Florida Power & Light (FPL) on June 16 asked the Federal Energy Regulatory Commission for all authorizations necessary to transfer to municipal utility JEA its ownership interests in certain substation equipment located at the St. Johns River Power Park (SJRPP) switchyard in Jacksonville, Florida, that is currently owned jointly by FPL and JEA.
SJRPP is a coal-fired generating facility in northeast Florida that is jointly owned by FPL and JEA. Pursuant to an Asset Transfer and Contract Termination Agreement (ATA), FPL and JEA have agreed to shut down the SJRPP generating facility as early as Jan. 5, 2018. Commission approval to shut down the SJRPP generating facility is not required, FPL noted.
However, the ATA excludes the Substation Assets from the dismantlement and environmental remediation of the SJRPP facilities, so that they can remain available to JEA for potential use in the future. Specifically, FPL will transfer the Substation Assets and land to JEA at zero cost following completion of the dismantlement and remediation activities. Because the SJRPP facilities will be dismantled prior to the transfer of the Substation Assets, the transfer is the only aspect of the SJRPP shutdown activities for which FPL seeks commission authorization under Federal Power Act Section 203.
In 1982, FPL and JEA entered in the Joint Ownership, Construction and Operation Agreement of SJRPP (JOA) to govern the construction, ownership, and operation of SRJPP, a 1,322-MW coal-fired facility. Under the JOA, FPL has a 20% undivided ownership interest in the SJRPP and the facility site and, under Article 8 of the JOA (PPA), an obligation to purchase from JEA an additional 30% of generation capacity from SJRPP. As such, FPL has effective control over 50% of the facility’s dispatch and takes on 50% of the operating costs.
The ATA provides for the shutdown of the SJRPP facilities as early as Jan. 5, 2018, and subsequent dismantlement and environmental remediation of those facilities. Under the ATA, FPL would pay JEA $90.4 million for the shutdown, funded through a combination of the assignment of FPL’s cash reserves held by JEA pursuant to the JOA of approximately $33.7 million and materials and supplies inventory of approximately $5.1 million (estimated based on March 31, 2017 balances), together with a cash payment of approximately $51.6 million.