Case Background
On August 3, 2021, Florida Power &
Light Company (FPL) filed a petition for a temporary waiver from or variance of
Rule 25-6.0143(1)(g), Florida Administrative Code (F.A.C.) (Petition). Investor-owned
electric utilities are required to maintain their accounts and records in
conformity with the Uniform System of Accounts for Public Utilities and
Licensees.[1] Rule 25-6.0143, F.A.C., addresses electric
utilities’ use of accumulated provision accounts 228.1, 228.2, and 228.4.
Paragraph (1)(g) of Rule 25-6.0143 requires that under the Incremental Cost and
Capitalization Approach methodology for determining the allowable costs to be
charged to cover storm-related damages, certain costs may be charged to Account
228.1 only after review and approval by the Commission. Before the Commission
makes this determination, the costs may be deferred if they were incurred prior
to June 1 of the year following the storm event.
Paragraph (1)(g) of the rule further
requires that:
By
September 30 a utility must file a petition for the disposition of any costs
deferred prior to June 1 of the year following the storm event giving rise to
the deferred costs.
FPL is asking the Commission for a
temporary variance from or waiver of the September 30 filing requirement. FPL
asks that it be allowed until December 31, 2021, to file its paragraph (1)(g)
petition concerning deferred storm costs related to Hurricane Isaias and
Tropical Storm Eta, and for Gulf Power Company (Gulf) to file its petition
concerning deferred storm costs related to Hurricane Sally and Hurricane Zeta.
Notice of FPL’s Petition was published in
the August 5, 2021, edition of the Florida Administrative Register, Vol. 47,
No. 151 as required by Section 120.542(6), Florida Statutes (F.S.). No one
commented on the Petition within the 14-day comment period provided by Rule
28-104.003, F.A.C. The Commission must approve or deny the Petition by November
1, 2021, under Section 120.542(8), F.S., or the Petition would be deemed approved.
The Commission has jurisdiction
under Sections 120.542, 350.115, 366.04, .05, and .06, F.S
Discussion
of Issues
Issue 1:
Should the Commission grant Florida Power &
Light Company's Petition for a temporary waiver or variance from Rule
25-6.0143(1)(g), F.A.C.?
Recommendation:
Yes. The Commission should grant Florida Power &
Light Company’s Petition for a temporary variance or waiver of Rule
25-6.0143(1)(g), F.A.C., to allow FPL and Gulf to file petitions for certain
deferred costs no later than December 31, 2021. (Cowdery, Mouring)
Staff Analysis:
FPL is
requesting that the Commission grant FPL and Gulf a temporary variance from or
waiver of Rule 25-6.0143(1)(g), F.A.C. Pursuant to this rule provision, as
explained in the Case Background, FPL and Gulf are required to file their
petitions for disposition of certain deferred costs by September 30, 2021.
Legal Standard for Rule Variances or
Waivers
Pursuant to
Section 120.542(2), F.S., the Commission is required to grant waivers and
variances from its rules “when the person subject to the rule demonstrates that
the purpose of the underlying statute will be or has been achieved by other
means by the person and when application of a rule would create a substantial
hardship or would violate principles of fairness.” A “substantial hardship” is
defined by statute as a “demonstrated economic, technological, legal, or other
type of hardship.”
Rule
25-6.0143, F.A.C., implements Section 350.115, F.S., which allows the
Commission to prescribe by rule uniform systems and classifications of accounts
for each type of regulated company and approve or establish adequate, fair, and
reasonable depreciation rates and charges. The rule also implements Section
366.04(2)(a), F.S., which gives the Commission power over electric utilities to
prescribe uniform systems and classifications of accounts.
FPL’s Petition
FPL states
that preparation and filing of the petitions for deferred costs related to the
four named storms no later than September 30, 2021, will create a substantial
hardship. FPL states that FPL and Gulf are engaged in the litigation of and
preparations for a number of proceedings, including the hearing in the FPL rate
case in Docket No. 20210015-EI and clause proceedings scheduled for final
hearings on November 2 though November 4, 2021. FPL explains that its Power
Delivery Business Unit provides much of the information and data necessary to
the preparations and filing of the referenced storm dockets and also is
responsible for maintaining the grid, preparing for and responding to tropical
storms and hurricanes, and stands ready to assist other utilities whose service
territories are impacted by natural disasters and other emergency events. FPL
alleges that requiring the preparation and filing of the identified storm cost
proceedings will necessarily detract from and adversely impact FPL’s and the
Power Delivery Business Unit’s “ability to devote its full attention and
resources to these critical tasks.”
FPL also
argues that no anticipated party to the proceedings and no customers will be
prejudiced by granting its Petition for temporary variance or waiver. Further,
FPL alleges that the requested temporary variance or waiver does not contravene
the rule’s implementing statutes.
FPL
represents that the Office of Public Counsel has no objection to the relief requested
in the Petition for temporary variance or waiver, and asks that the Commission
expedite consideration of the Petition and consider it at the September 2021
Commission Conference.
Purpose of the Underlying Statutes
Sections
350.115 and 366.04(2)(a), F.S., give the Commission power to prescribe by rule
uniform systems and classifications of accounts and to approve or establish
adequate, fair, and reasonable depreciation rates and charges for electric
utilities. The purpose of the September 30 filing date is to facilitate a
timely review of storm restoration costs and afford the Commission adequate
oversight on the use of Commission-approved storm reserves (Account 228.1).
Often the initial filings made pursuant to Rule 25-6.0143, F.A.C., reflect
estimated costs used to implement an interim cost recovery mechanism. As such,
staff believes that the purpose of Sections 350.115 and 366.04(2), F.S., will
be unaffected by granting the requested temporary variance or waiver.
Further, no
anticipated party to any proceedings and no customers will be prejudiced or
adversely affected by granting FPL’s Petition for temporary variance or waiver.
For these reasons, the purpose of the statutes will still be achieved as
required by Section 120.542, F.S., if FPL’s Petition for temporary variance or
waiver is granted.
Substantial Hardship
The
Commission has previously granted petitions for variance or waiver on the basis
that application of a rule’s filing deadline created substantial hardship
because of utility staffing limitations caused by the specific circumstances
alleged in those petitions.[2] Staff
believes that the essence of FPL’s substantial hardship allegations is that
under the specific circumstances alleged, FPL is experiencing staffing
limitations caused by the number of dockets FPL’s Power Delivery Business Unit
is currently involved in, which is in addition to the unit’s regular
responsibilities concerning maintaining the grid and preparing for and
responding to named storms. Under the specific facts presented, staff believes
that FPL has demonstrated substantial hardship under Section 120.542, F.S.
Conclusion
For the reasons
explained above, the Commission should grant Florida Power & Light
Company’s Petition for a temporary variance or waiver of Rule 25-6.0143(1)(g),
F.A.C., to allow FPL and Gulf to file petitions for certain deferred costs no
later than December 31, 2021.
Issue 2:
Should this docket by 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 order, a consummating order should be issued and this docket
should be closed. (Cowdery)
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 and this docket
should be closed.
