Case Background
Section
366.91(3), Florida Statutes (F.S.) requires that each investor-owned utility
(IOU) continuously offers to purchase capacity and energy from renewable energy
generators and small qualifying facilities. Florida Public Service Commission (Commission)
Rules 25-17.200 through 25-17.310, Florida Administrative Code (F.A.C.),
implement the statute and require each IOU to file with the Commission, by
April 1 of each year, a standard offer contract based on the next avoidable
fossil fueled generating unit of each technology type identified in the utility’s
current Ten-Year Site Plan. On March 30, 2017, Florida Public Utilities Company
(FPUC) filed a petition for approval of its revised standard offer rate schedule
and standard offer contract, in accordance with the rules cited above and Rules
25-9.003, 25-17.0825, and 25-17.0832, F.A.C.
Because FPUC, an
IOU, does not own or operate any electric generating units, it does not have
any avoidable units on which to base its standard offer contract. Rule
25-17.250(1), F.A.C., requires that, under these circumstances, the standard
offer contract be based on avoiding or deferring a planned purchase. FPUC
currently purchases all of its electric power through purchased power
agreements in its Northeast Division from Jacksonville Electric Authority (JEA),
and in its Northwest Division from Gulf Power Company (Gulf). FPUC is currently
in negotiations with Florida Power & Light (FPL) to become the full
requirements supplier for the Northeast Division once the contract with JEA
expires on December 31, 2017.
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 revisions to the standard
offer rate schedule and standard offer contract filed by Florida Public Utilities
Company?
Recommendation:
Yes. FPUC’s revised standard offer rate schedule and
standard offer contract conform to all the requirements of Rule 25-17.0825, and
Rules 25-17.200 through 25-17.310, F.A.C., and reflect the avoidable costs
associated with FPUC’s power purchase agreements. Staff recommends that the
revisions to the rate schedule and standard offer contract filed by FPUC be
approved as filed. (Thompson)
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 (RF) and small
qualifying facilities (QF) with a design capacity of 100 kilowatt (kW) or less.
FPUC does not own or operate any of its own electric generating facilities and
thus does not file a Ten-Year Site Plan. Instead, FPUC purchases its electric
energy under long-term, full requirements contracts with wholesale providers.
The standard offer rate schedule consists of three
components: (1) the Standard Offer-As Available schedule (SOA); (2) the
Standard Offer- Firm Schedule (SOF); and (3) the Standard Offer Contract. The
SOA and SOF consolidate FPUC's previous REN and COG tariffs, as approved by
this Commission in Order No. PSC-16-0531-PAA-EQ,
issued November 22, 2016. Revisions to FPUC’s standard offer contract and rate
schedule, in type-and-strike format, are included as Attachment A to this
recommendation. The capacity and energy payments under the proposed rate
schedule depend on the terms of FPUC’s wholesale contracts with its suppliers
for FPUC's Northeast Division and Northwest Division.
Northeast Division
At present, JEA is the full requirements supplier for
FPUC's Northeast Division, which consists of Fernandina Beach and Amelia Island.
FPUC is currently in negotiations with FPL to become the full requirements
supplier for the Northeast Division once the contract with JEA expires on
December 31, 2017. In response to Staff’s First Data Request, FPUC provided estimates
of the annual payments to an operator with a 10 MW facility, operating at a
capacity factor of 80 percent, for a RF/QF operator located inside the service
territory with FPL as the full requirements supplier.
Northwest Division
At present, Gulf is
the full requirements supplier for FPUC's Northwest Division, which consists of
portions of Jackson, Calhoun, and Liberty counties. In response to
Staff’s First Data Request, FPUC
provided estimates of the annual payments to an operator with a 10 MW facility,
operating at a capacity factor of 80 percent, for a RF/QF operator located
inside the service territory.
Conclusion
FPUC’s standard offer contract and related rate schedule
conform to all the requirements of Rule 25-17.0825, and 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 revisions to the rate schedule
and standard offer contract filed by FPUC be approved as filed.
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. (Corbari)
Staff Analysis:
This docket should be closed upon the 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.
