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State of Florida
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Public Service Commission
Capital Circle Office Center ● 2540 Shumard
Oak Boulevard
Tallahassee, Florida 32399-0850
-M-E-M-O-R-A-N-D-U-M-
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DATE:
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September 20, 2019
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TO:
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Office of Commission Clerk (Teitzman)
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FROM:
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Office of the General Counsel (Harper, A. King)
Division of Economics
(Coston, Draper, Galloway, Guffey, McNulty)
Division of Engineering
(Doehling, Graves, L. King)
Office of Industry
Development and Market Analysis (Breman, Crawford, Eichler)
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RE:
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Docket No. 20190131-EU – Proposed adoption
of Rule 25-6.030, F.A.C., Storm Protection Plan and Rule 25-6.031, F.A.C.,
Storm Protection Plan Cost Recovery Clause.
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AGENDA:
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10/03/19 – Regular Agenda – Rule Proposal – Interested Persons May
Participate
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COMMISSIONERS ASSIGNED:
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All Commissioners
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PREHEARING OFFICER:
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Fay
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RULE STATUS:
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Proposal May Not Be Deferred.
Rules must be proposed by October 31, 2019.
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SPECIAL INSTRUCTIONS:
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None
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Case Background
The 2019 Florida Legislature passed SB 796 to enact Section
366.96, Florida Statutes (F.S.),
entitled “Storm protection plan cost recovery.” Section 366.96, F.S., requires
each investor-owned electric utility (IOU) to
file a transmission and distribution storm protection plan (storm protection plan)
for the Commission’s review and directs the Commission to hold an annual proceeding
to determine the IOU’s prudently incurred costs to implement the plan and allow
recovery of those costs through a Storm Protection Plan Cost Recovery Clause
(SPPCRC).
Section 366.96(3), F.S., requires the Commission to adopt
rules to specify the elements that must be included in an IOU’s filing for the
Commission’s review of its storm protection plan. Section 366.96(11), F.S.,
further requires that the Commission adopt rules to implement and administer
the section and mandates that the Commission propose a rule for adoption as
soon as practicable after the effective date of the act, but not later than
October 31, 2019.
In furtherance of the Legislature’s directive, the
Commission’s Notice of Development of Rulemaking was published in Volume 45,
No. 11, of the Florida Administrative Register on June 7, 2019. The notice
included two new rules: Rule 25-6.030, Florida Administrative Code (F.A.C.),
which would specify the elements that must be included in an IOU’s storm
protection plan; and Rule 25-6.031, F.A.C., which would establish the SPPCRC.
Staff held rule development workshops to obtain
stakeholder comments on the draft rules on June 25, 2019, and August 20, 2019. Representatives
from Florida Power & Light Company (FPL), Tampa Electric Company (TECO),
Duke Energy Florida, LLC (DEF), Gulf Power Company (Gulf), Florida Public Utilities
Company (FPUC), Florida Retail Federation (FRF), Florida Industrial Power Users
Group (FIPUG), and the Office of Public Counsel (OPC) participated at the
workshops and submitted post-workshop comments. Additionally, representatives
from Florida Electric Cooperatives Association, Inc., (FECA) and Florida
Municipal Electric Association (FMEA) submitted post-workshop comments.
The Notice of Development of Rulemaking also included a
number of existing Commission rules that staff identified as potential
candidates for amendment or repeal in order to fully implement the new
legislation. Several stakeholders opined that it would be difficult to
determine any effects on existing rules until Rules 25-6.030 and 25-6.031, F.A.C.,
were adopted and effective. Staff agrees. Thus, whether any other existing
rules should be amended or repealed will be addressed in a future staff
recommendation for the Commission’s consideration after Rules 25-6.030 and
25-6.031, F.A.C., become effective.
Storm Protection Plans
Prior to the enactment of Section 366.96, F.S., IOUs submitted
storm hardening plans pursuant to Rule 25-6.0342, F.A.C., Electric
Infrastructure Storm Hardening, and recovered storm hardening costs through
base rate proceedings. Section 366.96, F.S., changes this process.
Section 366.96, F.S., finds that it is in the state’s
interest for IOUs to protect and strengthen the state’s transmission and
distribution systems in order to reduce outage times and restoration costs
associated with extreme weather conditions and enhance overall reliability. In
furtherance of this interest, Section 366.96(3), F.S., requires each IOU to
file a storm protection plan that covers the immediate 10-year planning period
and explains the systematic approach the utility will follow to reduce
restoration costs and outage times associated with extreme weather events. The
statute requires the Commission to adopt rules to specify the elements that
must be included in each utility’s storm protection plan. The intent of Rule
25-6.030, F.A.C., Storm Protection Plan, is to meet this statutory mandate.
Section 366.96(5), F.S., requires that no later than 180
days after an IOU files a storm protection plan that contains all of the
elements required by the Commission rule, the Commission must determine whether
it is in the public interest to approve, approve with modification, or deny the
plan. The statute requires that in reviewing the storm protection plan, the
Commission must consider the following four criteria:
1.
The extent to which the plan is expected to reduce
restoration costs and outage times associated with extreme weather events and
enhance reliability, including whether the plan prioritizes areas of lower
reliability performance.
2.
The extent to which storm protection of transmission
and distribution infrastructure is feasible, reasonable, or practical in
certain areas of the utility’s service territory, including, but not limited to, flood zones
and rural areas.
3.
The estimated costs and benefits to the utility and its
customers of making the improvements proposed in the plan.
4.
The estimated annual rate impact resulting from implementation
of the plan during the first 3 years addressed in the plan.
Thus, the information required by the Commission in Rule
25-6.030, F.A.C., Storm Protection Plan, must enable the Commission to review
each utility’s storm protection plan under the above criteria and ultimately
determine whether the plan is in the public interest.
Staff envisions that after Rule 25-6.030, F.A.C., becomes
effective, the Commission will open dockets to review each utility’s storm protection
plan. The Prehearing Officer will issue an Order Establishing Procedure (OEP)
to set all the controlling dates in the dockets, including the date by which
the IOUs must submit their plans and the hearing dates. Although separate dockets
will be opened to address each IOU’s storm protection plan, staff envisions
that one hearing will be held to address all of the dockets. As mentioned
above, the Commission will have 180 days after the IOU files its plan to
approve, approve with modifications, or deny the plan.
Additionally, Section 366.96(6), F.S., mandates that at
least every 3 years after approval of an IOU’s storm protection plan, the
utility must file for Commission review an updated storm protection plan that
addresses each element specified by Commission rule. The Commission must approve,
modify, or deny each updated plan pursuant to the criteria used to review the
initial plan. Staff envisions that the Commission will open dockets every 3
years to review each utility’s updated storm protection plan and that the
Prehearing Officer will issue an Order Establishing Procedure to set all
controlling dates in the dockets.
Section 366.96(10), F.S., also requires that beginning
December 1 of the year after the first full year of implementation of a storm
protection plan and annually thereafter, the Commission must submit a report on
the status of IOUs’ storm protection activities to the Governor, the President
of the Senate, and the Speaker of the House of Representatives. The report must
include, but is not limited to, identification of all storm protection
activities completed or planned for completion, the actual costs and rate
impacts associated with completed activities as compared to the estimated costs
and rate impacts for those activities, and the estimated costs and rate impacts
associated with activities planned for completion. Staff is recommending
requirements in Rule 25-6.030, F.A.C., to gather the information that the Commission
will need to develop its report pursuant to the statute. Staff envisions that
approval of this report will take place at a Commission Internal Affairs
meeting.
Storm Protection Plan Cost Recovery Clause
Section 366.96(7), F.S., directs the Commission to conduct
an annual proceeding, the “storm protection plan cost recovery clause,” to
determine an IOU’s prudently incurred storm protection plan costs and allow the
utility to recover such costs through a charge separate and apart from its base
rates. Rule 25-6.031, F.A.C., is intended to establish the SPPCRC, pursuant to
the statute.
Section 366.96(9), F.S., specifically includes in those
recoverable costs the depreciation costs associated with eligible capital
expenditures, as well as a return on the undepreciated portions of capital
expenditures at the company’s weighted average cost of capital. If the Commission
determines that costs were prudently incurred, those costs will not be subject
to disallowance or further prudence review except for fraud, perjury, or
intentional withholding of key information by the public utility. Section
366.96(8), F.S., provides that costs may be recovered through the clause only
if they are not recovered through base rates.
Once Rule 25-6.031, F.A.C., becomes effective, staff
envisions that the Commission will open a docket to establish the SPPCRC and
that like the Commission’s other cost recovery clause dockets, the Prehearing
Officer will issue an OEP to set forth all the controlling dates in the docket,
including the dates by which any requests for cost recovery for the year must
be filed. Staff also envisions that the SPPCRC will become a “roll-over” docket
like the Commission’s other cost recovery clause dockets.
There was discussion at the workshop and in post-workshop
comments from stakeholders as to when the hearing in the SPPCRC should be held.
Section 366.96, F.S., does not mandate IOUs to file for cost recovery each year
under the new clause, nor does the section contain any dates by which the
Commission must render its decision on any requests for cost recovery. Thus,
staff believes that the Commission has the discretion to determine the hearing
dates for this clause proceeding, and like the other cost recovery clauses any
controlling dates for the proceeding should be determined by the Prehearing
Officer, in conjunction with the Chairman’s Office.
The
Process for Storm Plan Approval and Cost Recovery
Staff
envisions that once Rules 25-6.030 and 25-6.031, F.A.C., become effective, the Commission
will open dockets simultaneously to address the plans and establish the SPPCRC.
While each IOU will have a docket to address its storm protection plan, one
hearing will be held to address all the plans. There will be a single docket and
single hearing for the SPPCRC, which will address IOUs’ recovery of costs
incurred implementing the storm protection plans. The hearing on an IOU’s
petition for cost recovery will be held only after the Commission has approved
the utility’s storm plan. Accordingly,
staff envisions that the process will work as follows: First, an electric utility will submit to the Commission a storm
protection plan; then the Commission will hold a hearing in the plan
docket to determine if the utility’s storm protection
plan is reasonable. If the utility’s storm protection
plan is approved, the utility’s petition for cost recovery for that plan
will be addressed in the hearing in the clause docket. If the utility’s
petition for cost recovery is approved in the SPPCRC, factors will be set and
go into effect at a date determined by the Commission. Though storm protection
plan cost recovery factors will be calculated separately, they will be
incorporated in the energy charge line item that includes the other clauses on
customers’ bills.
This recommendation addresses whether the Commission
should propose new Rules 25-6.030 and 25-6.031, F.A.C. The Commission has
jurisdiction pursuant to Sections 120.54 and 366.96, F.S.
Discussion
of Issues
Issue 1:
Should the Commission propose the adoption of Rule
25-6.030, F.A.C., Storm Protection Plan, and Rule 25-6.031, F.A.C., Storm
Protection Plan Cost Recovery Clause?
Recommendation:
Yes. The Commission should propose the adoption of
Rules 25-6.030 and 25-6.031, F.A.C., as set forth in Attachment A. The
Commission should also certify Rules 25-6.030 and 25-6.031, F.A.C., as minor
violation rules. (Breman, Eichler, Harper, A. King, Graves, Guffey)
Staff Analysis:
The purpose of this rulemaking is to create Rule
25-6.030. F.A.C., to specify the elements that must be included in an
investor-owned utility’s storm protection plan, and Rule 25-6.031, F.A.C., to
establish the SPPCRC. Staff is recommending that the Commission propose the
rules as set forth in Attachment A.
Overarching Themes That Emerged During Rule
Development
Staff held two rule development workshops on Rules 25-6.030
and 25-6.031, F.A.C. Three overarching themes seemed to drive the bulk of the
stakeholder’s comments. The first is whether Section 366.96, F.S., permits the
Commission to allow recovery of projected costs in the SPPCRC. The second is
when and through what filing should IOUs provide project-level detail to the
Commission. The third is what the approval of a storm protection plan means for
approval of costs in the SPPCRC. Before staff discusses its recommended
language for each rule, staff believes that it is important to discuss these
overarching issues.
Allowing for Projected Costs vs.
Actual/Incurred Costs Only
Staff envisions the SPPCRC mirroring other Commission cost
recovery clauses. In the Nuclear Cost Recovery Clause (NCRC), Energy Conservation
Cost Recovery Clause (ECCR), and Environmental Cost Recovery Clause (ECRC), the
Commission projects the costs the utility will incur in the next year and sets
a factor that will allow the company to recover those costs from customers as
the costs are incurred. Because the costs and the sales used to set the factor
are estimated, the amount of money the utility actually recovers may be more or
less than the actual costs. During the year the costs are incurred and the year
after the costs are incurred, the Commission performs a true-up of the costs
and the recovered amounts so that the utility ultimately recovers only those
costs actually incurred.
OPC asserts that Section 366.96, F.S., only permits IOUs
to recover their prudently incurred costs through the new cost recovery clause.
OPC argues that the Commission can allow IOUs to recover projected costs that
are later trued-up through the NCRC and ECRC because the statutes creating
those clauses specifically reference “projected” costs. According to OPC, because
Section 366.96, F.S., does not specifically provide for this same mechanism, it
therefore prohibits it. In support of this argument, OPC points to earlier
versions of SB 796 that contained language referring to the recovery of
projected costs—language that was almost identical to the language used in the
ECRC statute—and notes that the specific language on projected costs was
removed as the bill made its way through legislative committees.
Staff disagrees with OPC’s reading of the statute. While
the terms “projected costs” and “true-up” are not in Section 366.96, F.S., the
statute does not specifically bar the recovery of incurred costs through the
recovery of projected costs that are later trued-up. The statute is silent on
the matter; it only says that the Commission must allow the IOUs to recover
their prudently incurred costs. Additionally, the fact that language explicitly
providing for the recovery of projected costs was removed by the Senate proves
nothing about the meaning of the final version of the bill that became law.
“[O]ur legislatures speak only through statutes,”
not the legislative history underlying them. Declaring the meaning of a statute
based on speculation about why specific language was removed from the bill
during the legislative process is improper.
The IOUs state that storm protection plan cost recovery
should be based on projected costs and that OPC’s reading of Section 366.96,
F.S., is unduly restrictive. FPL states that this mechanism has worked well for
a wide variety of costs in other clause proceedings “because it allows IOUs to
begin recovery of costs as the costs are projected to be incurred, while
providing staff and intervenors with essentially three opportunities to review
the costs before their recovery is finalized.” FPL also points out that the
Commission has allowed recovery of projected costs subject to true-up with
actual costs under Section 366.93(2), F.S., the NCRC, which provides generally
for recovery of “costs incurred” and only refers to projected costs in
connection with carrying costs on an IOU’s projected construction cost balance.
Staff believes Section 366.96, F.S., gives the Commission
discretion to determine the mechanism by which IOUs can recover their prudently
incurred costs, including allowing IOUs to recover projected costs and
truing-up those projections when actual cost data becomes available. First and
foremost, by using this method, IOUs would ultimately recover only their actual
prudently incurred costs. This not only comports with the current procedure in
the NCRC and ECRC clauses, but it is also consistent with Section 366.96(7),
F.S., which directs the Commission to allow the IOUs to recover “prudently
incurred . . . storm protection plan costs . . . through a charge separate and
apart from its base rates.”
Second, allowing for the recovery of projected costs
enables the IOUs to recover costs as they are incurred. This reduces regulatory
lag and, ultimately, the costs passed on to customers, which is the purpose of
cost recovery clauses. Staff believes IOUs will be entitled to recover carrying
costs associated with the lag between when they incurred costs and when they
recover them. Under OPC’s interpretation, an IOU would incur costs in one year
but couldn’t request recovery of those costs until the next year’s SPPCRC. If
the Commission approved those costs in the SPPCRC, the utility could not begin
recovering the costs until the year after. This leaves customers paying
carrying costs for two years. Thus, using a cost recovery mechanism that should
minimize that regulatory lag, as staff is recommending in draft Rule 25-6.031,
F.A.C., should also minimize the carrying costs customers have to pay.
Third, allowing for the timely recovery of costs
incentivizes IOUs to undertake capital-intensive projects that will achieve the
purpose of the statute: hardening the state’s electric transmission and
distribution infrastructure to better withstand extreme weather conditions.
Fourth, the new statute is forward thinking as it
emphasizes planning in its objective—the statute requires the IOUs to come up
with a 10-year plan, not an annual one. Staff believes that consideration of
projected costs would be consistent with the requirement of long-term planning to
ensure infrastructure is hardened. Allowing projected costs to be included in
storm plan petitions gives the Commission a comprehensive view over the IOUs’
long-term storm protection projects. This is in the public interest because it
allows for transparency and review of the projects before the projects are
completed and costs are incurred. Staff believes that the approval of a storm
protection plan means it is reasonable for an IOU to continue to go forward
with the scope of activities and to incur costs consistent with the approved
plan.
Staff believes it is in the consumers’ interest for IOUs
to recover their incurred costs as near in time to when they were incurred as
possible. For the reasons set forth above, staff’s recommended rules provide
that projected costs are eligible for cost recovery.
When and Where Project-Level Details Should be
Provided
Staff’s recommended rules require IOUs to provide in their
storm protection plan project-level data for each of the first three years of
the plan. All of the IOUs commented that such a requirement is neither
“feasible” nor “desirable.” FPL asserts that the initiation of specific
projects within a program is subject to change until shortly before initiation
due to a host of factors. It argues that, as a consequence, accurately
projecting project-level data two or more years in the future is difficult, if
not impossible. Therefore, FPL suggests that the rules should only require the storm
protection plan to contain project-level data for the first year of the plan.
For the second and third years, it suggests that the data required be “more
general” than the data required for the first year yet still “sufficiently
detailed” to develop rate-impact estimates. FPL further suggests that
project-level detail should be required annually in the clause docket for the
subsequent planning year.
OPC and FRF assert that detailed project and spending
information is needed to ensure the prevention of double recovery by IOUs. OPC
states that “[a]t a minimum, year-by-year project and cost detail should be
required on a basis that allows the Commission and customers to determine what
costs, activities[,] and projects are being recovered in base rates at the time
recovery is sought” in the SPPCRC.
Staff believes that project-level information for each of
the first three years is necessary to provide a baseline for the Commission’s
review and comparison of costs sought in the SPPCRC. Additionally, without this level of detail,
the Commission could not adequately address the legislative requirement of
Section 366.96(4), F.S., as to rate impact, nor would it have enough
information to make an informed decision to modify a plan pursuant to Section
366.96(5), F.S. For these reasons, staff’s recommended rules require
project-level detail for each of the first three years. This is further discussed
in the sections of this recommendation pertaining to subsection (3) of Rule
25-6.030, F.A.C., and subsections (3) and (7) of Rule 25-6.031, F.A.C.
How the Storm
Rules Will Work Together
The third theme that arose from the rule development
workshops was how the approval process for storm protection plans and the clause
process would work together, if an IOU chooses to recover costs through the
clause. In other words, what does approval of a storm protection plan actually
mean in terms of cost recovery later on in the clause?
OPC raised concerns about whether it would have the opportunity
to challenge the costs of a project that was part of program and plan that was
previously approved by the Commission. Pursuant to Section 366.96, F.S., an electric utility may submit to the Commission a storm
protection plan that includes the utility’s proposed programs, projects, and
activities that are designed to meet the objectives of the statute, i.e., reducing
restoration costs and outage times associated with extreme weather events and enhancing
reliability. This is similar to the planning process
in the ECRC. If the utility’s storm protection plan is deemed to be in the
public interest and is approved, the IOUs are authorized to go forward in
implementing the approved plan. Approval of the plan (and programs and projects
within the plan), however, does not constitute a de facto approval of the
costs. Plan approval means the Commission has deemed the utility’s plan
reasonable and the utility may go forward with actions to implement the plan.
The prudence determination is
made later in the clause process. As part of the cost recovery clause, an IOU
seeking recovery for costs made pursuant
to its approved storm protection plan would file its petition at the times
directed by the Commission, pursuant to the OEP in the annual cost recovery
proceeding. As part of its petition, the IOU would submit a list of projects it
anticipates undertaking in the next year, including projected costs for those
projects. The Commission would determine whether the anticipated projects and programmatic
activity are consistent with the utility’s storm protection plan as well as the
reasonableness of the projected costs for those activities. As part of its
petition, the utility would also include available actual cost data for the
current year’s activities as well as actual cost data for the previous year’s activities.
The Commission would determine the prudence of those actual incurred costs and,
using the methods already used in other clauses, set factors for the recovery
of the projected costs and true-up the recovery of costs actually incurred.
Rule 25-6.030,
F.A.C., Storm Protection Plan
Rule 25-6.030, F.A.C., requires each IOU to file a petition
with the Commission for approval of a storm protection plan. The rule describes
the information that must be included in the storm protection plan, as well as
information needed for the Commission to satisfy its duty to file an annual report
with the executive and legislative branches detailing the IOUs’ planned and
completed storm protection projects and the related rate impacts.
Subsection (1): Application and Scope
This subsection requires each investor-owned electric
utility to file a petition with the Commission for approval of a storm
protection plan. It also mandates that the plan cover the utility’s immediate
10-year planning period and must be updated every 3 years.
OPC suggests that language be added to this subsection to
require each utility to file its plan on the third Monday of January of each
year the plan update is to be considered for Commission approval. TECO states
that it plans to prepare a storm protection plan and file it with the
Commission within 4 to 5 months of the storm rules being adopted, e.g., no
later than March 1, 2020. TECO suggests it would be more efficient for all of
the IOUs to file their plans at the same time given that the timing of the
Commission’s approval must be within the 180 day limit provided by Section
366.96, F.S.
The Commission will have 180 days after the utility files
its plan to approve, approve with modifications, or deny the plan; however,
there is no requirement in the statute that the Commission must review the
plans at a particular time of the year. Thus, staff does not recommend that the
Commission include the language offered by OPC, as this language will remove
some Commission discretion as to when the Commission wants to conduct its
review of plans. As discussed in the Case Background, staff envisions that
after Rule 25-6.030, F.A.C., becomes effective, the Commission will open a
docket to review each utility’s storm protection plan. The Prehearing Officer
will issue an Order Establishing Procedure to set all the controlling dates in
the docket, including the date by which investor-owned electric IOUs must
submit their plans and the hearing dates. Staff envisions that this same
procedure will be used to review future utility storm protection plans as well.
Subsection (2): Definitions
A storm protection plan is comprised of storm protection
programs. A program may include specific projects. Paragraph (2)(a) defines a
program as a category, type, or group of related storm protection projects that
is undertaken to enhance the utility’s existing infrastructure for the purpose
of reducing restoration costs and outage times and improving overall service
reliability. Paragraph (2)(b) defines a project as a specific activity designed
to enhance a specified portion of existing electric transmission or
distribution facilities for the purpose of reducing restoration costs and
outage times, and improving overall service reliability.
Paragraph (2)(c) identifies the “Transmission and
distribution facilities” that will be eligible for storm protection plans.
“Transmission and distribution facilities” are defined as “all utility owned
poles and fixtures, towers and fixtures, overhead conductors and devices,
substations and related facilities, land and land rights, roads and trails,
underground conduits, and underground conductors.”
FPL and Gulf
argue that the definition of “transmission and distribution facilities” should
be expanded to include additional types of assets, such as structures and
improvements, station equipment, underground conductors and devices, battery
storage equipment, meters and services. FPL also suggests the removal of
“substations and related facilities” from the definition because these assets
are included within the station equipment accounts.
TECO, DEF, and FPUC echo FPL’s suggestions to expand the
definition of “transmission and distribution facilities.” FPUC argues that
meters should be specifically enumerated in the definition of “transmission and
distribution facilities,” and DEF specifically suggests a change that would
explain the definition by including the language “and associated facilities.”
OPC comments that the definition of “transmission and
distribution facilities” should be narrowed to track the Federal Energy
Regulatory Commission’s Uniform System of Accounts (USOA) definitions of
“transmission and distribution facilities.” OPC argues the USOA definition
excludes meters, because the primary purpose of a meter is to measure
electricity delivery. According to OPC, a meter is therefore incidental and
ancillary to storm protection. Also, OPC argues battery storage assets should
not be included as transmission and distribution facilities for purposes
of storm protection because they are broadly categorized under the USOA as
production plant. Thus, OPC argues storage assets are not solely for resilience
against extreme weather.
Rule 25-6.030(3)(j), provides that the IOUs can submit in
its plan “[a]ny other factors the utility requests the Commission to consider.”
FPUC expresses concerns that this language could be narrowly construed to include
only factors pertaining to programs and projects consistent with the definition
of “transmission and distribution facilities.” FPUC’s concerns appear to be
based on a misunderstanding of the statute. The purpose of the statute is to
encourage programs and projects that protect the utility’s transmission and
distribution system. It does not require that every program or project entail a
physical change to the transmission and distribution system itself. Said
differently, staff intends for paragraph (3)(j) to be interpreted to encompass
factors pertaining to programs and projects that are designed to protect the
utility’s transmission and distribution facilities as that term is defined in
the rule.
Subsection (3): Contents of the Storm
Protection Plan
Subsection (3) provides the specific information that must
be provided in each storm protection plan, including descriptions of the
utility’s service area, the areas prioritized for enhancement, and any areas
where the utility has determined that enhancement of the utility’s existing
transmission and distribution facilities would not be feasible, reasonable, or
practical.
Subsection (3) also requires the utility to provide certain
cost estimates, such as an estimate of the annual jurisdictional revenue
requirements for each year of the storm protection plan and an estimate of rate
impacts for each of the first three years of the storm protection plan for
residential, commercial, and industrial customers. Paragraph (3)(e) requires that
for each of the first three years in an IOU’s storm protection plan the utility
provide a description of each proposed storm protection project that includes:
1.
The actual or estimated construction start and
completion dates;
2.
A description of the affected existing facilities,
including number and type(s) of customers served, historic service reliability
performance during extreme weather conditions, and how this data was used to
prioritize the proposed storm protection project; and
3.
A cost estimate including capital and operating
expenses; and
4.
A description of the criteria used to select and
prioritize proposed storm protection projects.
Paragraph (3)(f) requires the utility to provide a
description of its proposed vegetation management activities. The utility’s
description must include the projected frequency (trim cycle), the projected
miles of affected transmission and distribution overhead facilities, the
estimated annual labor and equipment costs for both utility and contractor
personnel, and a description of how the vegetation management activity will
reduce outage times and restoration costs due to extreme weather events.
Level of Project Detail Required in Storm
Protection Plans
The IOUs take issue with the requirement for project-level
information in years 2 and 3, arguing that it is not feasible or desirable for
the specific projects for years 2 and 3 to be detailed in the plan. Because projects
inevitably change due to a host of issues including access, customer
acceptance, and changing priorities, the IOUs argue that years 2 and 3 are
sufficiently detailed if the IOUs provide the type and number of projects and
program costs to support the development of annual rate-impact estimates for
the first 3 years. FPL suggests the following rule language in paragraph (3)(e)
instead of staff’s recommended rule language:
(e) For each of the first
three years in a utility’s Storm Protection Plan, the utility must provide the
following information:
1. For the first year of the
plan, a description of each proposed storm protection project that
includes:
i. 1. The actual or estimated
construction start and completion dates;
ii. 2. A description
of the affected existing facilities, including the number and type(s) of customers
served, historic service reliability performance during extreme weather events,
and how this data was used to prioritize the proposed storm protection project;
and
iii. 3. A cost
estimate including capital and operating expenses, both fixed and variable;
and
iv. 4. A description
of the criteria used to select and prioritize proposed storm protection
projects.
2. For the second and third
years of the plan, project related information such as estimated number and
cost of projects under a specific program, in sufficient detail, to allow the
development of preliminary estimates of rate impacts as required under
subsection 3(h) of this rule.
FPL suggests that project-level detail be provided
annually for the current year in the actual/estimated true-up filings under
Rule 25-6.031, F.A.C.
TECO also opposes project-level detail in years 2 and 3 in
the plan and suggests that the Commission consider the level of cost detail
found in the Demand-Side Management Plans as a benchmark for the cost detail
necessary in the storm protection plans. Likewise, DEF specifically cautioned
against rule language requiring project-level information in each of the first
3 years because such a requirement may result in petitions for rule waiver. According
to DEF, the requirement for 3 years of project-level data would force it to
either “create data that will be subject to extensive revision and [is without]
business purpose—an inefficient use of resources to both create and review—or
file for a rule waiver.” Moreover, all of the IOUs believe that project-level
shifts within an approved program should not constitute a modification that
requires Commission action.
FRF expresses support of project-level detail to ensure costs
are not double recovered. FRF commented at the workshop that the rule
should require extensive accounting data and more than just a description of
selection and prioritization. FRF suggests IOUs should be required to
demonstrate that selection and prioritization of all projects are based on
objective principles and benefits to customers.
OPC states that project-level details are necessary to
ensure that the costs being recovered through base rates are not also recovered
through the SPPCRC. OPC further states that “[g]iven the public interest in
protecting against storm damage, all IOUs should have specific plans with
detailed cost-tracking that comports with representations made to the
Commission and all stakeholders regarding what they have done, are continuing
to do and will do to continue storm protection efforts.” It also believes that
the Commission should “require each utility to submit information for the last
three years detailing all storm hardening projects that have been included in
the IOUs construction budgets including status completion.”
OPC suggests edits to the rule that allow for detailed
information for the first 3 years of any 10-year plan. OPC states that the
initial plan approval in particular should contain detailed project-by-project
information for amounts slated for recovery and include detail along the same
lines for the historical periods and for current and future periods covered by
the approved storm hardening plans that are in effect. According to OPC,
without sufficient detail in the plan and the clause filings, it will be difficult
to identify and differentiate the approved storm costs the IOUs are recovering
in base rates with current storm hardening plans versus the storm related costs
IOUs ask for cost recovery for in the SPPCRC. OPC also suggests that detailed
data is necessary to understand what costs are tied to settlement agreements
and thus necessary to ensure customers do not pay twice for the same costs.
FPL takes issue with OPC’s assertion that costs projected
under an IOU’s storm hardening plan that was previously approved prior to these
new storm protection plan rules should be treated automatically as already
recovered in base rates and thus excluded from cost recovery under the SPPCRC. FPL
states that it takes no position on whether the rules need a detailed mechanism
or protocol for determining a baseline to measure costs in the SPPCRC. However,
costs initially projected to be incurred pursuant to an approved storm protection
plan should be eligible for cost recovery under the SPPCRC.
The IOUs have the burden to prove that costs being
requested through the SPPCRC are not being recovered in base rates. As such, staff
believes that any petition for costs filed in the SPPCRC must evidence that the
utility is not seeking double recovery and therefore OPC’s concerns are more
appropriately addressed by the filing requirements in Rule 25-6.031, F.A.C.,
Storm Protection Plan Cost Recovery Clause, which is further discussed below.
With regards to project-level detail for all 3 years and as
previously discussed in the overarching themes section of the case background,
staff believes that project-level detail for years 1, 2, and 3 provides a
baseline for the Commission’s review and comparison of costs sought in the SPPCRC
from projects that were previously approved in a storm protection plan. This
information is also relevant to comply with subsections (4) and (5) of Section
366.96, F.S. This level of detail is necessary for the Commission to adequately
address the legislative requirement of Section 366.96(4), F.S. Also, without
project-level detail for all 3 years, the Commission would not have enough
information to make an informed decision to modify a plan pursuant to Section
366.96(5), F.S.
Whether Franchise Agreement Information Should
be Included in Storm Protection Plans
OPC argues that the storm protection plan should include
Franchise Agreements to ensure that programs or projects are not proposed or
modified to influence renewals. In response, DEF states such a provision would
be beyond the scope of Section 366.96, F.S., and would be information more
appropriately sought through discovery rather than the rule.
Staff’s draft rule requires that each utility provide a
description of the criteria used to select and prioritize proposed programs and
projects. Staff believes that this requirement will provide sufficient
information for vetting the basis of proposed programs and projects, including
franchise agreements. Thus, such specific criteria in the rule are unnecessary.
Subsection (4): Annual Status Report
Subsection (4) requires that each utility submit to the
Commission Clerk an annual status report on the utility’s storm protection plan
programs and projects. The rule provides that the annual status report must
identify all storm protection plan programs and projects completed in the prior
calendar year or planned for completion, provide actual costs and rate impacts
associated with completed programs and projects as compared to the estimated
costs and rate impacts for those programs and projects, and provide estimated costs
and rate impacts associated with programs and projects planned for completion
during the next year of the storm protection plan.
Rule 25-6.031, F.A.C., Storm Protection Plan
Cost Recovery Clause
Rule 25-6.031, F.A.C., addresses how an IOU may file a petition
for recovery of prudently incurred costs through the SPPCRC. Specifically, the
rule creates an annual clause proceeding, which consists of a true-up of the
previous year’s costs, a true-up and estimation for the current year’s costs,
and a projection of next year’s costs. The rule provides that costs recovered
in base rates may not be recovered through the clause.
Subsection (2): Simultaneous Filings
Subsection (2) allows an IOU to file a petition for
recovery of prudently incurred costs and reasonable projected costs through the
SPPCRC after its storm protection plan is filed with the Commission. FPL argues
that allowing a petition for cost recovery to be filed simultaneously with the
storm protection plan reasonably allows for conducting the clause on an annual
basis. OPC stated in the workshop that it would oppose simultaneous plan and
clause filings the first time the rules are implemented because it would be too
difficult to analyze base rates and incremental costs the first time. Recovery
of storm protection plan costs through the SPPCRC is not required by the statute
and is discretionary to the IOU.
Staff believes a simultaneous plan and clause petition
would allow for administrative efficiency and reduce regulatory lag. Therefore,
the rule allows an IOU to file a petition once its storm protection plan is
filed with the Commission.
Subsection (2) also provides that if the Commission
approves the utility’s storm protection plan with modifications, the utility has
15 business days to file an amended cost recovery petition and supporting
testimony reflecting the modifications. FPL suggests rule language that requires
an IOU to “promptly file an amended” clause petition in the event that the
Commission approves its storm protection plan with modifications. While staff
agrees in concept with allowing for prompt filings, staff believes that FPL’s
language is too ambiguous. It is staff’s belief that a timeline of 15 business
days conveys urgency while recognizing that some time will be needed for the
utility to draft and file an amended clause petition.
Subsection (3): Annual Hearing to Determine
Reasonableness of Projected Costs and Prudence of Actual Costs
Subsection (3) addresses the role of the annual cost
recovery proceeding in determining the reasonableness of an IOU’s projected
costs and the prudence of its actual costs to implement an approved storm protection
plan. The rule provides that an annual hearing to address petitions for
recovery of storm protection plan costs will be held and will be limited to
determining the reasonableness of projected storm protection plan costs, the
prudence of actual storm protection plan costs incurred by the utility, and to
establish storm protection plan cost recovery factors consistent with the requirements
of this rule.
In line with its position that storm protection plans
should not require the level of detailed information for years 2 and 3 of the
plans as required for year 1, FPL
proposes that the actual/estimated true-up filing in the cost recovery clause include
the project-level information. To accomplish this, FPL suggests that the
following language be added to subsection (3) of Rule 25-6.031:
The Commission shall determine the reasonableness
of the lists of projects (by applicable program) filed by the utility pursuant
to section (7)(b) of this rule based on whether such projects are consistent
with the program criteria for such projects approved by the Commission under
the utility’s Storm Protection Plan.
Staff disagrees with FPL’s suggestion that additional
language is required to clarify the standard that will be applied in the SPPCRC
hearings. Subsection (3) already notes that the Commission will determine the
reasonableness of projected costs of the storm protection plan, which would
necessarily entail a determination that the projects generating those costs are
consistent with the plan. Moreover, FPL’s suggested language seems to limit the
Commission’s reasonableness determination to only one review at the actual/estimated
true-up stage. The current language allows the Commission the flexibility to
make reasonableness reviews when necessary throughout the cost recovery process.
In its comments, OPC expresses a “fundamental concern”
about the timing of the SPPCRC hearing, advocating that the hearing take place
in the first 6 months of the year. OPC suggests that language be added to
subsection (3) of the rule to specify that the annual hearing under the rule
will be conducted no later than July 31 of each year after the calendar year in
which the first phase of the plan was approved. OPC believes that the SPPCRC
must be separated out from the other cost recovery clauses due to the amount of
time that OPC anticipates it will take to determine whether storm protection plan
costs are included in base rates and how such costs are to be determined.
FPL notes in its comments that applying the new clause
factors on a mid-year cycle could lead to customer confusion and would
introduce unnecessary complexity in the billing process. Although it has no
objection to leaving the procedural detail out of the rule and using an Order
Establishing Procedure to set all controlling dates, FPL provides a schedule in
its comments that essentially mirrors that of the NCRC, with a hearing taking
place in August/September and factors going into effect on January 1.
Unlike the Commission’s determination on the utility’s
storm protection plan, Section 366.96, F.S., does not include statutory
deadlines for the annual SPPCRC hearing. Thus, the Commission has full discretion
to determine the hearing dates for this clause proceeding. Staff recommends
that hearing dates for the proceeding should be determined by the Prehearing
Officer working in conjunction with the Chairman’s Office similar to the other
cost recovery clauses.
As discussed in the Case Background, staff envisions that
once Rule 25-6.031, F.A.C., becomes effective, the Commission will open a
docket to establish the SPPCRC, and the Prehearing Officer will issue an Order
Establishing Procedure to set forth all the controlling dates in the docket,
including the dates by which any requests for cost recovery for the year must
be filed. Staff also envisions that the SPPCRC will become a “roll-over” docket
like the Commission’s other cost recovery clause dockets.
Subsection (4): Deferred Accounting Treatment
Subsection (4) of the rule provides that costs recovered
through the clause will be trued-up in the clause, and the clause true-up
amounts will be afforded deferred accounting treatment at the 30-day commercial
paper rate. FPUC suggests that the phrase “over and under-recovery” be inserted
after the phrase “cost recovery true-up.” Staff disagrees because the presence
of a true-up event means either an over- or under-recovery event has occurred.
Thus, staff believes keeping only the phrase “true-up” adequately addresses the
occurrence of either an over- or under-recovery.
FPUC also suggests that additional language be added to
subsection (4) of the rule to address the regulatory treatment of deferred
capitalized expenses. Staff believes the rule does not need to address all
existing types of deferred accounting events. As currently drafted, the rule
requires information necessary to determine if a petition for cost recovery of
prudently incurred costs is consistent with an IOU’s approved storm protection plan.
The Commission must also receive enough information to ensure that the utility
is not recovering costs through the clause that it will also recover through
base rates. Staff believes the recommended rule language does this. Creating a
specific list of deferred capitalized expenses could only confuse rather than
clarify eligible expenses. Therefore, FPUC’s suggestion is not recommended.
Because OPC is opposed to any provisions in the rule which
allow cost recovery for projected costs as opposed to actually incurred costs, OPC
also took issue with subsection (4). OPC suggesting limiting the recovery of
costs related to variances caused by sales forecasting variances or changes in
the utility’s prices for services or equipment. Staff disagrees with OPC’s
suggestion for the reasons discussed in the first subsection in the section
discussing overarching themes.
Subsection (5): Treatment
of Subaccounts
Subsection (5) of the rule requires IOUs to maintain
subaccounts for costs subject to recovery to ensure separation of those costs
from costs not subject to recovery through the clause.
Subsection (6): Recoverable
Costs
Subsection (6) of the rule provides that an IOU’s petition
for recovery of costs prudently incurred to implement its storm protection plan
may include costs incurred after the filing of the utility’s storm protection plan.
The utility may recover the annual depreciation expense on capitalized storm
protection plan expenditures using the utility’s most recent
Commission-approved depreciation rates. Subsection (6) provides that the utility
may recover a return on the undepreciated balance of the costs calculated at
the utility’s weighted average cost of capital using the return on equity most
recently approved by the Commission. The rule requires that the utility submit
its final true-up of storm protection plan revenue requirements based on actual
costs for the prior year and previously filed costs and revenue requirements
for such prior year along with a description of the work actually performed
during such year.
DEF, TECO, and FPUC argue that subsection (6) should
specifically allow for the recovery through the SPPCRC of costs incurred
developing a storm protection plan. Read together, paragraph (2)(c) and
subsection (7) of Section 366.96, F.S., allow for the recovery of “reasonable
and prudent costs to implement an
approved transmission and distribution storm protection plan.” The plain language
of Section 366.96, F.S., allows an IOU to recover the costs of implementing a storm protection plan,
not developing it.
Paragraph (6)(b) of the rule states that the utility is
not permitted to recover costs through the SPPCRC that are included for
recovery through base rates or any other cost recovery mechanism. OPC suggests
adding language that states that the “utility must file detailed information
consistent with Rule 25-6.030(g), F.A.C., as a part of meeting its burden of
demonstrating that clause-eligible costs are not being recovered in base rates
or any other cost recovery mechanism.” Staff assumes that OPC’s rule reference
is for the purpose of requiring an estimate of the annual jurisdictional
revenue requirements for each year of the storm protection plan. Rule
25-6.030(3)(g), F.A.C., requires an IOU to provide an estimate of the annual
jurisdictional revenue requirements for each year of the storm protection plan,
so it is unnecessary for Rule 25-6.031, F.A.C., to restate that requirement.
Moreover, staff believes each utility’s demonstration that its costs are
excluded from other recovery mechanisms will be adequately vetted through the
clause hearing process pursuant to the filing requirements of Rule 25-6.031,
F.A.C.
OPC also suggests that the term “mid-point” be inserted
in paragraph (6)(c) after “equity” and
before “most recently approved by the Commission.” Staff believes this change
is not needed because the return on equity approved by the Commission is used
as the midpoint of a range of reasonableness.
In addition, FPL proposes the
following language as paragraph (6)(d): “The utility may request recovery
of cost of removal and any remaining investment associated with retirements of
Storm Protection Plan investments recovered under the clause.” Staff has two
concerns about the proposed language. First, staff is unsure how FPL or
other IOUs may determine remaining investment for any one asset. Under Rule
25-6.0436 Depreciation, F.A.C., and
Rule 25-6.04361 Subcategorization of Electric
Plant for Depreciation Studies and Rate Design, F.A.C., many assets,
especially transmission and distribution assets, are grouped in mass property
accounts, wherein asset age data for any single asset is unknown, thus the
remaining investment in that particular asset is also unknown. Staff believes
the methodology used to determine the net unrecovered investment amount for a
type of asset replaced in a storm protection plan project must take into
account the past recovery of both short and long lived assets relative to
average service life. Ideally, such a method would be reflective of both the IOUs’
gains received and losses incurred when such assets are removed, yielding net
unrecovered investment. Second, the cost of removal is reflected in current
depreciation rates for all assets, so some portion of removal costs for all
current assets have already been recovered in base rates. Staff is concerned
that this is not reflected in FPL’s proposed rule language, which appears to
allow for recovery of all removal costs through the clause. For these reasons,
staff does not recommend adding FPL’s recommended language.
Subsection (7): Cost Recovery Mechanism and Filing
Requirements
Subsection (7) addresses the filing requirements for the SPPCRC
and describes the mechanism used to project and true-up costs incurred to
implement the utility’s storm protection plan. Paragraphs (7)(a)–(c) describe the
same three-step mechanism used in other clauses. The three steps are referred
to in those paragraphs as the Final True-up for Previous Year, the Estimated
True-up for Current Year, and the Projected Costs for Subsequent Year. In other
words, the recovery of incurred costs is a moving three-year process that begins
with the projection of future costs and ends with the final true-up of those
projected costs. Paragraphs (7)(a)–(d) require the utility to submit data
sufficient to allow the Commission to project future costs and determine
incurred costs as that data becomes available. Paragraph (7)(d) also requires
the utility to submit data establishing sales forecasting variances and changes
in the utility’s price of service and equipment. Paragraph (7)(e) requires the
utility to submit its proposed factors and effective 12-month billing period.
OPC suggests striking paragraphs (7)(a), (7)(b), and
(7)(c) to remove the filing requirements that true-up projected costs to actual
incurred costs as well as the associated revenue requirements on a moving
three-year basis. In its comments, OPC asserted that there is a lack of
statutory authority for projected cost recovery as opposed to costs that have
been incurred. OPC recommends striking paragraphs (7)(a) through (c) to conform
the rule to that argument. As previously discussed, staff disagrees with OPC’s
premise that the rules should not allow for projected costs. Thus, staff
believes there is no need to change subsection (7).
FPL suggests that paragraph (7)(b) of the rule be revised
to show that this filing would include a listing of project-level information
for the current year, consistent with its position that storm protection plans
should not require the level of detailed information for years 2 and 3 of the
plans, as required for year 1 (see staff’s
discussion on subsection (3)(e) of Rule 25-6.030). However, FPL did not propose
comparable language for paragraph (7)(c) addressing projections or for true-up
filings in paragraph (7)(a). FPL did not state what was unique about the
current year filings of paragraph (7)(b) of the rule that necessitated the
added language. As previously noted in the analysis for the storm protection plan
rule, staff believes each utility’s respective petitions should require a
certain level of detail to support the utility’s respective requests in the
petitions for cost recovery in the clause. The recommended rule language of
paragraph (7)(b) adequately provides the filing requirements consistent with this
belief. Thus, the suggested changes are not necessary.
OPC also suggests editing paragraph (7)(e) to make the word “factors” singular. But each
utility has multiple rate classes, and each rate class has a unique factor. Therefore,
multiple factors will be set for each utility. Staff therefore does not
recommend incorporation of the editorial suggestion.
Subsection (8): Effect
on Subsequent Rate Proceeding
Subsection (8) provides that recovery of costs under this
rule does not preclude an IOU from proposing inclusion of unrecovered storm protection
plan implementation costs in base rates in a subsequent rate proceeding. FPUC and FPL suggest subsection (8) should
specifically identify or list for inclusion the “future revenue requirements
for existing storm protection plan investments” as eligible costs for future
base rate recovery. Staff disagrees. Subsections (2), (6), and (8) of the draft
rule allow for recovery of costs prudently incurred to implement an IOU’s storm
protection plan. The rule allows for recovery of costs prudently incurred after
the filing of the utility’s plan that implement the utility’s storm protection plan
and that were costs not previously approved in another proceeding. Because Rule
25-6.031, F.S., already covers all types of expenses appropriate for clause
recovery, there is no need for the rule to include a specific or enumerated
list of the types of costs as suggested by the IOUs. Listing types of costs could
confuse rather than clarify what is permitted for recovery under the rule.
Other Issues
FRF suggests that for transparency purposes, the rules
should require the storm protection plan cost recovery charges be shown as a
separate line item on customers’ bills. TECO recommends that to avoid customer
confusion, storm protection plan cost recovery charges be calculated separately
but incorporated in the energy charge line item that includes the other clauses
on customers’ bills.
Section 366.96, F.S., does not mandate that storm
protection plan cost recovery charges be shown as a separate line item on
customers’ bills. The statute is silent on the matter. Due to billing system
reprograming, the IOUs state they would incur additional costs, which would ultimately
be passed on to the customers if the Commission required that the storm
protection plan charges be a separate line item. On the other hand, the IOUs
say that no additional billing charges will be incurred as long as the storm
protection plan charges are incorporated into the non-fuel energy charge on
customers’ bills.
Staff believes each utility’s costs, and ultimately the
customers’ costs, would be higher if the Commission required a separate line
item on customers’ bills. The customers’ bills will include approved storm
protection plan cost recovery charges whether they are reflected as line items
or included in the energy charge line on the bill. Staff believes that adding
additional expenses for the sake of transparency is unnecessary and would be outweighed
by lower costs to the customers. Thus, staff believes the rules should not
mandate that the storm protection plan cost recovery charges be shown as a
separate line item on customers’ bills.
FRF also suggests adding a third rule, Rule 25-6.0301,
F.A.C., which would require an IOU to seek Commission approval for changes to
its storm protection plan that result in changes to the total cost of the plan of
more than a certain percentage of that total. Staff does not believe that such
a rule is necessary. Each utility will have to report and explain cost
variances in the SPPCRC proceedings. In these proceedings, the utility will
have to show cost changes and the cause of those changes. IOUs will also have
to show that all of their costs were prudently incurred to implement the
utility’s approved plan. In other words, requiring IOUs to seek the
Commission’s approval of a storm protection plan modification solely on the
basis of a cost variance is unduly duplicative of the scrutiny that will be a
part of the SPPCRC.
Minor Violation
Rules Certification
Pursuant to Section 120.695, F.S., beginning July 1, 2017,
for each rule filed for adoption, the agency head must certify whether any part
of the rule is designated as a rule the violation of which would be a minor
violation. Under Section 120.695(2)(b), F.S., a violation of a rule is minor if
it does not result in economic or physical harm to a person or adversely affect
the public health, safety, or welfare or create a significant threat of such
harm. Rule 25-6.030, F.A.C., and Rule 25-6.031, F.A.C., will be minor violation
rules, as a violation of these rules will not result in economic or physical
harm to a person or have an adverse effect on the public health, safety, or
welfare or create a significant threat of such harm. Therefore, for the
purposes of filing the rules for adoption with the Department of State, staff
recommends that the Commission certify proposed Rule 25-6.030 and 25-6.031,
F.A.C., as minor violation rules.
Statement of
Estimated Regulatory Costs
Pursuant to Section 120.54(3)(b), 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 rules are 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 after implementation.
The SERC concludes that any economic impacts that might be
incurred by affected entities would be a result of the statute rather than the
rules. Staff believes that the new rules will not likely directly or indirectly
increase regulatory costs in excess of $200,000 in the aggregate in Florida
within one year after implementation. Staff notes that the IOUs, in response to
staff’s SERC data request, provided potential financial impacts resulting from
specific requirements of Chapter 366.96, F.S.
Further, the SERC concludes that the rules 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 new rules do not require legislative ratification
pursuant to Section 120.541(3), F.S.
In addition, the SERC states that the rules will have no
adverse impact on small businesses, small cities, or small counties. The rules
will have minimal impact on state and local revenues and transactional costs. Any
implementation or enforcement costs on the Commission will be offset by the
additional staff positions and funding provided under the new law. No regulatory
alternatives were submitted pursuant to Section 120.541(1)(a), F.S. None of the
impact/cost criteria established in Section 120.541(2)(a), F.S., will be
exceeded as a result of the recommended rules.
Conclusion
Based on the foregoing, staff recommends the Commission
propose the adoption of Rules 25-6.030 and 25-6.031, F.A.C., as set forth in
Attachment A. Staff also recommends that the Commission certify Rules 25-6.030
and 25-6.031, F.A.C., as a minor violation rules.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. If no requests for hearing or comments are
filed, the rules should be filed with the Department of State, and the docket
should be closed. (Harper, A. King)
Staff Analysis:
If no requests for hearing or comments are filed,
the rules may be filed with the Department of State and the docket closed. When
these rules become effective, staff will bring a recommendation in a separate
docket for the Commission’s consideration on any other existing Commission
rules that need to be amended or repealed.
