In flip-flop, duke energy will buy existing power plant, not build one gas dryer vs electric dryer hookups

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The proposed agreement with Calpine Finance Construction Co. would allow Duke Energy to purchase the 10-year-old Osprey natural gas plant in the Auburndale area of Polk County. Details of the surprising deal were not yet disclosed, and its impact on ratepayers remained unclear during the first of two days of hearings held at the Florida Public Service Commission.

Duke earlier stressed that such an acquisition was a bad idea. Responding in mid August to Tampa Bay Times coverage, Duke Energy Florida president Alex Glenn wrote that the Osprey plant was "an electrical island" ill suited to purchase. He also criticized a Times story for quoting company critics whose comments were "unfounded in fact" and for articles "misleading to readers who deserve unbiased reporting."

Whether Tuesday’s flip-flop by Duke to endorse the Osprey deal reflected a new fire-sale price for the plant remains unclear. Sterling Ivey, a Duke spokesman, said the latest deal struck with Calpine appeared that "it could be more cost-effective."

But Duke’s decision to abandon, at least for the near future, its plans to build new peaker units — power needed when demand is highest — threatened to derail all three proposed projects because the utility had argued that they were a package needed to meet future electricity demand. Some opponents of Duke’s deal with Calpine said the agreement raises questions about the need for any of the utility’s plans, given that there still are other independent plants for sale and other ways to meet demand.

"We have a problem with the way Duke handled the entire procurement," said Marsha Rule, a lawyer representing NRG, another independent plant owner trying to sell a facility to Duke. "Now at the 11th hour, they say we’ve reached a deal. I think it is the wrong decision to sever part of (Duke’s plan) unless you send Duke back to the negotiating table."

The five-member Public Service Commission, however, approved Duke’s decision to withdraw the Suwannee plant proposal from consideration but does not have authority to force the utility to negotiate. The agreement with Calpine still must receive final approval by the Federal Energy Regulatory Commission, which oversees purchases of independent or so-called "merchant" power plants by utility companies.

Duke originally proposed to tear down three of its own 1950s-era units at its Suwannee power plant and replace them with new natural gas-fired, peak-demand units. It also wants to make improvements to another plant to improve its efficiency. Duke insisted it needed both by 2016.

"Duke is 100 percent responding to the bad attention to their effort to build unnecessary power plants," said Susan Glickman of the Southern Alliance for Clean Energy, which is participating in the hearings. "The PSC and lawmakers should force them into a transparent process to see if there is demand for new power and if they couldn’t meet that demand with the least cost resource — energy efficiency."

"Let’s not forget how we got here," Charles Rehwinkel, deputy state public counsel, who represents consumers before the PSC, told the commission. "We ask that the commission be especially vigilant" to ensure Duke really needs to spend more money for more plants.

Duke is making changes to its meter-reading routes to make them more efficient. Those changes led the utility to temporarily extend as many as 267,000 customers’ billing cycles, typically a month, by as many as 12 days. Customer bills revealed additional charges in some cases of $100 or more for the extended days. For some customers, the additional days bumped them into a higher rate class.