JUNO BEACH, Fla. – Florida Power & Light Company today issued a request for proposals (RFP) to build a third major natural gas pipeline to serve Florida.
Over the past decade, FPL has reduced its use of oil by 98 percent by investing in new, highly efficient power plants that use clean, U.S.-produced natural gas as a fuel to produce electricity. In 2001, FPL used more than 40 million barrels of oil to power customers; in 2012, the company will use less than one million barrels.
With the two existing major natural gas pipelines serving peninsular Florida nearing full capacity, the state needs new natural gas transportation infrastructure by 2017 to meet the growing need for natural gas power. A new major natural gas pipeline will also improve the reliability of the state’s critical fuel transportation system and expand the state’s access to onshore sources, helping reduce exposure to offshore sources in the Gulf of Mexico and supply interruptions caused by tropical weather.
“Replacing foreign oil with natural gas makes good sense for Florida and the nation. It has saved FPL customers billions of dollars in fuel costs. It also provides significant environmental benefits by lowering emissions. However, as we continue to increase our use of U.S.-produced natural gas and as the needs of the state’s residents and businesses grow, we can’t rely solely on the two major pipelines that currently serve the state. A new, third pipeline system that includes a hub to interconnect all three pipeline systems in Central Florida is essential for the continued reliability and security of the state’s supply,” said FPL President Eric Silagy.
Florida uses more natural gas for electricity than any U.S. state other than Texas, with about 60 percent of Floridians’ power generated by plants that burn natural gas. But, unlike Texas, Florida has minimal natural gas production, no storage capabilities and only two major pipelines to deliver the fuel necessary to power the peninsula’s residents and businesses.
In addition to meeting demand for additional natural gas and mitigating risk, building a new pipeline will generate thousands of jobs during construction and millions of dollars in new tax revenue for local schools and governments.
FPL is currently investing to modernize three old, oil and gas-fired power plants into high-efficiency natural gas energy centers that will be approximately 33 percent more efficient and 90 percent cleaner than the facilities they replace. The three new plants being built are projected to effectively pay for themselves over their operational lifetimes with more than $1 billion in net customer savings compared with any other available generation options to meet future needs. The net customer savings reflect the expected savings from the plants’ advanced fuel efficiency. FPL believes a new pipeline is the best option to fuel these and FPL’s existing natural gas plants in the near future as the electricity needs of FPL’s customers grow.
The proposed new “Southeast Pipeline” will provide 400,000 MMBtu per day, or approximately 400 million cubic feet per day, of natural gas capacity for FPL beginning in 2017, increasing in capacity in future years. It will be composed of two segments:
Approximately four-fifths of the roughly 700-mile distance from western Alabama to FPL’s Martin County plant would be covered by the upstream Florida Interstate Connection segment with the other one-fifth covered by the downstream Florida Southeast Connection segment. Interested companies can bid on one or both of the segments. The specific routes will be selected and proposed by companies submitting bids. FPL will oversee a fair, competitive RFP evaluation process that will select the best option or options for FPL customers.
As part of the evaluation process, FPL plans to consider a self-build alternative for the downstream Florida Southeast Connection segment. The self-build alternative, if found to be in the best interest of FPL customers, would be owned and operated by a NextEra Energy, Inc. company. No consideration is being given to an FPL self-build alternative for the upstream Florida Interstate Connection and Central Florida Hub portion. However, the cost to build a pipeline project of this size will be substantial, and the completion schedule is critical. To facilitate timely construction, NextEra Energy will be prepared to discuss financial involvement in support of a selected option. FPL customers would not provide funding nor see their bills impacted by this in any way.
For more information on the project, visit www.FPL.com/naturalgaspipeline.
Florida Power & Light Company
Florida Power & Light Company is the largest electric utility in Florida and one of the largest rate-regulated utilities in the United States. FPL serves approximately 4.6 million customer accounts and is a leading Florida employer with approximately 10,000 employees. The company consistently outperforms national averages for service reliability while its typical residential customer bills, based on data available in December 2011, are about 25 percent below the national average. A clean energy leader, FPL has one of the lowest emissions profiles and one of the leading energy efficiency programs among utilities nationwide. FPL is a subsidiary of Juno Beach, Fla.-based NextEra Energy, Inc. (NYSE: NEE). For more information, visit www.FPL.com.
Cautionary Statements and Risk Factors That May Affect Future Results
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, but instead represent the current expectations of NextEra Energy, Inc. (NextEra Energy) and Florida Power & Light Company (FPL) regarding future operating results and other future events, many of which, by their nature, are inherently uncertain and outside of NextEra Energy’s and FPL’s control. In some cases, you can identify the forward-looking statements by words or phrases such as “will,” “will likely result,” “expect,” “anticipate,” “believe,” “intend,” “plan,” “seek,” “aim,” “potential,” “projection,” “forecast,” “predict,” “goals,” “target,” “outlook,” “should,” “would” or similar words or expressions. You should not place undue reliance on these forward-looking statements, which are not a guarantee of future performance. The future results of NextEra Energy and FPL are subject to risks and uncertainties that could cause their actual results to differ materially from those expressed or implied in the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: effects of extensive regulation of NextEra Energy’s and FPL’s business operations; inability of NextEra Energy and FPL to recover in a timely manner any significant amount of costs, a return on certain assets or an appropriate return on capital through base rates, cost recovery clauses, other regulatory mechanisms or otherwise; impact of political, regulatory and economic factors on regulatory decisions important to NextEra Energy and FPL; risks of disallowance of cost recovery by FPL based on a finding of imprudent use of derivative instruments; effect of any reductions to or elimination of governmental incentives that support renewable energy projects of NextEra Energy Resources, LLC and its affiliated entities (NextEra Energy Resources); impact of new or revised laws, regulations or interpretations or other regulatory initiatives on NextEra Energy and FPL; effect on NextEra Energy and FPL of potential regulatory action to broaden the scope of regulation of OTC financial derivatives and to apply such regulation to NextEra Energy and FPL; capital expenditures, increased cost of operations and exposure to liabilities attributable to environmental laws and regulations applicable to NextEra Energy and FPL; effects on NextEra Energy and FPL of federal or state laws or regulations mandating new or additional limits on the production of greenhouse gas emissions; exposure of NextEra Energy and FPL to significant and increasing compliance costs and substantial monetary penalties and other sanctions as a result of extensive federal regulation of their operations; effect on NextEra Energy and FPL of changes in tax laws and in judgments and estimates used to determine tax-related asset and liability amounts; impact on NextEra Energy and FPL of adverse results of litigation; effect on NextEra Energy and FPL of failure to proceed with projects under development or inability to complete the construction of (or capital improvements to) electric generation, transmission and distribution facilities, gas infrastructure facilities or other facilities on schedule or within budget; impact on development and operating activities of NextEra Energy and FPL resulting from risks related to project siting, financing, construction, permitting, governmental approvals and the negotiation of project development agreements; risks involved in the operation and maintenance of electric generation, transmission and distribution facilities, gas infrastructure facilities and other facilities; effect on NextEra Energy and FPL of a lack of growth or slower growth in the number of customers or in customer usage; impact on NextEra Energy and FPL of severe weather and other weather conditions; risks associated with threats of terrorism and catastrophic events that could result from terrorism, cyber attacks or other attempts to disrupt NextEra Energy’s and FPL’s business or the businesses of third parties; risk of lack of availability of adequate insurance coverage for protection of NextEra Energy and FPL against significant losses; risk to NextEra Energy Resources of increased operating costs resulting from unfavorable supply costs necessary to provide NextEra Energy Resources’ full energy and capacity requirement services; inability or failure by NextEra Energy Resources to hedge effectively its assets or positions against changes in commodity prices, volumes, interest rates, counterparty credit risk or other risk measures; potential volatility of NextEra Energy’s results of operations caused by sales of power on the spot market or on a short-term contractual basis; effect of reductions in the liquidity of energy markets on NextEra Energy’s ability to manage operational risks; effectiveness of NextEra Energy’s and FPL’s hedging and trading procedures and associated risk management tools to protect against significant losses; impact of unavailability or disruption of power transmission or commodity transportation facilities on sale and delivery of power or natural gas by FPL and NextEra Energy Resources; exposure of NextEra Energy and FPL to credit and performance risk from customers, hedging counterparties and vendors; risks to NextEra Energy and FPL of failure of counterparties to perform under derivative contracts or of requirement for NextEra Energy and FPL to post margin cash collateral under derivative contracts; failure or breach of NextEra Energy’s and FPL’s information technology systems; risks to NextEra Energy and FPL’s retail businesses of compromise of sensitive customer data; risks to NextEra Energy and FPL of volatility in the market values of derivative instruments and limited liquidity in OTC markets; impact of negative publicity; inability of NextEra Energy and FPL to maintain, negotiate or renegotiate acceptable franchise agreements with municipalities and counties in Florida; increasing costs of health care plans; lack of a qualified workforce or the loss or retirement of key employees; occurrence of work strikes or stoppages and increasing personnel costs; NextEra Energy’s ability to successfully identify, complete and integrate acquisitions; environmental, health and financial risks associated with NextEra Energy’s and FPL’s ownership of nuclear generation facilities; liability of NextEra Energy and FPL for significant retrospective assessments and/or retrospective insurance premiums in the event of an incident at certain nuclear generation facilities; increased operating and capital expenditures at nuclear generation facilities of NextEra Energy or FPL resulting from orders or new regulations of the Nuclear Regulatory Commission; inability to operate any of NextEra Energy Resources’ or FPL’s owned nuclear generation units through the end of their respective operating licenses; liability of NextEra Energy and FPL for increased nuclear licensing or compliance costs resulting from hazards posed to their owned nuclear generation facilities; risks associated with outages of NextEra Energy’s and FPL’s owned nuclear units; effect of disruptions, uncertainty or volatility in the credit and capital markets on NextEra Energy’s and FPL’s ability to fund their liquidity and capital needs and meet their growth objectives; inability of NextEra Energy, FPL and NextEra Energy Capital Holdings, Inc. to maintain their current credit ratings; risk of impairment of NextEra Energy’s and FPL’s liquidity from inability of creditors to fund their credit commitments or to maintain their current credit ratings; poor market performance and other economic factors that could affect NextEra Energy’s and FPL’s defined benefit pension plan’s funded status; poor market performance and other risks to the asset values of NextEra Energy’s and FPL’s nuclear decommissioning funds; changes in market value and other risks to certain of NextEra Energy’s investments; effect of inability of NextEra Energy subsidiaries to upstream dividends or repay funds to NextEra Energy or of NextEra Energy’s performance under guarantees of subsidiary obligations on NextEra Energy’s ability to meet its financial obligations and to pay dividends on its common stock; and effect of disruptions, uncertainty or volatility in the credit and capital markets of the market price of NextEra Energy’s common stock. NextEra Energy and FPL discuss these and other risks and uncertainties in their annual report on Form 10-K for the year ended December 31, 2011 and other SEC filings, and this press release should be read in conjunction with such SEC filings made through the date of this press release. The forward-looking statements made in this press release are made only as of the date of this press release and NextEra Energy and FPL undertake no obligation to update any forward-looking statements.