October 6, 2009
FPL disappointed by PSC's decision on proposed Florida EnergySecure Line

Commission’s change in course produces uncertain energy future for Florida

JUNO BEACH, Fla. – The state Public Service Commission’s decision today regarding the proposed Florida EnergySecure Line will have far-reaching consequences for customers by forcing a delay in essential investments in Florida’s gas transportation infrastructure, Florida Power & Light Company said today.

“We are very disappointed that, despite a lengthy, comprehensive and transparent process, the Commission effectively denied the clear need for this investment and required that the entire process start over in order to go forward. FPL conducted an extensive evaluation of more than 60 proposals from seven different companies for both intrastate and interstate pipeline designs and found that the Florida EnergySecure Line as proposed would provide the lowest-cost option for FPL customers. All the evidence indicated that the Florida EnergySecure Line would be the most cost-effective and reliable method of increasing the supply of clean natural gas for our customers, diversifying the source of natural gas production beyond the Gulf of Mexico and enhancing the reliability of the electric system that serves half the population of Florida,” said FPL President and CEO Armando J. Olivera.

“For the long-term energy needs of the state, the Commission previously approved the construction of natural gas-fired units at FPL’s new West County Energy Center in Palm Beach County and the replacement of less-efficient oil plants at Cape Canaveral and Riviera Beach. The Florida EnergySecure Line would have provided the lowest-cost option to transport natural gas to these facilities, enhanced the sources of supply and reduced our reliance on the two existing pipelines that are prone to disruption. We now need to re-evaluate the pipeline project based on the PSC's decision today," Olivera said.

The 300-mile underground pipeline was scheduled to be completed by 2014. FPL customers would have seen no impact on their bills for five years, and a positive impact was expected over the lifetime of the project. The project was expected to yield operating savings ranging from approximately $200 million to $500 million as compared to alternatives for meeting customer demand over a 40-year pipeline lifespan.

In addition to the primary benefit of diversifying and protecting the state’s supply of natural gas, the project would have helped boost Florida’s economy by creating more than 7,500 jobs in the state, including 3,500 construction jobs, as well as more than $400 million in additional tax revenue across 14 counties over the lifetime of the project, according to an economic impact analysis. The Commission's decision today puts these benefits at risk.

Customers also would have benefited from increased competition in the marketplace if this project had been approved as requested. Texas-based Florida Gas Transmission (FGT) currently handles more than 60 percent of FPL's natural gas requirement through a single pipeline. If FGT were to be awarded the additional requirement, more than 80 percent of FPL's required natural gas would be carried through a single pipeline. FPL is concerned that a re-bidding process will result in higher prices, noting that FGT has asked for an increase of more than 50 percent on one of its two main transportation rates.

Florida Power & Light Company
Florida Power & Light Company (FPL) is the largest electric utility in Florida and one of the largest rate-regulated utilities in the United States. FPL serves 4.5 million customer accounts in Florida and is a leading employer in the state with nearly 11,000 employees. The company consistently outperforms national averages for service reliability while customer bills are well below the national average. A clean energy leader, FPL has one of the lowest emissions profiles and the No. 1 energy efficiency program among utilities nationwide. FPL is a subsidiary of Juno Beach, Fla.-based FPL Group, Inc. (NYSE: FPL). For more information, visit www.FPL.com.