The president of Florida Power & Light Co.discusses South Florida's energy needs, power deregulation and those controversial power lines in Boca Raton.

Q. Florida is a growing state. What are you looking at in terms of energy demand projections and how is FPL preparing to meet that demand?

A. If you look at our own internal projections, we're looking at demand in the 600 megawatt range [per year], which works out to a power plant a year. And that's really a combination of the growth coming from new people moving into the state and the increasing demand of the existing customers. People are buying bigger houses, more air conditioning, more computers and so forth.

Q. But you're not going to build a power plant every year. How are you going to meet that?

A. I don't see us literally building a power plant a year. For example, when you look at our 2007 need, we're proposing to add about 1,100 megawatts, which is more than the need in any one year. But we're also taking a look at what else can we do in renewables [like solar], if there are more opportunities in conservation programs. I think we'll be looking to meet those things through a combination of actions, not just building power plants.

Q. Besides power plants, this growth creates demand for other infrastructure -- the power lines, the transformers, the substations, which raise their own issues. Again, how will you meet that need?

A. That's going to be, in some ways, a tougher challenge. Not because we don't know what to do or are unwilling to put the capital into it, but because as the areas we serve get more densely populated, people don't want any kind of facilities in their neighborhoods. Particularly when you're talking about all these gated communities where they don't want to see a transmission line or a distribution line or a substation.

I don't have an easy solution for that. I think our best bet is that if there is a new area that is being developed, hopefully we can get into it ahead of the development and really plan for our facilities. And in the really [developed] urban areas -- a prime example is Fort Lauderdale, where you are seeing that whole downtown area, they are tearing down two-story buildings and putting up 20-story buildings -- try to work closely with the local communities and with the local governments and map out a strategy to get the facilities in there at the time the construction is going for the new buildings.

Q. In terms of the controversy in Boca Raton with the power lines, are there any lessons to be learned? Anything FPL would do differently?

A. I think the Boca situation is not one that anyone is happy with. If we had to do it over again, maybe we would try to start that whole community outreach program even earlier than we did, so that we wouldn't find ourselves in a situation where we felt strongly that the line really had to go up or we were going to have significant reliability problems.

It's sort of a normal thing that [news] coverage is for things that don't work out well and people are unhappy. But for every Boca line, we've got 20 or 30 other very successful lines that are built, where we worked with the community and where the community is satisfied with what is being done and how it is being done.

Q. You mentioned conservation, but there has always been a sentiment that FPL, like other electric utilities, makes money from selling electricity, and so conservation is not something the company really embraces. Is that fair to say?

A. I think that reflects a world where the company's earnings only come from assets, if you will, plant and service. But, first of all, the whole regulatory scheme has changed. And if you look at our own history, we have the largest load management program in the U.S. By that I mean we have a series of programs for residential and commercial/industrial customers where they get a credit in their bill every month and for that credit we have the ability to cycle [take off-line] some of their appliances and some of their equipment. No other company in the U.S. has as many megawatts on that kind of a program.

In addition, we've had, for many, many years, conservation programs where people can get energy audits. And over different time frames, we have actually paid people subsidies to put in ceiling insulation, window film covers, more efficient air conditioners and so forth. If you look at it, those conservation programs have really deferred the need for about 4,000 megawatts, or about 10 midsize power plants. So, the facts really don't bear out the idea that we have just closed the door on conservation.

Having said all that, I think we can do even better. We are trying to see how else can we keep improving on conservation programs. We are starting to consider more and more renewables, and can we expand the load control programs that I just mentioned.

Q. FPL has invested plenty in generators that can run on natural gas. Why?

A. Natural gas is really the primary fuel choice right now. And you get there really by a process of elimination. Coal generation creates some of the environmental concerns that you're familiar with. Not to mention in Florida you have all these transportation issues, i.e., how do you get the coal into the plant, whether it comes through a port or whether you have to bring it in by train. Oil has some of the same environmental issues. To have it completely scrubbed is really a pretty high capital cost. Nuclear: A lot of concerns about how well the public will accept if you expand nuclear.

So you quickly get to natural gas as the fuel of choice because it is the most environmentally benign. But, of course, what we have seen with that is that natural gas has been a lot more volatile. But everything that is being built in this country is natural gas, practically everything that is being built. You may find a few exceptions. But by and large, natural gas-fired power plants are kind of the only choice. So, if you look at the plants that we have built in the last 10 years, they are all natural gas. Everything that is in the pipeline is natural gas. So we have a huge commitment to that fuel.

Our concerns are the reliability of the gas and what can we do to dampen the volatility of that gas