Fighting The High Cost Of Fuel: What FPL Is Doing

We’re tackling this problem head on. Without these efforts, fuel prices would be even higher.

• We’re maintaining a diverse fuel supply. This helps stabilize fuel costs and maintain the reliability of our electric system. Our fuel mix includes natural gas (45 percent), nuclear (19 percent), purchased power (17 percent), oil (14 percent) and coal (5 percent).
• We make maximum use of our nuclear generating units. Nuclear power plants have low operating costs and produce safe, reliable, emissions-free power. And we’re taking steps toward adding additional nuclear units to our generation portfolio in Florida.
• We’re maximizing the use of coal-fired generation. While coal prices have increased, coal is far cheaper than oil and natural gas and subsequently we’ve been maximizing our use of the limited coal-fired generation that we own and increasing purchases of coal-fired power whenever possible. We believe that using more advanced technology coal generation can help us further diversify our fuel mix and lower fuel costs for our customers so we’re evaluating potential locations in Florida where we might site an advanced technology coal plant that would fulfill these objectives in a way that’s sensitive to Florida’s environment.
• A number of our plants can burn either oil or natural gas, so we can switch fuels depending on which is cheaper.
• We employ a “fuel hedging” buying strategy that takes advantage of preset contract prices to reduce the impact of fuel price volatility. Using this strategy saved our customers more than $600 million in 2005 alone.
• Our non-nuclear power plant fleet is approximately 12 percent more efficient than in 1999. We’ve invested heavily to re-power older, less efficient generating units and build new, state-of-the-art natural gas-fired units which now take less fuel to produce the same amount of electricity. This increased fuel efficiency has saved our customers nearly $500 million.
• We’re exploring new advances in wind, solar and ocean current technologies.
• Since 1999, we’ve reduced base electric rates by 15 percent or approximately $4 billion. With our latest rate agreement announced in August 2005, the benefits of those earlier rate reduction agreements have been extended through 2009. These agreements and the savings and refunds they provide have helped to offset somewhat the impact of skyrocketing fuel costs on customers. As a result of our recent rate agreement, we agreed to forgo our request for a $430 million base rate increase in 2006. Instead, base rates will remain flat through mid-2007.