Discussion
of Issues
Issue 1:
Should the
Commission grant FPUC’s petition for a temporary waiver of Rule 25-17.250(1),
F.A.C.?
Recommendation:
Yes.
Staff recommends that FPUC’s petition for a temporary waiver of Rule
25-17.250(1) should be granted. (Weisenfeld, Phillips).
Staff Analysis:
Rule
25-17.250(1), F.A.C., requires each electric investor-owned utility (IOU) to
file with the Commission by April 1 of each year a standard offer contract for
the purchase of firm capacity and energy from renewable generating facilities
and small qualifying facilities with a design capacity of 100 kW or less. The
standard offer contracts reflect each IOU’s next avoided unit shown in its most
recent TYSP. The rule further requires that “[e]ach investor-owned utility with
no planned generating unit identified in its TYSP shall submit a standard offer
based on avoiding or deferring a planned purchase.” As FPUC is a non-generating
electric IOU, it does not file a TYSP and has no avoidable generating units.
Rule
25-17.250(2)(a), F.A.C., provides that in order to ensure that each IOU
continuously offers a contract to producers of renewable energy, each standard
offer contract shall remain open until: 1) a request for proposal is issued for
the utility’s planned generating unit, or 2) the IOU files a petition for a
need determination or commences construction for generating units, or 3) the
generating unit upon which the standard offer contract was based is no longer part
of the IOU’s generation plan, as evidenced by a petition to that effect filed
with the Commission or by the utility’s most recent TYSP.
In its petition, FPUC asks that it be granted a temporary
waiver from the requirement to file its standard offer contract annually on
April 1 of each year until such time as the Company has entered into a new
contract or contracts for power supply to its electric divisions. FPUC is a
party to a long-term purchase power contract with Florida Power & Light and
Gulf Power Company that extends to 2026. FPUC states that granting a waiver
from the filing requirement would enable the Company to avoid for up to five
years the cost and use of resources necessary to accomplish the yearly filing,
since the Company’s standard offer contract will not change until its purchased
power agreements change. FPUC provides that in the event that the Company’s
purchased power agreements change sooner and in a manner that it becomes necessary
to amend the Company’s standard offer contract, that the Company would make a
revised standard offer filing as soon as necessary to reflect such changes to
its purchased power agreement.
Pursuant to
120.542(6), F.S., FPUC’s request for a rule waiver was submitted to Florida
Administrative Weekly for publication. Interested parties had until May 13,
2021, to submit written comments. No public comment was received.
Section 120.542, F.S., authorizes the
Commission to grant variances or waivers to the requirements of its rules where
the person subject to the rules demonstrates that the purpose of the underlying
statute has been or will be achieved by other means, and when application of a
rule would create substantial hardship or would violate principles of fairness.
"Substantial hardship" as defined in this Section means “a
demonstrated economic, technological, legal, or other type of hardship to the
person requesting the variance or waiver.”
The
underlying statutory provision pertaining to Rule 25-17.250(1), F.A.C., is
Section 366.91, F.S. Section 366.91(1), F.S., states:
The Legislature
finds that it is in the public interest to promote the development of renewable
energy resources in this State. Renewable energy resources have the potential
to help diversify fuel types to meet Florida’s growing dependency on natural
gas for electric production, minimize the volatility of fuel costs, encourage
investment within the State, improve environmental conditions, and make Florida
a leader in new and innovative technologies.
Section
366.91(3), F.S., enumerates requirements to promote the development of
renewable energy resources. In summary:
a) By January 1, 2006, each investor-owned
electric utility (IOU) and municipal utility subject to the Florida Energy
Efficiency and Conservation Act (FEECA) of 1980 must continuously offer to
purchase capacity and energy from specific types of renewable resources;
b) The contract shall be based on the utility’s
full avoided costs, as defined in Section 366.051, Florida Statutes; and,
c) Each contract must provide a term of at least
ten years.
Staff recommends that FPUC has demonstrated it will suffer
a substantial hardship if the provisions of Rule 25-17.250(1), F.A.C., are
strictly applied, and therefore, FPUC has provided a basis for a waiver of the
rule. Granting FPUC a waiver of Rule 25-17.250(1), F.A.C., would help the
Company avoid unnecessary costs and allocation of resources to produce a filing
that is otherwise redundant of the prior year’s filing and is already in
compliance with the pertinent rules and statutes. A waiver of Rule
25-17.250(1), F.A.C., allows the Commission to continue promoting the
development of renewable energy resources in Florida because it allows FPUC to
offer an economically feasible standard offer contract for renewable energy.
Issue 2:
Should the Commission approve the proposed standard offer
contract filed by FPUC?
Recommendation:
Yes. The provisions of FPUC’s standard offer
contract conform to all requirements of Rules 25-17.200 through 25-17.310,
F.A.C. The proposed standard offer contract provides flexibility in the
arrangements for payments so that a developer of renewable generation may
select the payment stream best suited to its financial needs. (Phillips)
Staff Analysis:
Section 366.91(3), F.S., and Rule 25-17.250, F.A.C.,
require that FPUC, as an IOU, continuously make available a standard offer
contract for the purchase of firm capacity and energy from renewable generating
facilities (RF) and small qualifying facilities (QF) with design capacities of
100 kilowatts (kW) or less. Pursuant to Rules 25-17.250(1) and (3), F.A.C., the
standard offer contract must provide a term of at least 10 years, and the
payment terms must be based on the utility’s next avoidable fossil-fueled
generating unit identified in its most recent TYSP, or if no avoided unit is
identified, its next avoidable planned purchase.
FPUC has determined that no changes are necessary from
last year’s filing that was approved by Order No. PSC-2020-0166-PAA-EQ, issued
in Docket No 20200109-EQ. Attachment A of this recommendation reflect identical
provisions approved last year.
Conclusion
Staff recommends that FPUC’s proposed standard offer
contract be approved as filed. The provisions of FPUC’s standard offer contract
conform to all requirements of Rules 25-17.200 through 25-17.310, F.A.C., and
should therefore be approved and made effective as of the date of the
Commission’s vote.
Issue 3:
Should this docket be closed?
Recommendation:
Yes. If no person whose
substantial interests are affected by the proposed agency action files a
protest within 21 days of the issuance of the Proposed Agency Action Order,
this docket should be closed upon the issuance of a consummating order. (Weisenfeld)
Staff Analysis:
At the conclusion of the protest period, if no
protest is filed, this docket should be closed upon the issuance of a
consummating order.
