Case Background
On December 29, 2025, Tampa
Electric Company (TECO or Company) petitioned the Florida Public Service
Commission (Commission) for approval of its Big Bend Clean Water Act Section
316(b) Study (Study) for cost recovery through the Environmental Cost Recovery
Clause (ECRC). TECO states that the Study is required to comply with Section
316(b) of the Clean Water Act. TECO expects the Study to be completed by March
2029.
The U.S. Environmental
Protection Agency (EPA) adopted a rule pursuant to Section 316(b) of the Clean
Water Act on September 7, 2004, establishing requirements to reduce mortality
of aquatic organisms caused by cooling water intake structures (CWIS) at
existing power plants. In 2004, TECO requested Commission approval for cost
recovery through the ECRC for a Comprehensive Demonstration Study, which was
needed to comply with the new EPA regulation. TECO’s ability to seek cost
recovery for that study was authorized by the Commission in Docket No.
20041300-EI.[1]
The 2004 Section 316(b) rule
changes were challenged and the EPA published a final rule regarding Section
316(b) (EPA Rule or Rule) on August 15, 2014, which outlined the requirements
for CWIS at existing facilities.[2] The EPA Rule requires that
the best technology available be applied to the design and operation of CWIS to
minimize adverse impacts to aquatic life. In 2018, TECO petitioned the
Commission for cost recovery through the ECRC for its Big Bend Unit 1 Section
316(b) Impingement Mortality project in order to comply with the EPA Rule. The
Commission approved ECRC cost recovery for the Big Bend project.[3] TECO explains that even
though its National Pollutant Discharge Elimination System (NPDES) permit was
administratively continued in 2018, the Company decided to go ahead with the
Impingement Mortality Project as part of its ongoing Big Bend Modernization
Project.
On August 27, 2025, the
Florida Department of Environmental Protection (DEP) issued a final NPDES
permit for TECO’s Big Bend Power Station (Big Bend) which contained conditions
for compliance with the EPA Rule. TECO states the primary focus of the Study is
to confirm that its Big Bend Mortality Project meets the requirements of Section
316(b) and to provide the DEP with information it will use to determine
compliance requirements in TECO’s next NPDES permit. TECO is requesting
approval of its Study in order to comply with the permit conditions outlined in
its NPDES permit.
Pursuant
to Section 366.8255, Florida Statutes (F.S.), the Florida Legislature
authorized the recovery of environmental compliance costs prudently incurred by
investor-owned electric utilities through the ECRC. The method for cost
recovery for such costs was first established by Order No. PSC-94-0044-FOF-EI,
issued on January 12, 1994. The Commission has jurisdiction over this matter
pursuant to Section 366.8255, F.S.
Discussion
of Issues
Issue 1:
Should the Commission approve Tampa Electric
Company’s petition for approval of the Big Bend Clean Water Act Section 316(b)
Study for cost recovery through the Environmental Cost Recovery Clause?
Recommendation:
Yes. Staff recommends that TECO’s Big Bend Clean
Water Act Section 316(b) Study is necessary to comply with the EPA Rule. Consistent
with prior ECRC orders, operation and maintenance (O&M) costs associated
with the Study should be allocated to appropriate rate classes on an energy
basis. (Lewis)
Staff Analysis:
The
EPA Rule establishes requirements for CWIS at existing facilities. The Rule
requires that the best technology available be applied to the design and
operation of CWIS to minimize impingement mortality
and entrainment[5]
of aquatic life. The Rule allows for seven different approaches for impingement
mortality compliance. For entrainment compliance, the Rule requires the
evaluation of closed-cycle cooling, alternative water supplies, and fine mesh
screens for a site-specific determination by the DEP Director.
In
its petition, TECO stated that it must complete several studies, including the
Big Bend Clean Water Act Section 316(b) Study, and reports by February 27,
2030, which is 180 days before its NPDES permit expires on August 26, 2030. The
focus of the Study is to confirm that the Big Bend Impingement Mortality
Project meets the EPA’s Rule requirements for Section 316(b) of the Clean Water
Act, to obtain information that the DEP will use to select the best technology
available for entrainment, and develop requirements that will be included in
TECO’s next Big Bend NPDES permit. To accomplish these goals, the Study will:
·
Review
background, source water, and biological data;
·
Evaluate
current plant configuration characteristics;
·
Evaluate
the method of compliance with impingement mortality best technology available;
·
Study
existing entrainment performance; and
·
Review
feasibility and cost estimates for available technologies.
Due
to the nature of this Study, TECO used an internal preferred source process to
select Environmental Consulting & Technology as the contractor to perform
the work. The Company stated that the contractor was selected due to its
experience, knowledge of Big Bend, and experience completing similar studies at
TECO’s Bayside Power Station. TECO estimates it will incur approximately
$1,178,300 in O&M expenses associated with the Study. TECO expects the
Study to be completed by March 2029.
In response to staff’s data request, TECO
provided data, as shown in Table 1-1, of the estimated impact to a residential
customer bill. [6]
Table 1-1
Residential Bill Impact
|
Year
|
$ / 1,000 kWh
|
$ / 1,200 kWh
|
|
2025
|
0.00
|
0.00
|
|
2026
|
0.00
|
0.00
|
|
2027
|
0.06
|
0.07
|
|
2028
|
0.00
|
0.00
|
|
2029
|
0.00
|
0.00
|
The Commission’s criteria for ECRC recovery relevant to this
docket, established by Order No. PSC-94-0044-FOF-EI, are:
(1)
The activities are legally required to comply with governmentally imposed
environmental regulation enacted, became effective, or whose effect was
triggered after the Company’s last test year upon which rates are based; and
(2) None of
the expenditures are being recovered through some other cost recovery mechanism
or through base rates.
Staff recommends that the Study proposed in TECO’s petition meets
these criteria. The Study described in the petition is necessary for the
Company to comply with governmentally imposed environmental regulations. The
compliance activities were required as a result of the August 27, 2025, DEP
issuance of the updated standards of the NPDES permit for Big Bend,
which contained conditions for compliance with the EPA Rule. TECO states the
primary focus of the Study is to confirm that its Big Bend Mortality Project
meets the requirements of Section 316(b) and to provide the DEP with
information it will use to determine compliance requirements in TECO’s next
NPDES permit. The costs of the proposed compliance
Study are not currently being recovered through some other cost recovery
mechanism or through base rates. Staff notes that the reasonableness and
prudence of individual expenditures related to the Study will be subject to the
Commission’s continuing review in future ECRC proceedings.
Conclusion
Staff
recommends that TECO’s Big Bend Clean Water Act
Section 316(b) Study is necessary to comply with the EPA’s
Rule. Consistent
with prior ECRC orders, O&M costs associated with the Study should be allocated to appropriate rate classes on an energy
basis.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. This docket should be closed upon issuance of a
Consummating Order unless a person whose substantial interests are affected by
the Commission’s decision files a protest within 21 days of the issuance of the
Proposed Agency Action Order. (Marquez)
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.
