FPL pipeline: Florida Power & Light to invest in new 600-mile natural gas pipeline

TALLAHASSEE, Fla. - As the state's dependence on natural gas grows, regulators on Thursday backed plans by Florida Power & Light to build a two-section, 591-mile Alabama to Indiantown natural-gas pipeline project.

Public Service Commission member Eduardo Balbis praised the project as helping the state's "fuel diversity" by reducing the chance of supply interruptions and price fluctuations. The project will add a third major pipeline bringing natural gas to power plants and other customers.

"I believe this is a good project," Balbis said. "Adding this pipeline, having a third come into the state, we're going to continue to rely on natural gas and this achieves that mitigation against price fluctuations."

Commissioner Julie Brown added that the need for additional fuel in Florida is "indisputable at this time."

The project involves two interconnecting pipelines, with one bringing natural gas into the state and the other stretching southeast of Orlando.

Permitting is underway for both sections of the project. While additional approvals are still needed from state and federal agencies, the main one being the Federal Energy Regulatory Commission, construction remains on schedule to begin in 2016.

The pipelines, which will boost Florida's natural gas capacity by about 25 percent, are expected to be operational in May 2017, said FPL spokeswoman Sarah Gatewood.

The two pipelines are expected to cost a combined $3.5 billion. The project is projected to require 6,600 jobs to build.

Another pipeline project was rejected by the Public Service Commission in 2009. The 2009 proposal was directly backed by FPL and would have primarily served the Juno Beach-based company.

The project now involves FPL's parent company, NextEra Energy, partnering with Spectra Energy Corp. in a venture called Sabal Trail Transmission LLC.

Sabal Trail will build a $3 billion, 465-mile pipeline that will travel from Southwest Alabama through Georgia to Osceola County in Central Florida.

Florida Southeast Connection, a separate subsidiary of NextEra, will build the second section, running 126 miles south from Osceola County to an FPL plant in Indiantown in western Martin County. The cost of that section has been put around $550 million.

The current proposal will bring about 1 billion cubic feet of natural gas a day into the state.

"We'll be renting part of that capacity, but not all of it," Gatewood said.

FPL will purchase about 400 million cubic feet a day when the pipelines open. The daily amount is scheduled to grow to 600 million cubic feet a day in 2020.

Utilities have increasingly shifted in recent years to natural gas from burning coal and oil. Powering plants with natural gas is cleaner, which helps utilities meet environmental standards, but gas also has been relatively inexpensive --- a situation that utilities expect to continue with the extraction of gas from shale formations in various parts of the country.

Currently, FPL uses 1.5 billion to 2 billion cubic feet of natural gas a day supplied by the two existing pipelines, one owned by Florida Gas Transmission Company, LLC, and the other owned by Gulfstream Natural Gas System, LLC.

Overall, nearly 68 percent of the state's electric generation, and more than 72 percent of FPL's total energy, comes from natural gas.

As part of the approval on Thursday, the commission agreed to review the prudence of the actual transportation costs during its annual cost recovery clause hearings.

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