the utility announced that it plans to triple its solar capacity, adding almost 225 megawatts of solar to its operations by 2016. The utility will build three new solar-powered plants in Florida, and said that as the price of solar drops, it’s “optimistic” that it could continue to add more solar to its mix.

Florida’s vulnerability to climate change and its impacts makes investing in renewable energy particularly important for the state. The state has been called “ground zero” for sea level rise, something that’s already contributing sunny-day flooding in parts of South Florida.