Florida Power & Light Company (FPL) today announced its plans to build an advanced technology coal power plant in Glades County, Florida, to meet the growing demand for electricity in the state while maintaining its industry-leading environmental performance.
The announcement is part of the company's plan to meet continued growth in the state and diversify the fuels used to produce Florida's power. "This innovative coal plant will utilize abundant coal reserves, increase system reliability and help stabilize power prices in the future," said Armando Olivera, president of FPL. "It will be one of the cleanest coal plants in the country, providing power for more than 650,000 homes."
The proposed FPL Glades Power Park will be built within a 5,000-acre site approximately five miles northwest of Moore Haven. Glades County Commissioners voiced strong support for the plant today, passing a resolution endorsing the project.
The Commissioners recognized the benefits of establishing an advanced technology coal-fired power plant in Glades County stating that it would provide significant economic benefits and, as it must comply with federal, state and local regulations, would also promote the health, safety and welfare of its residents.
"We are pleased to have found an excellent site in Glades County, and we look forward to an ongoing dialogue with community leaders, neighbors and other interested citizens as we develop and share our plans for this project," said Olivera.
"Building this state-of-the-art advanced technology coal plant is important for our customers to continue to enjoy reliable power and gain long-term price stability," said Olivera. "We must have fuel diversity to make that happen."
According to Michael Leighton, vice president and chief development officer, FPL studied coal-fired power plants domestically and internationally to bring the best proven technology to the proposed project in Florida. "Recent advancements in coal generation technology have increased plant efficiencies and significantly reduced emissions, allowing us the opportunity to use this abundant, lower cost resource to help meet the continued growth in Florida," Leighton said.
"The more people learn about the innovative technology we're planning to use, the more they will realize that coal is essential to meeting Florida's growing power needs," he said.
Fuel diversity encouraged by FPSC
The Florida Public Service Commission (FPSC) has strongly encouraged Florida electric utilities to diversify their fuel sources, including coal and nuclear, since most new generation facilities built in the past decade use natural gas.
Since 1999, FPL has invested $2.3 billion to build two new natural gas-fired combined-cycle power plants and convert two older oil-fired plants to utilize this cleaner fuel source and efficient technology. FPL's fleet of fossil-fired power plants is approximately 12 percent more efficient than just five years ago and is able to serve 700,000 more customers. FPL is also constructing a natural gas-fired plant in South Florida at its Turkey Point Plant site and plans a two-unit plant in western Palm Beach County.
"Natural gas-fired plants are highly efficient and can be constructed in a relatively short period of time," said Olivera. "However, with the volatility of natural gas and oil prices today and anticipated in the future, we must diversify and consider other fuel sources such as advanced technology coal, nuclear and renewable energy sources such as wind, solar and ocean current. This is a balanced and sensible approach for the future."
FPL's current fuel mix is: 43 percent natural gas, 19 percent nuclear, 17 percent oil, 18 percent coal, and 3 percent other, which includes renewable energy sources, as well as a mix of fuels from purchased power. In total, approximately 17 percent of FPL's electricity is supplied by other power companies under long-term purchase agreements.
The company has indicated that it expects to announce by the end of the year its plans to build an additional nuclear power plant in Florida. It also is pursuing the potential siting of wind turbines in the state.
A leader in energy conservation
The company remains committed to helping its customers become more energy efficient and reduce demand. According to the Department of Energy, FPL's energy conservation program is ranked first among all electric utilities in the nation. More than 1.7 million FPL customers currently participate in these programs. Over the past 20 years, these programs have enabled the company to avoid building the equivalent of 10 additional medium-sized power plants. Last month, the company announced additional energy conservation programs and enhancements to its existing programs.
Energy conservation alone, however, will not be enough to meet the future energy needs of Florida. Each year, FPL has been adding approximately 100,000 new customers and expects this trend to continue in the foreseeable future. In addition, energy consumption has increased by 30 percent per residential customer over the past 20 years.
A clean energy company
FPL and its parent company, FPL Group, operate one of the cleanest electricity generating fleets in the nation with significantly reduced power plant air emissions. Compared to 1998, FPL Group has achieved reductions in emissions rates of 64 percent for sulfur dioxide, 52 percent for nitrogen oxide and 18 percent for carbon dioxide. FPL Group was one of the first to join the U.S. Environmental Protection Agency's Climate Leaders Program, committing to achieve an 18 percent reduction in emissions rates of greenhouse gases by 2008 compared to a 2001 baseline. It remains on track to achieve that target.
FPL Glades Power Park
Following is a summary description of the new plant.
Generating Units: Two 980-megawatt generating units will be built on the 5,000-acre site in Glades County.
Transmission facilities: Transmission lines will be constructed from the power park to FPL's existing transmission system via an electrical substation to be located in Hendry County.
Generating technology: Proven advanced technology will be used to produce steam at much higher temperatures and pressures than in older conventional coal plants, dramatically increasing efficiency and greatly reducing the byproducts of coal combustion.
Environmental systems: Each unit will be equipped with the most advanced proven pollution control equipment available to meet or exceed Florida's stringent environmental regulations.
Permitting process: FPL plans to file a site certification application with the Florida Department of Environmental Protection by the end of 2006. Licensing takes approximately 12 to 18 months. As part of Florida's rigorous power plant siting approval process, FPL's proposal will be reviewed by the Florida Public Service Commission, the Florida Department of Environmental Protection, the South Florida Water Management District, and a host of local, regional and state agencies. Federal agencies such as the Environmental Protection Agency, U.S. Army Corps of Engineers, and U.S. Fish and Wildlife Service also will review the project.
Operational date: Construction of the new plant is expected to take five years. Unit 1 is scheduled to become operational in 2012 and Unit 2 in 2013.
Tax Revenue -- The plant is estimated to cost $2 to $3 billion. The plant will contribute an average of more than $21 million in property taxes each year in Glades County and its associated transmission facilities will contribute several million dollars annually in Hendry County.
Jobs -- Construction of the two units will employ an average of 1,600 workers annually for five years. The plant, when in operation, will employ a permanent, full-time staff of 180, including positions in technical, managerial and administrative roles.
Indirect employment -- It is expected that more than 150 full-time jobs will be created in the communities near the plant.
Community involvement: FPL plans a thorough community outreach program and regular communications with interested parties through multiple channels, including a special web site. To stay informed about the FPL Glades Power Park, visit .
Florida Power & Light Company is the principal subsidiary of FPL Group, Inc. (NYSE:FPL), nationally known as a high quality, efficient and customer-driven organization focused on energy-related products and services. With annual revenues of more than $11 billion and a growing presence in 26 states, FPL Group is widely recognized as one of the country's premier power companies. Florida Power & Light Company serves 4.4 million customer accounts in Florida. FPL Energy, LLC, FPL Group's competitive energy subsidiary is a leader in producing electricity from clean and renewable fuels. Additional information is available on the Internet at , and .
Cautionary Statements And Risk Factors That May Affect Future Results
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Reform Act), FPL Group, Inc. (FPL Group) and Florida Power & Light Company (FPL) are hereby providing cautionary statements identifying important factors that could cause FPL Group's or FPL's actual results to differ materially from those projected in forward-looking statements (as such term is defined in the Reform Act) made by or on behalf of FPL Group and FPL in this press release. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as will likely result, are expected to, will continue, is anticipated, believe, could, estimated, may, plan, potential, projection, target, outlook) are not statements of historical facts and may be forward-looking. Forward-looking statements involve estimates, assumptions and uncertainties. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors (in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements) that could cause FPL Group's or FPL's actual results to differ materially from those contained in forward-looking statements made by or on behalf of FPL Group and FPL.
Any forward-looking statement speaks only as of the date on which such statement is made, and FPL Group and FPL undertake no obligation to update any forward-looking statement to reflect events or circumstances, including unanticipated events, after the date on which such statement is made. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.
The following are some important factors that could have a significant impact on FPL Group's and FPL's operations and financial results, and could cause FPL Group's and FPL's actual results or outcomes to differ materially from those discussed in the forward-looking statements:
FPL Group and FPL are subject to complex laws and regulations and to changes in laws and regulations as well as changing governmental policies and regulatory actions, including initiatives regarding deregulation and restructuring of the energy industry. FPL holds franchise agreements with local municipalities and counties, and must renegotiate expiring agreements. These factors may have a negative impact on the business and results of operations of FPL Group and FPL.
-- FPL Group and FPL are subject to complex laws and regulations, and to changes in laws or regulations, with respect to, among other things, allowed rates of return, industry and rate structure, operation of nuclear power facilities, operation and construction of plant facilities, operation and construction of transmission facilities, acquisition, disposal, depreciation and amortization of assets and facilities, recovery of fuel and purchased power costs, decommissioning costs, ROE and equity ratio limits, and present or prospective wholesale and retail competition (including but not limited to retail wheeling and transmission costs). The FPSC has the authority to disallow recovery by FPL of any and all costs that it considers excessive or imprudently incurred. The regulatory process generally restricts FPL's ability to grow earnings and does not provide any assurance as to achievement of earnings levels.
-- FPL Group and FPL are subject to extensive federal, state and local environmental statutes as well as the effect of changes in or additions to applicable statutes, rules and regulations relating to air quality, water quality, waste management, wildlife mortality, natural resources and health and safety that could, among other things, restrict or limit the output of certain facilities or the use of certain fuels required for the production of electricity and/or require additional pollution control equipment and otherwise increase costs. There are significant capital, operating and other costs associated with compliance with these environmental statutes, rules and regulations, and those costs could be even more significant in the future.
-- FPL Group and FPL operate in a changing market environment influenced by various legislative and regulatory initiatives regarding deregulation, regulation or restructuring of the energy industry, including deregulation or restructuring of the production and sale of electricity. FPL Group and its subsidiaries will need to adapt to these changes and may face increasing competitive pressure.
-- FPL Group's and FPL's results of operations could be affected by FPL's ability to renegotiate franchise agreements with municipalities and counties in Florida.
The operation of power generation facilities, including nuclear facilities, involves significant risks that could adversely affect the results of operations and financial condition of FPL Group and FPL.
-- The operation of power generation facilities involves many risks, including start up risks, breakdown or failure of equipment, transmission lines or pipelines, use of new technology, the dependence on a specific fuel source, including the supply and transportation of fuel, or the impact of unusual or adverse weather conditions (including natural disasters such as hurricanes), as well as the risk of performance below expected or contracted levels of output or efficiency. This could result in lost revenues and/or increased expenses, including the requirement to purchase power in the market at potentially higher prices to meet its contractual obligations. Insurance, warranties or performance guarantees may not cover any or all of the lost revenues or increased expenses, including the cost of replacement power. In addition to these risks, FPL Group's and FPL's nuclear units face certain risks that are unique to the nuclear industry including the ability to store and/or dispose of spent nuclear fuel, the potential payment of significant retrospective insurance premiums, as well as additional regulatory actions up to and including shutdown of the units stemming from public safety concerns, whether at FPL Group's and FPL's plants, or at the plants of other nuclear operators. Breakdown or failure of an operating facility of FPL Energy may prevent the facility from performing under applicable power sales agreements which, in certain situations, could result in termination of the agreement or incurring a liability for liquidated damages.
The construction of, and capital improvements to, power generation facilities involve substantial risks. Should construction or capital improvement efforts be unsuccessful, the results of operations and financial condition of FPL Group and FPL could be adversely affected.
-- FPL Group's and FPL's ability to successfully and timely complete their power generation facilities currently under construction, those projects yet to begin construction or capital improvements to existing facilities within established budgets is contingent upon many variables and subject to substantial risks. Should any such efforts be unsuccessful, FPL Group and FPL could be subject to additional costs, termination payments under committed contracts, and/or the write-off of their investment in the project or improvement.
The use of derivative contracts by FPL Group and FPL in the normal course of business could result in financial losses that negatively impact the results of operations of FPL Group and FPL.
-- FPL Group and FPL use derivative instruments, such as swaps, options and forwards to manage their commodity and financial market risks, and to a lesser extent, engage in limited trading activities. FPL Group could recognize financial losses as a result of volatility in the market values of these contracts, or if a counterparty fails to perform. In the absence of actively quoted market prices and pricing information from external sources, the valuation of these derivative instruments involves management's judgment or use of estimates. As a result, changes in the underlying assumptions or use of alternative valuation methods could affect the reported fair value of these contracts. In addition, FPL's use of such instruments could be subject to prudency challenges and if found imprudent, cost recovery could be disallowed by the FPSC.
Because FPL Group and FPL rely on access to capital markets, the inability to maintain current credit ratings and access capital markets on favorable terms may limit the ability of FPL Group and FPL to grow their businesses and would likely increase interest costs.
-- FPL Group and FPL rely on access to capital markets as a significant source of liquidity for capital requirements not satisfied by operating cash flows. The inability of FPL Group, FPL Group Capital and FPL to maintain their current credit ratings could affect their ability to raise capital on favorable terms, particularly during times of uncertainty in the capital markets, which, in turn, could impact FPL Group's and FPL's ability to grow their businesses and would likely increase their interest costs.
Customer growth in FPL's service area affects FPL Group's results of operations.
-- FPL Group's results of operations are affected by the growth in customer accounts in FPL's service area. Customer growth can be affected by population growth as well as economic factors in Florida, including job and income growth, housing starts and new home prices. Customer growth directly influences the demand for electricity and the need for additional power generation and power delivery facilities at FPL.
Weather affects FPL Group's and FPL's results of operations.
-- FPL Group's and FPL's results of operations are affected by changes in the weather. Weather conditions directly influence the demand for electricity and natural gas and affect the price of energy commodities, and can affect the production of electricity at wind and hydro-powered facilities. FPL Group's and FPL's results of operations can be affected by the impact of severe weather which can be destructive, causing outages and/or property damage, may affect fuel supply, and could require additional costs to be incurred. At FPL, recovery of these costs is subject to FPSC approval.
FPL Group and FPL are subject to costs and other effects of legal proceedings as well as changes in or additions to applicable tax laws, rates or policies, rates of inflation, accounting standards, securities laws and corporate governance requirements.
-- FPL Group and FPL are subject to costs and other effects of legal and administrative proceedings, settlements, investigations and claims, as well as the effect of new, or changes in, tax laws, rates or policies, rates of inflation, accounting standards, securities laws and corporate governance requirements.
Threats of terrorism and catastrophic events that could result from terrorism may impact the operations of FPL Group and FPL in unpredictable ways.
-- FPL Group and FPL are subject to direct and indirect effects of terrorist threats and activities. Generation and transmission facilities, in general, have been identified as potential targets. The effects of terrorist threats and activities include, among other things, terrorist actions or responses to such actions or threats, the inability to generate, purchase or transmit power, the risk of a significant slowdown in growth or a decline in the U.S. economy, delay in economic recovery in the U.S., and the increased cost and adequacy of security and insurance.
The ability of FPL Group and FPL to obtain insurance and the terms of any available insurance coverage could be affected by national, state or local events and company-specific events.
-- FPL Group's and FPL's ability to obtain insurance, and the cost of and coverage provided by such insurance, could be affected by national, state or local events as well as company-specific events.
FPL Group and FPL are subject to employee workforce factors that could affect the businesses and financial condition of FPL Group and FPL.
FPL Group and FPL are subject to employee workforce factors, including loss or retirement of key executives, availability of qualified personnel, collective bargaining agreements with union employees and work stoppage that could affect the businesses and financial condition of FPL Group and FPL.