With expected customer savings between $38 million and $59 million, the Florida Public Service Commission (PSC) today approved termination of a Duke Energy Florida, LLC (DEF) agreement to purchase biomass energy from Florida Power Development, LLC (FPD). Approved by the PSC in 2009, the agreement is no longer cost effective for DEF customers.
FPD’s 60 megawatt (MW) biomass-fired facility in Brooksville came online in May 2014, with DEF purchasing the plant’s capacity and energy. Since then, however, DEF’s payments for the facility’s power have exceeded its costs to purchase the same amount of energy by constructing a new facility or by purchasing from an alternate supplier.
“Duke’s customers no longer benefit from the energy produced by burning waste at this biomass facility. Cleaner, more cost effective generation options are available, if warranted,” said PSC Chairman Art Graham. “In approving the termination agreement, we are keeping rates down and doing what’s best for the public interest.”
Retirement of the FPD facility will also reduce CO2 emissions by 2.3 to 2.6 million tons over the remaining agreement term, through 2034. Examples of materials that produce biomass fuels are scrap lumber, forest debris, and certain crops. Of DEF’s 511 MW renewable and cogeneration contracts, the FPD agreement was only 11.7 percent of its total renewable generation.
As part of the termination, DEF will pay $105 million to FPD, recovered as a regulatory asset through the Fuel and Purchase Power Cost Recovery Clause over 16 years.
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