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Florida utility to join drilling boom in Oklahoma

One of the nation’s largest electric utilities is investing in natural gas wells in Oklahoma in an attempt to secure a stable, low-cost resource source for its power plants.
By Jay F. Marks, Business Writer Published: June 27, 2014
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A Florida utility is poised to get involved in developing its own source of natural gas, but two of Oklahoma’s largest utilities do not seem inclined to follow suit.

Florida Power and Light Co. expects to save its customers more than $100 million by investing in long-term natural gas supplies.

The utility, which serves about 4.7 million customers, is partnering with Louisiana-based PetroQuest Energy Inc. to develop 38 natural gas wells in southeastern Oklahoma’s Woodford Shale. It will receive a portion of the gas produced from each well, if the project is approved by Florida regulators.

“With a growing fleet of cleaner, fuel-efficient natural gas-fired power plants and contracts for reliable and diverse gas transportation in place, we believe this to be the next logical step in providing clean electricity for our customers at affordable prices,” CEO Eric Silagy said. “This investment in natural gas production is an important component for delivering lower, more stable natural gas prices for our customers, and we anticipate identifying additional investment opportunities, thereby benefiting our customers even more over the long term.

“Importantly, customers will realize the greatest amount of savings in the early years when wells typically produce the most natural gas.”

Florida Power and Light purchases up to 2 billion cubic feet of natural gas a day to fuel its gas-fired power plants. Prices fluctuate based on marketing conditions, but the utility expects its deal with PetroQuest to provide gas at a relatively low and stable cost as long as the wells are producing. That typically is 30 years or more.

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