ORLANDO, Fla., Aug. 4, 2008 – The Florida Public Service Commission (PSC) today approved a request by the Florida Municipal Power Agency (FMPA) for a determination of need for a new natural gas-fueled electrical generating unit in Osceola County, Fla.

The Commission approved the need for FMPA to construct a new unit at the Cane Island Power Park, an existing power plant site near Intercession City. The proposed unit, known as Cane Island Unit 4, is projected to begin commercial operation in 2011 and generate 300 megawatts, enough electricity to serve approximately 60,000 homes in Florida.

“Additional electrical generation is needed to provide adequate electrical power in our communities, and the Public Service Commission’s decision today affirms that the proposed expansion of Cane Island is the best option to supply reliable, affordable power to our communities,” said Roger Fontes, General Manager and CEO of FMPA.

Determination of Need
The Public Service Commission is one of several state, federal and local agencies that must review any new electrical power plant during a multi-step approval process required by Florida law. The Commission’s role is to determine whether the proposed plant is needed to reliably meet customers’ needs and whether it is the most cost-effective option. The Commission also considers conservation measures reasonably available that might mitigate the need for the plant and looks at whether renewable energy sources and technologies are utilized to the extent reasonably available.

“The Commission’s determination of need today is a major milestone in the licensing process,” said Fontes. “I would like to thank the Kissimmee Utility Authority, our co-owners at the Cane Island Power Park, for their invaluable assistance with reaching this important goal.”

“The entire licensing and permitting process takes more than a year, so we still have more steps ahead of us. We will continue to share information with our neighbors, as we move forward through the process,” said Fontes.

Growing Power Needs
FMPA’s long-term power supply plan indicates that additional generating capacity must be added by 2011 to ensure the supply of electricity will be adequate to meet the demand of the cities it serves. FMPA provides all the wholesale electric power needs of 15 cities, including the Central Florida communities of Kissimmee, Leesburg, Ocala and Bushnell, as well as Clewiston, Fort Meade, Fort Pierce, Green Cove Springs, Town of Havana, Jacksonville Beach, Key West, Lake Worth, Newberry, Starke and Vero Beach.

FMPA member communities’ power needs are growing rapidly. Load forecasts project FMPA customers’ demand for power will increase more than 38% in the next 20 years. In addition, FMPA members have received power under several power purchase contracts that have recently expired or are nearing the end of their term. Together, these factors mean that by summer 2011 new generating capacity will be necessary to reliably serve FMPA’s member cities.

Evaluating the Alternatives
FMPA conducted a thorough analysis of alternatives to meet consumers’ projected need for electricity, and Cane Island Unit 4 was determined to be the most cost-effective alternative.

FMPA requested competitive bids for power purchase options, as well as renewable and solar energy resources and energy conservation programs. Evaluations showed that the proposed Cane Island Unit 4 is the most cost-effective option.

In addition to Cane Island Unit 4, FMPA is pursuing conservation and renewable projects. For example, FMPA signed a letter of intent to purchase 10 megawatts of solar power at locations throughout the state, and the Agency also created a new program to fund conservation programs in FMPA member cities. Renewable power resources and conservation are important, but they do not eliminate FMPA’s need for the proposed Cane Island Unit 4.

Carbon Reduction Activities
The important public policy issue of global climate change was also considered in FMPA’s evaluations. Although a specific regulatory framework has not yet been developed to regulate greenhouse gas emissions in the state of Florida, FMPA is committed to being part of a statewide effort to reduce emissions. Cane Island Unit 4 is part of FMPA’s long-term power supply plan, known as the 2008 Integrated Resource Plan. The plan describes how FMPA will provide reliable, affordable wholesale power, while achieving the state of Florida’s proposed goals for increasing the use of renewable energy, increasing energy conservation and reducing greenhouse gas emissions.

Cane Island Unit 4 will be fueled by clean-burning natural gas, and it will be one of the cleanest and most efficient plants in Florida. It is expected to displace generation from less efficient units, thereby reducing CO2 emissions and allowing FMPA to achieve near-term greenhouse gas reduction goals proposed by Florida Gov. Charlie Crist.

“We are committed to reducing greenhouse gas emissions to meet state goals,” said Fontes. “Cane Island Unit 4 is an important part of our plan to meet the governor’s first goal for greenhouse gas emission reductions. Based on our projections, we will reach the required reductions in CO2 emissions to 2000 levels by the year 2017.”

The potential for future carbon regulations was considered in the economic analysis of FMPA’s power alternatives. These analyses demonstrate that Cane Island Unit 4 is the most cost-effective alternative, even in a carbon-regulated environment.

“Our detailed evaluations give us confidence that Cane Island Unit 4 is the best choice to meet our customers’ power needs in an environmentally responsible way,” said Fontes.

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Florida Municipal Power Agency (FMPA) is a wholesale power company owned by 30 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 2 million Floridians. FMPA’s members are Alachua, Bartow, Blountstown, 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.