DATE:	June 26, 2013
TO:	Office of Commission Clerk (Cole)
FROM:	Division of Engineering (Ellis) Division of Economics (Garl) Office of the General Counsel (Murphy)
RE:	Docket No. 130074-EQ – Petition for approval of revisions to standard offer renewable energy tariff REN-1 and REN-2, by Florida Public Utilities Company.
AGENDA:	07/09/13 – Regular Agenda – Proposed Agency Action – Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Administrative
CRITICAL DATES:			None
SPECIAL INSTRUCTIONS:			None
FILE NAME AND LOCATION:			S:\PSC\ENG\WP\130074.RCM.DOC

 

 Case Background

Section 366.91(3), Florida Statutes (F.S.), requires that each investor-owned utility (IOU) to continuously offer to purchase capacity and energy from renewable energy generators.  Commission Rules 25-17.200 through 25-17.310, Florida Administrative Code (F.A.C.), implement the statute, and require each IOU file with the Commission by April 1 of each year a standard offer contract based on the next avoidable generating unit or planned purchase.  Florida Public Utilities Company (FPUC or Company) filed its petition for approval of an amended standard offer contract on April 1, 2013.

Because FPUC does not own or operate any electric generating plants, the utility does not have any planned generating unit that can be avoided.  For such a circumstance, Rule 25-17.250(1), F.A.C., requires a utility to base the standard offer contract on avoiding or deferring a planned purchase.  FPUC currently has purchased power agreements with Gulf Power Company (Gulf) for the Northwest Division and JEA (formerly Jacksonville Electric Authority) for the Northeast Division.  The rate schedules submitted, REN-1 and REN-2, reflect pricing for each division in accordance with the purchased power agreements for that region.

The Commission has jurisdiction over this standard offer contract pursuant to Sections 366.04 through 366.06 and 366.91, F.S.

Discussion of Issues

Issue 1: 

 Should the Commission approve the standard offer contract and related rate schedules filed by FPUC?

Recommendation: 

 Yes.  The revised standard offer contracts and related rate schedules conform to all the requirements of Rules 25-17.200 through 25-17.310, F.A.C., and reflect the avoidable costs associated with FPUC’s purchased power agreements.  Staff recommends that the revised standard offer contracts and related rate schedules filed by FPUC be approved.  (Ellis)

Staff Analysis: 

 Pursuant to Rule 25-17.250, F.A.C., an IOU must continuously make available a standard offer contract for the purchase of firm capacity and energy from renewable generating facilities and small qualifying facilities with a design capacity of 100 kilowatt (kW) or less. 

Since FPUC does not generate any electric energy for sale to retail customers, FPUC does not file a Ten-Year Site Plan and has no planned unit that can serve as an avoided unit.  In such a case, Rule 25-17.250(1), F.A.C., requires a standard offer be based on avoiding or deferring a planned purchase.  FPUC meets this requirement by submitting standard offer contracts based on the Company’s purchased power agreements (PPAs) with Gulf Power Company for the Northwest Division and JEA for the Northeast Division.

FPUC proposes revisions to two rate schedules for each division; REN-1, for as-available energy only, and REN-2, for energy and capacity.  Energy and capacity payments for these schedules are based on actual costs under FPUC’s wholesale contracts, with estimates provided in the rate schedule filing.  The revisions reflect updated energy price estimates for 2013, and are detailed below.  The rate schedules are otherwise unchanged.  The company’s standard offer contract, incorporating the revised rate schedules, is provided as Attachment A.

Northwest Division

Payments for energy in 2013 are projected at 3.823 cents per kilowatt-hour (kWh), a decrease of 21 percent from last year.  Payments for capacity are projected to remain at zero.  Based on current demand forecasts and a ratchet provision included in the PPA between FPUC and Gulf, renewable providers are unlikely to be able to avoid any capacity payments under the wholesale agreement.  Actual payments for a renewable provider would be based on the actual deferred cost of energy and capacity subject to FPUC’s PPA with Gulf.

Northeast Division

Payments for energy in 2013 are projected at 4.360 cents per kilowatt-hour (kWh), a decrease of 8.7 percent from last year.  Payments for capacity are projected at $11.38 per kilowatt (kW) of the renewable provider’s capacity at time of system peak, the same rate as the previous year.  Actual payments for a renewable provider would be based on the actual deferred cost of energy and capacity subject to FPUC’s PPA with JEA.

Conclusion

The revised standard offer contracts and related rate schedules conform to all the requirements of Rules 25-17.200 through 25-17.310, F.A.C., and reflect the avoidable costs associated with FPUC’s purchased power agreements.  Staff recommends that the revised standard offer contracts and related rate schedules filed by FPUC be approved.
Issue 2: 

 Should this docket be closed?

Recommendation:  Yes. This docket should be closed upon issuance of a Consummating Order, unless a person whose substantial interests are affected by the Commission’s decision files a protest within 21 days of the issuance of the Commission’s proposed agency action order.  Potential signatories should be aware that, if a timely protest is filed, FPUC’s standard offer contract may subsequently be revised.  (Murphy)

Staff Analysis: 

 This docket should be closed upon issuance of a Consummating Order, unless a person whose substantial interests are affected by the Commission’s decision files a protest within 21 days of the issuance of the Commission’s proposed agency action order.  Potential signatories should be aware that, if a timely protest is filed, FPUC’s standard offer contract may subsequently be revised.