- EF News

The Florida Public Service Commission on Tuesday approved new electricity generation proposed by Florida Power and Light Co., following a bid process that independent power producers say is unfair.

The commission, in a scheduled meeting, said FPL could move ahead with proposed expansions at its Martin and Manatee plants that will add about 1,900 megawatts of generation in southern Florida in 2005 and 2006.

A group of independent power producers calling itself the Florida Partnership for Affordable Competitive Energy or PACE says the current generation bid process unfairly favors proposals by the state's two traditional utilities, FPL and Progress Energy Inc. subsidiary, Florida Power.

FPL, a subsidiary of FPL Group Inc., serves over four million customers, or about eight million people, in southern Florida.

Under current rules, FPL or Florida Power issues requests for proposals for new generation, and independent generators can participate in that bidding process.

But the traditional utility chooses from among the proposals, including its own.

PACE argues that since state utility regulators adopted the bidding process in 1994, no new power project has been awarded to any company other than FPL or Florida Power.

The public service commission is reviewing the bidding process and will meet in early December to consider changes to the bid process.

"This is the largest single addition of power plant capacity the state of Florida has ever seen," said Mike Green, executive director of PACE. "We're disappointed the basis for this determination was a bid rule process that is going to be evaluated for change in three weeks before the same commission."

FPL has twice taken bids for proposals for the 1,900 MW of new generation and both times chose its own proposal to expand the Martin and Manatee plants on the grounds it would cost $83 million less than any of the 134 other proposals from independent companies.

Under the FPL plan, 789 MW of natural-gas-fired power capacity will be added at the Martin plant at a cost of $500 million, while 1,107 MW of natural-gas-fired generation would be added at the Manatee plant at a cost of $600 million.

FPL said the new generation would be enough to meet the needs of about 400,000 new customers.

The proposed expansions must go before two more public hearings early next year and must also receive approval from Florida's governor before construction can begin, FPL spokesman Bill Swank said.

The PACE group is made up of companies including Calpine Corp., Constellation Energy Group Inc. subsidiary of Constellation Power Inc., Duke Energy Corp. subsidiary Duke Energy North America and Reliant Energy Inc.

PACE has said the construction of new power plants in Florida could be a lucrative business, with Florida's population of 16 million expected to grow by 40 percent to 50 percent over the next 20 years, requiring some $5 billion of new power projects to meet growing demand.