(Bloomberg) — NextEra Energy Inc., the biggest North
American generator of wind and solar power, wants to buy a coal-fired electricity plant just to shut it down.
The company’s Florida Power & Light utility unit is asking
state regulators to approve a $520.5 million deal for the 250-megawatt Cedar Bay Generating Plant in Jacksonville, according
to a statement Friday.
Florida Power has been buying power from Cedar Bay under a
contract that dates to 1988. Buying the plant would let the
company terminate the contract, saving customers about $70
million and eliminating about 1 million tons in annual carbon
emissions. Coal plants are the biggest source of greenhouse
gases that are blamed for global warming, and are facing new
restrictions from the U.S. Environmental Protection Agency.
“Although years ago it made sense to buy this plant’s
power to serve our customers, times have changed,” Florida
Power Chief Executive Officer Eric Silagy said in the statement.
“We’re in a position to take ownership of the facility and
effectively buy out an outmoded contract.”
Under the power-purchase agreement, Florida Power pays more
than $120 million a year for capacity and maintenance, with
annual increases until the deal expires in 2024. The company
said it can now generate energy at a lower price.
Sarah Gatewood, a Florida Power spokeswoman, said the
company has no plans to build a new plant, and will make up for
Cedar Bay’s capacity with output from other facilities.
Florida Power plans to acquire CBAS Power Inc., which
indirectly owns the power plant. Once the deal is complete, it
will reduce output by 90 percent immediately, and shut it down
completely in two to three years.
The EPA expects to complete rules this year for coal plants
that would call for reductions in carbon dioxide pollutants of
30 percent by 2030 from 2005 levels.
To contact the reporter on this story:
Justin Doom in New York at
jdoom1@bloomberg.net
To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Will Wade, Steven Frank