ICF Consulting Completes Detailed Analysis of Proposed GridFlorida RTO

Study Reveals High Costs and Potential Significant Benefits
from a “Greenfield” GridFlorida RTO

FAIRFAX, VA, January 25, 2006 - ICF Consulting recently published its Cost-Benefit Study of the Proposed GridFlorida RTO. The comprehensive report was prepared under the guidance of the Florida Public Service Commission and sponsored by Florida Power & Light (FP&L), Progress Energy Florida (PEF), and Tampa Electric Company (TECO). The study examined the benefits and costs to peninsular Florida consumers of a GridFlorida Regional Transmission Organization (RTO) over a 13-year period under two centralized modes of operation—a Day-1 RTO and a Day-2 RTO. The project included significant involvement from the stakeholders in the Florida region, including transmission and generation owners, industry groups, U.S. Federal Energy Regulatory Commission (FERC) representatives, and state regulators. "ICF Consulting dedicated significant time and resources to incorporate stakeholder input and provide robust analyses that addressed the comments and concerns of all stakeholders," says Bob Croes of FP&L.

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The overall outcome of net benefits or costs to peninsular Florida consumers is dependent upon both quantitative and qualitative aspects of the RTO benefits. The quantitative benefits of a "Greenfield" Day-1 RTO with new systems and physical facilities are not nearly as large as the quantitative costs. Thus, a Day-1 RTO, as designed and studied, is probably not cost-effective even when qualitative benefits, such as the potential for improved investment efficiency and standardization of utility practices, are considered. In the case of a Day-2 RTO, although the quantified benefits were almost US$1 billion¹, the cost of a Greenfield Day-2 RTO was approximately 28 percent higher. Thus, if the qualitative Day-2 RTO benefits are approximately $285 million, the proposed GridFlorida RTO could break even.

"One milestone this study achieves in the electric power industry is a fundamentals-based approach to estimating and benchmarking RTO costs," says Kojo Ofori-Atta, an ICF Consulting vice president and transmission expert. "This study itemized all major RTO startup and operational costs for both Day-1 and Day-2 RTO modes of operation."

Learn more about ICF Consulting's transmission consulting services. Make inquiries through energy@icfi.com or 1.703.934.3637.

ICF International (Nasdaq: ICFI) partners with government and commercial clients to deliver consulting services and technology solutions in the energy, environment, transportation, social programs, defense, and homeland security markets. The firm combines passion for its work with industry expertise and innovative analytics to produce compelling results throughout the entire program life cycle, from analysis and design through implementation and improvement. Since 1969, ICF has been serving government at all levels, major corporations, and multilateral institutions. More than 1,800 employees serve these clients worldwide. ICF’s Web site is http://www.icfi.com.

For Immediate Release Contact: Douglas Beck 1.703.934.3820

 ¹NPV of 13-year RTO operations