DATE:	December 9, 2013
TO:	Office of Commission Clerk (Stauffer)
FROM:	Division of Engineering (Graves) Division of Economics (Draper, Wu) Office of the General Counsel (Murphy)
RE:	Docket No. 130007-EI – Environmental cost recovery clause.
AGENDA:	12/17/13 – Regular Agenda – Parties May Participate in Issue 1 Only.
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Balbis
CRITICAL DATES:			None
SPECIAL INSTRUCTIONS:			None

 

 Case Background

            On June 28, 2013, Florida Power & Light Company (FPL or Company) filed a Petition for Approval of Environmental Cost Recovery (Petition) for costs related to a proposed NO₂ compliance program (Project).  On October 3, 2013, Florida Industrial Power Users Group (FIPUG) filed a Motion to Establish Separate “Spin-Off” Docket to examine FPL’s Petition. FIPUG’s Motion was supported by the Office of Public Counsel (OPC) and DeSoto County Generating Company, LLC, (DeSoto).

 

By Order No. PSC-13-0490-PCO-EI, issued on October 16, 2013, testimony related to the Project was scheduled to be heard at a December 19 and 20, 2013 hearing.  This Order also provided that, “[p]ending a final Commission decision regarding the Project, FPL’s projected 2013 and 2014 Project costs shall be included in setting the 2014 factor” and that, “[i]f the Commission does not approve the Project, FPL shall be required to refund the costs that have been recovered, with interest, through the true-up process.”

 

A hearing was held on November 4, 2013, addressing all issues in the docket not related to the Project.  On November 19, 2013, the Florida Public Service Commission (Commission) issued Order No. PSC-13-0606-FOF-EI, which established 2014 Environmental Cost Recovery (ECRC) factors for FPL that included, subject to refund, costs associated with the Project.

 

On November 27, 2013, FPL filed a Motion to Postpone Hearing on NO₂ Compliance Project, and to permit Commission staff to recalculate factors that did not include costs related to the Project (Motion to Postpone).  By Order No. PSC-13-0636-PCO-EI, issued on December 2, 2013, the hearing dates for the Commission to address FPL’s Petition were changed to January 29 and 30, 2014.[1]  On December 4, 2013, FPL filed a Notice of Voluntary Dismissal Without Prejudice of NO₂ Project Petition, Intent to File Amended Petition, and Withdrawal of Motion to Postpone Hearing (Notice) which is the subject of the instant staff recommendation.  

Discussion of Issues

Issue 1: 

 Should the Commission acknowledge FPL’s Notice of Voluntary Dismissal Without Prejudice of NO₂ Project Petition, Intent to File Amended Petition, and Withdrawal of Motion to Postpone Hearing?

Recommendation: 

 Yes. The Commission should acknowledge FPL’s Notice of Voluntary Dismissal Without Prejudice of NO₂ Project Petition, Intent to File Amended Petition, and Withdrawal of Motion to Postpone Hearing. (Murphy)

Staff Analysis: 

 In its Notice, FPL gives notice of its voluntary dismissal without prejudice of its Petition, its intent to file an amended petition for environmental cost recovery of costs incurred to comply with the new 1-hour NO₂ standard, and withdrawal of its Motion to Postpone.

 

In support of its Notice, FPL states that 1) since its Petition was filed, alternatives to meet the 1-hour NO₂ standard have been proposed by FPL and DeSoto, and 2) the Florida Department of Environmental Protection (FDEP) has advised that additional data[2] is needed to confirm certain exceedances of the 1-hour NO₂ standard that are predicted by FPL’s air-dispersion modeling.  Relying on Saddlebrook Resorts, Inc. v. Wiregrass Ranch, Inc.,[3] FPL asserts that it is entitled to voluntarily dismiss its petition at any time prior to completion of the fact-finding process.  FPL avers that the fact-finding process concerning FPL’s Petition has not been completed. FPL states that the required monitoring could extend up to a year, but may be completed in a considerably shorter period of time.  FPL is voluntarily withdrawing its Petition and intends to refile an amended petition and supporting testimony once the results of the monitoring are known.  Thereafter, FPL will work with Commission staff and the parties to propose an appropriate hearing schedule to address the matter.      

 

            Order No. PSC-13-0490-PCO-EI provides that “pending a final Commission decision regarding the Project, FPL’s projected 2013 and 2014 Project costs shall be included in setting the 2014 factor.”  However, in view of FPL’s voluntary dismissal of the Petition and subject to the normal true up process, the Company does not object to the Commission approving revised 2014 ECRC factors that do not include Project costs.  FPL suggests that information needed to revise its ECRC factors is included in the hearing record. 

           

            Finally, the Company asserts that by filing this Notice, its Motion to Postpone Hearing is moot and therefore withdrawn.  

 

In considering a voluntary dismissal of a case, the Commission has consistently determined the following:

 

 

a plaintiff’s right to take a voluntary dismissal is absolute[4] and once a voluntary dismissal is taken, the trial court loses all jurisdiction over the matter, and cannot reinstate the action for any reason.[5]  Both of these legal principles have been recognized in administrative proceedings[6] and are consistent with our past decisions.[7]

See Order No PSC-12-0254-FOF-TP.[8]  Thus, staff recommends that the Commission acknowledge FPL’s voluntary dismissal, without prejudice, and cancel the hearing that is scheduled in this docket for January 29 and 30, 2014.  As suggested by the Company, this makes its Motion to Postpone Hearing moot. Finally, although the Company has provided notice of its intent to refile an amended petition, such a petition will necessarily be evaluated on its own merits when filed and Commission action is neither appropriate nor necessary at this time with respect to this eventuality.  

 

Issue 2: 

 Should the Commission revise FPL’s 2014 ECRC factors to reflect the removal of costs associated with the Company’s NO₂ Compliance Project?

Recommendation: 

 Yes, the Commission should revise FPL’s 2014 ECRC factors to reflect the removal of costs associated with the Company’s NO₂ Compliance Project.  The new ECRC factors should become effective with the first billing cycle in 2014, which falls on January 2, 2014.  The recommended ECRC factors are presented in Attachment B.  (Draper, Graves, Wu)   

Staff Analysis: 

 At Paragraph 4 of its Notice, FPL states that it does not object to the Commission revising FPL’s 2014 ECRC factors to not include NO₂ Compliance Project costs.  Removal of NO₂ Compliance Project costs reduces FPL’s 2014 environmental cost recovery amounts, including true-up amounts, by $6.26 million.[9]  A summary of FPL’s affected cost recovery amounts is shown in Attachment A.  The $6.26 million reduction, associated with removing NO₂ Compliance Project costs from FPL’s 2014 environmental cost recovery amounts, results in a $0.06 reduction on a 1,000 kilowatt-hour (kWh) residential bill.[10]  A summary of FPL’s revised ECRC factors for all rate schedules is shown in Attachment B. 

As summarized in Issue 1, certain circumstances have changed since FPL’s Petition was filed on June 28, 2013.  The changes described may impact the timing and nature of potential NO₂ Compliance Project costs.  Staff believes that it is reasonable to exclude the NO₂ Compliance Project costs from FPL’s 2014 ECRC amounts at this time because of these potential impacts.  Staff would note that removing the NO₂ Compliance Project costs at this time does not preclude FPL from seeking recovery of future costs associated with the Project.  Furthermore, staff’s recommendation is not intended to address whether or not costs associated with the NO₂ Compliance Project are eligible for recovery through the ECRC.  

Conclusion

Staff recommends that the Commission approve FPL’s revised 2014 ECRC factors, shown in Attachment B, to reflect the removal of costs associated with the Company’s NO₂ Compliance Project.  The recommended revision will result in a $0.06 reduction on a 1,000 kWh residential bill.  Additionally, staff recommends that the revised ECRC factors should be effective with the first billing cycle for 2014.

 

 

 

Issue 3: 

 Should this docket be closed?

 

Recommendation: 

 No.  The Environmental Cost Recovery Clause is an on-going docket and should remain open.  (Murphy)

Staff Analysis: 

  The Environmental Cost Recovery Clause is an on-going docket and should remain open.

 

Attachment A

 

Table 1:  Revised Cost Recovery Amounts^[11]

Estimated/Actual True-up ECRC  Amounts for the Period January 2013 through December 2013	($3,592,651)[12]
Projected ECRC Amount for the Period January 2014 through December 2014	$211,987,844
ECRC Amount, Including True-up Amounts, for the Period January 2014 through December 2014	$214,507,080

 

 

 

 

 

Attachment B

 

Table 2:  Revised 2014 ECRC Factors^[13]