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Fla. utility plans to add more than 1,600 MW of gas-fired capacity


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Fla. utility plans to add more than 1,600 MW of gas-fired capacity

Seminole Electric Cooperative Inc. has filed with Florida state regulators plans to develop two combined-cycle, natural gas-fired generating facilities totaling up to 1,623 MW of capacity by December 2022, in part to replace a coal-fired unit it intends to shut down.

The generation-and-transmission cooperative, which supplies power to nine member distribution cooperatives across Florida, said in two related filings with the state Public Service Commission it has a "significant need" to add approximately 1,265 MW of additional capacity to its resource portfolio by the end of 2022. One reason, it said, is that several power purchase agreements will be expiring in the next few years.

Seminole in early 2016 launched a request for proposals, seeking up to 1,000 MW of firm capacity. In its two petitions to the PSC, both filed Dec. 21, the company said it received 228 offerings from 41 counterparties.

"Seminole conducted extensive, multi-phase economic and risk analyses on each offering individually as well as the portfolios developed from combining multiple offerings," the utility said. "This combined evaluation of economic and non-economic attributes resulted in Seminole's selection of the most cost-effective, risk managed resource plan."

That selection has two parts. One part, according to a petition for determination of need filed with the PSC, calls for the construction of a 1,050-MW, "two-on-one" combined-cycle unit, called Seminole, at the utility's existing coal-fired Seminole plant in Putnam County, Fla. Once the new gas-fired unit is complete, expected by Dec. 1, 2022, one of the coal-fired units, both of which have been operating since the mid-1980s, will be retired. The Seminole plant's largest supplier of coal in 2017, according to S&P Global Market Intelligence data, is Alliance Resource Partners LP's Dotiki Mine in Webster County, Ky. This project is estimated to cost $727 million, and Seminole will pay for it through long-term financing. (Florida PSC Docket 20170266-EC)

The second part of Seminole's generation replacement, according to a separate petition for determination of need, includes the construction of a 573-MW "one-on-one" combined-cycle unit, called Shady Hills, in Pasco County, Fla. A unit of General Electric Co. already operates a gas-fired plant there, called Shady Hills. A new General Electric entity, Shady Hills Energy Center LLC, would build, own and operate the second Shady Hills combined-cycle unit and sell the output to Seminole under a 30-year tolling agreement beginning in December 2021. (Florida PSC Docket 20172067-EC)

If the commission rejects Seminole's request, the cooperative would not be able to retire any coal-fired capacity and will be forced "to go to the market to find replacement capacity at a higher cost," it said. The net-present-value revenues requirements impact would be $502 million, along with continuation of service of the coal unit, the utility said in the filings.

The cooperative's plan follows its long-range power supply strategy to diversify its energy portfolio with purchased power agreements, construction of a new gas-fired generating plant, a reduced reliance on coal and additional solar resources. Seminole CEO and General Manager Lisa Johnson in September called the plan "a balanced approach."

As a result of this strategy, the co-op plans to reduce the total size of its workforce as technology advances in energy generation require fewer positions.

"By removing one of the [coal-fired] units from service in approximately five years, our goal is to minimize the impact on our dedicated employees as well as the larger community," Johnson said in a news release.

Seminole Electric's members include Central Florida Electric Cooperative Inc., Clay Electric Cooperative, Inc., Glades Electric Cooperative Inc., Peace River Electric Cooperative Inc., Sumter Electric Cooperative d/b/a SECO Energy, Suwannee Valley Electric Cooperative Inc., Talquin Electric Cooperative Inc., Tri-County Electric Cooperative Inc. and Withlacoochee River Electric Cooperative.