Case Background
On January 6,
2020, Tampa Electric Company (TECO) filed a petition for approval of a
temporary (5-year) waiver of certain requirements in Rule 25-6.064,
Contribution-in-Aid-of-Construction for Installation of New or Upgraded
Facilities, Florida Administrative Code (F.A.C.), for the installation of
primary voltage power lines to the location of electric vehicle (EV) fast
charging stations. TECO also asks in its petition that the Commission approve a
revised tariff sheet to reflect the requested temporary rule waiver.
Rule
25-6.064, F.A.C.
A copy of Rule
25-6.064, F.A.C., is appended as Attachment A. The purpose of Rule 25-6.064,
F.A.C., is to establish a uniform procedure by which investor-owned electric
utilities calculate amounts due as CIAC from customers who request new
facilities or upgraded facilities in order to receive electric service. The
intent of the rule is to quantify the costs for certain new or upgraded
facilities’ construction in order to accurately determine the appropriate
amount of CIAC to be collected. The rule reflects the Commission’s
long-standing policy that, where practical, the person who causes the costs to
be incurred should bear the burden of those costs.
Subsection (2)
of Rule 25-6.064, F.A.C., is the required formula for calculating CIAC for new
or upgraded overhead facilities, and states:
|
CIAC
|
=
|
Total estimated
work order job costs of installing facilities
|
_
|
4 years
expected incremental base energy revenue
|
_
|
4 years
expected incremental base demand
revenues, if applicable
|
Paragraph (2)(c)
of Rule 25-6.064, F.A.C, the subject of TECO’s petition, states:
The expected
annual base energy and demand charge revenues shall be estimated for a period
ending not more than 5 years after the new or upgraded facilities are placed in
service.
Subsection (6)
of the rule requires each investor-owned utility to “use its best judgement in
estimating the total amount of annual revenues which the new or upgraded
facilities are expected to produce.”
Subsection (7)
of the rule allows an investor-owned utility to waive all or a portion of CIAC
for customers, but requires the utility to reduce plant in service as if CIAC
had been collected, unless the Commission determines that there is a
quantifiable benefit to the general body of ratepayers.
TECO’s
Petition
TECO states that the purpose for the
temporary rule waiver is to create a pilot program to help encourage the growth
of EVs in Florida. TECO states that EVs present many benefits to Florida in
general and to TECO’s customer base, including lowering reliance on petroleum-based
fuels and a new and potentially beneficial electric load over which to spread
fixed costs. TECO asserts that “[o]ne of the known barriers to growth of the EV
market is the lack of public- and place-of-employment based fast charging
stations.” And that one of the major barriers to the more widespread
development of fast charging stations is “the initial cost to extend primary
voltage power lines to the location where the fast charger would be most
convenient to attract current and potential EV owners.”
TECO states that
the intent of the requested temporary rule waiver is to eliminate a barrier to
the construction of new EV fast charging stations. TECO states that annual revenues for fast
charging stations are “likely very low when the charger is first installed,
partly as it takes considerable time to make its market presence known to
attract customers, but also partly because there are not many EVs on the road
to take advantage of fast charges.” TECO asserts that the low initial revenue
equates to a minimal CIAC credit against what is often a substantial line
extension cost to hook up a EV fast charging station. TECO states that this is
an imposing barrier to the installation of EV fast charging stations.
To remove this
barrier, TECO is asking that a 10-year revenue estimation period be substituted
for the 5-year revenue estimation period in Rule 25-6.064(2)(c), F.A.C. TECO
states that if this rule waiver is granted, it will “use its best estimates to
calculate the highest base rate revenues expected to be received from each station
during the 10-year period,” under subsection (6) of the rule. TECO states that
use of a 10-year estimation period would result in lower CIAC for those third
party customers installing EV fast charging stations and, as a result, encourage
more development of EV fast charging stations.
Consistent with
its stated intent to create a pilot program, TECO is requesting that the
temporary rule waiver be limited to a period of 5 years. TECO states that 5
years will be sufficient to determine whether use of a 10-year estimating
period has a beneficial impact on the EV market. It further states that 5 years
would give time for the EV charging infrastructure market “to develop and grow
to such a point that this waiver can be removed – either because it is no
longer necessary to spur development of fast EV charging infrastructure or
because the technology no longer needs such support to enable the chargers to
be placed into service.”
TECO also asks
the Commission to approve a new tariff sheet, Fourth Revised Sheet No. 5.105, to reflect the temporary rule
waiver. A copy of the revised tariff sheet is appended as Attachment B.
Procedural
Matters
Notice of the
petition was published in the Florida Administrative Register (F.A.R.) on
January 9, 2020, pursuant to Section 120.542(6), Florida Statutes (F.S.). The F.A.R.
notice stated, in accordance with Rule
28-104.003, F.A.C., that interested persons may submit written comments on the
petition within 14 days of the notice. No written comments were received on the
petition.
Pursuant to
Section 120.542(7), F.S., by letter dated January 24, 2020, staff requested
TECO provide additional information on the petition. TECO responded to staff’s
letter on February 6, 2020.
Staff held a
noticed, informal meeting on February 25, 2020, to allow the company and other
interested persons further opportunity to discuss the petition. Representatives
from TECO, the Office of Public Counsel (OPC), and the Southeast Energy
Efficiency Alliance participated at the meeting.
Section
120.542(7), F.S., requires the Commission to grant or deny a petition for rule waiver
within 90 days after receipt of the original petition, the last item of timely
requested additional material, or the petitioner’s written request to finish
processing the petition. Thus, the Commission must grant or deny the petition
no later than May 6, 2020, which is 90 days from February 6, 2020, the date of
TECO’s response to staff’s request for additional information. A petition not granted or denied within 90
days after receipt of a completed petition is deemed approved.
The Commission
has jurisdiction pursuant to Sections 120.542, 366.03, 366.05, and 366.06, F.S.
Discussion
of Issues
Issue 1:
Should the Commission grant TECO's petition for a
temporary waiver of or variance from Rule 25-6.064(2)(c), F.A.C., and approve
TECO's Fourth Revised Tariff Sheet No. 5.105?
Recommendation:
Yes, the petition for temporary rule waiver/variance
should be granted subject to the condition that TECO file annual reports during
the 5-year rule waiver/variance period, with the first report due on March 1,
2021. Each annual report should include the following information for the
preceding calendar year:
·
For each EV fast charger line
extension installed during the reporting period, the number of EV fast chargers
served, the total line extension cost, the CIAC collected, the total annual
revenue collected (demand and energy), the line extension usage metrics (demand
and energy), and the balance of any related cross subsidy (total cost less CIAC
collected less total energy/demand revenue collected to date);
·
System-wide Totals (summed for all
years since the time the temporary rule waiver/variance was granted) for each
of the following: EV fast charger line
extensions installed, the number of EV fast chargers served, EV fast charger
line extension costs, CIAC collected, total annual revenue collected (demand
and energy), line extension usage metrics (demand and energy), and the balance
of any related cross subsidy (total cost less CIAC collected less total
energy/demand revenue collected to date); and
·
Projected annual growth for the next
five years in TECO’s service territory of EVs, EV fast chargers, and EV fast
charger line extensions.
In addition, the Commission should approve TECO’s Fourth
Revised Tariff Sheet No. 5.105, which reflects the temporary rule
waiver/variance. The effective date of the revised tariff sheet should be the date
of the consummating order. Before the expiration of the 5-year rule
waiver/variance period, TECO should be required to file a revised tariff sheet
reflecting the removal of the temporary rule waiver/variance, which staff
should be given administrative authority to approve. (Cibula, McNulty, Smith II)
Staff Analysis:
TECO is asking that a 10-year revenue estimation period be
substituted for the 5-year revenue estimation period in Rule 25-6.064(2)(c),
F.A.C. TECO is requesting that the rule waiver be limited to a period of 5
years and apply only to the installation of primary voltage powers lines to the
location of EV fast charging stations.
Legal Standard for Rule Waivers or Variances
Rule waivers and variances
are governed by Section 120.542, F.S. Section 120.542(1), F.S., provides:
Strict application of uniformly applicable rule
requirements can lead to unreasonable, unfair, and unintended results in
particular instances. The Legislature finds that it is appropriate in such
cases to adopt a procedure for agencies to provide relief to persons subject to
regulation.
Section 120.542(2), F.S., states that the agency must
grant a rule variance or waiver if the petitioner demonstrates: (1) the purpose of the underlying statutes will be
or has been achieved by other means; and (2) that application of the rule would
create a substantial hardship or would violate the principles of fairness. A
substantial hardship is a “demonstrated economic, technological, legal, or
other type of hardship to the person requesting the variance or waiver.”
Principles of fairness are violated when “the literal application of a rule
affects a particular person in a manner significantly different from the way it
affects other similarly situated persons who are subject to the rule.”
Section 120.542(1), F.S., further states that an agency
may limit the duration of any grant for a variance or waiver and impose
conditions on the grant “only to the extent necessary for the purpose of the
underlying statute to be achieved.”
The Purpose of the Underlying Statutes
Rule 25-6.064, F.A.C., cites as its law implemented
Sections 366.03, 366.05(1), and 366.06(1), F.S. Sections 366.05 and 366.06,
F.S., authorize the Commission to prescribe just, fair, reasonable, and
compensatory rates. Section 366.03, F.S., requires investor-owned utilities to
furnish to each person applying for service reasonably sufficient, adequate,
and efficient service upon terms required by the Commission and prohibits an
investor-owned utility from giving any undue or unreasonable preference to any
persons or locality. TECO states that the purpose of these underlying statutes
will be achieved by other means if the temporary rule waiver is granted.
TECO states that Sections 366.03, 366.05(1), 366.06(1),
F.S., grant the Commission broad discretion in setting utility rates. It argues
that substituting a different estimation period for calculating the revenues
used to calculate CIAC due from EV fast charger installers will not result in
an undue or unreasonable preference to any person and will not impair the ability
of the Commission to prescribe fair, just, and reasonable rates. TECO states
that as the EV market develops, high-voltage chargers will be a new source of
load over which to spread TECO’s system costs, which will benefit all the
company’s customers.
In response to staff’s request for additional information,
TECO states that:
In the context of [TECO’s] petition, the company is not
asking to do away with the revenue credit or to even reduce the number of years
over which expected revenues are to be counted; rather, the company is seeking
to expand the period of time over which the four years of expected incremental
base energy revenue can be counted. Therefore, while the company does expect a
higher revenue credit to be realized, the concept behind the requested waiver
or variance is not materially different than the current policy.
TECO states in its petition that CIAC payments are
intended to reduce potential cross-subsidy between the load associated with the
new or upgraded facilities and existing customers taking service from existing
facilities and acknowledges that cross-subsidization will occur if the petition
is granted. TECO further states, however, that it anticipates a de minimis
impact on the general body of ratepayers because the company does not expect
the revised tariff to result in an amount of line extensions for high-voltage
EV chargers that would cause a material impact on the amount of CIAC collected
relative to TECO’s overall invested capital. In this regard, TECO states:
Thus, despite any initial cross-subsidization that may
occur, the result will be providing a reasonable preference for fast charging
infrastructure in these early market development years of EVs and be beneficial
for Tampa Electric’s ratepayers now and into the future. The selection of a further advanced period to
calculate the expected base revenues simply defers the period such a subsidy is
in place for the period before the four years of base revenues actually occurs. At that point, the subsidy ends and the
purposes of the rule are implemented.
TECO states that ratepayers benefit from the addition of
more EV fast charges “which can incent the faster acceptance and choice of EVs
by customers.” TECO states that EVs reduce emissions and utilize cleaner energy
generation by TECO, including solar photovoltaic sites, and reduce reliance on
petroleum-based fuels. Moreover, TECO states that EVs may someday be a valuable
resource to TECO’s general body of ratepayers as a new and potentially
beneficial electric load over which to spread fixed costs and “as a source of
energy storage and load shaping to meet future energy infrastructure and energy
control mechanisms.” TECO asserts that encouraging market development for EVs
meets the statutory directives of Sections 366.81, 366.94, 377.601, 377.815,
403.42, 627.06535, F.S., which it states support actions to facilitate and
benefit EVs and aim to reduce reliance on petroleum fuels in Florida.
TECO also asserts that the temporary rule waiver request
specifically aligns with Section 366.05(1)(a), F.S., which addresses the
Commission’s authority to “require repairs, improvements, additions,
replacements, and extensions to the plant and equipment of any public utility
when reasonably necessary to promote the convenience and welfare of the
public.” TECO states the temporary rule waiver promotes the convenience and
welfare of the public through encouraging the development of fast charging
stations “during this important period where there is need for more such
chargers to encourage the market for electric vehicles to grow.” TECO further
states the revised tariff would not be discriminatory because it will be
uniformly applied to any customer seeking a line extension to serve a Level 3
EV charging station during the 5-year temporary variance period.
Staff’s Analysis
As acknowledged by TECO in its petition, CIAC payments are
intended to reduce potential cross subsidy between the load associated with the
new or upgraded facilities and existing customers taking service from existing
facilities. Staff reviewed TECO’s petition with regard to (1) the potential for
cross subsidies that may result over an extended period if this waiver is
utilized, and (2) the lack of reliable quantifiable information regarding the
projected number of line extensions, line extension costs, and credit amounts
(offsetting revenue), which would aid in calculating the CIAC and the amount of
the potential subsidy.
It is a long-standing regulatory concept that a cross
subsidy occurs when the cost-causer does not fully pay for the costs incurred
to provide service, resulting in those unrecovered costs then shifting to the
general body of ratepayers. TECO argues that the added cross subsidy associated
with this pilot program should be considered in conjunction with anticipated
benefits. Primary among these benefits is the incremental load growth expected
to be realized from the proposed tariff revision. TECO contends that reducing
CIAC for the requested line extensions would allow the utility to serve more
high-voltage chargers, and thus spread the fixed costs of its system across
such consumption.
Staff reviewed potential cross subsidy in this case by
considering the recovery of costs under the rule versus the proposed rule
waiver. By rule, CIAC is calculated using the cost of (in this case) the line
extension and subtracting from that cost the expected revenues.
|
CIAC
|
=
|
Total estimated work order job costs of installing
facilities
|
_
|
4 years expected incremental base energy revenue
|
_
|
4 years expected base demand revenues
|
The CIAC is the portion of the line extension costs the
customer pays upfront when he or she initiates service. As shown above, the
CIAC payment is based on the costs of the new facilities, reduced by 4 years of
expected revenue. Per paragraph (2)(c) of the rule, the 4 years of expected
revenue must be estimated within a 5-year period after the new facilities are
placed in service. The 4 years of expected base energy and demand revenues
represent the time-limited credit allowed to the customer for the portion of
the installation costs not paid via the CIAC payment. This credit to CIAC is
expected to be offset by revenues from the customer after the 4-year period
concludes within the first 5 years following line extension installation.
TECO’s argument is that EV fast charger line extension revenues are expected to
be substantially less in years 1-5 than they would be in years 5–10. TECO
believes the proposal of a 10-year estimation timeframe “would lower the CIAC
barrier for construction of new high-voltage EV chargers, increase the number
of such chargers in the service territory and result in faster adoption of
electric vehicles.”
The extent and duration of the subsidy in this case is
dependent on cost and revenue data. TECO indicated that it has no cost-benefit
study or analysis or estimate of the beneficial load growth associated with the
program at this time. A
cost-benefit analysis of the program would require data that the utility has
indicated is not available, including the number of expected line extensions,
total line extension costs, and credit amounts.
TECO indicates it appears the subsidy, under the proposed
rule waiver, could be expected to continue beyond the rule’s standard 5 years,
but declining over this time period.
Staff has prepared an example of the potential subsidy based on a hypothetical
installation, as shown in Table 1-1. In this example, staff used TECO’s
estimated average EV fast charger line extension cost ($21,662 per line
extension, rounded to $21,000) and a company estimate of annual base revenue
growth associated with a single EV fast charger over a 10-year period.
Staff emphasizes that these revenue estimates are for illustrative purposes
only because, according to TECO, each line extension project is unique and
requires customers input to estimate.
Table 1-1 illustrates how CIAC is currently calculated by
Rule 25-6.064, F.A.C., versus TECO’s proposed CIAC rule waiver. The current
calculation reflects projected revenues of $5,000 in Years 2 through 5 ($1,000
+ $1,250 + $1,250 + $1,500). Subtracting this revenue credit from the estimated
line extension cost of $21,000 results in a $16,000 CIAC charge. This credit
would be offset in Year 5, once the $5,000 in incremental revenues has been
collected.
In contrast, TECO’s proposed CIAC rule waiver results in a
$20,000 credit, reflecting projected revenues of $20,000 in Years 7-10, which
is $15,000 higher than under the rule. This credit to CIAC would not be fully
offset by the customer’s revenues until Year 9, assuming the projected revenues
match the amount actually collected.
Thus, for this illustrative implementation of the CIAC
waiver, the subsidy would be greater ($20,000 rather than $5,000) and remain longer
(9 years rather than 5 years) under the proposed CIAC rule waiver for EV fast
charger line extensions. The period of time in which it takes for the credits
to CIAC based on expected revenues to be offset by actual revenues represents
the subsidization period since that is money that was spent by the utility, not
the customer or cost causer.
Staff notes that TECO has installed only one line
extension for EV fast chargers to date, yet it has provided EV fast charger
service to 13 locations in its service territory, serving over 50 EV fast
charger stations. Given the ability of TECO to provide service to a number of
potential EV fast charger locations without a line extension, staff believes
the total impact on net income resulting from the waiver will be smaller than
it would otherwise have been.
Staff believes that TECO has adequately demonstrated that
the purposes of the underlying statutes will still be achieved if the requested
temporary rule waiver/variance is granted for the temporary and limited purpose
of the pilot program. The Commission has broad authority pursuant to the
underlying statutes to set just, fair, and reasonable rates. Moreover, the
temporary rule waiver/variance will not completely do away with the revenue
credit or reduce the number of years over which expected revenues are to be
counted, it only expands the period of time over which the 4 years of expected
incremental base energy revenue can be counted. Thus, third party installers of
EV fast charging stations will still have to pay some amount of CIAC to have
the electric line extended, just at a lesser amount than required by the rule.
Substantial Hardship
TECO alleges that strict application of Rule 25-6.064,
F.A.C., will create a substantial hardship. Specifically, TECO states that the
5-year estimating period for calculating CIAC in paragraph (2)(c) of the rule
creates a substantial, imposing barrier to more widespread development of EV
fast chargers, which in turn discourages the growth of EVs. TECO opines that
this is because there is a substantial initial cost to extend primary voltage
power lines to the location where the fast charger would be most convenient to
attract current and potential EV owners.
TECO states that the expected 5-year revenues for a high-voltage EV
charger are likely very low when the charger is first installed, and this means
there will be a minimal credit against what is often a substantial line
extension cost to hook up such a fast charger. TECO asserts that “[t]his creates
a significant barrier to achieving the reduced emissions, reduced reliance on
petroleum-based fuels, and potential load growth in TECO’s service territory
that would benefit ratepayers.”
TECO states that the Commission’s draft Review of the 2019
Ten-Year Site Plans of Florida’s Electric Utilities shows that the growth rate
for EV adoption is expected to greatly accelerate over the next ten years. TECO
states that for this reason, moving from a 5-year to a 10-year estimation
period will result in a larger revenue credit, removing a substantial barrier
to the development of new high-voltage EV chargers now, and assisting in the
development of the EV market overall. TECO states that it believes that given
the projected acceleration in the EV adoption rate over the next 10 years and
the potential benefit the variance/waiver could provide to improving that
adoption rate, moving to a 10-year estimation period would lower the CIAC
barrier for construction of new high-voltage EV chargers, increase the number
of such chargers in the service territory, and result in faster adoption of
EVs.
Staff’s Analysis
Staff first notes that Rule 25-6.064(7), F.A.C., allows an
investor-owned utility to waive all or a portion of CIAC for customers, but
requires the utility to reduce plant in service as if CIAC had been collected,
unless the Commission determines that there is a quantifiable benefit to the
general body of ratepayers. In response to staff’s letter requesting additional
information, TECO stated that it could not quantify the benefit to customers at
this time. The
company further stated that the purpose of this program was to determine if
those benefits would materialize.
It opined that if no third parties avail themselves of the pilot program, then
there is no harm, but no benefit. If they do, TECO stated that it will try to
determine whether the benefits are sufficient to exceed what little subsidy is
provided. TECO
states that it intends to use the waiver period to monitor the applicability to
new EV fast charger installations, which it believes will assist in future
projections.
Staff believes that TECO has adequately demonstrated that
complying with Rule 25-6.064, F.A.C., would be a substantial hardship within
the meaning of Section 120.542, F.S., for the temporary and limited purpose of
the pilot program. Staff is concerned as to the limited quantifiable
information available. However, as stated above, staff sees the potential
benefit of allowing TECO to explore, for a limited time period, the extent to
which the current CIAC methodology presents a barrier to the installation of
line extensions to serve EV fast chargers.
Reporting Requirements as a Condition on the
Grant of Temporary Rule Waiver/Variance
Section 120.542(1), F.S., allows
agencies to impose conditions on rule waivers/variances, as long as those
conditions are necessary for the purpose of the underlying statute to be
achieved. Because this petition is a pilot program with the intent to eliminate
a barrier to the construction of new EV fast charging stations, and given the
lack of quantifiable information, staff believes certain reporting requirements
are necessary for monitoring the efficacy of the program and levels of cross
subsidy. Therefore, if the petition is granted by the Commission, staff
recommends that the Commission’s approval be conditioned on TECO filing annual
reports during the 5-year rule waiver/variance period, with the first report
due on March 1, 2021. Each annual report should include the following
information for the preceding calendar year:
·
For each EV fast charger line
extension installed during the reporting period, the number of EV fast chargers
served, the total line extension cost, the CIAC collected, the total annual
revenue collected (demand and energy), the line extension usage metrics (demand
and energy), and the balance of any related cross subsidy (total cost less CIAC
collected less total energy/demand revenue collected to date);
·
System-wide Totals (summed for all
years since the time the temporary rule waiver/variance was granted) for each
of the following: EV fast charger line
extensions installed, the number of EV fast chargers served, EV fast charger
line extension costs, CIAC collected, total annual revenue collected (demand
and energy), line extension usage metrics (demand and energy), and the balance
of any related cross subsidy (total cost less CIAC collected less total
energy/demand revenue collected to date); and
·
Projected annual growth for the next
five years in TECO’s service territory of EVs, EV fast chargers, and EV fast
charger line extensions.
As stated above, staff’s
underlying concern with this pilot program, aside from a lack of quantifiable
information, relates to the potential level of cross subsidies that may result
if this waiver is extensively utilized. However, staff believes that with the
limited nature of the program, along with the monitoring and reporting
requirements listed above, the level of the cross subsidies created by this
program should be relatively small compared to TECO’s net income.
Conclusion
Staff recommends that the Commission grant TECO’s petition
for temporary waiver of or variance from Rule 25-6.064(2)(c), F.A.C., subject to
the condition that TECO make the annual reporting requirements set forth above.
In addition, the Commission should approve TECO’s Fourth Revised Tariff Sheet
No. 5.105, which reflects the temporary rule waiver/variance. The effective
date of the revised tariff sheet should be the date of the consummating order.
Before the expiration of the 5-year rule waiver/variance period, TECO should be
required to file a revised tariff sheet reflecting the removal of the temporary
rule waiver/variance, which staff should be given administrative authority to
approve.
Issue 2:
Should this docket be closed?
Recommendation:
If no person whose substantial interests are
affected by the proposed agency action files a protest within 21 days of the
issuance of the order, a consummating order should be issued. TECO’s Fourth
Revised Sheet No. 5.105 should become effective upon issuance of the
consummating order. The docket should remain open for the annual reports. The
docket should be administratively closed when TECO’s revised tariff sheet
reflecting the removal of the temporary rule waiver/variance is administratively
approved by staff after the 5-year waiver/variance period expires. (Cibula)
Staff Analysis:
If no person whose substantial interests are
affected by the proposed agency action files a protest within 21 days of the
issuance of the order, a consummating order should be issued. TECO’s Fourth
Revised Sheet No. 5.105 should become effective upon issuance of the consummating
order. The docket should remain open for the annual reports. The docket should
be administratively closed when TECO’s revised tariff sheet reflecting the
removal of the temporary rule waiver/variance is administratively approved by
staff after the 5-year waiver/variance period expires.
If a protest is filed, TECO’s Fourth Revised Sheet No. 5.105
should not become effective.
25-6.064 Contribution-in-Aid-of-Construction for Installation
of New or Upgraded Facilities.
(1) Application and scope. The purpose
of this rule is to establish a uniform procedure by which investor-owned
electric utilities calculate amounts due as contributions-in-aid-of-construction
(CIAC) from customers who request new facilities or upgraded facilities in
order to receive electric service, except as provided in Rule 25-6.078, F.A.C.
(2)
Contributions-in-aid-of-construction for new or upgraded overhead facilities
(CIACOH) shall be calculated as follows:
|
CIACOH
|
=
|
Total estimated work
order job cost of installing the facilities
|
-
|
Four years expected
incremental base energy
revenue
|
-
|
Four years expected
incremental base demand revenue, if applicable
|
(a) The cost of the service
drop and meter shall be excluded from the total estimated work order job cost
for new overhead facilities.
(b) The net book value and cost of
removal, net of the salvage value, for existing facilities shall be included in
the total estimated work order job cost for upgrades to those existing
facilities.
(c) The expected annual base energy and
demand charge revenues shall be estimated for a period ending not more than 5
years after the new or upgraded facilities are placed in service.
(d) In no instance shall the CIACOH
be less than zero.
(3)
Contributions-in-aid-of-construction for new or upgraded underground facilities
(CIACUG) shall be calculated as follows:
|
CIACUG
|
=
|
CIACOH
|
+
|
Estimated difference
between cost of providing the service underground and overhead
|
(4) Each utility shall apply
the formula in subsections (2) and (3) of this rule uniformly to residential,
commercial and industrial customers requesting new or upgraded facilities at
any voltage level.
(5) The costs applied to the formula in
subsections (2) and (3) shall be based on the requirements of Rule 25-6.0342,
F.A.C., Electric Infrastructure Storm.
(6) All CIAC calculations under this
rule shall be based on estimated work order job costs. In addition, each
utility shall use its best judgment in estimating the total amount of annual
revenues which the new or upgraded facilities are expected to produce.
(a) A customer may request a review of
any CIAC charge within 12 months following the in-service date of the new or
upgraded facilities. Upon request, the utility shall true-up the CIAC to
reflect the actual costs of construction and actual base revenues received at
the time the request is made.
(b) In cases where more customers than
the initial applicant are expected to be served by the new or upgraded
facilities, the utility shall prorate the total CIAC over the number of end-use
customers expected to be served by the new or upgraded facilities within a
period not to exceed 3 years, commencing with the in-service date of the new or
upgraded facilities. The utility may require a payment equal to the full amount
of the CIAC from the initial customer. For the 3-year period following the
in-service date, the utility shall collect from those customers a prorated
share of the original CIAC amount, and credit that to the initial customer who
paid the CIAC. The utility shall file a tariff outlining its policy for the
proration of CIAC.
(7) The utility may elect to waive all
or any portion of the CIAC for customers, even when a CIAC is found to be
applicable. If however, the utility waives a CIAC, the utility shall reduce net
plant in service as though the CIAC had been collected, unless the Commission
determines that there is a quantifiable benefit to the general body of
ratepayers commensurate with the waived CIAC. Each utility shall maintain
records of amounts waived and any subsequent changes that served to offset the
CIAC.
(8) A detailed statement of its standard
facilities extension and upgrade policies shall be filed by each utility as
part of its tariffs. The tariffs shall have uniform application and shall be
nondiscriminatory.
(9) If a utility and applicant are
unable to agree on the CIAC amount, either party may appeal to the Commission
for a review.
Rulemaking
Authority 366.05(1), 350.127(2) FS. Law Implemented 366.03, 366.05(1),
366.06(1) FS. History–New 7-29-69, Amended 7-2-85, Formerly 25-6.64, Amended
2-1-07.
