August 22, 2014
Natural gas is key to Florida's power supply

Photo: Map by FPL

Energy Trends

Natural gas is key to Florida's power supply

But, are Florida's utilities putting too many eggs in one basket?

Florida’s utilities now generate as much as 60% of the state’s electricity from natural gas, but should that number be higher? The debate over that answer could be critical to the state’s future power supply.

Some utilities executives warn that a lack of diversity in power supply could be dangerous if there is any kind of disruption in supply from tropical weather or a gas price spike. Even so, they’re resigned to a heavier reliance on natural gas for the foreseeable future given the opposition to coal plants and the difficulty and expense of nuclear facilities.

That reliance will intensify further if a proposed natural gas pipeline into Florida is completed. With the state’s two major natural gas pipeline systems in central and south Florida nearing full capacity, FPL has proposed a third to bring more domestically sourced natural gas to Florida by May 2017. Fifty years ago, Florida only had one way to bring gas into the state:

The Florida Gas Transmission Pipeline, a 5,500-mile system that stretches from Texas to the Florida peninsula. A decade ago, Gulfstream Natural Gas completed a competing pipeline system that stretches from Mobile Bay in Alabama to Port Manatee on Tampa Bay. The proposed system would run from Alabama to Martin County in Florida, where it would connect with FPL’s power system. Other pipelines serve the Panhandle.

Mike Sole, vice president for state governmental affairs at Florida Power & Light, says the proposed pipeline system includes a hub to connect all three pipeline systems in central Florida and is essential for the reliability of the state’s natural gas supply.

The power company says Florida uses more natural gas for electricity than any other state besides Texas. But unlike Texas, Florida has minimal natural gas production, no storage capabilities and only two major pipelines in central and south Florida to deliver the fuel necessary to power homes and businesses.

The new pipeline would offer several advantages, Sole says. Gulfstream and Florida Gas Transmission bring in gas from the Gulf of Mexico region, but the new pipeline would allow the state to diversify origination and receive supplies from more inland, on-shore shale gas reserves. Because the proposed pipeline would connect with the existing pipelines, “If there’s a disruption on one pipeline, there’s an opportunity to source natural gas through other pipelines,” Sole says.

Sole says the third pipeline has become more critical with his company’s construction of three new power plants in Florida that run mostly on natural gas, considered to be cleaner, less expensive and more efficient than oil. Without the new multibillion-dollar natural gas pipeline, by 2017 there’s a risk of falling short of supply, he says.

The proposed natural gas pipeline would add 400 million more cubic feet per day to the state’s supply, with an increase to 600 million in 2020. John Ramil, president and CEO of TECO Energy in Tampa, says the new pipeline may have to extend to areas beyond what FPL has proposed. “We need to make sure whatever is built, all potential users have access to and the gas can get to markets that need it.”

For now, FPL is seeking bids from companies interested in building the pipeline. Sole says FPL will make its recommendations to the Florida Public Service Commission this summer.

Tags: Energy & Utilities, Transportation

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