Lakeland Electric Has Deal to Fill Power Gaps After Coal Plant Closes

Lakeland Electric has negotiated with Orlando Utilities Commission to fill any gaps in the power supply after it shutters the coal-burning McIntosh 3 plant at the end of March and before expected new generation comes online in 2023.

City commissioners on Tuesday will consider a power-delivery contract with the Orlando municipal utility and will vote on formally decommissioning the 38-year-old plant.

The plant had been scheduled for closure in fall 2024, but Lakeland Electric officials say they can save $13.1 million by closing it this spring.

“A unique component of this particular agreement is that the energy purchases that will be made by Lakeland Electric will only be made as needed or what is necessary. There is no minimum or maximum requirements with regard to the amount of energy that’s purchased. Both capacity and transmission are at a firm price,” Assistant City Attorney Ramona Sirianni told city commissioners this morning when they previewed the contract.

The cost for capacity and transmission during the three-year contract is $23,437,500 and is included in Lakeland Electric’s 2021 budget. Energy costs are estimated at $650,000 in 2021, and are also budgeted, officials said.

Orlando Utility Commission, which is a 40% owner of the McIntosh 3 plant, is part of the same statewide municipal power-sharing pool as Lakeland Electric. It’s the only member of the power pool that has sufficient excess capacity to supply Lakeland’s anticipated needs, Lakeland Electric General Manager Joel Ivy said.

A vote to decommission the plant is required in order to terminate contracts for coal purchase and railroad delivery without penalties, Sirianni told commissioners. Decommissioning obligates the city to remove the entire plant, not just shut it down, Ivy has said.

Local and national leaders of the Utility Workers Union of America have criticized Lakeland Electric’s plans to close the plant earlier than anticipated, saying they have an agreement that the plant would be closed only under catastrophic failure.

An estimated 60 workers will be laid off as a result of the plant closure. Utility officials have said affected workers will receive training, resumé help and the chance to apply for other city jobs. But the union’s local president told city commissioners on Jan. 4 that he had seen no evidence of that yet.

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