News Column

FPL Builds Plant That Will Actually Work

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The hulking hunk of steel that towers over U.S. 1, across the Indian River from the Kennedy Space Center, stands as a monument to one utility's success -- and another's failure. Come June 1, Florida Power and Light, the state's largest power company, plans to flip the switch on the state's newest natural gas plant. The 1,250-megawatt power generator took just over two years to build and will cost FPL customers $970 million. That's about $130 million under budget. Duke Energy customers could only wish to be so lucky.

For the $3.1 billion Duke wasted on the now-shuttered Crystal River nuclear plant and the proposed Levy County nuclear plant that may never get built, the utility could have constructed three natural gas plants with more power than both of the reactor projects combined. And Duke would still have had almost $200 million left over to buy fuel for the gas units.

Now Duke, after squandering customers' money on its ill-fated nuclear ambitions, wants to build a natural gas plant to replace the broken Crystal River reactor. That's another billion dollars customers will have to pay.

Critics say the blame extends far beyond Duke.

"The lack of regulatory oversight, the lack of legislative oversight and the lack of planning are costing the state dearly," said Stephen Smith, executive director of the Southern Alliance for Clean Energy, which has been battling against fees charged to utility customers in advance for new nuclear plants.

"It's a broken system," Smith said. "We're seeing it play out with sort of tragic ramifications in Florida."

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It could have been different.

State lawmakers pushed for new nuclear power as a way to diversify the state's mix of energy sources. They didn't want to become too reliant on natural gas with its historic price volatility.

So in 2006, the Legislature passed a law that allows utilities to charge in advance for new nuclear projects. The law has raised money that went toward increasing production capacity at existing FPL nuclear reactors; the same law forced Duke customers to pay billions -- for nothing.

Some Tampa Bay area state senators want the utilities to either move forward with construction of new nuclear power plants or stop collecting customer money for plants they will never build. The senators plan to introduce a bill this week to hold the utilities accountable for use of the advance fee.

Even so, Adam Putnam, commissioner of the Department of Agriculture and Consumer Services and the state's point person on energy matters, and other state leaders remain committed to the idea that investment in nuclear is key for Florida's energy future.

"Nuclear power continues to be a clean, cheap long-term solution," Putnam said.

Yet utilities nationwide increasingly are announcing decisions to trim their nuclear ambitions, including last week's decision by Dominion Power to close its Kewaunee plant in Wisconsin this spring because it was no longer economically viable.

Low natural gas prices, the result of widespread use of a drilling technology called "fracking" that has produced an abundant domestic supply, are making it difficult for any other energy source to compete.

Meanwhile, the natural gas plant FPL is set to open in Cocoa, which has a population of 17,000, is the first of three new 1,250-megawatt gas generators the utility will fire up over the next three years. A plant in Riviera Beach opens next year, and a third one in Port Everglades opens in 2016.

The Cocoa project will bring Brevard County $12 million a year in additional tax revenue, $3 million more than the Crystal River nuclear plant was bringing Citrus County. The loss of the nuclear plant is prompting deep cuts in county and education budgets in Citrus, while Brevard is on the cusp of a boom.

"That $12 million will be a gigantic boost for the area -- the school system alone will see a tremendous boost," said FPL spokesman Neil Nissan, as he helped guide a tour around the grounds of the plant.

What it won't bring in is the hundreds of jobs a nuclear plant employs, such as sizable security teams.

The gas plant requires just 40 to 50 full-time workers.

Technology is fueling more efficient operations at power stations.

For example, the high-tech control room sports roughly three dozen flat-panel monitors, the size found in the average family room these days, and little else but some small desktop computers.

Outside, smoke stacks painted in light gray are half the size of the 300-foot-tall barbershop pole-styled red and white smoke stacks that once stood on the site for the 50-year-old oil and gas plants FPL razed for the new power station.

Compared to the former facility, the new plant will cut the carbon emission rates by about 50 percent and generate power with more than 90 percent fewer air emissions, without using any additional water or land.

And other than its imposing presence on the side of the road, the plant also won't attract the kind of attention its predecessor did with plumes of smoke wafting through the air.

"At most you'll see a small heat sheen," Dennis Donahue, the project's construction manager, said with a smile on a walking tour of the facility. "No particulates come out of those things at all. It's really impressive."

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The cost also is impressive.

Mark Bubriski, another FPL spokesman, noted that the sluggish economy lowered the price of steel, which appears to have cut some of the project's costs.

At $970 million for a unit that will power some 250,000 homes and businesses, the up-front costs of the gas plant and the low natural gas prices make it difficult in the short term to look at any other type of power generator.

If Duke built just one natural gas plant with the $3.1 billion it spent on the Crystal River and Levy nuclear projects, it would have enough money left over to fuel that plant for eight years at today's prices, according to the U.S. Energy Information Administration.

Even with plans to build a natural gas plant by 2018, Duke still clings to hopes that the proposed $24 billion Levy nuclear project will make economic sense sometime in the future.

"Conditions can change in unexpected ways, and a diversity of power sources is vital to ensuring reliable service," said Duke spokesman Sterling Ivey. "This is particularly important in Florida, which, due to our geography, has to be more self-sufficient than most other states. Nuclear power remains a key component of Progress Energy's strategy to meet its customers' future energy needs with efficient, carbon-free electricity."

Duke, which became the parent company of Progress Energy Florida last July, has yet to commit to building the Levy plant, despite the hundreds of millions of dollars it has collected from its 1.6 million Florida customers.

"It's very clear to us, there's no justification for pursuing these high-risk and problematic nuclear facilities, given you have a low-cost option available," said Smith, the executive director of the environmental group Southern Alliance for Clean Energy.

"They're just taking money from customers," he said, "and giving them nothing of value."

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