Case Background
On August 11,
2023, Tampa Electric Company (TECO or Company) filed a petition for approval of
a new depreciation account and rate for
electric vehicle (EV) charging stations (Petition). The Company’s
request is in accordance with Rules 25-6.0436(2)(a), Florida Administrative
Code (F.A.C.), which provides that “[n]o utility shall change any existing
depreciation rate or initiate any new depreciation rate without prior
Commission approval;” and Rule 25-6.0436(3)(b), F.A.C., which requires that:
“[u]pon establishing a new account or subaccount classification, each utility
shall request Commission approval of a depreciation rate for the new plant
category.”
Pursuant to Rule
25-6.0436(3)(a), F.A.C., electric utilities are required to maintain depreciation
rates and accumulated depreciation reserves in accounts or subaccounts in
accordance with the Uniform System of Accounts (USOA) for Public Utilities and
Licensees, as found in the Code of Federal Regulations,[1] which is incorporated by reference in Rule
25-6.014(1), F.A.C.
On April 21, 2021,
TECO received Commission authorization to implement its electric vehicle
charging pilot program (Pilot). Under this Pilot, TECO will purchase,
install on customer premises within the Company’s service territory, own, and maintain
200 Level 2 EV charging ports and 4 direct current fast charging (DCFC) ports., The first EV chargers under the Pilot went
into service on September 30, 2023. As of October 6, 2023, 50 EV charging
ports have been installed on customer premises.
With this Petition, TECO requests the
Commission’s approval to establish a new depreciation account, 370.10 – Electric Vehicle Charging Stations, with an
average service life (ASL) of 10 years, a net salvage (NS) of zero percent, and
an annual depreciation rate of 10 percent, for recording all of its Pilot-related
EV charging stations.
Currently, TECO
also owns some Non-Pilot EV charging stations that are sited on the Company’s
property. These charging stations are not accessible to the public and are used
for internal company purposes. TECO began purchasing these stations in 2019. Given
the location and primary use of the stations, TECO recorded these charging
stations in existing Account 394.00 – Tool Shop & Garage Equipment, which
utilizes an ASL of 7 years. TECO noted that it plans to add more of
the Non-Pilot charging stations on Company property. Through the Petition, TECO requests authority
to record the costs of its Non-Pilot Company-Use EV charging station equipment
in the new Account 370.10 – Electric Vehicle Charging Stations with the same 10
percent annual depreciation rate.
Staff is not
aware of any public comments or concerns regarding this matter.
The Commission
has jurisdiction over this matter pursuant to Sections 366.04, 366.05, and
366.06, Florida Statutes (F.S.).
Discussion
of Issues
Issue 1:
Should TECO’s request to establish a new depreciation
account with applicable annual depreciation rate for the Company to record its
EV charging stations be approved, and if so, what is the appropriate account classification
and the associated depreciation rate?
Recommendation:
Yes. Staff recommends approval of TECO’s petition to
establish a new Account 370.10 – EV Charging Stations to record all its Company-owned
EV charging stations. Staff further recommends an annual depreciation rate of
10 percent applicable to this account be approved. (Wu, Kunkler)
Staff Analysis:
TECO seeks the Commission’s approval to establish a
new Account 370.10 – EV Charging Stations to record all its Company-owned EV
charging stations. The Company proposes an ASL of 10 years, a net salvage (NS)
of zero percent, and an annual depreciation rate of 10 percent for this
account.
Account Classification
Regulatory guidance regarding account classification of
electric vehicle charging stations and related equipment is not clearly
defined, as there is currently no listing of electric vehicle charging stations
under any plant account within the USOA. In its Petition, TECO references two
utilities that currently record depreciation of EV charging stations. These two
referenced utilities are Duke Energy Florida, LLC. (DEF) and Florida Power &
Light Company (FPL).
On December 2, 2021, the Commission approved FPL’s request
to record EV charging stations in Account 371.00 – Installations on Customer
Premises. On May
20, 2022, the Commission approved DEF’s request to establish Account 370.70 – EV
Charging Stations for recording EV DCFC assets.
DEF’s chargers were installed on customer premises as part
of a pilot program, and the stations incorporated a meter that DEF utilized for
its own purposes. TECO
stated that its Pilot EV charging stations also include a metering device which
is used in part for the Company’s own purposes.
TECO explained that one of the purposes of the Pilot is to collect “a variety
of data points” regarding EV charging, which will provide TECO with the ability
“to understand any potential system planning impacts.” Based
on these aspects of TECO’s charging stations, the Company concluded that
Account 370.10 is the appropriate account for TECO’s charging stations.
As mentioned earlier, TECO currently books all EV charging
stations, both Pilot and Non-Pilot Company-Use, in Account 394.00 – Tool Shop
& Garage Equipment. As of September 30, 2023, the total plant amount for
both Pilot-related Customer Premise and Non-Pilot, Company-Use EV charging
stations is $663,191 and $398,747, respectively.[15]
The Company additionally requests approval to transfer the plant and reserve
associated with these existing EV charging stations from Account 394.00 to Account
370.10 – EV Charging Stations, if the establishment of Account 370.10 is
approved. TECO claimed that this accounting treatment is more appropriate than
the existing classification in Account 394.00, and will also ensure consistency
across both types of charging stations owned by the company.
Staff notes that Account 370.10 is a subaccount of Account
370 – Meters. To determine if this account is the most appropriate account for
recording TECO’s EV charging stations, staff considered the nature of the Pilot
EV charging stations and their control and monitoring capabilities.
Additionally, staff considered that Account 370.10 – EV Charging Stations will also
be used to record TECO’s Non-Pilot, Company-Use EV charging stations, which are
located on company property. Staff believes that Account 370.10 – EV Charging
Stations is more appropriate than Accounts 371.00 – Installations on Customer
Premises or 394.00 – Tool Shop & Garage Equipment due to the service
functions of data collection and consistency discussed previously.
Staff recommends approval of TECO’s request to establish
Account 370.10 and transfer the plant and reserve that are associated with the
existing EV charging stations from Account 394.00 to Account 370.10.
Requested Depreciation Parameters and
Depreciation Rate
TECO proposes an ASL of 10 years, a NS of zero percent and
an annual depreciation rate of 10 percent for its petitioned Account 370.10 –
EV Charging Stations. This proposal is consistent with the depreciation
parameters and rate that the Commission approved for DEF’s EV charging account.
TECO stated that, as the Commission noted in Order No.
PSC-2022-0183-PAA-EI, DEF relied on guidance from the manufacturer of the
charging stations and the advice of a third-party depreciation consultant to
establish that a 10-year ASL is typical for DCFC stations. In
its Petition, TECO acknowledged that it similarly based its proposal of the
petitioned account’s service life and depreciation rate on feedback from the
manufacturer of the Pilot charging stations.
According to the distributor/manufacturer of TECO’s Pilot
charging stations, the recommended minimum design life of the EV charging
stations is 7 years.
TECO stated that the Company’s proposal of a 10-year ASL is based on the
expectation that EV charging stations will last longer than the vendor's
minimum design life of 7 years.
Staff inquired of TECO about the warranty terms for its EV
charging stations. The Company responded that all Pilot charging stations have a
4-year warranty which includes maintenance and labor.
The warranty terms of the Non-Pilot EV charging stations vary based on the manufacturer.
Some existing Company-Use EV charging stations are no longer under warranty and
the warranty for those stations may have varied from one to five years at the
time of installation. However, the Non-Pilot charging stations that were installed
more recently are warrantied
to be free of defects in materials and workmanship under normal use for a
period of 4 years.
Staff notes that the Commission approved FPL’s request to
use an ASL of 15 years for its EV charging stations account; and
the Commission also approved DEF’s request to use an ASL of 10 years for its EV
charging stations account. Staff
believes that an ASL of 10 years is more appropriate for TECO’s currently petitioned
Account 370.10 – EV Charging Stations based on the design life and the warranty
period of the Company’s EV charging stations.
TECO proposed a NS of zero percent for the petitioned
Account 370.10. The Company reported that it began installation of the Non-Pilot
EV charging station in 2019, and has not had to retire or remove any assets.
As such, there is no TECO-specific retirement data available, at this time, to either
support or oppose the Company’s proposed
zero present NS. Staff agrees with the Company’s NS proposal which is
consistent with the Commission’s prior order for DEF.
Using the proposed ASL of 10 years and NS of zero percent,
the resulting annual remaining life depreciation rate for Account 370.10 is 10
percent. Staff notes that the appropriateness of these depreciation parameters
and rate will be evaluated periodically through the Commission’s review of
TECO’s depreciation study that will be filed at least every four years per Rule
25-6.0436(4)(a), F.A.C.
In conclusion, staff recommends approval of TECO’s
petition to establish a new Account 370.10 – EV Charging Stations to record all
of its Company-owned EV charging stations. Staff further recommends an ASL of
10 years, a NS of zero percent, and an annual depreciation rate of 10 percent
applicable to this account be approved.
Issue 2:
If a new depreciation rate for TECO’s EV charging
stations is authorized in Issue 1, what should be the effective date?
Recommendation:
If the Commission approves staff’s recommendation in
Issue 1, staff recommends that any newly-authorized depreciation rate for TECO’s
EV charging stations applicable to Account 370.10 – EV Charging Stations become
effective October
1, 2023. (Wu)
Staff Analysis:
TECO indicated that it would like its petitioned 10 percent
depreciation rate to be effective October 1, 2023, as the first Pilot-related
EV charging stations were placed into-service in September, 2023. The Company reported
that, as of September 30, 2023, all existing EV charging ports that were placed
in-service are booked to the existing Account 394.00. The total plant amounts
for Pilot-related customer-premise and Non-Pilot Company-Use charging ports are
$663,191 and $398,747, respectively. TECO noted that, if
authorized, it would perform the necessary asset cost transfers and related
reserve transfers for the EV charging stations from the current Account –
394.00 Tool
Shop & Garage Equipment to the new Account 370.10 – EV Charging
Stations.
Depreciation is the recovery of invested capital
representing equipment that is providing service to the public. This recovery
is designed to take place over the related period of service to the public,
which begins with the equipment’s in-service date. Therefore, staff recommends
an implementation date of October 1, 2023, based on the aforementioned plant
in-service status of the EV charging stations.
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 order, this docket should be closed upon the issuance of a
consummating order. (Stiller)
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.
