Climate Challenge Participation Accord

DOE's Energy Partnerships for a Strong Economy

CLIMATE CHALLENGE PARTICIPATION ACCORD

Between Florida Power and Light Company and U.S. Department of Energy

This Participation Accord describes the commitments that Florida Power and Light Company (FPL) and the U.S. Department of Energy (DOE) have made to participate in the Climate Challenge Program in pursuit of the President's goals for reducing greenhouse gas emissions. The Climate Challenge Program is a joint, voluntary effort of DOE and the electric utility industry to reduce, avoid or sequester greenhouse gas emissions. The framework of the Climate Challenge Program was established in the Climate Challenge Program Memorandum of Understanding and exhibits thereto dated April 20, 1994 (the Climate Challenge Program MOU) (Appendix I to this Participation Accord).

FPL is the fifth largest investor-owned electric utility in the United States and the largest in Florida serving 3.4 million customers (of which 89% are Residential, 10.6% Commercial, and 0.4% Industrial). FPL's existing generation consists of 3,073 MW nuclear, 12,323 MW oil and gas, and 896 MW coal units. FPL's electricity demand in 1993 consisted of 33,488 GWH (51%) Residential, 28,508 GWH (43%) Commercial, and only 3,889 GWH (6%) industrial. FPL's 1993 energy mix was 25% nuclear, 17% gas, 32% oil, 5% coal, and 17% purchased power (see Exhibit A for a summary of FPL's generation and demand).

FPL's service area includes seven out of 11 of the fastest growing metropolitan areas in the United States. The population in the area FPL serves is expected to increase by 20% between 1990 and 2000 compared to a U.S. population growth of about 10% over the same time. FPL has a strong environmental record and its energy mix strategy has already resulted in a lower than the U. S. electric utility industry average rate of greenhouse gas emissions.

I. FPL Commitments

A.

1.
Consistent with paragraph II.B.1.e of the Climate Challenge MOU, FPL makes a specific commitment to limit the rate of greenhouse gas emissions to its 1990 level, 1.38 lbs/Kwh (as calculated in Exhibit D), expressed in terms of emissions per kilowatt-hour sold. FPL CO2 rate calculations are only for the energy resources (generation, purchased power, and demand side programs) and do not include non-generation projects (e.g., reforestation, recycling, etc.). In order to achieve the commitment, FPL has undertaken and intends to undertake the activities described in Exhibit B. Based on FPL's 1994 Integrated Resource Planning (IRP) assumptions, these activities will result in approximately 11 million tons of CO2 reduction from the 2000 reference case. FPL's IRP assumptions are being updated annually and 2000 projections will be adjusted accordingly. FPL's commitment is based on these assumptions remaining as currently forecasted. Should these assumptions change the commitment may need to be changed.

2.
FPL's commitment may be modified upon mutual agreement with DOE. Influencing factors for reexamining the magnitude and scope of any specific commitment include, but are not limited to, the following circumstances:

a.

Substantial changes in regulatory commission or district, board or council decisions, particularly on the establishment of rates and cost recovery.

b.
Substantial changes in FPL's integrated resources plan, fuel price forecast, customer load forecast, financial resources, or other IRP assumptions.

c.
Institutional changes in FPL or corporate restructuring of FPL, such as a merger or acquisition, corporate reorganization, divestiture, or bankruptcy.

d.
Severe or unusual weather-related conditions (such as those caused by drought, flood, hurricane) that have substantial impacts on FPL's operations, generation, capacity, or load.

e.
Actual or imminent changes to international treaties or federal, state, regional, or local laws or regulations on greenhouse gas emissions.

B.
FPL and other FPL Group subsidiaries are also undertaking other activities which, although not part of FPL's commitment, additionally reduce, avoid, or sequester greenhouse gas emissions. These activities are described in Exhibit C. FPL is also participating in Waste Wise program which is a part of the President's Global Climate Action Plan.

C.
Consistent with paragraph II.B.1.a of the Climate Challenge MOU, FPL has participated in the Utility Forest Carbon Management Program ($5,000 in 1994) identified in Exhibit A of the Climate Challenge MOU. FPL is currently evaluating whether to maintain participation in this initiative in 1995 and beyond. FPL is also evaluating its participation in the International Utility Efficiency Partnership Program.

D.
FPL will report annually on activities and achievements of FPL and other FPL Group subsidiaries under the Climate Challenge Program. Results achieved during each year shall be reported in clear and understandable manner that is consistent with the guidelines adopted pursuant to subsection 1605(b) Energy Policy Act and the Climate Challenge accounting protocols in Exhibit B of the Climate Challenge Program MOU. The first such report may include a description of the activities and achievements of the FPL prior to its becoming a participant in the Program, expressed on an annual basis to the extent possible.

E.
FPL will confer with DOE on or before December 31, 1997 to evaluate jointly the progress of the FPL in achieving its Climate Challenge Program goals and to discuss possible adjustments to its voluntary commitments.

F.
The Climate Challenge Program representative for FPL will be:
Mr. Nick Arsali, P.E.
11770 U.S. Highway One
North Palm Beach, FL 33408


FPL agrees to notify DOE prior to or, in any event, no later than 30 days after any change in the contact.

II. DOE Commitments

A.
DOE's commitments to FPL are those set out in section III of the Climate Challenge Program MOU, which are hereby incorporated in this Participation Accord by reference.

B.
DOE will consider FPL requests to intervene in regulatory proceedings of federal, state and local commissions and boards on issues pertinent to the Climate Challenge Program. Before DOE intervenes in regulatory and other proceeding pertaining to FPL for purposes of addressing Climate Challenge Program issues, it will provide notice to FPL.

C.
DOE will provide an annual report to FPL describing the actions that it has taken to fulfill its commitments under section III and Exhibit C of the Climate Challenge Program MOU and the results of those actions.

D.
The Climate Challenge Program representative for DOE, who will serve as liaison to FPL, will be:
Dr. Allan R. Hoffman
U.S. Department of Energy
1000 Independence Avenue, S.W.
Washington, D.C. 20585
(202) 586 - 1786


DOE agrees to notify FPL prior to or, in any event, no later 30 days after any change in liaison responsibilities or personnel.

III. General Provisions

A.
Use of DOE-developed materials by FPL will be governed by the provisions of section IV of the Climate Challenge Program MOU, which are hereby incorporated in this Participation Accord by reference.

B.
In addition to the foregoing provisions, DOE and FPL agree to act in accordance with the principles set out in section I of the Climate Challenge Program MOU and the general provision set out in subsection V.A-V.D, V.F and V.G of the Climate Challenge Program MOU, which are hereby incorporated by reference.

C.
Either party may withdraw from this Participation Accord or any of its activities under the Climate Challenge Program without penalty and without being subject to remedies at law or equity.

	        	 

      Florida Power and Light Company         U. S. Department of Energy



      Name: __________________________        Name: __________________________

      

      Title: _________________________        Title: _________________________



      Date: __________________________        Date: __________________________

		

Attachments: Exhibit A (FPL Generation and energy demand summary)

Exhibit B (Generation and Demand Side Programs Activity Summary)

Exhibit C (Other Projects Summary)

Exhibit D (FPL CO2 Emissions Analysis for 1990 and 2000, Graph 1, Table 1)

Exhibit E (DSM Programs and Activities)

Exhibit F (Recycling Programs and Activities)

Appendix I (Climate Challenge MOU, as executed April 20, 1994)

Exhibit B

FOSSIL GENERATION:

INCREASED USE OF NATURAL GAS - FPL implemented steps in the early 1990's to significantly increase the availability of competitively priced natural gas supplies for future generating units. This was done at a time when FPL's integrated resource plan and fuel diversity strategies called for the construction of pulverized coal units. The expansion of FPL's natural gas supplies allowed FPL to construct two new state of the art high efficiency combustion turbine combined cycle plants (the Lauderdale Repowering Project and the Martin Combined Cycle Project) in lieu of the 2-720 MW pulverized coal units originally planned. In addition, the innovative, first of a kind repowering of the Lauderdale steam electric plant allowed for the retirement of two old, inefficient 137 Mw oil/gas burning boilers.

HEAT RATE EFFICIENCY IMPROVEMENTS - From 1990 through 1994, FPL implemented several large scale capital projects to improve the efficiency of its fossil power plant fleet. These activities include Putnam Plant Heat Recovery Steam Generator Replacements, and Turbine, Boiler, and Controls Upgrades at various Fossil Plants. FPL has plans to implement additional heat rate improvement projects through 1997. These actions will significantly improve FPL's fossil fleet efficiency, thus reducing the rate of CO2 produced per Mw generated.

AVAILABILITY IMPROVEMENTS - From 1990 through 1994, FPL implemented several large scale capital projects to improve the availability of its fossil power plant fleet. The various Plant Reliability/Availability activities have resulted in a significant increase in unit availabilities. These actions enabled FPL to defer the construction of a 720 MW pulverized coal unit to beyond the Year 2000.

SANFORD PLANT GAS CAPABILITY - FPL's Sanford Units 4 and 5, two 400 Mw oil fired steam electric units, were modified to be dual fuel capable in 1991 and 1993 respectively. This modification allows the plants to burn gas in lieu of oil, when it is available. This project has resulted in CO2 reductions of 71 tons in 1991, 269 tons in 1992, 97 tons in 1993 and an estimated 82 tons in 1994.

CUMULATIVE EFFECTS OF FOSSIL GENERATION ACTIVITIES - FPL estimates that the projects listed above will result in a cumulative CO2 emissions reduction of approximately 56 million tons total for the period from 1990 through 2000 (as compared to the 2000 reference case).

Exhibit B
FLORIDA POWER and LIGHT
CLIMATE CHALLENGE PROGRAM
Energy Resources Activity Summary

NUCLEAR GENERATION:

AVAILABILITY IMPROVEMENTS - The nuclear Plant Reliability/Availability activities have increased nuclear generation which resulted in less fossil generation. FPL Nuclear Division's future activities will continue to strive to maximize the electrical output of the nuclear plants through systematic elimination of sources of unavailability. The Nuclear Division will accomplish its goal by optimizing the frequency and duration of refueling outages, reducing the frequency and length of unplanned outages/derates, reducing the number of maintenance outages and by ensuring a high material condition of the nuclear plants through effective maintenance. This activity will result in a cumulative CO2 emissions avoidances of approximately 22 million tons total for the period from 1990 through 2000 (as compared to the 2000 reference case).

DEMAND SIDE MANAGEMENT

DEMAND SIDE MANAGEMENT ACTIVITIES: FPL's cost- effective portfolio of Demand Side Management programs (Exhibit E) will provide an estimated 1,840 GWHs of energy savings through the year 2000. FPL offers residential customers programs in the areas of building envelope, HVAC (cooling and heating) and load control to meet their energy and demand needs. These programs, plus lighting, refrigeration and efficient motor replacement programs are also offered to commercial and industrial customers. This activity will result in a cumulative CO2 emissions avoidances of approximately 8 million tons total for the period from 1990 through 2000.

FLORIDA POWER and LIGHT COMPANY

REFORESTATION PROGRAM ACTIVITIES: FPL has an active Reforestation Program to promote the full realization of the CO2 sequestering potential of the urban forest. On a continuing basis, FPL is donating trees and seedlings to community and charitable organizations for urban reforestation projects. From 1991 through June of 1994, 9,862 donated trees have been planted as part of tree removal/replacement projects and 9,293 additional trees and seedlings have been donated by FPL, then planted by community and charitable organizations.

COOL COMMUNITIES ACTIVITIES: FPL initiated this program in 1992 with a $250,000 contributions. FPL is currently studying the conservation impact of this program. The Cool Communities program is directed by American Forest in cooperation with the EPA, DOE, DOD, U.S. Forest Services, and several non-profit organizations, to mobilize community and corporate resources to conserve energy by strategically planting trees and lightening the surface of buildings. Dade County (within FPL Service Area) is one of six metropolitan areas selected in 1992 to demonstrate the feasibility of the program and to serve as models for its expansion. The energy conservation benefits of the program are intended to result in lower electricity bills for consumers and reduce the greenhouse gas emissions.

RECYCLING ACTIVITIES: The Central Reclamation and Salvage (CRS) group has corporate wide programs to collect and process metals, paper, cardboard and aluminum cans. Revenue generated by these programs is returned to FPL and less energy is used to manufacture using recycled metals instead of raw ores. From 1981 - 1989, CRS managed an average of 1,794 tons of recyclable metals per year, with 2,165 tons in 1993. The CRS paper and cardboard recycling programs provides post consumer fiber for paper mills. In 1993, 299.6 tons of paper and cardboard and 10 tons of stretch wrap were processed. In 1994, it is estimated that 402 tons of paper and cardboard and 8 tons of stretch wrap will be recycled. These activities will result in a cumulative CO2 emissions avoidance of approximately 2,760 tons total for the period from 1990 through 2000 (Exhibit F).

FLEET VEHICLE ACTIVITIES: FPL fleet vehicle specifications call for the smallest and lightest weight vehicle consistent with work requirements. Pick ups and vans have been downsized to compact and mini size, radial tires have been installed to improve fuel economy and heavy vehicles have been standardized with diesel engines. The fleet services department is monitoring the development of alternative fuel technology and actively supporting electric vehicle demonstration and promotion activities by FPL's marketing department. FPL will purchase several electric vehicles for fleet and other uses in 1995 and will increase the number of its new light vehicles consistent with Energy Policy Act requirements.

USE OF RECOVERED MINERAL OIL IN FPL INDUSTRIAL BOILERS: After the mineral oil has been drained from damaged transformers, it is collected and analyzed. If the collected oil meets the testing parameters, it is used to fire the boilers at the fuel terminals. This saves the fuel terminals from buying additional boiler fuel and avoids incurring disposal costs for the used oil. This activity will result in a cumulative CO2 emissions avoidances of approximately 22,873 tons total for the period from 1990 through 2000 (displacing 750,000 gallons of residual oil with mineral oil from 1990 to 1994 and projecting additional 1,000,000 gallons through 2000).

TRANSMISSION AND DISTRIBUTION ACTIVITIES: FPL is increasing the efficiency of the distribution system by optimizing power flows on the lines. FPL is installing radio-controlled, fault-sensing Distribution Automation switches to enhance service restoration, trouble call management, fault location and isolation. FPL is also planning or has in progress a number of projects to improve transmission efficiency such as the multi- phase transmission line project and a pilot project for the dynamic rating of transmission lines.

REMOTE METER READING ACTIVITIES: FPL is undertaking this activity to reduce the number of miles driven by its meter readers. By installing radio-controlled devices, FPL is able to monitor and read the customers meter remotely. This activity will result in a reduction of 5,000,000 miles traveled and a cumulative CO2 emissions avoidances of approximately 2,349 tons total for the period from 1990 through 2000.

SF6 GAS RECLAIMING AND DISPOSAL ACTIVITY - FPL has been reclaiming the SF6 gases from its Substation gas circuit breakers. From 1990 to 1994, 33,560 lbs. of SF6 were reclaimed. An additional 51,333 lbs. will be reclaimed through 2000. This activity will result in a cumulative equivalent CO2 emissions avoidances of approximately 700,000 tons total for the period from 1990 through 2000.

OTHER FPL GROUP's SUBSIDIARIES

TURNER FOOD INC. ACTIVITIES: Citrus tree plantings at Turner Foods include additional acreage for the new Charlotte grove, expansion of the Gator Slough, Florida Citrus Nursery and Highland groves as well as the annual replacement of deceased and aged trees at all our groves. This activity will result in a cumulative CO2 emissions sequestration of approximately 815,000 tons total for the period from 1990 through 2000.

ESI ACTIVITIES: In 1985, ESI Energy was established as a subsidiary of FPL Group to participate in the growing independent power market. ESI is involved in a variety projects with wind, geothermal, solar, biomass, natural gas and waste solid fuel technologies. ESI develops projects of different sizes, acquires existing facilities and manages and operates projects to meet industry needs. ESI also provides debt and equity capital, transaction management, project structuring, construction management and technical and financial leadership. ESI's projects include 160 Mw Solar, 115.2 Mw Geothermal, 376.9 Mw Wind, 135.1 Mw Wood, and 107 Mw Waste-to-Energy. ESI activities will result in a cumulative CO2 emissions avoidances of approximately 4.7 million tons total for the period from 1990 through 2000 (Based on the State CO2 factors published in the EPAct 1605(b) Guidelines).

Exhibit E

FPL's first DSM efforts started in 1978, soon after the Mideast Oil Embargo. Initially, FPL's primary focus was the residential market due to the large percentage of FPL's electricity demand from its residential market segment. FPL's effort with its DSM programs have resulted in cumulative summer peak demand reductions of approximately 1,500 MWs and an estimated cumulative annual energy reduction of 3,000 GWHs through 1993.

In the 90's, FPL has continued to provide cost-effective residential programs, while increasing emphasis on the commercial/industrial sectors. In 1993, three new programs were fully implemented: Commercial/Industrial Air Cooled Chillers, Commercial/Industrial High Efficiency Split/Package DX Air Conditioning and Efficient Motors. In addition, implementation began on both the Commercial/Industrial Custom Incentive and Off-Peak Battery Charging programs.

A summary of FPL's DSM programs follows:

Residential Conservation Service is an energy audit program designed to assist residential customers in making their homes more energy efficient through the installation of conservation measures and the implementation of conservation practices.

Conservation Window Treatment is a program designed to encourage the installation of window treatment on unshaded, single pane, clear glass with eastern, western and southern exposures in residential dwellings that utilize electric air conditioning.

Residential Ceiling insulation is a program designed to encourage the installation of ceiling insulation in residential dwellings which are equipped with whole-house electric air conditioning and/or electric heating but which have inadequate ceiling insulation.

Conservation Water Heating is a program designed to promote the replacement of conventional electric water heaters with solar or heat recovery water heating equipment.

Residential Load Control is a program designed to offer voluntary load control to residential customers.

Cogeneration and Small Power Production is a program intended to facilitate the installation of cogeneration and small power production facilities.

Conservation H.E.LP. (Home Energy Loss Prevention) is a program designed to diagnose and repair air distribution system leakage and to provide for contractor installation of small energy conserving measures in customers' homes.

Commercial/Industrial Efficient Lighting is a program designed to encourage the installation of energy efficient lighting measures in commercial/industrial facilities.

Commercial/Industrial Load Control is a program designed to offer voluntary load control to commercial/industrial customers with a minimum billing demand and controllable load of 200 Kw or more.

Business Energy Evaluation - New Construction: This program, which was approved as the Energy Efficiency for new Commercial/Industrial Facilities: Energy Systems Planning Program, is designed to provide a free evaluation of commercial and industrial customers' proposed facilities while in the design stage. The FPL representative will provide the customers with recommendations regarding practices and conservation programs that will reduce their demand and energy usage.

Commercial/Industrial Thermal Energy Storage is a program designed to encourage summer on-peak demand reduction by increasing the use of thermal energy storage for space cooling. Cash incentives are offered to participating customers.

Efficient Motors Program is a program designed to encourage qualified customers to select a high efficiency motor over a standard efficiency motor at replacement or new installation.

Commercial/Industrial Program for High Efficiency Split/Package DX Air-Conditioning is a program designed to encourage qualified customers to purchase commercial DX air-conditioning equipment with energy efficiencies above Florida's Energy Efficiency Code.

Commercial/Industrial Program for Air-Cooled Chiller Efficiency Enhancements is a program designed to encourage qualified customers to install energy-efficient electric air-cooled or waste cooled chillers in the new construction and retrofit markets.

Commercial/Industrial Business Custom Incentive is a program designed to assist FPL's commercial and industrial customers in achieving lower electric demand and energy savings. FPL will provide incentives to qualifying commercial and industrial customers who purchase, install and successfully operate cost-effective energy efficiency measures which are not covered by other FPL programs and which reduce electric demand or shift electric demand from summer peak.

Off-Peak Battery Charging Program: The objective of this program is to reduce the current coincident peak demand and the future growth of coincident peak demand by shifting the coincident Kw load due to battery charging.

Business Energy Evaluation: This program, which was approved as the Commercial/Industrial 'Walk-Thru' Energy Survey Program, is an energy audit program designed to identify and encourage implementation of demand and energy reducing measures in existing Commercial/Industrial facilities.

High-Efficiency Residential HVAC ia a program designed to provide financial incentives for residential customers to purchase a more efficient unit when replacing an existing air conditioning system.

Commercial/Industrial Water-Cooled Chiller Replacement: This program is designed to encourage energy conservation through the replacement of inefficient water- cooled electric chillers with energy-efficient water-cooled electric chillers.

 DEPT/BUS UNIT     PAPER PRODUCTS     SCRAP METAL      WOOD PRODUCTS         NOTES        

                       (lbs)             (lbs)             (lbs)                          

_____________________________________________________________________________________

Central                                                                                   

Reclamation &         223,650          2,343,915         904,101                             

Salvage                                                                                   

_____________________________________________________________________________________

Nuclear                                                                 Used oil sent     

Division                5,800            188,000          12,000        offsite for       

                                                                        recycling.        

_____________________________________________________________________________________

Fossil Plants     Some handled on        606,211                        Used oil sent     

                  a                                                     offsite for       

                  plant-by-plant                                        recycling.        

                  basis.                                                                  

_____________________________________________________________________________________

TOTALS                229,450          3,138,126         916,101                             

Please send comments to:
Lawrence.Mansueti@hq.doe.gov