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Regulator staff recommends approval of FPL's proposed 1,163-MW gas plant

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Regulator staff recommends approval of FPL's proposed 1,163-MW gas plant

Florida Public Service Commission staff on Feb. 16 filed a recommendation in support of Florida Power & Light Co.'s petition to construct a 1,163-MW combined-cycle unit at Dania Beach.

If the commission approves the gas plant at its scheduled March 1 vote, the decision would be a victory for the NextEra Energy Inc. subsidiary, which said the capacity is necessary to accommodate population growth in its service territory. The proposed Dania Beach project would replace two older gas-fired units at the Lauderdale plant slated for retirement.

Florida's consumer advocate has argued ratepayers will be charged more to fund Dania Beach compared to other options, and environmentalists warn against emissions from the facility.

During a January hearing, Dania Beach opponents cited FPL's own projections that it will only need 54 MW of generation in 2024, two years after the unit's proposed in-service date, making the Dania Beach project's capacity an unnecessary addition to the utility's portfolio, especially when a transmission line is set to deliver 1,200 MW to customers in 2019.

PSC staff concluded in a memo to commissioners that the utility has demonstrated a need for Dania Beach in the mid-2020s time frame to maintain system reliability and integrity. Although Florida's Office of Public Counsel and the Sierra Club said a renewable power facility should be considered over the gas-fired unit, staff said renewable and demand-side management alternatives were not cost effective.

While the staff also found that FPL's proposed financial, fuel and environmental costs associated with Dania Beach are reasonable, and thus eligible for cost recovery, the analysts acknowledged that the unit will not improve the utility's overall fuel diversity. Dania Beach's efficiency would allow FPL to reduce the total amount of gas needed to serve its customers, according to the filing.

Reliability will also be maintained because the unit will use existing oil backup infrastructure, staff wrote.

Dania Beach is ultimately the cheapest option to replace the retiring capacity, staff concluded. Steve Sim, FPL's director of integrated resource planning, told commissioners in January that it would cost $337 million to keep the Lauderdale site running and $1.3 billion if it were to be replaced with equivalent amounts of solar and storage.

The utility developed 33 post-Lauderdale resource plans, he said, including options for renewables and demand-side management. A solar-storage plan was one of three finalists but eventually lost out to the "2-on-1" combined-cycle unit.

"Staff recommends that there is value in evaluating multiple reliability perspectives in order to maintain reliability and integrity of the grid and expects FPL to maintain reliability as it has stated with the proposed [Dania Beach] Unit 7," the recommendation said.