After working around everything from gopher tortoises to President Donald Trump’s tax reform law, Duke Energy is now raising concerns with its decision to abandon a utility partner, potentially so that Duke can compete directly with that partner. The about-face could cost a Central Florida community hundreds of jobs and millions of dollars – all based on using financing delays as an excuse.
The passage of President Trump’s tax package delayed financing of the U.S. EcoGen Polk biomass renewable energy production plant, and Duke Energy is now pointing to the financing delay as an excuse to pull the plug on the project. U.S. EcoGen, Duke Energy’s partner on the project since 2011, has invested more than $40 million into the development of the project that Duke no longer wants to pursue, even though the financing delay issue has been resolved.
U.S. EcoGen asked North Carolina-based Duke for a one-year extension on the commercial operation of the project, pushing the delivery of power from 2019 to 2020, but Duke refused to honor the request – even though the Florida Public Service Commission (PSC) said the project would save ratepayers an estimated $59.8 million. The refusal to extend the delivery date may end up costing Polk County about 350 construction jobs, 250 high-paying permanent jobs, and millions in projected economic benefits over the next 30 years in a region of Florida already hard hit by closures of phosphate mines and agricultural hardships.
Duke’s move rejecting this extension has ruffled the feathers of a number of prominent lawmakers.
In a letter to Duke this month, State Sen. Aaron Bean, chair of the Senate Communications, Energy and Public Utilities Committee, pushed the company not to abandon the project. “This $400 million Polk Generating Facility also provides a critical financial impact to Central Florida Fort Meade, our farming industry and so many other employers,” said Bean. “This community was severely impacted by the closure of the phosphate mines, and the project would return good-paying jobs to the Fort Meade area. The community would have an estimated $15 million in recurring income in local taxes and support for its agricultural areas.”
State Rep. Jay Trumbull, chair of the House Energy and Utilities Subcommittee, echoed Sen. Bean’s comments in a letter to Duke this month. “As a renewable energy resource, this facility will help to mitigate the impacts of price volatility and cost increases of natural gas that may occur over time,” Trumbull wrote. “For this reason and so many more, we need to see this important project built and operational as soon as possible.”
But Duke’s motive for killing the project could be rooted not in U.S. EcoGen’s financing delay, but in Duke’s own internal plans to operate a competing renewable energy business. In a 2017 settlement with the PSC, Duke requested permission to enter the renewable energy space, potentially making the utility company a direct competitor with its own renewable energy partners.
The impact of Duke’s decision to pull the plug is likely to be substantial. U.S. EcoGen already started construction of the project, purchased more than 1,330 acres in Polk County and invested more than $40 million to date, and has continued to move the project forward with the hiring of numerous engineers, contractors, and other technical experts.
The economic fallout is devastating, but the political fallout may not be fully realized until Election Day. In addition to Sen. Bean and Rep. Trumbull, the project had widespread community support and substantial backing in the local community. It’s also the kind of project that Governor Rick Scott has touted in the past, creating hundreds of needed jobs with the average compensation for plant workers projected at over $60,000 per year.