Florida Power decides it's the best pick

The utility says it is the best company to build a new plant to serve its needs. Its critics say they aren't surprised.

By LOUIS HAU
© St. Petersburg Times
published June 8, 2002

ST. PETERSBURG -- Florida Power Corp. said Friday it beat out four other bidders to win the right to build a 540-megawatt power plant at the Hines Energy Complex in Polk County.

The result didn't come as a shock to energy experts: Florida Power owns the Hines site, and it picked itself as the winner of the competition.

The decision was greeted by renewed calls from consumer advocates and independent power producers for an overhaul of the bidding process, something that the state Public Service Commission is already considering.

"We weren't surprised," said Martha Harbin, a spokeswoman for the Florida Partnership for Affordable Competitive Energy, a lobbying group for companies that build wholesale "merchant" plants. "They've never chosen an outside (bidder) before, and we didn't expect them to this time. . . . Because the rules allow them to do that, you can't expect them to do otherwise."

Officials at Tampa Electric Co., which submitted one of the bids rejected by Florida Power, declined to comment.

Since 1994, regulated Florida utilities in need of additional steam-generated capacity in excess of 75 megawatts have been required to consider outside bids for the construction of the project before proceeding with the bid deemed most economical.

But under state law, the utility, rather than an independent third party, collects the proposals, evaluates them and chooses the winner. The PSC has the authority to overturn the decisions but has never done so.

Since the competitive bidding requirement was enacted, two utilities have built or begun construction on power plants after going through the bidding process, choosing themselves and receiving subsequent PSC approval.

One of them was Florida Power, which broke ground in March on a 495-megawatt plant at the Hines complex. The company already has a 482-megawatt plant on the site that started operating in 1999.

But complaints from independent power producers about the bidding process have recently drawn more attention.

When Florida Power & Light of Juno Beach announced in January that it had opted for a self-build proposal to provide an added 1,900 megawatts of capacity, the resulting furor from independent power companies persuaded the company to open up the project to a new round of bids in April. FPL expects to announce a new short list of bidders in a week or two.

The PSC's review of the bidding rules will include a public hearing scheduled for July 19 in Tallahassee.

Florida Power spokesman Aaron Perlut said the company welcomes the review, but argued that consumers benefit from the process as it stands.

"We believe that the current system of regulation in Florida works," Perlut said. "We have low prices, adequate supply and a stable market . . . It's worked well for our customers, who are enjoying (electricity) rates that are 10 percent below the national average."

Ernie Bach, executive director of the Largo-based consumer advocacy group Florida Action Coalition Team, tartly summarized the more skeptical view of the bidding process.

"Let's see, they have a choice between paying another company to build the plant or build it themselves and get reimbursed with interest from ratepayers for the next 30 years," Bach said in a statement. "I suppose we should be concerned about their competency to run a company if they didn't take that deal."

-- Louis Hau can be reached hau@sptimes.com or (813) 226-3404.

© 2006 • All Rights Reserved • St. Petersburg Times
490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111

Contact the Times | Privacy Policy
Standard of Accuracy | Terms, Conditions & Copyright