NextEra Plans to Buy Florida Coal-Power Plant Just to Close It

NextEra Energy Inc., the biggest North American generator of wind and solar power, wants to buy a coal-fired electricity plant just to shut it down.

The company’s Florida Power & Light utility unit is asking state regulators to approve a $520.5 million deal for the 250-megawatt Cedar Bay Generating Plant in Jacksonville, according to a statement Friday.

Florida Power has been buying power from Cedar Bay under a contract that dates to 1988. Buying the plant would let the company terminate the contract, saving customers about $70 million and eliminating about 1 million tons in annual carbon emissions. Coal plants are the biggest source of greenhouse gases that are blamed for global warming, and are facing new restrictions from the U.S. Environmental Protection Agency.

“Although years ago it made sense to buy this plant’s power to serve our customers, times have changed,” Florida Power Chief Executive Officer Eric Silagy said in the statement. “We’re in a position to take ownership of the facility and effectively buy out an outmoded contract.”

Under the power-purchase agreement, Florida Power pays more than $120 million a year for capacity and maintenance, with annual increases until the deal expires in 2024. The company said it can now generate energy at a lower price.

Sarah Gatewood, a Florida Power spokeswoman, said the company has no plans to build a new plant, and will make up for Cedar Bay’s capacity with output from other facilities.

Florida Power plans to acquire CBAS Power Inc., which indirectly owns the power plant. Once the deal is complete, it will reduce output by 90 percent immediately, and shut it down completely in two to three years.

The EPA expects to complete rules this year for coal plants that would call for reductions in carbon dioxide pollutants of 30 percent by 2030 from 2005 levels.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE