Case Background
On December 27,
2024, Duke Energy Florida, LLC (DEF or Company) filed its petition for a
limited preceding seeking authority to implement an interim storm restoration
recovery charge to recover $1.09 billion for the incremental restoration costs
related to Hurricanes Debby, Helene, and Milton, as well as the replenishment
of its retail storm reserve. Included in the $1.09 billion is interest charged
on unrecovered costs for Hurricanes Debby, Helene, and Milton. Pursuant to the
2024 Settlement Agreement (2024 Settlement) approved by the Commission in Order
No. PSC-2024-0472-AS-EI, the recovery of storm costs from customers will begin,
on an interim basis, 60 days after the filing of a cost recovery petition and
tariff with the Commission. DEF
requested a 12-month recovery period, applied to all bills from March 2025
through February 2026.
On January 31,
2025, DEF submitted updated rate calculations for all rate classes and revised
tariffs, as well as an updated response to staff’s first data request. The
updated calculations reflect revised cost allocation factors, resulting in
minor changes to the storm cost recovery factors for all customers.
Specifically, DEF included in its petition a distribution allocation factor for
customers taking service at transmission level that overallocated distribution
storm costs to transmission-level customers. The revised rate calculation is
consistent with the calculation of previous storm cost recovery charges
approved in Order No. PSC-2024-0377-FOF-EI. The
updated rate calculations do not change the total $1.09 billion incremental storm
costs proposed for recovery. On February 4, 2025, the Commission approved DEF’s
interim storm restoration recovery charges consistent with DEF’s January 31,
2025, updated rate calculations and revised tariffs by Order No.
PSC-2025-0061-PCO-EI issued on February 24, 2025.
On March 6,
2025, White Springs Agricultural Chemicals, Inc. d/b/a PCS Phosphate-White
Springs (PCS) timely filed a Motion for Reconsideration of Order No.
PSC-2025-0061-PCO-EI (PCS’s Motion) pursuant to Rule 25-22.0376, Florida
Administrative Code (F.A.C.). In its Motion, PCS argues that the approved
allocation factors did not accurately reflect the cost allocation factors
utilized in DEF’s 2021 and 2024 Rate Settlements.
On March 6,
2025, Nucor Steel Florida, Inc. (Nucor) also timely filed a Motion for
Reconsideration of Order No. PSC-2025-0061-PCO-EI (Nucor’s Motion) pursuant to
Rule 25-22.0376, F.A.C. In its Motion, Nucor asks that the Commission grant
reconsideration in order to clarify that cost allocation and rate design
treatment remain open issues in this case that can be addressed by parties
later in this proceeding.
On March 13,
2025, DEF timely filed its Response to PCS’s Motion (DEF’s Response to PCS’s
Motion) as well as its Response to Nucor’s Motion (DEF’s Response to Nucor’s
Motion). DEF argued that neither PCS nor Nucor identified any issue of fact or
law that the Commission overlooked or failed to consider that would justify
reconsideration of Order No. PSC-2025-0061-PCO-EI.
Also on March
13, 2025, Nucor filed its Response to PCS’s Motion agreeing with PCS’s position
and asserting its own position that final allocation and rate design of the
storm restoration recovery charges remains an open issue that parties should be
afforded the opportunity to litigate at a later point in this case.
This
recommendation addresses the appropriate disposition of PCS’s and Nucor’s
motions for reconsideration. No request for oral argument was concurrently
filed with either motion, as required under Rule 25-22.0022(1), F.A.C., however,
oral argument may be heard at the Commission’s discretion under Rule
25-22.0022(7)(b), F.A.C. The Commission has jurisdiction over this matter
pursuant to Sections 366.04, 366.05, 366.06, and 366.076, Florida Statutes.
Discussion
of Issues
Issue 1:
Should PCS’s Motion for Reconsideration of Order No.
PSC-2025-0061-PCO-EI be granted?
Recommendation:
No. Reconsideration should be denied because PCS’s
Motion for Reconsideration fails to raise a point of fact or law that the
Commission overlooked or failed to consider in rendering its decision. (Dose)
Staff Analysis:
Law
The appropriate standard of review for reconsideration of
a Commission order is whether the motion identifies a point of fact or law that
the Commission overlooked or failed to consider in rendering the order under
review. See Stewart Bonded Warehouse, Inc. v. Bevis, 294 So. 2d 315
(Fla. 1974); Diamond Cab Co. v. King, 146 So. 2d 889 (Fla. 1962); and Pingree
v. Quaintance, 394 So. 2d 162 (Fla. 1st DCA 1981). It is not appropriate to
reargue matters that have already been considered. Sherwood v. State,
111 So. 2d 96 (Fla. 3d DCA 1959) (citing State ex. rel. Jaytex Realty Co. v. Green,
105 So. 2d 817 (Fla. 1st DCA 1958)). Furthermore, a motion for reconsideration
should not be granted “based upon an arbitrary feeling that a mistake may have been
made, but should be based upon specific factual matters set forth in the record
and susceptible to review.” Stewart Bonded Warehouse, Inc., 294 So. 2d at 317.
PCS’s Motion
In its Motion, PCS argues that the approved allocation
factors did not accurately reflect the cost allocation factors utilized in
DEF’s 2021 and 2024 Settlements. More specifically, PCS claims that DEF failed
to sub-functionalize Distribution
costs between Distribution – Primary and Distribution – Secondary, which each
have different allocators pursuant to the 2021 and 2024 Rate Settlements. PCS
asks that the Commission direct DEF to re-calculate its storm surcharge
exhibits to be consistent with allocation factors in its base rate method and
to submit a compliance filing to allocate costs consistent with the 2021 and
2024 Settlements.
DEF’s Response
In DEF’s Response to PCS’s Motion, DEF argued that PCS did
not identify any issue of fact or law that the Commission overlooked or failed
to consider that would justify reconsideration of Order No.
PSC-2025-0061-PCO-EI. More specifically, DEF argues that there is no
requirement that storm recovery costs be allocated using the same allocation
utilized for base rates. DEF asserts that previous storm cost recovery filings
used the same language, utilized the same treatment for distribution costs, and
referenced the same controlling settlement agreements. DEF additionally asserts
that it does not sub-functionalize storm restoration costs between Distribution
– Primary and Distribution – Secondary because costs are not tracked or
recorded in a manner to facilitate that sub-functionalization, and so DEF does
not have the information necessary to perform such a calculation. While DEF
accepts that PCS accurately described the allocation of base rates under
Paragraph 30(c) of the 2021 Settlement Agreement and Paragraph 29(c) of the
2024 Settlement, DEF contends that these apply only to base rates and not to
storm cost recovery.
Nucor’s Response
In Nucor’s Response to PCS’s Motion, Nucor agreed with
PCS’s position. Nucor’s response also reiterates its position from its own
motion that final allocation and rate design of the storm restoration recovery
charges remains an open issue that parties should be afforded the opportunity
to litigate at a later point in this case. This second point is addressed in
Issue 2.
Analysis
The 2021 and 2024 DEF Settlements were entered in base
rate proceedings and, accordingly, address a wide range of issues. Both
Settlements set forth the allocation factors to be used for base rates. In a base
rate case, DEF sub-functionalizes distibution costs between “Distribution –
Primary” and “Distribution – Secondary” and the allocation factors for distribution
primary and distribution secondary costs differ. DEF does not sub-functionalize
storm restoration costs between distribution primary and distribution secondary
and, therefore, applies the distribution primary allocation factor to all
distribution costs (both primary and secondary).
The Settlements separately set forth the procedures applicable
to the storm surcharge. These procedures include allowing DEF to maintain a
storm reserve of approximately $132 million and allowing DEF to collect a storm
surcharge on a 12-month recovery period subject to approval and true-up. These
storm cost recovery procedures allow DEF to avoid regulatory lag by recovering
costs due to storm damage quickly and effectively, subject to true-up, while
allowing all parties and the Commission the opportunity to review all costs.
Neither Settlement sets allocation factors specific to storm surcharge, and
neither otherwise requires DEF to sub-functionalizes between “Distribution –
Primary” and “Distribution – Secondary” in a storm cost recovery filing.
Previous storm surcharges have not sub-functionalized distribution costs.
PCS contends that the approved allocation factors did not
accurately reflect those approved in DEF’s 2021 and 2024 Settlements. The
instant case concerns a storm surcharge rather than base rates, and DEF applies
a distribution allocation factor that is consistent with the 2021 and 2024 Settlements
to the allocation of distribution storm restoration costs consistent with its
past storm recovery surcharges. DEF complied with all relevant portions of the
2024 Settlement as it pertains to storm surcharges. Therefore, staff believes
that PCS failed to raise a point of fact or law that the Commission overlooked
or failed to consider. Consequently, staff recommends that the Commission deny
PCS’s Motion for Reconsideration.
Issue 2:
Should Nucor’s Motion for Reconsideration of Order
No. PSC-2025-0061-PCO-EI be granted?
Recommendation:
No. Reconsideration should be denied because Nucor’s
Motion for Reconsideration fails to raise a point of fact or law that the
Commission overlooked or failed to consider in rendering its decision. Staff
recommends however that the Commission clarify on its own motion that the cost
allocation and rate design treatment have not been finally determined in this
docket and may still be raised for final determination later in this
proceeding. (Dose)
Staff Analysis:
Law
As stated more fully in Issue 1, the appropriate standard
of review for reconsideration of a Commission order is whether the motion identifies
a point of fact or law that the Commission overlooked or failed to consider in
rendering the order under review. Furthermore, a motion for reconsideration
should not be granted based upon an arbitrary feeling that a mistake may have been
made, but should be based upon specific factual matters set forth in the record
and susceptible to review.
Nucor’s Motion
In Nucor’s Motion, it argues that neither the 2021 nor the
2024 settlement prescribes the appropriate cost allocation and rate design for
the storm cost recovery surcharge at issue in this docket. Nucor asks that the
Commission grant reconsideration in order to clarify that cost allocation and
rate design treatment remain open issues in this case that can be addressed by
parties later in this proceeding. Nucor further contends that parties should
have a full opportunity to conduct discovery on the costs that DEF seeks to
recover through the interim storm cost recovery charge, the reasoning for the
cost allocation and rate design selected by DEF to recover storm costs, and to
develop positions on the appropriate cost allocation and rate design used to
recover such costs from customers.
DEF’s Response
In DEF’s Response to Nucor’s Motion, DEF argued that Nucor
failed to identify a point of fact or law that the Commission overlooked.
Additionally, DEF contends that Nucor’s Motion does not request the Commission
to take action on any specific portion of Order No. PSC-2025-0061-PCO-EI. DEF
claims that petitioning the Commission for a statement of “clarification” of
the Order is inappropriate for a motion for reconsideration. Further, DEF
asserts that Nucor has not been denied the opportunity to conduct discovery on
this matter and that Nucor waited until the day after Order No.
PSC-2025-0061-PCO-EI issued to serve discovery.
Analysis
Nucor’s instant Motion failed to raise a point of fact or
law that the Commission overlooked or failed to consider. Therefore, staff
recommends that the Commission deny Nucor’s Motion for Reconsideration.
However, staff agrees that the cost allocation and rate design treatment have
not been finally determined in this proceeding. Therefore, staff recommends that
the Commission clarify on its own motion that the final allocation and rate
design of the storm restoration recovery charges remains an open issue and that
parties should be afforded the opportunity to conduct discovery and develop
positions on these issues in this proceeding.
Issue 3:
Should this docket be closed?
Recommendation:
No, this docket should remain open pending final
reconciliation of actual recoverable storm costs with the amount collected
pursuant to the interim storm restoration recovery charge and the calculation
of a refund or additional charge if warranted. (Dose)
Staff Analysis:
No, this docket should remain open pending final
reconciliation of actual recoverable storm costs with the amount collected
pursuant to the interim storm restoration recovery charge and the calculation
of a refund or additional charge if warranted.
