Source: Institute for Energy Economics and Financial Analysis
A $400 million, 176-mile transmission line that will connect Gulf Power Co.’s service territory in the Florida panhandle to Florida Power & Light Co. customers in the state’s northeast could boost the value of solar generation for both utilities thanks to their time zone difference.
Optimizing solar is one of several potential benefits likely to factor into any decision by NextEra Energy Inc. to merge its two regulated subsidiaries into one utility, along with other corporate and regulatory obligations it could streamline through a merger.
During NextEra Energy’s investor conference June 20, Gulf Power President Marlene Santos said management is assessing the impacts of merging flagship utility FPL and Gulf Power, which NextEra purchased from Southern Co. in 2018. As of June 26, NextEra Energy said it is still reviewing all options on what combining the two companies would mean for customers currently served by FPL and Gulf Power.
FPL serves nearly 5 million customers in southern Florida as well as the state’s northeast, while Gulf Power has about 460,000 customers in the Florida panhandle. Since the panhandle is in the Central Time Zone, while the rest of Florida is in Eastern Time Zone, Gulf Power’s North Florida Resiliency Connection transmission project could help with electricity demand and solar generation.
“Once the line is built, it’s very possible that solar in Gulf’s territory monitors very valuable because it is time shifted from where most of the load is,” NextEra Chairman, President and CEO Jim Robo said during the investor presentation. “You will be able to deliver solar at that last hour when the sun is setting, but it hasn’t set yet where Gulf is.”
Michael Goggin, vice president of consulting firm Grid Strategies LLC, said having larger grid operating areas connected by transmission allows utilities to better adjust to variance in weather and climate across different regions. In the case of FPL and Gulf Power, their time zone difference shifts supply and demand peaks for electricity and could help mitigate sudden demand surges, such as when people come home in the evenings or ramp up air conditioning during hot summer days.