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Emera continuing to explore converting Fla. coal plant to gas

Emera Inc. is considering converting a unit to natural gas at its coal-fired Big Bend plant in Tampa, Fla., to increase efficiency and provide a backstop for expected solar installations.

The Halifax, Nova Scotia-headquartered company anticipates a conversion cost of about $800 million to add a pair of natural gas combustion turbines and heat recovery steam generators at the Tampa Electric Co. facility, CEO Scott Balfour said on a May 11 conference call. One unit at the 1,632-MW, four-unit plant would be shuttered, while the turbine from another would use steam from the gas-fired generators. The company is expected to reach a final decision on the modernization plan in the next few months, once environmental approvals have been obtained. Construction would start in 2019 with an in-service date of late 2022 or early 2023.

The Big Bend plant's four units, in Hillsborough County, Fla., began operating between 1970 and 1985. Major coal suppliers, according to S&P Global Market Intelligence data, include Murray Energy Corp.'s Genesis mine in Ohio County, Ky., and Alliance Resource Partners LP's Warrior Preparation Plant in Hopkins County, Ky.

"We see tremendous opportunity at Tampa Electric to displace coal-fired generation with lower-emissions natural gas-fired generation," Balfour said on the call to discuss first-quarter earnings. "This modernization would significantly reduce the carbon intensity of energy produced by the facility and generate significant savings for customers."

The modernization plan would result in savings of $750 million for the utility's customers, Balfour said. Initial capital spending from the project is expected to be funded by internally generated cash flow at Tampa Electric. The fast-responding gas units could also benefit Emera's growing solar generation facilities by providing backup power in times of need. The company is spending an estimated $850 million to bring as much as 395 MW of solar capacity into service by the first quarter of 2019.

"We believe that there is further capacity in the Florida grid for solar and we are actively looking to install an additional 600 MW post-2020," Balfour said.

Separately on May 10 Emera reported first-quarter 2018 adjusted net income of C$202 million, or 87 Canadian cents per basic share, compared to C$152 million, or 72 Canadian cents basic per share, in the year-ago quarter. The S&P Capital IQ normalized consensus EPS estimate for the most recent quarter was 80 Canadian cents per share.