House Bill 0821
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Florida House of Representatives - 2000 HB 821
By Representative Fuller
1 A bill to be entitled
2 An act relating to electric power service;
3 providing a short title; amending s. 366.04,
4 F.S.; prohibiting the Public Service Commission
5 from approving certain liabilities or
6 obligations of certain public utilities;
7 providing an exception; granting the commission
8 jurisdiction over operation of a coordinated
9 electric power grid; requiring the commission
10 to provide for fair and efficient operation of
11 the power grid; restricting certain activities
12 by the commission; amending s. 366.041, F.S.;
13 requiring the commission to consider certain
14 attributes of service interruptions in setting
15 rates and charges; creating s. 366.042, F.S.;
16 providing definitions; providing for rate
17 reductions; requiring the commission to
18 determine the average southeastern rate for
19 each class of electric service; specifying
20 limitations on rate charges by public
21 utilities; requiring a public utility to
22 initiate a full rate case before the commission
23 under certain circumstances; providing
24 requirements; requiring compliance with certain
25 rate requirements by a time certain; creating
26 s. 366.043, F.S.; providing for publication of
27 electric service interruption information;
28 creating s. 366.044, F.S.; providing
29 legislative findings; prohibiting the
30 commission from approving certain rates,
31 charges, fees, pass-throughs, or adjustments;
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1 requiring the commission to review certain
2 historic electric dockets; providing for public
3 hearings on such dockets; providing for refunds
4 of certain charges; amending s. 366.06, F.S.;
5 requiring the commission to conduct regular
6 revenue requirements analysis cases for certain
7 purposes; providing requirements and
8 procedures; providing an effective date.
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10 WHEREAS, a low-cost, reliable electric supply is vital
11 to the health, safety, and welfare of Floridians and the
12 economic development of this state, and
13 WHEREAS, Florida residents have the highest electric
14 bills in the southeastern United States and the second highest
15 electric bills of any state in the nation, and
16 WHEREAS, industrial electric rates in Florida are the
17 highest in the southeastern United States and the cost of
18 electricity is a major factor in the ability of this state to
19 attract and retain businesses that will provide employment for
20 Floridians, and
21 WHEREAS, businesses are experiencing record power
22 outages that result in untold lost production and adversely
23 impact their ability to effectively and competitively manage
24 their operations, and
25 WHEREAS, there has not been a full rate case hearing in
26 this state since 1985 and the true cost of providing electric
27 service has not been proven by Florida's electric utilities in
28 over 14 years, and
29 WHEREAS, the privilege of operating a monopoly
30 franchise for electric service in this state carries with it
31 the obligation to provide reliable electric service at the
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1 lowest possible price to the residents of this state, NOW,
2 THEREFORE,
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4 Be It Enacted by the Legislature of the State of Florida:
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6 Section 1. This act may be cited as the "Florida
7 Electric Rate Reduction, Reliability, and Fairness Act."
8 Section 2. Subsections (1) and (5) of section 366.04,
9 Florida Statutes, are amended, and subsection (7) is added to
10 said section, to read:
11 366.04 Jurisdiction of commission.--
12 (1)(a) In addition to its existing functions, the
13 commission shall have jurisdiction to regulate and supervise
14 each public utility with respect to its rates and service;
15 assumption by it of liabilities or obligations as guarantor,
16 endorser, or surety; and the issuance and sale of its
17 securities, except a security which is a note or draft
18 maturing not more than 1 year after the date of such issuance
19 and sale and aggregating (together with all other
20 then-outstanding notes and drafts of a maturity of 1 year or
21 less on which such public utility is liable) not more than 5
22 percent of the par value of the other securities of the public
23 utility then outstanding. In the case of securities having no
24 par value, the par value for the purpose of this section shall
25 be the fair market value as of the date of issue. The
26 commission, upon application by a public utility, may
27 authorize the utility to issue and sell securities of one or
28 more offerings, or of one or more types, over a period of up
29 to 12 months; or, if the securities are notes or drafts
30 maturing not more than 1 year after the date of issuance and
31 sale, the commission, upon such application, may authorize the
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1 utility to issue and sell such securities over a period of up
2 to 24 months. The commission may take final action to grant
3 an application by a public utility to issue and sell
4 securities or to assume liabilities or obligations after
5 having given notice in the Florida Administrative Weekly
6 published at least 7 days in advance of final agency action.
7 In taking final action on such application, the commission may
8 deny authorization for the issuance or sale of a security or
9 assumption of a liability or obligation if the security,
10 liability, or obligation is for nonutility purposes; and shall
11 deny authorization for the issuance or sale of a security or
12 assumption of a liability or obligation if the financial
13 viability of the public utility is adversely affected such
14 that the public utility's ability to provide reasonable
15 service at reasonable rates is jeopardized. Securities issued
16 by a public utility or liabilities or obligations assumed by a
17 public utility as guarantor, endorser, or surety pursuant to
18 an order of the commission, which order is certified by the
19 clerk of the commission and which order approves or authorizes
20 the issuance and sale of such securities or the assumption of
21 such liabilities or obligations, shall not be invalidated by a
22 modification, repeal, or amendment to that order or by a
23 supplemental order; however, the commission's approval of the
24 issuance of securities or the assumption of liabilities or
25 obligations shall constitute approval only as to the legality
26 of the issue or assumption, and in no way shall it be
27 considered commission approval of the rates, service,
28 accounts, valuation, estimates, or determinations of cost or
29 any other such matter. The jurisdiction conferred upon the
30 commission shall be exclusive and superior to that of all
31 other boards, agencies, political subdivisions,
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1 municipalities, towns, villages, or counties, and, in case of
2 conflict therewith, all lawful acts, orders, rules, and
3 regulations of the commission shall in each instance prevail.
4 (b) The commission shall not approve the assumption of
5 liabilities or obligations as guarantor, endorser, or surety
6 for, or the issuance or sale of securities by, any public
7 utility which has, during the preceding 2 years, invested in,
8 purchased, or constructed, on its own or through a parent,
9 sister, or affiliated company, an electric generating plant
10 outside of this state unless the public utility has electric
11 reserve margins in this state which equal or exceed 20
12 percent.
13 (5) The commission shall further have jurisdiction
14 over the planning, development, operation, and maintenance of
15 a coordinated electric power grid throughout Florida to assure
16 an adequate and reliable source of energy for operational and
17 emergency purposes in Florida and the avoidance of further
18 uneconomic duplication of generation, transmission, and
19 distribution facilities. In order to achieve the fair and
20 efficient operation of the electric power grid, the commission
21 shall ensure that no single utility, acting on its own or
22 together with another utility, is able to exercise excessive
23 control over the flow of electricity across the grid or
24 otherwise exert control over the grid which would hinder the
25 development of an efficient, fair, and competitive wholesale
26 market for electricity.
27 (7) The commission shall not lobby, advocate, or take
28 any public position with respect to proposed federal
29 legislation unless:
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1 (a) Such action will advance a specific energy policy
2 objective set forth in this chapter relating to the electric
3 industry.
4 (b) The commission has first held a public meeting at
5 which all interested parties are given an opportunity to voice
6 their opinions on the proposed federal legislation and
7 proposed position of the commission.
8 Section 3. Subsection (1) of section 366.041, Florida
9 Statutes, is amended to read:
10 366.041 Rate fixing; adequacy of facilities as
11 criterion.--
12 (1) In fixing the just, reasonable, and compensatory
13 rates, charges, fares, tolls, or rentals to be observed and
14 charged for service within the state by any and all public
15 utilities under its jurisdiction, the commission is authorized
16 to give consideration, among other things, to the efficiency,
17 sufficiency, and adequacy of the facilities provided and the
18 services rendered; the cost of providing such service and the
19 value of such service to the public; the ability of the
20 utility to improve such service and facilities; and energy
21 conservation and the efficient use of alternative energy
22 resources; provided that no public utility shall be denied a
23 reasonable rate of return upon its rate base in any order
24 entered pursuant to such proceedings. In its consideration
25 thereof, the commission shall have authority, and it shall be
26 the commission's duty, to hear service complaints, if any,
27 that may be presented by subscribers and the public during any
28 proceedings involving such rates, charges, fares, tolls, or
29 rentals; however, no service complaints shall be taken up or
30 considered by the commission at any proceedings involving
31 rates, charges, fares, tolls, or rentals unless the utility
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1 has been given at least 30 days' written notice thereof, and
2 any proceeding may be extended, prior to final determination,
3 for such period; further, no order hereunder shall be made
4 effective until a reasonable time has been given the utility
5 involved to correct the cause of service complaints,
6 considering the factor of growth in the community and
7 availability of necessary equipment. In the commission's
8 consideration of rates, charges, fares, tolls, or rentals for
9 electric service, the commission shall consider the frequency
10 and duration of service interruptions by a utility due to lack
11 of adequate electric reserve margins. Service interruptions
12 include all interruptions of normal continuous electric
13 service, including reductions in voltages and momentary
14 interruptions.
15 Section 4. Sections 366.042, 366.043, and 366.044,
16 Florida Statutes, are created to read:
17 366.042 Electric rate reductions.--
18 (1) As used in this section:
19 (a) "Rate" or "rates" means the rates, charges,
20 pass-throughs, adjustments, fares, tolls, or fees observed and
21 charged for electric service within this state, but excludes
22 any taxes.
23 (b) "Average southeastern rate" means the average rate
24 for customers in the same class of service in the states of
25 Georgia, Maryland, North Carolina, South Carolina, Virginia,
26 West Virginia, Alabama, Kentucky, Mississippi, and Tennessee.
27 (2) The commission shall determine the average
28 southeastern rate for each class of service using average
29 revenue per kilowatt-hour information for electric utilities
30 provided by the Energy Information Administration in the
31 United States Department of Energy.
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1 (3) Notwithstanding any other provision of law or any
2 tariff filed with the commission, no public utility shall
3 charge a rate to any customer in any:
4 (a) Residential class of service which exceeds the
5 average southeastern rate for residential class customers;
6 (b) Commercial class of service which exceeds the
7 average southeastern rate for commercial class customers; or
8 (c) Industrial class of service which exceeds the
9 average southeastern rate for industrial class customers.
10 (4) No public utility shall charge any rate which
11 exceeds the limits specified in this section until the utility
12 initiates a full rate case before the commission and proves by
13 clear and convincing evidence that the rate limitations are
14 unjust according to the criteria specified in this chapter and
15 that the cost of providing electric service in this state
16 exceeds the average cost of providing electric service in the
17 southeastern states. Public Counsel shall, and any affected
18 customer may, be a party to such rate cases.
19 (5) Each public utility shall comply with the electric
20 service rate requirements of this section no later than
21 January 1, 2001.
22 366.043 Publication of service interruptions.--Each
23 quarter, the commission shall publish, in one or more
24 newspapers of general circulation in the service territory of
25 each public utility, a summary of such utility's service
26 interruptions or curtailments during the previous period,
27 including, by customer class, the number of interruptions, the
28 duration of interruptions, and the number of customers
29 affected. Interruptions include any interruptions of normal
30 continuous electric service including reductions in voltages
31 and momentary interruptions.
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1 366.044 Refunding of stranded costs improperly charged
2 to consumers.--
3 (1) The Legislature finds that stranded costs have not
4 arisen in this state and will not arise in this state unless
5 there is retail competition in the provision of electric
6 service in this state and that, therefore, it is unreasonable
7 and unjust for any public utility to charge consumers for
8 stranded costs.
9 (2) The commission shall not approve any electric
10 rate, charge, fee, pass-through, or adjustment, including any
11 adjustment to depreciation or amortization schedules, on the
12 basis of avoidance or recovery of stranded costs.
13 (3)(a) The commission shall review the commission's
14 electric dockets for the last 10 years and identify any docket
15 or other proceeding in which the commission has approved the
16 recovery of stranded costs by any public utility. In
17 reviewing such electric dockets, the commission shall consider
18 all potential methods of recovering stranded costs, including
19 whether a public utility has accelerated or otherwise altered
20 the utility's depreciation or amortization schedules. If the
21 commission identifies a docket in which the commission
22 approved the recovery of stranded costs, the commission shall
23 initiate a new docket to determine by public hearing the
24 amount of such stranded costs and order a refund to consumers
25 of such amount with interest.
26 (b) The affected public utility may appear as a party
27 in any docket initiated pursuant to this section and present
28 evidence contesting whether consumers were charged for
29 stranded costs and the amount of stranded costs to be
30 refunded.
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1 (c) An electric consumer or group of consumers may
2 petition the commission to conduct a public hearing pursuant
3 to this section. The petition shall identify the public
4 utility involved and the docket in which the commission
5 approved the charging of stranded costs to consumers.
6 Section 5. Subsection (2) of section 366.06, Florida
7 Statutes, is amended to read:
8 366.06 Rates; procedure for fixing and changing.--
9 (2)(a) Whenever the commission finds, upon request
10 made or upon its own motion, that the rates demanded, charged,
11 or collected by any public utility for public utility service,
12 or that the rules, regulations, or practices of any public
13 utility affecting such rates, are unjust, unreasonable,
14 unjustly discriminatory, or in violation of law; that such
15 rates are insufficient to yield reasonable compensation for
16 the services rendered; that such rates yield excessive
17 compensation for services rendered; or that such service is
18 inadequate or cannot be obtained, the commission shall order
19 and hold a public hearing, giving notice to the public and to
20 the public utility, and shall thereafter determine just and
21 reasonable rates to be thereafter charged for such service and
22 promulgate rules and regulations affecting equipment,
23 facilities, and service to be thereafter installed, furnished,
24 and used.
25 (b) During the 5-year period starting January 1, 2000,
26 and ending December 31, 2004, and during each successive
27 5-year period, the commission shall conduct at least one full
28 revenue requirements analysis case to determine and fix fair,
29 just, and reasonable rates, charges, and fares that may be
30 charged or collected by each public utility for the utility's
31 electric service. The Public Counsel shall be a party to each
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1 case and shall zealously advocate for the lowest possible
2 rates for electric service for the citizens of this state.
3 The Public Counsel may not agree to any settlement or
4 compromise of any such case until after such time as the
5 Public Counsel has obtained substantial discovery from the
6 affected public utility concerning the utility's cost of
7 service. Any customer of the public utility and any other
8 affected party may be a party to the case. Nothing in this
9 subsection shall prevent the commission from conducting cases
10 more frequently than once every 5 years.
11 Section 6. This act shall take effect July 1, 2000.
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2 HOUSE SUMMARY
3
Prohibits the Public Service Commission from approving
4 liabilities or obligations of a public utility which
invests in electric power generating plants in other
5 states and fails to maintain at least a 20 percent
reserve margin in Florida.
6
7 Grants the commission jurisdiction over operation of a
coordinated electric power grid, requires the commission
8 to provide for fair and efficient operation of the power
grid by ensuring that no single utility exercises
9 excessive control over the grid, and restricts the
commission's federal lobbying activities.
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11 Requires the commission to consider service interruption
frequencies and durations in setting rates and charges.
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13 Provides for rate reductions by requiring the commission
to determine the average southeastern rate for each class
14 of electric service and specifing limitations on rate
charges by public utilities.
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16 Requires public utilities to publish electric service
interruption information.
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18 Prohibits the commission from approving rates, charges,
fees, pass-throughs, or adjustments based on stranded
19 costs, requires the commission to review past 10-year
electric dockets for stranded costs evidence in the
20 commission's rate cases, and provides for public hearings
and refunds of such costs.
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22 See bill for details.
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