The Florida Public Service Commission (PSC) today granted Progress Energy Florida (PEF) permission to recover the costs associated with transporting new supplies of domestic natural gas. The utility company plans to enhance the reliability of its fuel supply by entering into a series of agreements to move supplies of natural gas along a proposed pipeline known as the Southeast Supply Header (SESH).
When complete, the 270-mile pipeline will transport natural gas from Perryville, Louisiana to interconnecting Gulfstream and Florida Gas Transmission pipelines near Mobile County, Alabama. The SESH pipeline is expected to be in service in the summer of 2008.
“Access to the Southeast Supply Header pipeline and new domestic natural gas supply basins will help ensure that Florida can keep up with the growing demand for natural gas,” said PSC Chairman Lisa Polak Edgar. “By increasing the number of potential suppliers, utilities can also lessen the impact of possible supply disruptions caused by hurricanes or other severe weather events.”
The proposed pipeline gives PEF access to new on-shore gas production basins in North Louisiana and East Texas. PEF currently relies heavily on gas produced off-shore in the Gulf of Mexico, which can be susceptible to hurricanes and tropical storms. Commissioners agreed supplier diversity and reliability would be enhanced by reducing PEF’s dependence on fuel supply sources in the Gulf of Mexico.
Commissioners carefully weighed PEF’s request along with the benefits to its customers and voted to allow the company to recover the costs of transporting natural gas through the pipeline. Commissioners also agreed the SESH pipeline will increase natural gas supplies in the Mobile Bay area and, as a result, may potentially lower costs. If realized, the lower costs would offset any additional gas transportation costs. The PSC will review the gas transportation costs and fuel savings in PEF’s annual fuel clause proceedings.
The PSC is committed to making sure that Florida's consumers receive their electric, natural gas, telephone, water, and wastewater services in a safe, affordable, and reliable manner. The PSC exercises regulatory authority over utilities in the areas of rate base/economic regulation; competitive market oversight; and monitoring of safety, reliability, and service.
For additional information, visit www.floridapsc.com.