FMPA Weekly
A weekly e-newsletter for FMPA members
June 13, 2011
LAST WEEK
Duke-Progress Merger
FMPA filed a protest June 3 with federal energy regulators objecting to the proposed merger of Duke Energy and Progress Energy. FMPA said the merger should not be approved by the Federal Energy Regulatory Commission without necessary factual investigation, discovery and a hearing, including an investigation of possible anticompetitive effects the merger could have on electricity markets in Florida. “Duke and Progress are merging to form what they say will be the largest utility in the United States (although the recently announced Exelon Corp.-Constellation Energy merger may be larger), FMPA’s filing states. “There is already very high generation concentration in Florida and limited import capability. Despite the size and scope of the proposed merger, the two private utilities did not present market power screens for Peninsular Florida. FMPA pointed out that when Florida Power Corp. merged with Carolina Power & Light Co. in 2000 to form Progress Energy, the utilities completed an analysis of how the Florida market could be affected by the merger. “The screen failure in that merger led to conditions designed to protect the public, FMPA said. In the current merger proposal, the applicants’ failure to conduct an analysis of potential impacts on the Florida electricity market “prevents any finding that this merger will be consistent with the public interest. FMPA conducted studies that it said “demonstrate the very high Peninsular Florida generation concentration. They show that if the merger is allowed, this concentration will increase. If the merger is approved, among the conditions that FMPA seeks are: 1) added transmission capacity between Georgia and Florida, 2) improved inteal Florida transmission capability, 3) assured economic generation and transmission, 4) opportunities for plant investment and purchased power rights, and 5) protections for Crystal River Unit 3. Contact: Fred Bryant
Transmission Rate Increase
Progress Energy Florida held a conference call last Tuesday with FMPA and its other wholesale transmission customers to discuss the status of its transmission rates. Progress is proposing a 4.5% rate increase effective June 1, 2011. The increase would raise prices from $1.73 per kW-month to $1.81 per kW-month. FMPA’s Planning Department is reviewing the impact Progress’ proposed rate increase would have on FMPA members. FMPA has until Sept. 15 to challenge the rate increase. Contact: Michele Jackson
Joint Purchase Project
FMPA’s Joint Purchase Project (JPP) met last Thursday and awarded a bid to refurbish, repair and dispose of overhead transformers to Gresco. Members of the JPP also discussed the performance of the scrap metal bid. Contact: Sharon Samuels
THIS WEEK
St. Lucie Audit
Steve Ruppel and Yaritza Velez travel to Juno Beach, Fla., on Monday to complete an audit of billings from Florida Power & Light to FMPA’s St. Lucie Project. The auditors expect to be in the field through Friday reviewing billings for fiscal 2009 and fiscal 2010. Contact: Rich Popp
FMPA Compliance Workshop
FMPA will hold a two-day Compliance Workshop on Tuesday from noon to 5 p.m. and Wednesday from 8 a.m. to 1 p.m. in the Board room. Compliance staff and subject-matter experts in facility ratings, planning and protection are encouraged to attend. Participants will discuss a variety of topics, including cyber security, FMPA’s Inteal Compliance Program and North American Electric Reliability Corporation standards. The workshop is available via https://fmpa.webex.com/mw0306ld/mywebex/default.do?siteurl=fmpa>webcast; for those unable to attend. Contact: Frank Gaffney
ARP CROD Workshop
The All-Requirements Project (ARP) Executive Committee meets Thursday at 9 a.m. in the Board room for a Contract Rate of Delivery (CROD) Workshop. Fort Pierce Utilities Authority is seeking answers from the Committee to the following questions: 1) what factors are the Executive Committee and FMPA staff considering when deciding whether to increase or decrease the calculated CROD amount by 15%, and 2) will the Committee consider changing the designation of excluded resources under the ARP contract to include Stanton resources. The full agenda package is available on the Member Portal. Contact: Nick Guarriello
ARP Executive Committee Meeting
The All-Requirements Project (ARP) Executive Committee meets Thursday in the Board room at 10 a.m. or immediately following the ARP CROD Workshop. The Committee will discuss action items including: 1) ARP and Agency budgets for fiscal 2012, 2) an additional exit strategy for Taylor swaps, 3) release capacity option with Peoples Gas Service, and 4) GenOn permanent release capacity on Florida Gas Transmission to replace Gulfstream entitlement. The full agenda package is available on the Member Portal. Contact: Nick Guarriello
Cane Island Unit 4
Cane Island Unit 4 continues testing this week in preparation for commercial operation later this month. The Florida Department of Environmental Protection will be on-site as contractors begin environmental testing of the unit. After performance testing is complete, the unit will undergo a reliability run for seven days and then will be taken offline for scheduled maintenance. Upon completion of the maintenance, the unit will be ready for final certification and commercial operation. Contact: David Schumann
All-Requirements Project Weekly Load Statistics
The weekly update of the All-Requirements Project historical load graph has been posted on the Member Portal. The graph is updated through June 12. Contact: Jim Atz
Special Dates
Congratulations to Richard Montgomery, who celebrates four years with FMPA on Saturday, June 18.
COMING UP
2011 FMEA-FMPA Annual Conference
The 2011 FMEA-FMPA Annual Conference will be held July 19-21 at The Breakers in Palm Beach. Representatives from all segments of the electric utility industry are encouraged to attend. The conference kicks off with two pre-conference seminars on July 19: 1) electric utility 101, and 2) crisis communications. The following days feature general sessions and breakout sessions on a variety of important and timely topics. Rocky Bleier, former running back for the Pittsburgh Steelers pro football team, will speak on how not to avoid life’s twists and tus, but condition yourself to lean into them. The hotel reservation deadline is June 27. Visit Registrationhttp://www.regonline.com/Register/Checkin.aspx?EventID=974697>Registration; is required. Visit http://www.usoln.org/>www.usoln.org; for more information. Contact: Mike Siefert
INDUSTRY NEWS
ElectriCities Agrees Not to Oppose Duke-Progress Merger
ElectriCities of North Carolina and the state’s two municipal power agencies, North Carolina Easte Municipal Power Agency (NCEMPA) and North Carolina Municipal Power Agency No. 1, said they had negotiated agreements with Duke Energy and Progress Energy and would not oppose the merger. Ken Raber, senior vice president for ElectriCities, reportedly said the terms of agreement between the two power agencies and Duke and Progress are confidential at this time. Generally, they agreed on points that would benefit the agencies and cities, he said. However, two North Carolina communities, the town of New Be and the city of Rocky Mount, intervened at the Federal Energy Regulatory Commission opposing the merger. The two, both members of NCEMPA, said they are worried about market power the combined utility could wield in the region and the effect on wholesale power markets.
TAPS Names First Executive Director
John Twitty will become the first executive director of the Transmission Access Policy Study Group (TAPS) on July 1. Twitty, a former chairman of the American Public Power Association’s Board of Directors, has worked in the utility industry for 28 years. He retired last week from his position as General Manager and CEO of City Utilities of Springfield, Mo.. TAPS was organized in 1989 as an informal association of transmission-dependent electric utilities to advocate for the improvement of the transmission grid in America. Now representing utilities in 33 states, the organization recently incorporated to better fulfill its mission. FMPA is a member of TAPS.
FPL to Request Base Rate Hike Next Year
Florida Power & Light (FPL) expects to request a “modest base rate increase early next year, FPL President Armando Olivera told the Sun Sentinel editorial board last Tuesday. The utility’s rate freeze agreement with consumer groups and others expires at the end of 2012. Olivera did not say if the rate increase would be more than the $1.27 billion proposed annual base rate hike that regulators rejected last year. As part of the base rate request, FPL wants to start charging customers in 2013 and 2014 for the conversion of two power plants from oil to natural gas. The upgrades will cost approximately $2.4 billion, which will be passed to customers over a 30-year period. However, fuel savings from the plants are projected to offset the costs, said FPL Spokesman Mark Bubriski.
FMPA Weekly is published by FMPA for employees and goveing boards of FMPA member utilities. Questions or comments about this newsletter may be directed to Ryan Dumas or Ashley Tinstman in FMPA’s Public Relations Department.
Want more background on the names and terms used in this newsletter? Check out FMPA’s Glossary, which features some of the most frequently mentioned committees, companies, places and terms, or contact the person named in each FMPA story to lea more. (Click here for the Staff Directory.)
Have a question, comment or story idea for the newsletter? FMPA welcomes your feedback at any time. Contact: Ryan Dumas or Ashley Tinstman
Florida Municipal Power Agency
8553 Commodity Circle
Orlando, FL 32819-9002
Tel 407 355-7767
Fax 407 355-5794
www.fmpa.com
Community Power. Statewide Strength. ®