Commission Conference Agenda

1 Docket No. 090079-EI – Petition for increase in rates by Progress Energy Florida, Inc.
Docket No. 090144-EI – Petition for limited proceeding to include Bartow repowering project in base rates, by Progress Energy Florida, Inc.
Docket No. 090145-EI – Petition for expedited approval of the deferral of pension expenses, authorization to charge storm hardening expenses to the storm damage reserve, and variance from or waiver of Rule 25-6.0143(1)(c), (d), and (f), F.A.C., by Progress Energy Florida, Inc.

Critical Date(s):		03/19/2010 (12-Month Effective Date)
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Skop
Staff:	ECR: Marsh, Slemkewicz, D. Buys, Davis, Dowds, Draper, Hewitt, Higgins, Kummer, L'Amoreaux, P. Lee, Lester, Matlock, Maurey, Ollila, Piper, A. Roberts, Springer, Stallcup, Thompson, Wright APA: Hallenstein, Harvey, Mailhot, Vinson GCL: Fleming, Klancke, Sayler, Young RAD: Crawford, Ellis, Graves, Webb SSC: C. Lewis, Moses, Vickery

(Participation is Limited to Commissioners and Staff)

Issue 1:

DROPPED.

Issue 2:

Is PEF's projected test period of the twelve months ending December 31, 2010, appropriate? (Category 1 Stipulation)

Approved Stipulation:

Yes. The twelve months ended December 31, 2010, is the appropriate test year. (AFFIRM, FIPUG, NAVY, and PCS do not affirmatively stipulate this issue, and took no position.)

Issue 3:

What are the appropriate inflation, customer growth, and other trend factors for use in forecasting? (Category 2 Stipulation)

Approved Stipulation:

The appropriate inflation, customer growth and other trend factors for use in forecasting are those included in the MFRs, as filed.

Issue 4:

Are PEF's forecasts of customer growth, KWH by revenue class, and system KW for the projected test year appropriate? (Category 2 Stipulation)

Approved Stipulation:

Yes.

Issue 5:

Are PEF's forecasts of billing determinants by rate class for the projected test year appropriate? (Category 2 Stipulation)

Approved Stipulation:

Yes.

Issue 6:

Is the quality and reliability of electric service provided by PEF adequate?

Should the current-approved depreciation rates, capital recovery schedules, and amortization schedules be revised? (Category 1 Stipulation)

Approved Stipulation:

Yes. The parties’ positions on how they should be revised are set forth in subsequent issues. (AFFIRM did not affirmatively stipulate to this issue, and took no position.)

Issue 8:

What are the appropriate capital recovery schedules?

Is PEF's calculation of the average remaining life appropriate?

What life spans should be used for PEF's coal plant?

What life spans should be used for PEF's combined cycle plants?

What are the appropriate depreciation parameters (remaining life, net salvage percent, and reserve percent), amortizations, and resulting rates for each production unit, including but not limited to coal, steam, combined cycle, etc.?

What are the appropriate depreciation parameters (remaining life, net salvage percent, and reserve percent), amortizations, and resulting rates for each transmission, distribution, and general plant account?

Based on the application of the depreciation parameters that the Commission has deemed appropriate to PEF's data, and a comparison of the calculated theoretical reserves to the book reserves, what are the resulting differences?

What, if any, corrective reserve measures should be taken with respect to the differences identified in the Issue 14?

What should be the implementation date for revised depreciation rates, capital recovery schedules, and amortization schedules? (Category 1 Stipulation)

Approved Stipulation:

The implementation date should be January 1, 2010. (AFFIRM did not affirmatively stipulate this issue, and took no position.)

Issue 17:

Should the current-approved annual dismantlement provision be revised?

What, if any, corrective reserve measures should be approved for fossil dismantlement?

What is the appropriate annual provision for dismantlement?

Are PEF's assumptions in the fossil dismantlement study with regard to site restoration reasonable?

DROPPED.

Issue 22:

Should the currently approved annual nuclear decommissioning accruals be revised? (Category 1 Stipulation)

Approved Stipulation:

No. The issues associated with PEF’s nuclear decommissioning study should be deferred from the rate case and addressed next year when FPL files its nuclear decommissioning study in December 2010. This will afford the Commission the opportunity to address the appropriateness of each companies’ cost of nuclear decommissioning at the same time. PEF will not be required to prepare a new site-specific nuclear decommissioning study. However, PEF will be required to update the current study with the most currently available escalation rates. (AFFIRM, AG, and NAVY did not affirmatively stipulate this issue, and took no position.)

Issue 23:

What is the appropriate annual decommissioning accrual in equal dollar amounts necessary to recover future decommissioning costs over the remaining life Crystal River Unit 3 (CR3)? (Category 1 Stipulation)

Approved Stipulation:

The issues associated with PEF’s nuclear decommissioning study should be deferred from the rate case and addressed next year when FPL files its nuclear decommissioning study in December 2010. This will afford the Commission the opportunity to address the appropriateness of each companies’ cost of nuclear decommissioning at the same time. PEF will not be required to prepare a new site-specific nuclear decommissioning study. However, PEF will be required to update the current study with the most currently available escalation rates. (AFFIRM, AF, and NAVY did not affirmatively stipulate this issue, and took no position.)

Issue 24:

Has the company removed all non-utility activities from rate base?

Should any adjustments be made to rate base related to the Bartow Repowering Project? (Category 1 Stipulation)

Approved Stipulation:

No. This stipulation does not prejudice the rights of any intervenor to contest the legality of including the Bartow project in rates during 2009. The new rates resulting from Docket No. 090079-EI, which will reflect the rate base and revenue requirement impact of the Bartow project, will supercede the rate change resulting from Order No. PSC-09-0415-PAA -EI as of the effective date of the new rates. (AFFIRM, and NAVY did not affirmatively stipulate this issue, and took no position.)

Issue 26:

Should an adjustment be made to reflect any test year or post test year revenue requirement impacts of "The American Recovery and Reinvestment Act" signed into law by the President on February 17, 2009? (Category 2 Stipulation)

Approved Stipulation: No.

Issue 27:

Is PEF's requested level of Plant in Service for the projected 2010 test year appropriate?

What adjustments, if any, should be made to accumulated depreciation to reflect revised depreciation rates, capital recovery schedules, and amortization schedules resulting from PEF's depreciation study?

Is PEF's requested level of Accumulated Depreciation and Amortization in the amount of $4,437,117 for the 2010 projected test year appropriate?

Is PEF's requested level of CWIP-No AFUDC in the amount of $151,145,000 for the projected 2010 test year appropriate?

Is PEF's requested level of Plant Held for Future Use in the amount of $25,723,000 for the projected 2010 test year appropriate?

Is PEF's requested level of Nuclear Fuel - No AFUDC (net) in the amount of $126,566,000 for the projected 2010 test year appropriate?

Should an adjustment be made to PEF's requested storm damage reserve, annual accrual of $14.9 million, and target level of $150 million?

Should any adjustments be made to PEF's fuel inventories? (Category 2 Stipulation)

Approved Stipulation:

No adjustment should be made to PEF’s requested level of non-nuclear fuel inventories in the amount of $347,235,000 (system). The appropriate jurisdictional amount is a fall-out based on the jurisdictional separation factor approved in Issue 89.

Issue 35:

Should unamortized rate case expense be included in Working Capital?

Has PEF appropriately reflected the impact of SFAS 143 (Asset Retirement Obligations) in its proposed working capital calculation?

Is PEF's requested level of Working Capital Allowance in the amount of ($9,041,000) for the projected test year appropriate?

Is PEF's requested level of Rate Base in the amount of $6,238,617,000 for the 2010 projected test year appropriate?

What is the appropriate amount of accumulated deferred taxes to include in the capital structure for the projected test year?

What is the appropriate amount and cost rate of the unamortized investment tax credits to include in the capital structure for the projected test year?

Should PEF's requested pro forma adjustment to equity to offset off-balance sheet purchased power obligations be approved?

What is the appropriate equity ratio that should be used for PEF for purposes of setting rates in this proceeding?

Have rate base and capital structure been reconciled appropriately?

What is the appropriate capital structure for the projected test year?

What is the appropriate cost rate for short-term debt for the projected test year?

What is the appropriate cost rate for long-term debt for the projected test year?

What is the appropriate return on equity (ROE) for the projected test year?

What is the appropriate weighted average cost of capital including the proper components, amounts, and cost rates associated with the projected capital structure?

Is PEF's projected level of total operating revenues in the amount of $1,517,918,000 for the 2010 projected test year appropriate?

What are the appropriate adjustments to reflect the base rate increase for the Bartow Repowering Project authorized in Order No. PSC-09-0415-PAA-EI?

Has PEF made the appropriate test year adjustments to remove conservation revenues and expenses recoverable through the Conservation Cost Recovery Clause? (Category 2 Stipulation)

Approved Stipulation:

Yes.

Issue 52:

Has PEF made the appropriate test year adjustments to remove fuel and purchased power revenues and expenses recoverable through the Fuel and Purchased Power Cost Recovery Clause? (Category 2 Stipulation)

Approved Stipulation:

Yes.

Issue 53:

Has PEF made the appropriate test year adjustments to remove capacity revenues and expenses recoverable through the Capacity Cost Recovery Clause? (Category 2 Stipulation)

Approved Stipulation:

Yes.

Issue 54:

Has PEF made the appropriate test year adjustments to remove environmental revenues and expenses recoverable through the Environmental Cost Recovery Clause? (Category 2 Stipulation)

Approved Stipulation:

Yes.

Issue 55:

DROPPED.

Issue 56:

Has PEF made the appropriate adjustments to remove Aviation cost for the test year?

Should an adjustment be made to advertising expenses?

DROPPED.

Issue 59:

Is PEF's proposed allowance of $2,412,100 for directors and officers liability insurance appropriate?

Is PEF's proposed allowance of $3,669,000 for 2010 injuries and damages expense appropriate?

Is PEF's proposed allowance of $23,228,000 for 2010 A&G office supplies and expenses appropriate?

Should an adjustment be made to PEF's proposed 2010 allowance for O&M expense to reflect productivity improvements, if any?

Should an adjustment be made to PEF's requested level of salaries and employee benefits for the 2010 projected test year?

Are PEF's proposed increases to average salaries for 2010 appropriate?

Are PEF's proposed increases in employee positions for 2010 appropriate?

Should the proposed 2010 allowance for incentive compensation be adjusted?

Should the Company's proposed 2010 allowance for employee benefit expense be adjusted?

Should an adjustment be made to the accrual for property damage for the 2010 projected test year?

Should an adjustment be made to PEF's 2010 generation O&M expense?

Should an adjustment be made to PEF's 2010 transmission O&M expense?

Should an adjustment be made to PEF's 2010 distribution O&M expense?

DROPPED.

Issue 73:

What is the appropriate amount and amortization period for PEF's rate case expense for the 2010 projected test year?

Should an adjustment be made to bad debt expense for the 2010 projected test year? (Category 2 Stipulation)

Approved Stipulation:

No.

Issue 75:

What adjustments, if any, should be made to the 2010 projected test year depreciation expense to reflect revised depreciation rates, capital recovery schedules, and amortization schedules resulting from PEF's depreciation study?

What is the appropriate amount of depreciation and fossil dismantlement expense for the 2010 projected test year?

What is the appropriate amount of nuclear decommissioning expense for the 2010 projected test year? (Category 1 Stipulation)

Approved Stipulation:

The appropriate amount if $0. (AFFIRM did not affirmatively stipulate this issue, and took no position.)

Issue 78:

What adjustments, if any, should be made to the amortization of End of Life Material and Supplies inventories? (Category 2 Stipulation)

Approved Stipulation:

No adjustments should be made.

Issue 79:

What adjustments, if any, should be made to the amortization of the costs associated with the last core of nuclear fuel? (Category 2 Stipulation)

Approved Stipulation:

No adjustments should be made.

Issue 80:

Should an adjustment be made to taxes other than income taxes for the 2010 projected test year?

Is it appropriate to make a parent debt adjustment as per Rule 25-14.004, Florida Administrative Code?

Should an adjustment be made to Income Tax expense for the test year?

Is PEF's requested level of Operating Expenses in the amount of $1,249,372,000 for the 2010 projected test year appropriate?

Is PEF's projected net operating income in the amount of $268,546,000 for the 2010 projected test year appropriate?

Has PEF appropriately accounted for affiliated transactions? If not, what adjustment, if any, should be made?

What is the appropriate projected test year revenue expansion factor and the appropriate net operating income multiplier, including the appropriate elements and rates for PEF? (Category 2 Stipulation)

Approved Stipulation:

The appropriate projected test year revenue expansion factor is 61.207% and the appropriate net operating income multiplier is 1.63381.

Issue 87:

Is PEF's requested annual operating revenue increase of $499,997,000 for the 2010 projected test year appropriate?

Has PEF correctly calculated revenues at current rates for the projected test year?

Is PEF's proposed separation of costs and revenues between the wholesale and retail jurisdictions appropriate?

What is the appropriate Cost of Service Methodology to be used to allocate base rate and cost recovery costs to the rate classes?

If the Commission approves a cost allocation methodology other than the 12 CP and 1/13th Average Demand, should all cost recovery factors be adjusted to reflect the new cost of service methodology.

How should any change in revenue requirements approved by the Commission be allocated among the customer classes?

Is PEF's proposed methodology for treatment of unbilled revenue due to any recommended rate change appropriate? (Category 2 Stipulation)

Approved Stipulation:

Yes.

Issue 94:

Is PEF's proposed charge for Investigation of Unauthorized Used appropriate? (Category 2 Stipulation)

Approved Stipulation:

Yes.

Issue 95:

Should the Commission approve PEF's proposal to eliminate its IS-1, IST-1, CS-1, and CST-1 rate schedules and transfer the current customers to otherwise applicable rate schedules?

Is PEF's proposal to grandfather certain terms and conditions for existing IS-1, IST-1, CS-1, and CST-1 customers transferred to the IS-2, IST-2, CS-2, and CST-2 rate schedules appropriate?

Should PEF's proposal to close the RST-1 rate to new customers be approved? (Category 2 Stipulation)

Approved Stipulation:

Yes.

Issue 98:

Are PEF's proposed customer charges appropriate?

Are PEF's proposed service charges appropriate?

Is PEF's proposed charge to Temporary Service appropriate?

Is PEF's proposed Premium Distribution Service charge appropriate?

DROPPED.

Issue 103:

Are PEF's proposed monthly fixed charge carrying rates to be applied to the installed cost of customer-requested distribution equipment, lighting service fixtures, and lighting service poles, for which there are no tariffed charges, appropriate? (Category 1 Stipulation)

Approved Stipulation:

The methodology used by PEF to calculate the monthly fixed charge carrying rates is appropriate. To the extent any of the inputs used by PEF in the calculation are modified at the revenue requirements Agenda, PEF should recalculate the monthly fixed charge carrying rates using the approved inputs. (OPC, AFFIRM, AG, FIPUG, NAVY, and PCS did not affirmatively stipulate this issue, and took no position.)

Issue 104:

Are PEF's proposed delivery voltage credits appropriate? (Category 2 Stipulation)

Approved Stipulation:

Yes.

Issue 105:

Are PEF's power factor charges and credits appropriate? (Category 2 Stipulation)

Approved Stipulation:

Yes. PEF’s proposed power factor charge and credit of $0.25 kilovolt-ampere reactive (kVAR) is appropriate.

Issue 106:

Is PEF's proposed lump sum payment for time-of-use metering costs appropriate? (Category 2 Stipulation)

Approved Stipulation:

Yes. PEF’s proposed $90 lump sum payment contained in the RST-1 rate for time-of-use metering costs is appropriate.

Issue 107:

What is the appropriate method of designing time-of-use rates for PEF?

What are the appropriate charges under the Firm, Interruptible, and Curtailable Standby Service rate schedules?

What is the appropriate level of the interruptible credit?

Should the interruptible credit be load factor adjusted?

What are the appropriate energy charges?

What are the appropriate demand charges?

What are the appropriate lighting charges?

Should PEF's proposal to revise its Leave Service Active (LSA) provision (tariff sheet No. 6.110) be approved?

What is the appropriate effective date for PEF's revised rates and charges?

Are the rates proposed by Progress Energy Florida fair, just, and reasonable, and compensatory as those terms are used in Chapter 366, Florida Statutes, including specifically Sections 366.03, 366.041(1), 366.05(1), and 366.06(1), Florida Statutes?

In fulfilling it mandate under Section 366.01, Florida Statutes, to regulated public utilities in the public interest and for the protection of the public welfare, and its mandate under Section 366.041(1) to fix fair, just, reasonable, and compensatory rates that consider among other things the value of such service to the public and that do not deny the utility a reasonable return upon its rate base, should the Commission grant any part of PEF's proposal to increase its base rate in this docket?

Should any of the $13,078,000 interim rate increase granted by Order No. PSC-09-0413-PCO -EI be refunded to the ratepayers?

Should PEF be required to file, within 90 days after the date of the final order in this docket, a description of all entries or adjustments to its annual report, earnings surveillance reports, and books and records which will be required as a result of the Commission's findings in this proceeding? (Category 1 Stipulation)

Approved Stipulation:

Yes. (AFFIRM did not affirmatively stipulate this issue, and took no position.)

Issue 118:

DROPPED.

Issue 119:

Does the creation of a regulatory asset and the deferral of pension expenses from a period covered by the Stipulation approved by Order No. PSC-05-0945-S-EI to a future period violate the terms of the Stipulation and order?

Does the creation of a regulatory asset and the deferral of pension expenses from a period covered by the Stipulation and order to a future period constitute retroactive ratemaking?

Does the creation of a regulatory asset and the deferral of pension expenses from a period covered by the revenue sharing provisions of the Stipulation and order to a future period result in double recovery of those expenses?

Should this docket be closed?