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FPL awards natural gas pipeline contract to Texas firm

Florida's largest utility picked a Texas firm to build a third major natural gas pipeline into the state that would run from Alabama through the heart of the peninsula.

Under the proposal chosen by Florida Power & Light, Spectra Energy, of Houston, would build 465 miles of new natural gas pipeline at a cost of $3 billion. The project would increase the state's natural gas pipeline system by more than 20 percent when completed in 2017.

The project still must receive final approval from the state Public Service Commission and the Federal Energy Regulatory Commission.

"This is a significant improvement to Florida's pipeline infrastructure," said Mike Sole, FPL's vice president for state government affairs. "It brings more natural gas to Florida, which is clearly needed."

Florida receives most of its natural gas from two pipeline companies, Florida Gas Transmission, whose line runs across the panhandle down to Miami-Dade County, and Gulfstream Natural Gas, whose line flows from Mobile Bay, Ala., to Manatee County.

In addition to adding 465 miles of new interstate pipeline, the project also would connect the new major line, called the Sabal Trail Transmission, to the other two major lines. Florida Gas Transmission and Gulfstream currently are not connected.

Other natural gas users such as Duke Energy Florida and Tampa Electric also could tap the new pipeline.

"This project is designed to service the entire peninsula, the entire state," said Dave Shammo, a Spectra Energy Transmission vice president.

FPL plans to spend $550 million for an additional line to connect the Sabal Trail Transmission to its Martin County plant.

Sole said there has been a growing need for more pipeline capacity in Florida, the second largest natural gas user in the country behind Texas.

FPL recently fired up a new natural gas plant in Cape Canaveral and plans to add two similar power plants in Rivera Beach and Port Everglades over the next few years.

Duke Energy is proposing to build a new natural gas plant to replace the broken and shuttered Crystal River nuclear plant.

The state already produces 60 percent of its electricity from natural gas and that is expected to grow as dirty coal plants go offline and more natural gas units replace them.

Duke and FPL are proposing to build new nuclear plants, but licensing and cost have delayed those projects. And questions abound whether they will ever get built.

Even so, Sole says the new pipeline is needed independent of the plans for the reactors.

"We continue to evaluate and pursue additional nuclear," Sole said. "What this project does is also address our need … We see natural gas as an important element, just as renewables are. I think they all complement each other."

FPL is seeking the PSC approval for the project by the end of the year.

In 2009, the PSC rejected FPL's last pipeline proposal because commissioners said they did not believe the $1.53 billion project was the best and cheapest option for the utility's customers.

This time around, FPL consulted with the commission before issuing its request for proposals.

Spectra Energy says it hopes federal regulators will sign off on the project by mid-2016 in time enough to bring the pipeline in service in May 2017.

Ivan Penn can be reached at ipenn@tampabay.com.

FPL awards natural gas pipeline contract to Texas firm 07/26/13 [Last modified: Friday, July 26, 2013 11:18pm]
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