Taylor Energy Center Proves More Economical Than Power Purchase Alternatives
May 19, 2006 – Plans for the Taylor Energy Center will move forward since power purchase proposals considered as an alternative to the plant proved significantly more expensive.
Mike Lawson, project manager for the Taylor Energy Center, said, “The objective of our project is to provide reliable and cost-effective electricity for consumers in an environmentally responsible way. The results of this market comparison show that our project is still the best option for meeting both the financial and environmental stewardship goals set by the owners.”
The four utility owners of the Taylor Energy Center solicited power purchase proposals last December as a potential alternative to building the proposed coal power plant in Taylor County. Requesting proposals to purchase power-as an alternative to building a new power plant-is part of the normal process prescribed by Florida’s Power Plant Siting Act to determine the most economical option for providing needed electricity.
The request for proposals was sent to more than 40 potential bidders and published in seven major newspapers around the country. Seven potential bidders attended the mandatory pre-bid conference and two bidders, Walton Properties and Southern Power Company (Southern), submitted notices of intent to participate in the process. Southern submitted two proposals.
Southern’s proposals included a 797 Megawatt facility using Supercritical Pulverized Coal technology at a plant that would be located at the Taylor Energy Center’s proposed site. This is the same technology, fuel and location proposed by the Taylor Energy Center. The second proposal was to provide 784 Megawatts using a natural gas-fired, combined cycle plant located in St. Lucie County, Fla. Both proposals are for a 20-year term, beginning June 1, 2012.
The proposals were reviewed for compliance with minimum requirements and were evaluated based on average cost per megawatt hour. The review concluded that the two proposals were significantly more costly than the Taylor Energy Center’s own sealed cost estimate submitted simultaneous with the proposal deadline.
The coal proposal ranges from 15 percent to 35 percent more expensive than the Taylor Energy Center over a range of evaluation scenarios and the gas-fired combined cycle proposal ranges from 31 percent to 53 percent more expensive.
Based on the evaluation, the utilities involved in the Taylor Energy Center have notified Southern that the proposals were not economically competitive and will not be pursued further.
Lawson added, “Building the plant ourselves is more economical in this case for primarily two main reasons. First, the utilities involved in this project are all not-for-profit entities. It’s safe to assume there is a profit margin in the power sale proposals. Second, the utilities involved in this project can issue tax-exempt financing for the power plant. This is a lower cost of borrowing that makes a difference on a capital-intensive project like a coal plant.”
“Completing this market comparison is another milestone in our project’s development,” Lawson said. “Now that we know this plant is our best option, we look forward to proceeding with the permitting process. At the same time, we will continue our community outreach activities in Taylor County. We have a good story to tell and are committed to being a good neighbor.”
The Taylor Energy Center is a proposed state-of-the-art 800 MW power plant to be located in Taylor County, Fla., near the city of Perry. The mission of the project is to provide reliable power at an affordable price in an environmentally responsible manner. This $1.5 billion power plant will create 1,500 construction jobs and 180 permanent jobs. The plant will be jointly owned by four community-owned electric utilities: Florida Municipal Power Agency, JEA, the City of Tallahassee, Fla., and Reedy Creek Improvement District. Additional information is available on the Internet at www.taylorenergycenter.org.