The Board of Directors for Florida public power utility JEA on Feb. 24 approved new and modified power purchase agreements after a presentation by Interim JEA Chief Electric Systems Officer Garry Baker and representatives of The Energy Authority.
The amendments provide for JEA to purchase 230 megawatts of firm capacity and transmission with the option for an additional 50 megawatts from FPL, an investor-owned utility.
That agreement would support JEA’s energy needs and electric sales to Santee Cooper in South Carolina and Dalton Utilities in Georgia.
Capacity and energy will be delivered from Units 3 and 4 of the Vogtle nuclear power plant in Georgia.
JEA expects savings from the sale to reach $150 million between 2027 and 2032.
By paying for $150 million in projects in cash rather than borrowing, JEA will avoid $10 million in annual interest payments over the next 30 years, said Karen McAllister, Public Information Officer for JEA.
“We maintain a fixed charge coverage ratio of 1.6. This means that for every $1 we reduce in fixed debt costs (the denominator), we can reduce the required customer revenue (the numerator) by $1.60. Therefore, issuing $150 million in less debt translates to $16 million in annual savings for our customers over that same 30-year period,” she noted.
“Additionally, we estimate that not issuing $150 million in debt will lower our debt-to-asset ratio by about 2% compared to our previous forecast.”
In summary, if JEA uses the $150 million in savings from the PPAs to fund capital projects rather than issuing debt, “our customers will save nearly $16 million per year for 30 years, and our debt-to-asset ratio will be reduced by about 2%,” McAllister said.
These savings will ramp up over the six-year term of the PPAs (2027–2032).
“These annual savings will help stabilize future rate adjustments if costs remain stable,” she said.
“In this period of rapid growth across South Carolina, Santee Cooper is continually planning to best meet our customers’ future energy needs. As part of that work, we issued a request for proposals last year seeking to purchase electric capacity. We identified several competitive deals for a total of 350 megawatts (MW) in purchased power in 2027 and 250 MW in 2028,” said Mollie Gore, Director of Corporate Communications and External Affairs.
The largest contract from that process is with JEA, for the purchase of excess capacity from the JEA system, which includes an energy call option, she noted.
“Terms for the agreement include a capacity component of 206 MW in 2027 and 103 MW in 2028. Energy purchases we make over those two years would be based on pricing and our system needs,” Gore said.
“Santee Cooper expects to bring online approximately 650 MW of our own resources, including new generating capacity and battery storage, in late 2027 and 2028. We are pleased to have these power agreements to support customer needs before those resources are complete. Power purchases have become a routine part of operations for many utilities. Santee Cooper will continue to seek capacity options to complement our own generation going forward,” Gore said.
"This new partnership with JEA is mutually beneficial, allowing both utilities to meet the unique energy demands of our customers," Dalton Utilities said. "By securing this additional capacity, Dalton Utilities will provide reliable, carbon free electricity for an expanding data center customer while separately continuing to manage a diverse portfolio of energy resources for our residential, commercial, and industrial customers."
