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Infrastructure: Growing Stronger and Greener

Florida’s business infrastructure is not only growing, it’s poised to become greener, too. In June 2008, Gov. Charlie Crist, a long-time advocate of green initiatives and alternative fuels, put his signature on Florida’s most progressive energy bill to date, which includes new energy-efficient building codes, renewable energy standards and a program to reduce greenhouse gas emissions.

“Charlie Crist has fired the starting gun,” says Jerry Karnas, director of the Environmental Defense Fund’s Florida Climate Project and a member of the Governor’s Action Team on Energy and Climate Change, “because it’s time for Florida to get into the race. Crist is not only offering a moral pathway, but also a pathway to a new economy.”

Market forces, shifting demographics and a spirit of innovation are fueling a statewide infrastructure makeover, and green technologies play a vital role.

ENERGY SECTOR

“Our balanced approach to meeting future energy needs uses a combination of resources, including energy efficiency, renewable energy and state-of-the-art power plants such as nuclear,” says Jeffrey Lyash, president and CEO of Progress Energy Florida, which has invested heavily in renewable initiatives such as solar, hydrogen, wind and biomass.

“We think biomass is especially promising,” he adds. “Since 2006, we have signed contracts to purchase the electrical output of three biomass power producers. We also consider nuclear to be a green energy source because it is carbon free and does not contribute to climate change.”

Energy sector investments across the board are guided, in part, by population growth. From 2000 to 2007, Florida’s population grew by about 2.4% annually. The University of Florida’s Bureau of Economic and Business Research predicts that Florida’s population will grow by just 1.1% each year through 2010, then return to previous growth levels through 2020. Energy providers are taking these numbers into consideration and looking long term.

“We have experienced slower customer growth in 2007 and in the first quarter of 2008 than in previous years,” says John Ramil, Tampa Electric Company (TECO) Energy president and COO. TECO expects to return to a more normal growth pattern of about 2% by 2010 and, Ramil says, “to add 150 megawatts of generation per year and related transmission and distribution infrastructure.”

Likewise, Pensacola-based Gulf Power, a subsidiary of Southern Company, expects demand to increase 2% to 3% per year. Says President and CEO Susan Story, “Economic downturns come and go, but we believe Florida’s diverse economy can address these challenges and come out even stronger.”

e-grass
Florida is exploring a wide range of alternative energies: e-grass (biofuel), solar, nuclear and ocean turbines. [Photo by Forest and Kim Stars (USGS) top]
e-grass

A diversity of fuels and energy sources is meeting Florida’s needs:

Green Initiatives

Florida’s new energy bill directs the Public Service Commission (PSC) to establish minimum standards for the amount of electric energy that must be derived from renewable sources. In addition, the Florida Department of Environmental Protection must develop a “cap-and-trade” program by 2010 whereby credits would be issued to companies that reduce greenhouse gas emissions and penalties to those that do not. Power plants and other businesses that reduce pollution would be able to sell their credits to companies that exceed the mandated cap on carbon dioxide emissions.

Nuclear Power

In July 2008, Progress Energy received unanimous approval from Florida’s Public Service Commission to build a $17-billion nuclear energy facility in Levy County. Projected to come on line beginning in 2016, the plant will eventually generate 2,200 megawatts of power — enough to supply 1.3 million average households. Approvals from the Florida Department of Environmental Protection and the U.S. Nuclear Regulatory Commission are still needed before construction can begin.

Florida Power & Light (FP&L), Florida’s largest investor-owned utility, operates two nuclear power plants in Florida — on Hutchinson Island near Fort Pierce and at Turkey Point on Biscayne Bay south of Miami; in March, the PSC approved two new nuclear plants at Turkey Point.

Bill Cantrell"Developing an intrastate natural gas pipeline is “a logical extension of the business we already do."
— Bill Cantrell, President, SeaCoast Gas and Peoples Gas

Natural Gas

About 39% of Florida’s electric generating capacity comes from natural gas. But that figure could rise to 50% by 2013, according to a 2007 Florida Energy Commission report. Worries over greenhouse emissions “have basically taken coal off the table as a fuel for new power plants in Florida,” says David Rogers, executive director of the Florida Natural Gas Association, “but they have taken natural gas up the ladder.”

Rogers expects that increased quantities of Gulf Coast gas will be available to Florida as new Western natural gas suppliers move to the Northeast and Midwest. Supplies of Liquid Natural Gas (LNG) are increasing, too; as many as 10 LNG projects are currently under way in Florida and other Gulf Coast states.

Peoples Gas, Florida’s largest natural gas distribution utility, serves 330,000 customers and will soon serve more. In June 2008, its parent company, TECO Energy, formed a new subsidiary to develop an intrastate natural gas pipeline. SeaCoast Gas Transmission will supply natural gas to a new power plant planned for northeast Florida. As more gas-fired power plants are built, the pipeline could be expanded to serve other Florida regions.

Ethanol — Fueling Florida's Future

The new comprehensive energy bill signed into law by Gov. Crist in June 2008 requires that by December 31, 2010, all gasoline sold in Florida must contain 10% ethanol. It’s no wonder then that as many as five separate companies are planning to build plants in locations across the state to produce ethanol from a variety of sources, including wood fiber, sugar cane residue, various grasses, citrus waste and other materials.

Meanwhile, Texas-based Kinder Morgan, a major pipeline transporter and terminal operator, is retooling its 16-inch pipeline that carries gasoline from the Port of Tampa to Orlando. By May 2009, a new fuel — ethanol — will be flowing through that pipe.

New ethanol storage units are under construction, too. One example is the new $90-million ethanol storage facility that Jacksonville-based Gate Petroleum is building near the St. Johns River.

Renewable Alternatives

Solar

In June 2008, FP&L announced plans to build three solar energy plants in Florida:

  • The DeSoto Next Generation Solar Energy Center in DeSoto County, which will provide 25 megawatts of photovoltaic solar capacity, making it the world’s largest photovoltaic solar facility.
  • The Martin Next Generation Solar Energy Center in Martin County, which will provide up to 75 megawatts of solar thermal capacity in a hybrid design that uses the power of the sun to generate electricity from steam.
  • The Space Coast Next Generation Solar Energy Center at Kennedy Space Center, which will provide 10 megawatts of photovoltaic solar capacity.

At a total cost of $688 million, these three plants represent the first commercial-scale renewable energy to be installed in Florida. Combined, they will generate 110 megawatts of solar power — making Florida No. 2 in the nation for solar energy and providing enough emissions-free electricity to power 35,000 homes and businesses.

Wind

Wind is proving to be both an inexpensive and abundant source of power for many states; whether Florida is among them remains to be seen. Two energy providers — FP&L and Progress Energy Florida — are conducting studies to determine the viability of harnessing Florida’s ocean breezes to generate electricity.

Biofuel

  • Talks are under way between Tallahassee city officials and Biomass Gas & Electric LLC to establish a plant for converting wood chips into electric power on 22 acres at Florida State University’s Innovation Park.
  • Brevard County has partnered with Michigan-based Landfill Energy Systems to construct an $11-million, 6,000-square-foot waste-to-energy plant which converts the methane gas generated by deteriorating garbage into electricity.
  • In Manatee County, FP&L expects to generate enough electrical energy from landfill gases to serve 1,800 homes by January 2009.
  • Atlanta-based Geoplasma continues to pursue its plans to build a $500-million plasma-arc gasification plant at St. Lucie County’s landfill to convert garbage into electricity.

TELECOMMUNICATIONS

Florida enjoys geographical advantages, suggests Marshal Criser III, president of AT&T Florida. “This is a gateway state with gateway connectivity to Latin America, Europe and the world. Our company has those connections, and we want to be part of that gateway.”

Size matters, too. “Florida is our largest market among the 18 states we serve,” says Tommy L. Mathews, spokesperson for Embarq, “and our ongoing investments in existing and new technology reflect that importance.”

Market niches also command attention. For example, at Verizon, the focus is on the Tampa Bay region, says Michelle Robinson, the company’s Southeast Region president, where emerging health and education communities, along with MacDill Air Force Base, are creating an environment that’s “ripe for investment.”

Says Robinson, “We’re here for the long run.”

Telecom: Recent Developments
  • Florida’s “Consumer Choice Act of 2007” has changed the pay-TV franchise process by permitting telephone companies to petition the state rather than local governments to obtain cable TV and Internet services franchises. This means more competition for cable companies and new opportunities for telecoms. AT&T Florida alone is expending $750 million on improvements to its communications infrastructure throughout the state, including the new “U-verse” TV and high-speed Internet service.
  • Verizon, which invested $836.9 million in plants and equipment in Florida in 2006, including investments in its fiber-to-the-premises initiative, hopes to merge with Alltel Wireless. If regulators agree to the merger, Verizon’s reach will stretch from the Tampa Bay area into the Florida Panhandle.
  • The Florida Public Service Commission is studying a proposal that would allow a more “level playing field” for interactions between traditional telephone companies and their wireless and cable TV competitors.

WATER

Michael Max
This compact unit can make 20 gallons of clean water a day, says AquaVentus CEO Michael Max. [Photo: Jeffrey Camp]
The Florida Department of Environmental Protection (FDEP) manages the quality and quantity of Florida’s water supply. In addition to developing statewide water policies, FDEP works closely with five water management districts — Northwest Florida, Suwannee River, St. Johns River, Southwest Florida and South Florida — to ensure that their programs are consistent with provisions of the Florida Water Resources Act and the Water Protection and Sustainability Program, both of which were created to provide a safe and abundant water supply well into the future.
  • In June 2008, the state of Florida announced its intention to buy 187,000 acres of agricultural land owned by U.S. Sugar Corporation in the state’s South Central region for $1.75 billion. Aimed at restoring the natural flow of water to the Everglades, this historic development should allow water managers to better clean and store water for Florida’s future needs.
  • Tampa Bay’s desalination plant — the largest in the U.S. — has begun pumping 25 million gallons of drinking water to more than 2.4 million customers. Florida’s water managers envision additional “desal” plants to meet growing water demands.
  • St. Petersburg-based AquaVentus has devised a way to make water from air. The company’s compact refrigeration unit — the size of a large cooler and powered by electricity, a generator or the sun — makes 20 gallons of clean, drinkable water a day by wringing the humidity out of air. AquaVentus plans to begin selling the units in 2009.

Keeping Systems Secure

Florida’s Public Service Commission takes a proactive approach to keeping this state’s infrastructure secure and operational in the face of climate change uncertainties and possible hurricanes. Utilities and telecommunications providers are required by the PSC to perpetually “harden” their systems in order to minimize potentially adverse impacts on business owners and residents.

For energy providers, these efforts include more wind-resistant equipment, the clearing of vegetation and enhanced backup and emergency services, especially for hospitals, nursing homes and military bases. On the telecom side, portable generators and fleets of “mobile cell sites on wheels” are at the ready for activation as soon as storms pass.

This level of preparedness does not come without a price, of course. In 2007, Sprint invested $59 million to get ready in the coastal areas it serves. Likewise, Verizon invested more that $150 million in 2007 to strengthen its Florida network, including approximately $20 million to enhance its Tampa Bay switching facility, which, the company says, is designed to hold up in a Category 5 hurricane. FP&L has spent more than $158 million since 2006 replacing thousands of power poles, trimming trees along 22,859 miles of power lines and upgrading substations throughout its statewide system.