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Tampa Electric is turning to natural gas

The utility wants to build a plant at the Polk Power Station by 2013.

By ASJYLYN LODER, Times Staff Writer
Published January 19, 2008

The question hangs like smog over Florida's utilities: If not coal, then what?

Some clean air advocates, cheered by the cancellation of plans for five coal plants in the state last year, hoped alternative energy might take up the slack. Tampa Electric has a different answer: natural gas.

Tampa Electric plans to build a more than 500-megawatt natural gas plant at its Polk Power Station, said Tom Hernandez, the utility's vice president for supply.

The utility finds itself pressed on several fronts at once. Continued growth means it needs a new power plant by 2013. But Tampa Electric can't afford pricey nuclear plants, like those planned by Progress Energy and Florida Power & Light. It also can't afford expensive forays into large renewable projects. That leaves Tampa Electric with two choices: coal or natural gas.

With the increasing likelihood of greenhouse gas regulation, carbon-heavy coal looks like a poor choice.

That's why the utility cancelled plans in October for a 630-megawatt "clean coal" plant. Natural gas will produce less carbon dioxide, the primary contributor to climate change.

It's also cheaper to build. The utility estimated the cost of its cancelled coal plant at $2-billion, or about $2,900 per kilowatt. A 2006 estimate for the natural gas plant estimated $1,000 per kilowatt, Hernandez said. He cautioned that inflation for cement, steel and other supplies will drive up that price.

With fewer emissions at a cheaper price, why didn't TECO plan on natural gas in the first place? Blame the fuel's cost, Hernandez said. It costs Tampa Electric at least twice as much to burn natural gas instead of coal, he said.

Natural gas prices have more than doubled since 2002, according to the Energy Information Administration, the federal agency that tracks energy statistics. When Hurricanes Katrina and Rita disrupted supplies in 2005, prices surged even higher.

Tampa Electric relies on coal for about 55 percent of its power, and natural gas for the rest, Hernandez said. The new plant will boost natural gas to 48 percent. If the utility continues to invest in natural gas, that will leave it further exposed to higher prices and weather-related disruptions in supply, Hernandez said. The utility wants the plant to come on line in 2013. After that, Tampa Electric will probably turn again to coal.

Q & A: The decision
What happened?
Tampa Electric says it will build a natural gas power plant in Polk County to replace the planned coal plant that the utility canceled in October.
How big is it?
More than 500 megawatts, or enough to power 150,000-homes.
How much will it cost?
In 2006, the utility estimated that this type of plant would cost $1,000 per kilowatt. However, that number could be substantially higher because prices have risen for construction needs like cement and steel.
When will it be built?
It's unclear when construction will start, and Tampa Electric is still months from seeking regulatory approval. The utility wants the plant to be on line by 2013.
Source: Tampa Electric

Asjylyn Loder can be reached at aloder@sptimes.com or (813) 225-3117.

[Last modified January 18, 2008, 23:16:53]