Case Background
The Energy Conservation Cost
Recovery (ECCR) clause is a mechanism through which utilities recover reasonable and
prudent costs related to energy conservation programs. Rule 25-17.015, Florida Administrative Code
(F.A.C.), Energy Conservation Cost Recovery, requires all electric and gas utilities that seek to
recover conservation program-related costs to file with the Commission ECCR
program costs and collected revenue for the prior year (actual and true-up
amounts), the current year (actual and estimated amounts), and the future year
(projected amounts).
By Order No. PSC-2018-0423-PAA-GU,
issued on August 24, 2018, in Docket No. 20180004-GU, the Commission granted a
Petition for Waiver of Rule 25-17.015(1)(b), F.A.C, by Peoples Gas System,
Florida Public Utilities Company, Florida Division of Chesapeake Utilities
Corporation, Florida Public Utilities Company- Fort Meade, Florida Public
Utilities Company-Indiantown Division, Florida City Gas, St. Joe Natural Gas Company,
and Sebring Gas System (collectively utilities). The utilities asserted that it
was a substantial hardship to file 8 months of current year actual and
estimated data reflecting ECCR program costs as required by
Rule 25-17.015(1)(b), F.A.C. The utilities asserted that they could provide the
Commission with filings based on six months of actual data and six months of
projected data, which would allow the utilities to meet the deadline set forth
by the Commission’s Order Establishing Procedure (OEP) and which would be a more
reasonable means of achieving the purpose of Rule 25-17.015(1)(b), F.A.C.
Accordingly, staff
initiated this rulemaking to amend Rule 25-17.015 (1)(b), F.A.C., to remove the
provisions that require investor-owned electric and gas utilities to file the
current year’s ECCR program costs and collected revenue for 8 months actual and
4 months estimated. Additionally, the rulemaking will remove the requirement
that the ECCR proceeding occur in November of each year. The removal of the 8
and 4 month filing and proceeding requirements will allow the Commission
flexibility to establish the filing dates for the ECCR proceedings by an OEP.
Staff also recommends that
the rule be amended to remove an unnecessary form requirements and to add clarifying language concerning the
evaluation of advertising costs associated with ECCR conservation efforts.
The Commission’s
Notice of Development of Rulemaking was published in the Florida Administrative
Register on March 20, 2018, in Volume 44, No. 55. There were no requests for a rule development
workshop, and no workshops were held. No
comments from interested parties were received.
This
recommendation addresses whether the Commission should propose the amendment of
Rule 25-17.015, F.A.C. The Commission has jurisdiction pursuant to Section
120.54, F.S., Section 366.04, F.S., and Section 366.05, F.S.
Discussion
of Issues
Issue 1:
Should the Commission propose the amendment of Rule 25-17.015,
F.A.C., Energy Conservation Cost Recovery?
Recommendation:
Yes. The
Commission should propose the amendment of Rule 25-17.015, F.A.C., as set forth
in Attachment A. Staff recommends that the Commission certify amended Rule
25-17.015, F.A.C., as a minor violation rule. (Harper, Coston)
Staff Analysis:
Sections
366.80, 366.81, 366.82, 366.83 and 403.519, F.S., collectively, provide
conservation goals requirements for the utilities. Section 366.82, F.S., requires that the
Commission develop rules that establish conservation goals, approve
conservation plans, and monitor programs related to the promotion of
demand-side renewable energy systems and the conservation of electric energy
and natural gas usage. Rule 25-17.015, F.A.C. (ECCR rule), requires utilities to
report certain costs and revenues associated with each utility’s conservation
programs.
Rule 25-17.015, F.A.C., is the Commission’s only cost recovery clause rule
that includes a fixed timeline for the actual and estimated filings and a requirement
that ECCR proceedings occur during November of each calendar year. Paragraph (1)(b)
requires that the utilities file the current year’s actual and estimated
filings with 8 months actual and 4 months estimated actual true-up amounts. The
filing deadlines and hearing schedule associated with the other annual cost
recovery clauses are dictated by each respective clause’s OEP. Staff is recommending that paragraph
(1)(b) be amended to remove the November proceeding requirement and the 8
months actual and 4 months estimated filing provisions to allow the Commission greater flexibility in
scheduling the annual ECCR hearing.
Paragraph
(1)(e) states that within the 90 days immediately following a utility’s true-up
filing, each utility must file a report on the first six-month actual results
for the current docket year. The utilities must use Form PSC/ECO/44 (11/97),
Energy Conservation Cost Recovery Annual Short Form (Short Form), to provide
this information. Staff
recommends that Paragraph (1)(e) be
removed because the Short Form becomes unnecessary with the change to Paragraph
(1)(b). The original purpose of this
form was to provide an update on the actual costs or true-up, prior to the
actual/estimated filing. If Paragraph (1)(b) of the rule is amended as set forth in Attachment
A, the Short Form will become redundant to the actual/estimated filings that
will be filed with the Commission prior to the annual clause hearings in the
fall.
Staff
is also recommending that Subsection (5) be amended to clarify language
concerning the evaluation of advertising costs associated with conservation
efforts. The current rule language is vague and could potentially limit the
Commission’s ability to assess and evaluate the appropriateness of these
costs. Staff recommends that Subsection (5) of the rule be amended to refer the Commission to
the program parameters established in each utility’s Commission-approved Demand-Side
Management (DSM) Plan when evaluating whether advertising costs are directly
related to an approved conservation program.
Minor Violation Rules Certification
Pursuant to Section 120.695, F.S., beginning July 1, 2017,
for each rule filed for adoption, the Commission is required to certify whether
any part of the rule is designated as a rule the violation of which would be a
minor violation. A list of the Commission rules designated as minor violation
rules is published on the Commission’s website, as required by Section
120.695(2), F.S. Currently, Rule 25-17.015, F.A.C., is on the Commission’s list
of rules designated as minor violations. If the Commission proposes the amendment
of Rule 25-17.015, F.A.C., the rule would continue to be considered a minor
violation rule. Therefore, for purposes of filing the amended rules for
adoption with the Department of State, staff recommends that the Commission
certify proposed amended Rule 25-17.015, F.A.C., as a minor violation rule.
Statement of Estimated Regulatory Costs
Pursuant to Section 120.54, F.S., agencies are encouraged
to prepare a statement of estimated regulatory costs (SERC) before the
adoption, amendment, or repeal of any rule.
The SERC is appended as Attachment B to this recommendation. The SERC analysis also includes whether the
rule amendment is likely to have an adverse impact on growth, private sector
job creation or employment, or private sector investment in excess of $1
million in the aggregate within five years of implementation.
The SERC concludes that the rule amendment will not likely
directly or indirectly increase regulatory costs in excess of $200,000 in the
aggregate in Florida within one year after implementation. Further, the SERC concludes that the rule
amendment will not likely have an adverse impact on economic growth, private
sector job creation or employment, private sector investment, business
competitiveness, productivity, or innovation in excess of $1 million in the
aggregate within five years of implementation. Thus, the rule amendment does
not require legislative ratification pursuant to Section 120.541(3), F.S. In addition, the SERC states that the rule amendment
will not have an adverse impact on small business and will have no impact on
small cities or counties. No regulatory alternatives were submitted pursuant to
paragraph 120.541(1)(a), F.S. None of
the impact/cost criteria established in paragraph 120.541(2)(a), F.S., will be
exceeded as a result of the recommended revision.
Conclusion
Based on the foregoing, staff recommends the Commission
propose the amendment of Rule 25-17.015, F.A.C., as set forth in Attachment A. Staff
recommends that the Commission certify amended Rule 25-17.015, F.A.C., as a
minor violation rule.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. If no requests for hearing or comments are
filed, the rule may be filed with the Department of State, and this docket
should be closed. (Harper)
Staff Analysis:
If no requests for hearing or comments are filed,
the rule may be filed with the Department of State, and this docket should be
closed.
25-17.015 Energy Conservation Cost
Recovery.
(1)
The Commission shall conduct annual energy conservation cost recovery (ECCR)
proceedings during November of each calendar year. Each utility over
which the Commission has ratemaking authority may seek to recover its costs for
energy conservation programs. Each utility seeking cost recovery shall file the
following at the times directed by the Commission, pursuant to the order
establishing procedures in the annual cost recovery proceeding:
(a)
An annual final true-up filing showing the actual common costs, individual
program costs and revenues, and actual total ECCR revenues for the most recent
12-month historical period from January 1 through December 31 that ends prior
to the annual ECCR proceedings. As part of this filing, the utility shall
include a summary comparison of the actual total costs and revenues reported to
the estimated total costs and revenues previously reported for the same period
covered by the filing in paragraph (1)(b). The filing shall also include the
final over- or under-recovery of total conservation costs for the final true-up
period.
(b)
An annual estimated/actual true-up filing showing eight months actual
and four months projected common costs, individual program costs, and
any revenues collected. Actual costs and revenues should begin January 1
immediately following the period described in paragraph (1)(a). The filing
shall also include the estimated/actual over- or under-recovery of total
conservation costs for the estimated/actual true-up period.
(c)
An annual projection filing showing 12 months projected common costs and
program costs for the period beginning January 1 following the annual hearing.
(d)
An annual petition setting forth proposed energy conservation cost recovery
factors to be effective for the 12-month period beginning January 1 following
the annual hearing. The Such proposed cost recovery
factors shall take into account the data filed pursuant to paragraphs (1)(a),
(b) and (c).
(e)
Within the 90 days that immediately follow the first six months of the
reporting period in paragraph (1)(a), each utility shall report the actual
results for that period on Form PSC/ECO/44 (11/97), entitled, Energy
Conservation Cost Recovery Annual Short Form, which is incorporated by
reference in this rule, and may be obtained from the Director, Division of
Economics, Florida Public Service Commission.
(2)
Each utility shall establish separate accounts or subaccounts for each
conservation program for purposes of recording the costs incurred for that
program. Each utility shall also establish separate subaccounts for any
revenues derived from specific customer charges associated with specific
programs.
(3)
A complete list of all account and subaccount numbers used for conservation
cost recovery shall accompany each filing in paragraph (1)(a).
(4)
New programs or program modifications must be approved prior to a utility seeking
cost recovery. A utility may seek cost recovery for implementation costs
associated with new or modified programs incurred prior to Commission approval.
Specifically, any incentives or rebates associated with new or modified
programs may not be recovered if paid before approval. However, if a
utility may not seek cost recovery for any incentives or rebates associated
with new or modified programs paid prior to Commission approval incurs
prudent implementation costs before a new program or modification has been
approved by the Commission, a utility may seek recovery of these expenditures.
(5)
Advertising expense recovered through energy conservation cost recovery shall
be directly related to an approved conservation program, shall not mention a
competing energy source, and shall not be company image enhancing. When the
advertisement makes a specific claim of potential energy savings or states
appliance efficiency ratings or savings, all data sources and calculations used
to substantiate these claims must be included in the filings required by
subsection paragraph (1)(a). In determining whether an
advertisement is “directly related to an approved conservation program,”,
the Commission shall refer to the program parameters established in
the utility’s Commission-approved Demand-Side Management Plan. In addition, the Commission shall consider,
but is not limited to, whether the advertisement or advertising campaign:
(a)
Identifies a specific problem;
(b)
States how to correct the problem; and
(c)
Provides direction concerning how to obtain help to alleviate the problem.
Rulemaking
Authority 350.127(2), 366.05(1) FS. Law Implemented 366.04(2)(f), 366.06(1),
366.82(3), (5) FS. History–New 1-27-81, Amended 12-30-82, 3-27-86, Formerly
25-17.15, Amended 8-22-90, 11-16-97, 5-4-99,___________.
See Order No. PSC-2018-0094-POC-EG, in Docket No.
20180002-EG, where the Commission granted an Order Establishing Procedure for
the electric utilities in the ECCR docket, and Order PSC-2018-0115-GU, in
Docket No. 20180004-GU, where the Commission granted an Order Establishing
Procedure for the gas utilities in the ECCR docket.
