Infrastructure Aims for Balanced Portfolio

A new push for security and reliability in the electric, gas, water and telecommunications sectors statewide is fueling greater diversification in Florida's infrastructure portfolio. With the passage of the Florida Energy Act in spring 2006, Gov. Jeb Bush noted that Florida is now poised to "reduce its dependence on imported oil, spur economic growth and ensure that a balanced mix of fuel sources and technologies is readily available for years to come." This $30 million package, which creates a nine-member Florida Energy Commission and uses economic incentives to encourage energy diversification and conservation, is also aimed at boosting energy dependability when disruptive storms occur.

The 2006 Energy Act is just one of many public- and private-sector initiatives that are changing the face of Florida's infrastructure.

Tax exemptions on equipment for alternative energy sources and tax credits for facilities producing renewable energy technologies are part of the 2006 Energy Act.

For instance, the Florida Public Service Commission (PSC) now requires investor- owned utilities in the state to offer contracts for "the development of renewable resources as alternative energy sources." And the Solar Energy System Incentives Program signed into law in June 2006 provides rebates through 2010 to individuals and businesses that install solar equipment for heating and cooling.

In addition, many Florida companies both big and small have established their own in-house programs to conserve energy and explore new power sources such as bio-mass, solar and hydrogen.

Not surprisingly, much of this work has caught the attention of the federal government. As part of a national effort to promote energy efficiency, the U.S. Department of Energy (DOE) has awarded Florida a grant of $1.2 million and describes the state as a "testing ground for the hydrogen economy, offering tax incentives for businesses that invest in hydrogen technologies."

Hydrogen energy research is, in fact, well under way at the University of Central Florida, the University of Florida and several private sector sites. Additionally, a public-private task force is developing commercialization strategies designed to promote Florida as a hydrogen-business region.

Powering up
Compared to the rest of the country, energy remains relatively inexpensive in Florida. According to DOE reports, Florida spends less per person on energy than any other state--about 20% below the national average. Florida's power rates are competitive with neighboring Southeastern states and much lower than elsewhere in the U.S. In 2004, for example, Florida's investor- owned utilities commercial rates were 7.7 cents per kilowatt hour, compared to 13.7 cents in New York. At the same time, Florida ranks third in total energy consumption, but industry experts expect demand for electricity to increase 30% over the next decade.

"We continually explore cleaner, newer, and more efficient ways to produce energy for our customers," says Jeff Lyash, president and CEO of Progress Energy Florida. "We offer some of the nation's most innovative and successful energy efficiency programs and also invest in partnerships researching biomass, solar technologies and hydrogen.

While these initiatives hold great promise, today they can't provide enough power at an affordable price to meet our customers' growing demand for energy. We will need to plan and build new generation to meet our region's growing demand for electricity."

Meanwhile, potential energy sources include natural gas, coal and agricultural products. Florida's PSC granted a request from Florida Power and Light (FP&L), a major investor-owned utility company providing electric power throughout Florida, to construct two natural gas plants in Palm Beach County, with the utility's agreement to adopt new conservation and fuel diversification programs.

Meanwhile, as part of its Clean Coal Power Initiative, the DOE has selected the Orlando Utilities Commission and Southern Company to construct a $557 million, 285-megawatt advanced coal gasification facility in Orange County. Also planned for the area by Biomass Investment Group Inc. is a 130,000- kilowatt power plant that burns "E-Grass," a crop grown on site.

In North Central Florida, Gainesville's city utility is proposing to build a new 200-megawatt generating unit and retrofit an existing one in order to burn solid fuels such as coal, petroleum coke and waste wood. Further north, four utilities have plans to build a $1.5 billion coal-burning power plant--the Taylor Energy Center--near Perry in Taylor County to help meet future regional energy demands.

A trend toward natural gas
Despite renewed interest in burning solid fuels, the overriding trend in Florida is toward eco-friendly natural gas, which is delivered by four intrastate pipelines, the two largest of which are Florida Gas Transmission and Gulf Stream Natural Gas.

"Currently, 40% of Florida's generators burn natural gas," says Ken Wiley, president of the Florida Energy Reliability Council (FERC). "We project in the next four or five years it could be 50%."

To meet the state's growing demand, the natural gas industry wants to offer liquefied natural gas (LNG)--a refrigerated form of natural gas that makes fuel storage and shipping easier. "Florida's growing demand," says David Rogers, executive director for the Florida Natural Gas Association, "makes using LNG an economically feasible plan."

Currently under way is the Cypress Pipeline Project. The first of its kind in Florida, this project calls for sending LNG that has been heated in Savannah, Ga., via pipeline to a destination south of Jacksonville. Industry proposals also envision other delivery systems, such as storing LNG in reservoirs in the Bahamas, or delivering it by refrigerated ships to floating facilities in the Atlantic Ocean for transmission through undersea pipelines to south Florida.

Growing telecom capacities
As electric utilities power up, miles of fiber-optic cables continue to unfurl and create a galaxy of high-speed Internet connections all across Florida. Super-fast transmissions now take place at several Network Access Points (NAPs). South Florida is home to AMPATH, the Miami-based international network that provides widebandwidth digital communications between various research and education networks in the U.S., Latin America and several other countries using a vast system of undersea cables.

Forrester Research, an independent technology and marketing research firm, chose Orlando as one of 2005's top American metro areas via broadband. And eight Florida metro areas ranked among the nation's top 50 "Most Unwired Cities," according to Intel's annual wireless Internet survey.

Last year, 10 Florida universities completed a two-and-a-half-year project to get the Florida LambdaRail Network up and running. This state-of-the-art education Internet system can hurl information at a speed of 10 gigabits per second, making possible 100 times more Internet power than was previously available to university researchers. "FLR offers the highest capacity and quality optical networking capability available in the world to all higher education institutions in Florida," says Dr. Mark Hoit, project official and interim associate provost of information technology at the University of Florida.

Florida's wireless capacities are growing, too. Cingular Wireless, for instance, has plans to invest more than $360 million this year to expand its Florida network; in 2005, Alltel undertook a $66 million upgrade.

Industry diversification is also in the works. "Verizon is changing the focus of its operations," explains Robert Z. Elek, manager of media relations for Verizon Communications. In addition to its wireless business, the company provides advanced communications services for large businesses, government and international organizations, including broadband communications, which, says Elek, "is best exemplified by our multi-year, multibillion dollar project to build a fiber optic network directly to consumers' homes and to small and mid-sized businesses along the path." As a result, more than 40,000 households in the Tampa Bay area now have access to Verizon Fi
OS television.

Reclaiming, reusing
Florida's infrastructure also includes an abundance of water. The state boasts 50,000 miles of rivers and streams and more than 700 freshwater springs, with underground aquifers supplying 92% of the state's drinking water.

Rapid growth, however, poses challenges. The Florida Department of Environmental Protection (DEP) estimates that Florida will need 9.1 billion gallons of water a day in 20 years--two billion more gallons than Floridians use now.

Long-range planning, diversification and high standards for construction and system upgrades are helping ensure that Florida's infrastructure remains secure.

Water management in Florida remains decentralized, and policy implementation currently is the responsibility of five water management districts. Proposals for meeting future water needs include the development of new water sources, demineralization of brackish waters and desalination of seawater. In addition, efforts by water managers to find better ways to conserve and store water and to use reclaimed water are making headway. In 2004, the WaterReuse Association named Florida's Department of Environmental Protection WaterReuse Program its WaterReuse Institution of the Year.

Prepared for quick response
Diversification is only one of the ways Florida's infrastructure is becoming more secure. Lessons learned from recent hurricanes are also making an impact.

As a result of the ongoing MESONET project at the University of North Florida in Jacksonville, for example, the state will soon have better storm tracking capabilities in place. Explains Pat Welsh, executive director of the Advanced Weather Information Systems Lab at UNF: "MESONET is an aggregation of independent smaller weather gathering entities--such as water management districts, state emergency operations, universities and meteorologists on a federal, state and local level--that try to boost the National Oceanic and Atmospheric Administration's data gathering ability. We're trying to get everyone on the same format."

Meanwhile, city governments and disaster agencies all across the state are also upgrading their internal communication networks. In the wake of two consecutive record-breaking hurricane seasons, Florida companies too have been tweaking their disaster plans by taking part in simulation drills, adding generators and emergency crews, and "hardening" their systems for better protection. BellSouth, for instance, has relocated many critical switches to upper floors of buildings and improved the encasing on some of its most fragile equipment. For its part, Florida Power and Light has adopted new extreme wind velocity zone criteria-- up to 150 mph in some places--as the standard for all of its distribution, construction and system upgrades. And Gulf Power, serving Florida's Northwest region, coordinates storm preparation and response through its Emergency Management Center.

Telecommunications companies are making changes, too. Cingular Wireless has invested $60 million to harden its networks and beef up its hurricane response programs. To better serve their customers following storms, the company has developed two "cells on wheels"--self-contained mobile sites that can be pulled or driven to stricken areas to provide cell phone service. In addition, Cingular has available two portable "base-camps" consisting of huge tents outfitted with carpeting, air conditioning, washers and dryers and other amenities for use by as many as 80 emergency workers.

Sprint Nextel plans to spend about $100 million to bolster its infrastructure along coastal areas throughout the South. A portion of these funds will be used to set up permanent generators at 800 critical wireless cell sites and network facilities in Florida. In 2006, Sprint Nextel created a separate company, EMBARQ, to provide a suite of communications services to customers in its local service territories.

Tampa Electric Company (TECO), has activated a new toll-free "outage and restoration" phone system that allows the company to handle up to 30,000 calls at once and pinpoint service restoration needs using the caller's telephone number as identifier.

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