Review of 2008 Ten-Year Site Plans - Public Service Commission

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1. EXECUTIVE SUMMARY Pursuant to Section 186.801(1), Florida Statutes (F.S.), each generating electric utility must submit to the Florida Public Service Commission (Commission) a ten-year site plan which estimates the utility’s power generating needs and the general location of its proposed power plant sites over the ten-year planning horizon. By April 1, 2008, eleven utilities filed Ten-Year Site Plans with the Commission. 1 The Commission is required to perform a preliminary study of each plan and classify them as either “suitable” or “unsuitable.” All findings of the Commission are made available to the Florida Department of Environmental Protection (DEP) for its consideration at any subsequent electrical power plant site certification proceedings. The Commission has reviewed the Ten-Year Site Plans filed by the eleven reporting utilities and finds that the projections of load growth appear reasonable and that the reporting utilities have identified additional generation facilities required in order to maintain an adequate supply of electricity at a reasonable cost. Therefore, the Commission finds the 2008 Ten-Year Site Plans filed by the eleven reporting utilities to be suitable for planning purposes. While the 2008 Ten-Year Site Plans are suitable for planning purposes, they are subject to change due to several factors including changes to fuel cost and energy use projections, evolving technology, and changing energy policy. Currently, approximately 11,000 megawatts (MW) of capacity have either received a determination of need or are under construction. Based upon other utility filings and actions, approximately 5,000 MW of planned capacity may be delayed beyond 2017. Utilities have cited declining energy projections as one reason for the recent changes. The Commission will continue to monitor changes to the utilities’ plans in order to ensure an adequate supply of electricity at a reasonable cost. Building an Energy Efficient Florida Pursuant to Section 366.03, F.S., each public utility has a statutory obligation to serve every customer within its service territory. As the state’s load and energy requirements continue to grow, Florida’s utilities must continue to explore all measures to ensure the most efficient means for serving their customers’ needs. The Commission notes the following components as critical to implementing an effective energy policy in Florida. 1 Investor-owned utilities (IOUs) filing 2008 Ten-Year Site Plans include Florida Power & Light Company (FPL), Tampa Electric Company (TECO), Gulf Power Company (GULF), and Progress Energy Florida, Inc. (PEF). Municipal utilities filing 2008 Ten-Year Site Plans include Florida Municipal Power Agency (FMPA), Orlando Utilities Commission (OUC), City of Lakeland (LAK), City of Tallahassee (TAL), JEA (formerly Jacksonville Electric Authority), and Gainesville Regional Utilities (GRU). Seminole Electric Cooperative (SEC) also filed a 2008 Ten-Year Site Plan. Review of 2008 Ten-Year Site Plans - 1 -
1. Demand-Side Management (DSM) and Conservation The first step toward building an energy efficient Florida begins with minimizing the load and energy requirements which the utilities must serve. Reduced load and energy requirements are essential in decreasing the burning of fossil fuels and deferring the need for additional generating capacity. Load and energy requirements are affected by many variables including population growth, demographics, and weather patterns. Customer choice, however, serves as the foundation for wise energy use in order to reduce dependence on expensive liquid fuels and reduce greenhouse gas emissions. Utilities play an important role in educating consumers to make wise energy choices. Through DSM programs, Florida’s utilities can have a direct effect on customer energy usage patterns. Florida’s investor-owned utilities (IOUs) have reported more than $250 million in conservationrelated expenditures in 2007, marking the highest expenditures since 1999. Expenditures in 2008 are projected to exceed $285 million. This trend illustrates the commitment of Florida’s utilities to DSM and energy efficiency. However, per capita energy consumption is projected to increase. Over the planning period, Florida’s utilities are projecting more than 7,600 MW of summer peak load reduction from DSM and energy efficiency programs. The demand reductions projected in the 2008 Ten-Year Site Plans are based on goals which represent a minimum threshold utilities must meet before building any major power plants. Overall, demand and energy savings from utilitysponsored DSM and energy efficiency programs are expected to surpass current goals by as much as 60 percent. The utilities’ current goals were set by the Commission in 2004. In 2008, the Legislature amended Section 366.82, F.S., which expands the Commission’s process for establishing DSM and energy conservation goals. More specifically, the Commission must now consider the impact of demand-side renewable energy systems as well as an expanded scope of potential conservation and efficiency measures. Additional considerations include the need for incentives and the effect of emission compliance costs. Utilities have launched a technical potential study to start the goal setting process, and a hearing date is set for August 2009. New goals will be set in December 2009 and should be reflected in the utilities’ 2010 Ten-Year Site Plans. 2. Renewable Generation Renewable generation is another key component of building an energy efficient Florida. Currently, approximately 1,000 MW of renewable generation are available in Florida. Roughly 450 MW are sold to Florida’s utilities as firm capacity; the remaining capacity is either sold on an asavailable basis or used internally by customers. If all three forms of renewable energy – firm, nonfirm, and self-service – are combined, data suggests that renewable energy accounted for 3.6 percent of the IOUs retail energy needs in 2007. Historically, relatively high capital and operating costs as well as limited physical applications have hampered the development of renewable energy in the state. The 2008 Ten-Year Site Plans indicate approximately 500 MW of new renewable capacity are presently planned through the year 2017. Current utility-owned generation is approximately 50,000 MW, so the contribution toward fuel diversification from renewable energy remains relatively small. Review of 2008 Ten-Year Site Plans - 2 -
Page 1 and 2: Review of 2008 Ten-Year Site Plans
Page 3 and 4: Traditional Energy Generation and a
Page 5 and 6: LIST OF FIGURES Figure 1. State of
Page 7: LIST OF ACRONYMS Bcf Billion Cubic
Page 11 and 12: Station. PEF is currently conductin
Page 13 and 14: Information Sources In April 2008,
Page 15 and 16: 3. ENERGY DEMAND A utility’s load
Page 17 and 18: and five years prior. For example,
Page 19 and 20: y the Commission represent a minimu
Page 21 and 22: Overall, demand and energy savings
Page 23 and 24: 4. ENERGY GENERATION Current projec
Page 25 and 26: of generating up to approximately 1
Page 27 and 28: Solar In order to demonstrate the f
Page 29 and 30: (CT) and combined cycle (CC) units
Page 31 and 32: 15 percent every year within the pl
Page 33 and 34: The addition of nuclear capacity wi
Page 35 and 36: Based upon other utility filings an
Page 37 and 38: Natural Gas Price Forecasts and Sup
Page 39 and 40: contracted for 50 percent of the ca
Page 41 and 42: Nuclear Fuel Price Forecasts and Su
Page 43 and 44: and maintains an open dialog with t
Page 45 and 46: Update of 2006 Florida Central Coor
Page 47 and 48: Southwest Florida Regional Planning
Page 49: City of Tallahassee Department of E

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