Florida's Electric Supply:  Issues Affecting Reliability

By Lila A. Jaber

Recent events in the Northeastern United States relating to the reliability of electricity put the term "grid" into morning newspapers. But exactly what an electric grid is and how it relates to the reliability of the electric supply in Florida remains something of a mystery to many readers.

In this context, the term "grid" refers to a system made up of three components: generation, transmission and distribution. Generation refers to the power plants that actually produce the power, transmission refers to the means by which power moves from power plants to specific destinations, and distribution is the means by which electricity is delivered to consumers.

The Florida electric grid has proven to be a resilient system, holding up well through extremes of nature — hurricanes, tornadoes and lightning strikes — and exponential population growth. It should be noted that while there is no such thing as a system that functions with 100 percent reliability 100 percent of the time, it is also true that for a number of reasons, Florida’s vulnerability to a systemic failure of its electric grid is far less than the states affected by the largest blackout in U.S. history in mid August. This is true for a number of reasons.

First, our geography makes us unique. Being a peninsula limits our ability to import power from surrounding states. While Florida is hooked up electrically to the Eastern Interconnection grid system in Georgia, we only import about 8 percent of energy over long distance transmission lines. Consequently, we must have enough power plants in Florida to meet the bulk of our power requirements. A key component of an electric system’s reliability is the adequacy of its supply.

As it stands today, the Florida peninsula has 22 generating utilities with a combined capacity of 38,857 megawatts (MW) . Three investor-owned utilities (Florida Power & Light, Progress Energy Florida and Tampa Electric Co.) provide nearly 75 percent of those 38,857 MW. When power purchases from non-utility generators are added, the total rises to 41,719 MW of generating capacity. By the year 2005, Florida utilities plan to add approximately 5,725 MW of generating capacity, most of which is already under construction.

While most utilities in the nation plan to have about 15 percent more generation than they need, Florida Power & Light, Progress Energy Florida and Tampa Electric Company have committed to have generation reserve margins of 20 percent by the year 2004. Based on recent reports, those three utilities have already met that goal in 2003, with reserve margins of about 24 percent.

Second, while all complicated systems like power grids have a small probability of failure, the Florida transmission system is designed so that a single disturbance in one area does not cascade into other areas. This exact scenario occurred in 2002 when a utility had a disruption on its system. While customers of that utility experienced outages, the problem did not affect customers of other utilities.

Third, the Florida Public Service Commission (PSC) conducts an annual review of electric utilities that own transmission and generation facilities in Florida. Our technical staff assesses both the existing system and the planned upgrades for the next ten years. If the PSC determines that there is an inadequacy in the system, we have the statutory authority to require the necessary system improvements. Some improvements may require review by other state agencies for environmental or land use impacts, but for the PSC, the issues focus on balancing the reliability of the system with the cost of the necessary upgrades to the utilities, some of which may be borne by ratepayers.

On a realistic level, the existing safeguards built into the Florida electric system, our relative independence from electric providers located in other states, and reserve margins maintained by Florida’s investor-owned utilities, provide an alternative that has proven dependable in supplying our state’s energy needs.

Our experience with the grid system in Florida has been positive. With the continued commitment of the state’s electric utilities and ongoing surveillance by a staff of skilled professionals from Florida state agencies, disruptions can be isolated and opportunities for systemic outages can be minimized.

Lila A. Jaber is the chairman of the Florida Public Service Commission. The PSC sets the rates regulated utility companies charge for natural gas, electric and telephone service within the state.

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