FPL announces innovative plan to acquire and phase out coal-fired power plant, saving customers millions of dollars

Florida Power & Light Company(FPL) today filed a petition with the Florida Public Service Commission (PSC)to request approval to acquire a power plant that it has had under a long-termcontract to purchase power since 1988.www.FPL.comUpon taking ownership of the Cedar Bay Generating Plant, a 250-megawattcoal-fired facility located in Jacksonville, Fla., FPL plans to immediatelyterminate the contract and reduce the plant's operations by 90 percent, withthe intention of eventually phasing the plant out of service. This plan isprojected to save FPL customers an estimated $70 million and prevent nearly 1million tons of carbon dioxide emissions annually."Although years ago it made sense to buy this plant's power to serve ourcustomers, times have changed. We have invested billions of dollars to improvethe efficiency of our system, reduce our fuel consumption, prevent emissionsand cut costs for our customers," said Eric Silagy, president and CEO of FPL."Now we're in a position to take ownership of the facility and effectively buyout an outmoded contract with the goal of ultimately phasing the plant out ofservice, which will mean reduced carbon emissions and millions of dollars insavings for our customers. This proposal is another smart step forward in ourongoing effort to serve our customers with affordable clean energy now and inthe future.""The Nature Conservancy welcomes FPL's innovative approach to promote energysolutions that will help reduce emissions in Florida," said Temperince Morgan,executive director of the Florida Chapter of The Nature Conservancy.In 1988, the PSC approved a long-term purchased-power agreement between FPLand the direct owner of the Cedar Bay plant, Cedar Bay Generating Company,Limited Partnership. The contract was based on the cost of power at the time;however, today FPL can generate electricity at a much lower cost. Also, whilethe Cedar Bay plant is well-run, it nonetheless emits very high rates of CO2compared with FPL's current generation fleet, which has an overall CO2emissions rate much lower than the national average.Under the existing purchased-power agreement, fixed payments for capacity andoperating and maintenance total more than $120 million a year currently withannual increases until the contract's expiration in 2024. Like otherpurchased-power agreements, the fixed payments are paid for by customersthrough their rates, in addition to the cost of energy when the plant isoperating.In its filing with the PSC today, FPL proposes to purchase CBAS Power Inc.,the indirect owner of the plant, from CBAS Power Holdings, LLC, for a price of$520.5 million. FPL would then terminate the purchased-power contract,avoiding the fixed payments that customers would otherwise pay through theirrates over the remaining life of the contract.Upon taking ownership, FPL expects to decrease plant operations by about 90percent so that it operates no more than about 5 percent of the time based onits true economics. Reducing the plant's operations will prevent nearly 1million tons of carbon dioxide emissions every year. The U.S. EnvironmentalProtection Agency (EPA) calculates that this amount of carbon reduction isequivalent to saving more than 100 million gallons of gasoline or switchingmore than 23 million incandescent light bulbs to energy-efficientcompact-fluorescent lights every year.Based on the company's current analysis of operational needs, FPL expects topermanently decommission the Cedar Bay plant within the next two to threeyears. In 2017, when Florida's access to clean natural gas is expected to beenhanced by the new interstate natural gas pipeline entering commercialoperation, FPL believes that the Cedar Bay plant will no longer be economic todispatch or needed for reliability, and therefore would be retired nearlyeight years sooner than it otherwise would have been.FPL is requesting PSC approval of the purchase by July 31, 2015, so that thepurchase can be completed as soon as possible to maximize customer savings.The fixed payments under the existing purchased-power contract are paid forthrough the capacity cost recovery clause on a customer's electric bill, andFPL requests that the costs and customer savings associated with its proposalbe handled through the same mechanism. Compared with the current fixedpayments, the net cost is expected to be slightly higher during approximatelythe first three years, but then significantly lower over the remaining life ofthe contract – producing total projected net savings of approximately $70million for customers.The proposed plan is consistent with FPL's ongoing strategy of making smart,innovative investments to deliver affordable clean energy for its customers.Since 2001, FPL's investments in high-efficiency natural gas generation haveenabled the company to cut its use of foreign oil by more than 99 percent –from more than 40 million barrels of oil in 2001 to less than 1 millionbarrels annually today. FPL has been strategically phasing out older, lessefficient fossil fuel plants and replacing them with new, high-efficiencynatural gas energy centers that use approximately one-third less fuel permegawatt-hour. The company has also invested heavily to increase its use ofzero-emissions nuclear and solar energy and recently announced plans to tripleits solar capacity by the end of 2016.Thanks in large part to the company's affordable clean energy strategy FPL iswell-positioned to meet the EPA's Clean Power Plan targets for reductions inCO2 emissions – with no expected additional costs – unlike many electricutilities across the country. Likewise, by lowering the state's overallemissions rate, the plan filed today will help Florida meet the EPA's proposedstatewide CO2 emissions reduction goals."It's this kind of forward-thinking that not only identifies solutions thatare truly a win-win, but also contribute to our parent company's recognitionas one of the world's most admired companies and among the top 10 in the worldfor innovativeness and community responsibility," noted Silagy.Florida Power & Light CompanyFlorida Power & Light Company is the third-largest electric utility in theUnited States, serving more than 4.7 million customer accounts across nearlyhalf of the state of Florida. FPL's typical 1,000-kWh residential customerbill is approximately 25 percent lower than the national average and, in 2014,was the lowest in Florida among reporting utilities for the fifth year in arow. FPL's service reliability is better than 99.98 percent, and its highlyfuel-efficient power plant fleet is one of the cleanest among all utilitiesnationwide. The company was recognized in 2014 as the most trusted U.S.electric utility by Market Strategies International, and has earned thenational ServiceOne Award for outstanding customer service for anunprecedented 10 consecutive years. A leading Florida employer withapproximately 8,700 employees, FPL is a subsidiary of Juno Beach, Fla.-basedNextEra Energy, Inc. (NYSE: NEE), a clean energy company widely recognized forits efforts in sustainability, ethics and diversity, including being ranked inthe top 10 worldwide for innovativeness and community responsibility as partof Fortune's 2015 list of "World's Most Admired Companies." NextEra Energy isalso the parent company of NextEra Energy Resources, LLC, which, together withits affiliated entities, is the world's largest generator of renewable energyfrom the wind and sun. For more information, visit these websites:www.NextEraEnergy.com, www.FPL.com, www.NextEraEnergyResources.com.