NAVIGATION

December 13, 2017
Economic development has become a mission for utilities in Florida

Photo: Thomas Winter/FPL

"Bringing in a new business to Florida is not just a real estate transaction, it's really about finding the perfect marriage of a business and a community," says FPL's Crystal Stiles.

Economic Backbone

Economic development has become a mission for utilities in Florida

Carlton Proctor | 8/26/2016

The first priority for Florida’s five investor-owned electric utilities is generating and delivering power to more than 7.28 million customers. But in recent years the companies have taken on another task — from Gulf Power’s site certification programs to Duke Energy’s community databases to Florida Power & Light’s special rates for startup companies, the state’s power companies have become active players in economic development.

Most of the efforts began as a political and economic response to the Great Recession, as the utilities looked for ways to bolster their revenue and support local efforts to attract industry.

“During that time, our customers were having to choose between paying their power bill and putting food on the table, and that was not a scenario that we took lightly,” says Crystal Stiles, FPL’s economic development director. “So we started doing what we could to help our customers find jobs and find opportunities for their families.”

In addition to its site certification program for industrial parks, Gulf Power is focusing on industry diversification in its Panhandle service region, which depends heavily on military spending and tourism, says Rick Byars, the company’s lead economic development executive.

Gulf Power is working with the University of West Florida and Florida’s Great Northwest — a privately funded economic development agency — on a diversification strategy centered on aerospace industries and manufacturing.

Duke Energy’s economic development efforts include workforce development initiatives, as well as sustained investment in programs aimed at attracting and retaining businesses within its Florida service territories. Like FPL and Gulf Power, Duke also maintains extensive demographic databases that are made available to local economic development agencies.

FPL’s first program was the Economic Development Rate, established in 2011. It offers declining discounted power rates over a five-year period for growing businesses that commit to creating jobs and expanding investment. “We have 62 companies that have taken advantage of that rate,” says Stiles, “and those companies have pledged to add 12,900 new jobs to Florida’s workforce.”

In 2013, FPL launched Poweringflorida.Com, which hosts a database for available commercial and industrial properties and buildings in all 67 of Florida’s counties.

“If you don’t have a way for a company to locate sites and buildings in a state that might house a new business, then you’re off the list before they ever pick up the phone to call you,” says Stiles. “We have over 10,000 sites and buildings on what is a very dynamic list that is constantly changing and being updated.”

Part of FPL’s website is a business and competitive intelligence tool, which it offers to all economic development entities throughout the state. The tool provides specific demographic data and analytics that help communities understand their competitive advantages by comparing themselves to similar communities in other states.

“Bringing in a new business to Florida is not just a real estate transaction, it’s really about finding the perfect marriage of a business and a community,” says Stiles.

“If you can pull all those demographic factors together to give executives a broad and detailed view of what you have to offer when they are looking for a location,” she adds, “your chance of success is exponentially increased.”

Q&A

» Emera’s CEO talks about the company’s plans for newly acquired TECO.

Robert R. Bennett is president and CEO of Emera U.S., a Canadian-based power company that completed its acquisition of TECO Energy for $6.5 billion in July. Florida businesses included in the purchase are Tampa Electric Co. (TECO), which serves more than 725,000 customers, and Peoples Gas System, the state’s largest natural gas distributor, which serves more than 365,000.

Bennett spoke with FLORIDA TREND about his plans for TECO and Emera U.S.

Q: What made TECO an attractive acquisition for Emera?

A: TECO was well known for its innovative thinking and for being a well-rounded electric utility and gas company. For Emera, TECO added the diversity we wanted for our portfolio. It’s obviously a huge transaction because it has doubled the size of Emera. Now we’re actually a $21-billion company, which makes us a very significant utility player in North America.

Q: What part will solar power play in your company plans to develop in Florida?

A: With solar power, the challenge is finding ways to develop it at the right pace and right cost so that it’s acceptable as part of Florida’s energy mix. However, I think of all forms of clean energy, it is by far the most important part of our clean energy mix that exists in Florida.

Q: Given that potential, what do you estimate will be the percentage of TECO’s solar production output in five years?

A: It’s too early for me to make an estimate of that because we’re just now getting involved in the business. But I’m very enthusiastic about making more of TECO’s energy from solar. But it has to be what our customers want, and I hear more and more that it is what our customers want. But it also has to be what regulators and policymakers in the state can support.

Q: Emera is investing in tidal power generating sources in Nova Scotia. Do you see any potential for that kind of investment in Florida?

A: It’s hard to say whether tidal generation turbines will work in Florida because the technology is still in its infancy.

Q: Does your transition to clean energy in Florida include wind energy generation?

A: I wonder if there’s an opportunity for the development of wind energy here in Florida. But, generally, the science I’ve read says the wind regime in Florida is not steady enough to make that viable.

Q: What are the main sources today of TECO’s power generation?

A: Most of it now comes from natural gas. There is another component called Integration Gasification Combined Cycle that essentially turns coal into a flammable gas. There are only three of these type coal gasification plants in the U.S., and we have one of them in operation.

» Solar Energy in 2020

The Solar Energy Industries Association predicts that by 2020 the industry will employ 220,000 more U.S. workers in manufacturing, installation, sales and other related jobs. Moreover, solar will be generating about 3.5% of the national’s electricity by 2020, up from 1% in 2016.

» Solar Energy Dynamics

Aided by tax breaks and declining installation costs, solar energy systems are growing rapidly in Florida. Solar advocates say rooftop technology saves users money and helps protect the environment by reducing demand for fossil fuels. Utilities counter that large, utility-scale solar plants are the most efficient way to produce solar and that the financial evaluations of home rooftop installations frequently omit costs related to service contracts, replacing components of the systems and increased insurance premiums for some. In addition, utilities say, home solar system owners don’t pay any costs of the pole and wire infrastructure the utilities must maintain to meet requirements to serve all electric consumers within their territories.

Florida’s Power Sources

61% — Percentage of Florida’s power generated from natural gas. Florida was second only to Texas in 2014 in net electricity generation from natural gas.

23% — Percentage generated from coal

12% — Percentage generated from nuclear

5% — Percentage generated from solar and other sources, including agricultural and municipal wastes. In 2014, the state ranked 10th in the nation in net generation from utility-scale solar energy.

OIL & NATURAL GAS

» Last year, according to the state Department of Environmental Protection, nearly 600,000 barrels of oil and 746.54 million cubic feet of natural gas were produced in Florida.

» Breitburn Energy Partners, headquartered in Los Angeles, operates production regions in Santa Rosa County’s Jay oilfields and in southwest Florida in an area known as Raccoon Point and Lehigh Park oilfields. In total, the company has interests in 94 productive wells in Florida and in 2014 acquired QR Energy’s oil and gas properties in the state.

» A Texas company, Burnett Oil, has received permission from the National Park Service to do seismic tests to determine if there’s oil under the Big Cypress National Preserve. Another firm, Kanter Real Estate, has applied to drill an exploratory well in Broward County.

» Florida does not have any crude oil refineries. The state’s petroleum products are delivered by tanker and barge to marine terminals in Jacksonville, Miami, Tampa, Port Canaveral, Port Manatee, Fort Lauderdale and West Palm Beach.

» Petroleum product imports, including gasoline and gasoline blending components, residual fuel oil, jet fuel and asphalt arrive in Florida from around the world. Brazil is the main exporter of ethanol products to the state.

» Florida’s natural gas production peaked in the late 1970s, and by 2009 had fallen to a fraction of the earlier production. Increased natural gas withdrawals since 2009 have primarily been used to repressure oil reservoirs to improve oil recovery. Only a small amount of Florida’s limited natural gas production is marketed.

» Florida does not mine coal. Almost all of the coal consumed in the state is used for electricity generation. Domestic supplies for Florida’s coal-fired electricity generating plants are delivered by railroad and barge, mostly from Kentucky, Illinois, Indiana and West Virginia. Florida generators also import coal from abroad, typically from Latin America.

UTILITY NOTES

» In 2002, 80% of Gulf Power’s energy came from coal and 20% from natural gas. This year, the Pensacola-based company, a division of Southern Co., is projecting that 75% will come from natural gas, 20% from coal and 5% from renewables. When Gulf Power’s military solar projects at Eglin Air Force Base, Saufley Field in Pensacola and Holley Field in Navarre are completed in 2017, its share of renewables will climb to nearly 10%, says CEO Stan W. Connally Jr.

» FPL is adding photovoltaic solar facilities in Manatee, Charlotte and DeSoto counties. The solar farms, expected to go on line by the end of this year, will generate 74.5 megawatts each, tripling FPL’s solar generation capacity from its current 110 megawatt to 333 megawatt. FPL is also projecting the addition of another approximately 300 megawatts of solar power will be added to its system by 2021.

» FPL has a rate increase request pending before the Florida PSC. If approved, the new rates will take effect in early 2017, again in 2018 and in 2019. The proposed rate increase would help the utility modernize its power generation. Even with the increase, all typical customer bills will remain lower than they were in 2006, says FPL’s Alys Daly.

» TECO has begun planning for an incremental 18-megawatt solar farm at its Big Bend Power Station. Projected start date for the facility is May 2017. In its 10-year site plan filed in 2016 with the Florida Public Service Commission, TECO announced it plans to build additional gas combustion turbines to meet reserve power margins anticipated for the peak summer loads in 2020 and 2023 and beyond.

» Gulf Power has filed a petition with the Florida Public Service Commission seeking approval to add 94 megawatts of wind energy from the Kingfisher Wind Farm in Oklahoma. If FPSC approves the petition, Gulf’s wind energy total mix would total 272 megawatts.

» The Seminole Electric Cooperative, a group of nine cooperatives that collectively serve 1.7 million Florida residents in mostly rural areas, will build a 2.2-megawatt solar facility at the site of an existing gas-powered facility in Hardee County.

» Gulf Power has retired two of its coal-fired units at Plant Smith and Plant Scholz in Bay County.

» Duke Energy’s service area covers approximately 20,000 square miles, including Orlando, Clearwater and St. Petersburg, and serves some 1. 7 million customers. The utility’s customer base is expected to grow on average by 1.5% over the next 10 years, bringing the total customer forecast levels to 1,994,675 customers by 2025.

Tags: Energy & Utilities, Economic Backbone

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