All-Requirements Project Members Celebrate 20 Years of Power Supply Independence
ORLANDO, Fla., May 1, 2006 – Twenty-years ago today, Florida Municipal Power Agency (FMPA) began serving the wholesale power needs of several Florida cities, enabling municipal utilities of all sizes to become owners—not just customers—of a large, efficient statewide power system.
Since beginning operation on May 1, 1986, this program, known as the All-Requirements Project, has given municipal electric utilities control over their wholesale power supply. This independence has also produced lower power costs, a more efficient system and strategic strength in numbers.
All-Requirements was originally founded to serve five cities with a peak demand of 325 Megawatts, but the project’s early success attracted many new members. Today, All-Requirements is a 1,600 Megawatt system serving 15 cities throughout Florida, from the panhandle to Key West. It is one of the 25 largest municipal utilities in the United States.
“FMPA’s All-Requirements Project has for two decades played an active and important role in protecting the interests of municipal utilities and their customers,” said FMPA General Manager and CEO Roger Fontes. “The situation for Florida’s municipal utilities today would be much different if not for some of the hard-won accomplishments of our All-Requirements members.”
During the past 20 years, All-Requirements’ most important milestones include:
Introducing Wholesale Competition: By becoming an all-requirements supplier, FMPA introduced competition into Florida’s wholesale power market, which was previously dominated by three investor-owned utilities. This helps foster competition, which in turn provides significant savings shared by all Florida customers.
Saving Millions for Consumers: When the project was formed, the original members expected to save approximately one percent per year in wholesale power costs. As it turned out, they saved an average of 15% or more, compared to what they would have paid their previous power supplier. Over the years, participants’ savings have amounted to hundreds of millions of dollars.
FMPA also saved money for nine other municipal utilities. When these cities were given the opportunity to purchase power from FMPA, an investor-owned utility agreed to match FMPA’s costs in order to retain those cities as customers. From 1986 until the agreement was cancelled in 1998, nine cities with the rate matching offer received $34.2 million in refunds from that investor-owned utility.
Opening Access to the High-Voltage Transmission Grid: On behalf of the All-Requirements Project, FMPA has been active in federal regulatory forums as a champion for new rules requiring utilities to provide open and fair access to the nation’s interstate transmission network. FMPA filed and won a precedent-setting case at the Federal Energy Regulatory Commission seeking a type of transmission service that transmission owners used themselves but would not offer to others. The ruling in FMPA’s case and subsequent FERC orders seek to ensure that wholesale buyers and sellers can reach each other without suffering anticompetitive and discriminatory practices imposed by transmission owners.
“I believe it is fair to say that the All-Requirements Project’s actions played a major role in establishing open, non-discriminatory access as the nation’s policy regarding common-carrier use of the nation’s transmission grid,” said Fontes.
Providing Self-Determination to Utilities of All Sizes: Perhaps the most significant benefit of All-Requirements is its ability to give municipal utilities, large and small, control over their power supply future. All-Requirements members are not wholesale power customers; they are owners of one of the largest, most diverse municipal electric systems in the nation.
“Joint action through the All-Requirements Project has given Florida’s municipal utilities both the power to choose their own path and the strength to overcome any obstacles they encounter,” said Fontes.
The All-Requirements Project’s top 20 accomplishments of the past 20 years include:
|May 1, 1986||FMPA’s All-Requirements Project begins operation. The founding cities are Bushnell, Green Cove Springs, Jacksonville Beach, Leesburg and Ocala.|
|September 1987||During the first year of operation, All-Requirements participants saved $11.7 million, or 16.5%, less than it would have cost for the cities to remain with their previous supplier.|
|July 1988||To increase economies of scale, All-Requirements was a founding member of the Florida Municipal Power Pool with Orlando Utilities Commission and Lakeland Electric.|
|April 1989||Integrated Dispatch and Operations contracts are signed by five generating systems to join All-Requirements. Contracts are put in escrow and negotiations began for transmission service from Florida Power & Light.|
|May 1991||Clewiston joins All-Requirements.|
|May 1994||In a precedent-setting decision, the Federal Energy Regulatory Commission orders Florida Power & Light to sell network service to FMPA. With network service, generating utilities can be incorporated into All-Requirements.|
|April 1996||FMPA begins purchasing network service for the existing members of All-Requirements.|
|June 1997||Vero Beach is the first generating city to join All-Requirements since network transmission service became available.|
|October 1997||Starke begins coordinated operations as a member of All-Requirements.|
|January & April 1998||Fort Pierce and Key West begin operating as part of All-Requirements. Adding four cities in less than a year increases the project’s size by more than 60%.|
|October 1998||FMPA, on behalf of All-Requirements, makes a commitment with KUA to jointly build a 250 MW combined cycle unit at Cane Island. At the time it was the largest single generating resource for All-Requirements.|
|March 1998||All-Requirements credit rating is upgraded to ‘A+’ by Fitch IBCA, reflecting the financial strength of the project.|
|October 1999||FMPA and Florida Power & Light reach a comprehensive settlement for a lawsuit worth millions of dollars to All-Requirements. The lawsuit filed by FMPA seeks relief for alleged breach of contract and antitrust violations related to the provision of transmission service.|
|February & July 2000||The cities of Fort Meade, Havana and Newberry join All-Requirements.|
|October 2002||Kissimmee Utility Authority and the city of Lake Worth join All-Requirements, increasing the project’s size by 30% to become one of the state’s largest municipal utility and the sixth largest utility in peninsular Florida.|
|December 2002||FMPA takes the lead to begin development of a solid-fuel power plant for All-Requirements, the first major base load project initiated by FMPA.|
|August 2002||FMPA embarks on a fuel management program to control the volatility of natural gas prices and develops a Board-approved risk management.|
|November 2004||FMPA is a founding member of Public Gas Partners created to secure economical, long-term natural gas supplies and reduce the cost of natural gas to protect the All-Requirements’ rate.|
|November 2004||FMPA acquires land in Fort Pierce to develop the Treasure Coast Energy Center, the first wholly owned power plant site for All-Requirements.|
|November 2005||FMPA, on behalf of All-Requirements, breaks ground in Key West for a 42 MW, low sulfur oil-fired combustion turbine power plant, the first unit licensed and built by FMPA.|
Florida Municipal Power Agency (FMPA) is a wholesale power company owned by 29 municipal electric utilities. FMPA provides economies of scale in power generation and related services to support community-owned electric utilities. The members of FMPA serve approximately 1.8 million Floridians. FMPA’s members include Alachua, Bartow, Bushnell, Chattahoochee, Clewiston, Fort Meade, Fort Pierce, Gainesville, Green Cove Springs, Havana, Homestead, Jacksonville Beach, Key West, Kissimmee, Lake Worth, Lakeland, Leesburg, Moore Haven, Mount Dora, New Smyrna Beach, Newberry, Ocala, Orlando, Quincy, St. Cloud, Starke, Vero Beach, Wauchula and Williston.