TECO selects gas supplier for Gannon

The choice of Florida Gas Transmission Co. apparently won't affect plans to build pipelines by two other groups.

By JEFF HARRINGTON

© St. Petersburg Times, published June 20, 2000

Tampa Electric has chosen to tap into a natural gas pipeline being developed by Florida Gas Transmission Co. as it converts its Gannon power station from coal to natural gas.

The agreement will provide 180-million cubic feet per day to Gannon by spring 2002. Repowering Gannon from air-polluting coal is the centerpiece of a $1-billion settlement that Tampa Electric's parent, TECO Energy, reached with the Environmental Protection Agency early this year.

Florida Gas Transmission, which runs the state's only existing gas pipeline, is jointly owned by Enron Corp. and El Paso Energy Corp. Its pipeline expansion is now estimated to cost $440-million.

Although the agreement helps TECO stay on track with the Gannon conversion, it does little to resolve an intensifying battle between two other groups vying to build costly natural gas pipelines across Florida.

Duke Energy Corp. and Williams Cos. want to build a $1.5-billion pipeline from Mobile, Ala., that would cross the Gulf of Mexico, come ashore at Anclote Key and stretch over Pasco County en route to the East Coast of Florida.

Coastal Corp. of Houston is countering with similar plans for a $1.5-billion-plus, 700-mile pipeline from the Alabama coast across central Florida. El Paso Energy earlier this year bought Coastal. That has not prompted organizers to back off the Coastal pipeline even though El Paso, as a half-owner of Florida Gas Transmission, would be competing against itself.

Jeff Share, editor of the trade magazine Pipeline & Gas, said three or four deals the size of the Gannon project would be enough to secure one of the new pipeline competitors.

"This just keeps strengthening FGT. They're going to be hard to compete with," Share said. "They'll try to nail down as many of these as they can before (the utilities) can sign up with competing pipelines."

TECO spokeswoman Laura Plumb said the utility had in-depth discussions with all potential providers of natural gas.

Williams spokesman Chris Stockton downplayed the decision, saying the Gannon plant was not on the proposed customer list it originally submitted. He said Williams and Duke already have more than half the commitments they need for the project.

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