Proposal offers lowest cost to city’s customers, optimizes FMPA power resources

ORLANDO, Fla., Aug. 5, 2010 – The City Commission of Quincy, Fla., voted July 27 to select Florida Municipal Power Agency (FMPA) as the city’s new full-requirements wholesale electric provider.

The city chose FMPA’s bid to provide a market-based, full-requirements sale of approximately 23 megawatts for a five-year term scheduled to begin January 2011. FMPA’s proposal was selected because it provided the lowest cost to the city and its customers.

“FMPA is honored to have the opportunity to deliver reliable, low-cost power to the city of Quincy,” said FMPA General Manager and CEO Nicholas P. Guarriello. “This partnership is a win-win that will optimize FMPA’s generation use for its member-owners, while saving money for Quincy and its electric customers.”

“We would like to thank FMPA for the opportunity to partner with them as our power supply provider. FMPA is a great organization that seems to always have the best interest of their members and customers in mind. We think it is an excellent opportunity for both the city of Quincy customers and the FMPA members,” said Quincy Director of Utilities Mike Wade. “We at the city are excited about partnering with FMPA and look forward to working with the Agency to develop a dynamic relationship.”

Competitive Bidding Saves Money for Quincy

FMPA was selected through a competitive request for proposals, which the city initiated in June. The city received six bids, including proposals from the city’s current wholesale provider, Progress Energy, as well as Constellation Energy, Florida Power & Light, the city of Tallahassee and two bids from FMPA.

A report from the city’s consulting engineers from Fred Wilson & Associates, Inc. indicated that FMPA’s proposal “will result in significantly lower wholesale power costs for the contract term, including necessary up-front costs and the fuel sensitivities.” The consultant’s analysis indicated that competing bids ranged from 16% to 29% higher than FMPA’s bid.

Since Quincy is a municipal electric utility, cost savings under the new arrangement will stay in the community and benefit local citizens.

FMPA Optimizes its Generation Resources

FMPA will serve the city of Quincy with a mix of clean, efficient power generation located throughout the state of Florida.

In recent years, FMPA has modernized its fleet of power plants to generate electricity more efficiently. New generation, like the Treasure Coast Energy Center, located in Fort Pierce, Fla., and Cane Island Unit 4, which is under construction in Osceola County, Fla., can produce electricity nearly 40% more efficiently than the older, less efficient units they offset. Higher efficiency means lower cost and fewer emissions per kilowatt hour.

FMPA currently provides all the wholesale power needs of 14 Florida cities, including Bushnell, Clewiston, Fort Meade, Fort Pierce, Green Cove Springs, Town of Havana, Jacksonville Beach, Key West, Kissimmee, Lake Worth, Leesburg, Newberry, Ocala and Starke. Serving the power supply needs of other municipal electric utilities, like Quincy, is an opportunity for the Agency to optimize its generation capacity resources, including its reserve level, as part of FMPA’s strategic plan to lower wholesale electric costs.

Next Steps

The City Commission has directed staff to work with FMPA to negotiate a power supply contract. Negotiations will begin immediately. The city must also arrange a new agreement for network transmission service with Progress Energy Florida. Both parties hope to have the agreements completed in time for the new wholesale contract to begin January 2011.

# # #

Florida Municipal Power Agency (FMPA) is a wholesale power company owned by 30 municipal electric utilities in Florida. FMPA provides economies of scale in power generation and related services to support community-owned electric utilities. The members of FMPA serve approximately two million Floridians. FMPA’s members include 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