Case Background
On May 18, 2016,
Duke Energy Florida, LLC (DEF or the company) filed a petition for approval of
modifications to its approved premier power service rider (PPS rider) and local
government underground cost recovery tariff (underground tariff), and for
approval of a new local government underground cost recovery contract. The primary purpose of the PPS rider is to
provide back-up supply of electricity service in the event normal electricity
supply is interrupted.
Staff issued one
data request to DEF on May 27, 2016, for which responses were received on June
7, 2016. On May 24, 2016, DEF provided, by email, its waiver of the
Commission’s 60-day deadline, as set forth in Section 366.06(3), Florida
Statutes (F.S.), through August 9, 2016. The tariff pages with proposed changes
are contained in Attachment A of this recommendation. The Commission has
jurisdiction over this matter pursuant to Sections 366.05(1) and 366.06, F.S.
Discussion
of Issues
Issue 1:
Should the Commission approve DEF's petition for
approval of modifications to its approved PPS rider and underground tariff and
for approval of a new local government underground cost recovery contract?
Recommendation:
Yes, the Commission should approve DEF's petition
for approval of modifications to its approved PPS rider and underground tariff
and for approval of a new local government underground cost recovery contract.
(Guffey)
Staff Analysis:
DEF has proposed three modifications to its tariff:
(1) allow interruptible and curtailable customers to take service under the PPS
rider; (2) clarifications to the underground tariff; and (3) add a new local
government underground cost recovery contract form. The three revisions are
discussed in detail below.
PPS Rider Modification
The PPS rider is available on a voluntary basis to
commercial customers who require on-site generators to serve as back-up
electric supply. Pursuant to the PPS rider, DEF installs, operates, and
maintains back-up power generators at the customer’s premises and customers are
responsible for the cost of the back-up generation. The PPS rider is designed
for customers such as hospitals, municipal water and wastewater facilities, and
financial institutions. The PPS rider was first approved in 2001 as an
experimental tariff for five years. In
2006, the Commission approved modifications and extended the tariff for an
additional five years. In
2011, the PPS rider became a permanent tariff.
Currently, the PPS rider is available only to customers
taking service under a firm rate schedule. DEF is proposing modifications to
its PPS rider tariff Sheet Nos. 6.370 and 6.371 to allow customers taking
service under the interruptible and curtailable tariffs to also participate in
the PPS rider. In response to staff’s data request, DEF explained that there
are customers on the interruptible and curtailable tariffs who have sensitive
manufacturing and operational processes and need backup generation to support
power quality. DEF further explained that interruptible/curtailable customers
have the option to install their own back-up generation on the customer’s side
of the meter. However, under certain situations, due to the configuration of
facilities it may be more advantageous to the customer from an operational
perspective to install a back-up system on the company’s side of the meter
through the PPS rider.
Underground Tariff Modification
The underground tariff
provides local governments with an optional mechanism for the recovery
of the costs of converting overhead electric service to underground service
through a fee on DEF=s
electric bill. The local government underground tariff was approved in 2002.
The tariff provides for the calculation of an annual recovery amount, which is
the amount collected by DEF through a fee added to individual customer electric
bills and remitted to the local government that undertook the conversion
project. Only customers on whose behalf the conversion was made would pay the
fee.
DEF is proposing minor modifications to its underground
tariff Sheet Nos. 4.124 and 4.125 to reformat the formula for the annual
recovery amount and to correct cross-references to other sections in DEF’s
local government underground tariff. DEF is not proposing to change the
calculation of the annual recovery amount.
New Local Government Underground Cost Recovery
Contract
DEF’s third request is to seek approval for a new local
government underground cost recovery contract form (tariff Sheet Nos. 7.000 and
7.060 through 7.063). Although Section 12.06(7) of the currently approved
underground tariff discussed above refers to a cost recovery form, DEF
currently does not have an approved standard contract form in its tariff. Accordingly,
DEF is requesting approval of this new form, which tracks the requirements of
the underground tariff and establishes the specific terms and conditions for
underground capital cost recovery. In its response to staff’s first data
request, DEF stated that the company has not contracted with any local
governments for underground cost recovery to date. The company has had
discussions with local governments regarding overhead to underground conversion
projects; however, none of the local governments have requested to execute a
cost recovery contract to date.
Conclusion
Staff has reviewed DEF’s proposed tariff modifications and
responses to staff’s data request and believes the proposed modifications are
reasonable. Also, because customers who request service under the PPS rider are
responsible for the cost of the back-up generation, the general body of
ratepayers is protected. Therefore, staff recommends approval of DEF's petition
for approval of modifications to its approved PPS rider and underground tariff,
and for approval of a new local government underground cost recovery contract.
Issue 2:
Should this docket be closed?
Recommendation:
If Issue 1 is approved
and a protest is filed within 21 days of the issuance of the order, the tariff
should remain in effect pending resolution of the protest. If no timely protest
is filed, this docket should be closed upon the issuance of a consummating
order. (Leathers)
Staff Analysis:
If Issue 1 is approved and a protest is filed within
21 days of the issuance of the order, the tariff should remain in effect
pending resolution of the protest. If no timely protest is filed, this docket
should be closed upon the issuance of a consummating order.
