Juno Beach, Fla., April 30, 2010 – Florida Power and Light Company, a unit of FPL Group, will move forward with a $2 billion investment to modernize two power plants while reducing company staffing levels by about 300 positions as a result of the currently difficult economy.
The actions will benefit FPL customers by delivering customer benefits for decades to come, including fuel savings and improvements in environmental performance and reliability, while keeping current operating costs in line.
“These decisions were not easy, but we believe that the near-term focus on keeping operating costs in line while continuing to invest in our infrastructure to deliver the best value, service and reliability over the long term represents a balanced and responsible approach to meeting the needs of our customers,” said FPL President and CEO Armando J. Olivera.
FPL suspended activity on the modernizations in January in order to evaluate the impact of a rate case decision, including its effect on FPL’s creditworthiness and implications for the cost of capital.
Following an in-depth analysis, the company determined it is appropriate to move ahead with the modernizations of its Riviera Beach and Cape Canaveral power plants.
FPL estimates that the new units will save customers $850 million to $950 million over the life of the plants as compared to keeping the existing facilities in the fleet.
In addition, the new units will improve air quality by reducing particulate emissions by 88 percent at these sites and improve the plants’ carbon dioxide emission rate by more than 50 percent. Furthermore, the new plants don’t require any additional use of water or land.
The modernizations of the two plants will create demand for 1,300 direct and 4,000 indirect jobs during the construction period. The units will go into service in 2013 and 2014, as originally planned.
“Since the rate case decision, we have been downgraded by two rating agencies and are on negative watch by another. We strongly believe that the Florida Public Service Commission underestimated the actual cost of FPL’s equity in the recent base rate proceeding. This continues to be a source of concern to us. At the same time, an in-depth analysis has made it clear that the modernizations at Riviera Beach and Cape Canaveral continue to show a substantial benefit for our customers. As a result, we will move forward with the projects. Implicit in this decision, of course, is the recognition that we must demonstrate to the PSC throughout the service lives of these important investments, the need for a fair and appropriate return to the investors who will help to make these and other projects a reality,” Olivera said.
FPL is the largest electric utility in Florida and one of the largest rate-regulated utilities in the U.S. FPL serves about 4.5 million customer accounts in Florida and is a leading employer in the state with 10,500 employees.
The company consistently outperforms national averages for service reliability while customer bills are below the national average. FPL is a unit of Juno Beach, Fla.-based FPL Group, Inc.