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 eight months
of current
year actual and four months 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 eight months actual
and four months estimated. Additionally, the rulemaking will remove the
requirement that the ECCR proceeding occur in November of each year. The
removal of the eight and four 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 requirement 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 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 eight months actual and four 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 eight months actual and four 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 of 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 proposed
change to Paragraph (1)(b). The
original purpose of this form was to provide a six month update on the actual
costs or true-up, per Section 366.82(11) F.S. If Paragraph (1)(b) of the
rule is amended as set forth in
Attachment A, the actual/estimated filings will satisfy the requirements set
forth in Section 366.82(11), F.S.
Staff
is also recommending that Subsection (5) of the ECCR rule 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 Order approving the program when evaluating whether advertising costs are
directly related to an approved conservation program. This amendment is clarifies
that electric and natural gas conservation programs are approved by Commission
order.
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 evaluates 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 of the proposed rule.
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 Order approving the program. 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 (2),
(7)-(11), (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 issued 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 issued an Order Establishing
Procedure for the gas utilities in the ECCR docket.
