| 1 | A bill to be entitled |
| 2 | An act relating to renewable energy; creating s. 366.91, |
| 3 | F.S.; providing a popular name; providing legislative |
| 4 | findings; providing definitions; requiring the Public |
| 5 | Service Commission to require public utilities to offer a |
| 6 | purchase contract to facilities that produce qualified |
| 7 | renewable resources; providing requirements for such |
| 8 | contracts; providing for cost recovery; providing for |
| 9 | sales of renewable energy to a utility other than the host |
| 10 | utility; authorizing the commission to adopt rules; |
| 11 | creating s. 366.95, F.S.; providing definitions; |
| 12 | establishing and providing for a minimum renewable energy |
| 13 | purchase requirement; providing for cost recovery; |
| 14 | providing for rules; providing penalties; requiring a |
| 15 | report to the Legislature; amending s. 403.7061, F.S.; |
| 16 | deleting a permit requirement for a waste-to-energy |
| 17 | facility; establishing new requirements for solid waste |
| 18 | management; providing an effective date. |
| 19 |
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| 20 | Be It Enacted by the Legislature of the State of Florida: |
| 21 |
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| 22 | Section 1. Section 366.91, Florida Statutes, is created to |
| 23 | read: |
| 24 | 366.91 Renewable energy standard offer contract.-- |
| 25 | (1) POPULAR NAME.--This section may be known by the |
| 26 | popular name the "Renewable Electric Energy Production Act." |
| 27 | (2) LEGISLATIVE FINDINGS.--The Legislature finds that it |
| 28 | is in the public interest to promote the development of |
| 29 | renewable electric resources in this state. Renewable electric |
| 30 | resources have the potential to help diversify Florida's growing |
| 31 | dependency on natural gas for electric production, minimize the |
| 32 | volatility of fuel costs, encourage investment within this |
| 33 | state, improve environmental conditions, and make Florida a |
| 34 | leader in new and innovative technologies. However, the |
| 35 | Legislature acknowledges that, at this time, renewable electric |
| 36 | resources cost more than traditional generating technologies and |
| 37 | fuels. Therefore, a greater deployment of renewable electric |
| 38 | resources must be balanced against any adverse impacts on |
| 39 | electric rates. To balance these objectives, the Legislature |
| 40 | authorizes the Public Service Commission to require public |
| 41 | utilities to make available a renewable generation contract for |
| 42 | purposes of encouraging greater deployment of renewable electric |
| 43 | resources. |
| 44 | (3) DEFINITIONS.--As used in this section, the term: |
| 45 | (a) "Biomass" means a power source that is comprised of, |
| 46 | but not limited to, combustible residues or gases from forest |
| 47 | products manufacturing, agricultural and orchard crops, waste |
| 48 | products from livestock and poultry operations and food |
| 49 | processing, urban wood waste, municipal solid waste, municipal |
| 50 | liquid waste treatment operations, and landfill gas. |
| 51 | (b) "Qualified renewable resource" means energy produced |
| 52 | from any method or process that uses one or more of the |
| 53 | following fuels or processes: fuel cells, biomass, solar |
| 54 | photovoltaic energy, municipal solid waste, geothermal energy, |
| 55 | wind energy, hydroelectric or thermal ocean energy, |
| 56 | hydroelectric energy, landfill gas, agricultural products and |
| 57 | byproducts, and waste heat from nonfossil-fueled exothermic |
| 58 | reactions. |
| 59 | (4) RENEWABLE GENERATION CONTRACTS.--The commission shall |
| 60 | require public utilities to offer to facilities that produce |
| 61 | qualified renewable resources a renewable generation contract |
| 62 | that allows such facilities to sell any electric output to any |
| 63 | public utility in this state. To achieve the purposes of this |
| 64 | chapter, such a contract may contain payment provisions that |
| 65 | offer financial incentives for qualified renewable resources |
| 66 | based on the construction and operation of utility-owned |
| 67 | generating facilities that provide for fuel diversity and fuel |
| 68 | cost stabilization for that public utility. The commission may |
| 69 | use a statewide generating facility in determining the financial |
| 70 | incentives to be contained in the contract. The commission shall |
| 71 | establish standards relating to the terms, conditions, and |
| 72 | payment schedules of such contracts to reflect the actual |
| 73 | operational performance and capacity factors associated with a |
| 74 | utility-owned generating facility that provides for fuel |
| 75 | diversity and fuel cost stabilization. The commission may adjust |
| 76 | capacity payment schedules according to the extent that |
| 77 | operational performance, reliability, risks, and capacity |
| 78 | factors of a facility producing qualified renewable resources |
| 79 | differ from the performance and capacity factors of a utility |
| 80 | generating unit. Each contract must provide a minimum contract |
| 81 | term of 5 years and be approved by the commission. Prudent and |
| 82 | reasonable costs associated with a renewable generation contract |
| 83 | shall be recovered from the ratepayers of the contracting |
| 84 | utility. The commission may periodically review and establish |
| 85 | new payment schedules, identify the most current selected |
| 86 | utility-owned generating or statewide generating unit that |
| 87 | provides for fuel diversity and fuel cost stabilization, and |
| 88 | review the terms and conditions for prospective renewable |
| 89 | generation contracts to minimize the cost impacts of such |
| 90 | contracts on ratepayers. |
| 91 | (5) TRANSMISSION.--A facility that produces qualified |
| 92 | renewable resources for sale to a public utility must pay the |
| 93 | actual construction costs of its interconnection with the |
| 94 | transmission grid. A facility that produces qualified renewable |
| 95 | resources may elect to sell its electric output to a utility |
| 96 | outside the service territory of the host utility in which the |
| 97 | facility is geographically located. Any costs for transmitting |
| 98 | the output to another utility are to be borne by the facility |
| 99 | requesting the transmission service. |
| 100 | (6) RULEMAKING.--The commission may adopt rules to |
| 101 | administer this section. |
| 102 | Section 2. Section 366.95, Florida Statutes, is created to |
| 103 | read: |
| 104 | 366.95 Minimum renewable energy requirements.-- |
| 105 | (1) DEFINITIONS.--As used in this section, the term: |
| 106 | (a) "Biomass" means a power source that is comprised of, |
| 107 | but not limited to, combustible residues or gases from forest |
| 108 | products manufacturing, agricultural and orchard crops, waste |
| 109 | products from livestock and poultry operations and food |
| 110 | processing, urban wood waste, municipal solid waste, municipal |
| 111 | liquid waste treatment operations, and landfill gas. |
| 112 | (b) "New sources of renewable energy" means sources of |
| 113 | renewable energy constructed or put into production after the |
| 114 | effective date of this act or new contracts entered into after |
| 115 | that date for a source of generation in production prior to that |
| 116 | date. |
| 117 | (c) "Renewable energy" means energy produced from any |
| 118 | method or process that uses one or more of the following sources |
| 119 | of energy: fuel cells, biomass, solar thermal or solar |
| 120 | photovoltaic energy, municipal solid waste, geothermal energy, |
| 121 | wind energy, hydroelectric or thermal ocean energy, |
| 122 | hydroelectric energy, landfill gas, agricultural products and |
| 123 | byproducts, and waste heat from nonfossil-fueled exothermic |
| 124 | reactions. |
| 125 | (d) "Renewable energy credit" means a tradable unit that |
| 126 | represents the commodity formed by unbundling the environmental |
| 127 | attributes of a unit of renewable energy from the underlying |
| 128 | electricity. |
| 129 | (2) MINIMUM RENEWABLE ENERGY PURCHASE REQUIREMENT.-- |
| 130 | (a) Beginning in 2006, each public utility must ensure |
| 131 | that it produces or purchases from new sources of renewable |
| 132 | energy in Florida an amount of renewable energy that is |
| 133 | equivalent to at least 0.5 percent of its amount of annual net |
| 134 | energy for load. Each year thereafter, this required percentage |
| 135 | amount is to increase by 0.5 percent until a total of 4 percent |
| 136 | of annual net energy for load is reached. |
| 137 | (b) A public utility may meet this requirement by: |
| 138 | 1. Purchasing energy under a renewable generation contract |
| 139 | pursuant to s. 366.91; |
| 140 | 2. Purchasing energy from qualified renewable resources in |
| 141 | a transaction other than a renewable generation contract; |
| 142 | 3. Purchasing renewable energy credits from utilities that |
| 143 | have qualified renewable resources in excess of the requirements |
| 144 | of paragraph (a); |
| 145 | 4. Using renewable energy through a program approved by |
| 146 | the commission to produce verifiable or estimated reductions in |
| 147 | a customer's energy consumption, including net metering |
| 148 | programs; or |
| 149 | 5. Contributing to the Florida Alternative Energy |
| 150 | Technology Center. |
| 151 | (c) Each public utility must produce or purchase the |
| 152 | renewable energy credits through the least cost alternative |
| 153 | available, with costs being prudent and reasonably incurred. |
| 154 | (3) COST RECOVERY.--Any increased costs to a public |
| 155 | utility are to be recovered, without differentiation between |
| 156 | customer classes, through the appropriate cost recovery clause |
| 157 | mechanism administered by the commission. If at the end of a |
| 158 | year a utility fails to meet the minimum renewable energy |
| 159 | requirement, the utility may remedy this shortfall by making a |
| 160 | contribution to the Florida Alternative Energy Technology Center |
| 161 | in the amount of the shortfall. The commission shall determine |
| 162 | the amount of the shortfall and the associated payment by April |
| 163 | 1 of the following year. |
| 164 | (4) COMMISSION RULES.--The commission must adopt rules |
| 165 | governing the creation, valuation, and trading of renewable |
| 166 | energy credits. These rules must address all means by which a |
| 167 | public utility may obtain credit. Credits are to be based on |
| 168 | one-megawatt-hour units. The value of a credit for a |
| 169 | contribution to the Florida Alternative Energy Technology Center |
| 170 | must be the amount of the financial incentives determined under |
| 171 | s. 366.91. If the amount of the financial incentives differs |
| 172 | among the contracts offered by public utilities, the value of a |
| 173 | credit must be the average amount of these financial incentives. |
| 174 | The commission may adopt rules to ensure that the purchase of |
| 175 | renewable energy credits or certificates by utilities is |
| 176 | conducted in a fair and impartial manner, consistent with the |
| 177 | goals set forth in this section. |
| 178 | (5) PENALTIES.--Upon a finding by the commission that a |
| 179 | utility has violated this section, the commission may impose the |
| 180 | penalties provided in s. 366.095. |
| 181 | Section 3. The Public Service Commission must submit a |
| 182 | report to the President of the Senate and the Speaker of the |
| 183 | House of Representatives by October 1, 2009, describing: |
| 184 | (1) The total amount of new renewable energy that has been |
| 185 | developed in Florida. |
| 186 | (2) The amount of this new renewable energy that is under |
| 187 | a renewable generation contract pursuant to s. 366.91, Florida |
| 188 | Statutes, and the average price for this new renewable energy. |
| 189 | (3) The amount of new renewable energy, other than new |
| 190 | renewable energy provided for in subsection (2), made available |
| 191 | and the average price. |
| 192 | (4) The amount of public utility contributions to the |
| 193 | Florida Alternative Energy Technology Center for which credits |
| 194 | were obtained. |
| 195 | (5) An estimate of the economic effect on the state. |
| 196 | Section 4. Subsection (3) of section 403.7061, Florida |
| 197 | Statutes, is amended to read: |
| 198 | 403.7061 Requirements for review of new waste-to-energy |
| 199 | facility capacity by the Department of Environmental |
| 200 | Protection.-- |
| 201 | (3) An applicant must provide reasonable assurance that |
| 202 | the construction of a new waste-to-energy facility or the |
| 203 | expansion of an existing waste-to-energy facility will comply |
| 204 | with the following paragraphs subsections: |
| 205 | (a) The facility is a necessary part of the local |
| 206 | government's integrated solid waste management program in the |
| 207 | jurisdiction where the facility is located and cannot be avoided |
| 208 | through feasible and practical efforts to use recycling or waste |
| 209 | reduction. |
| 210 | (b) The use of capacity at existing waste-to-energy |
| 211 | facilities within reasonable transportation distance of the |
| 212 | proposed facility must have been evaluated and found not to be |
| 213 | economically feasible when compared to the use of the proposed |
| 214 | facility for the expected life of the proposed facility. This |
| 215 | paragraph does not apply to: |
| 216 | 1. Applications to build or expand waste-to-energy |
| 217 | facilities received by the department before March 1, 1993, or |
| 218 | amendments to such applications that do not increase combustion |
| 219 | capacity beyond that requested as of March 1, 1993; or |
| 220 | 2. Any modification to waste-to-energy facility |
| 221 | construction or operating permits or certifications or |
| 222 | conditions thereto, including certifications under ss. 403.501- |
| 223 | 403.518, that do not increase combustion capacity above that |
| 224 | amount applied for before March 1, 1993. |
| 225 | (c) The county in which the facility is located will |
| 226 | achieve the 30-percent waste reduction goal set forth in s. |
| 227 | 403.706(4) by the time the facility begins operation. For the |
| 228 | purposes of this section, the provisions of s. 403.706(4)(c) for |
| 229 | counties with populations of 75,000 or less do not apply. |
| 230 | (c)(d) The local government in which the facility is |
| 231 | located has implemented a mulching, composting, or other waste |
| 232 | reduction program for yard trash. |
| 233 | (d)(e) The local governments served by the facility will |
| 234 | have implemented or participated in a separation program |
| 235 | designed to remove small-quantity generator and household |
| 236 | hazardous waste, mercury containing devices, and mercuric-oxide |
| 237 | batteries from the waste stream prior to incineration, by the |
| 238 | time the facility begins operation. |
| 239 | (e)(f) The local government in which the facility is |
| 240 | located has implemented a program to procure products or |
| 241 | materials with recycled content, pursuant to s. 403.7065. |
| 242 | (f)(g) A program will exist in the local government in |
| 243 | which the facility is located for collecting and recycling |
| 244 | recovered material from the institutional, commercial, and |
| 245 | industrial sectors by the time the facility begins operation. |
| 246 | (g)(h) The facility will be in compliance with applicable |
| 247 | local ordinances and with the approved state and local |
| 248 | comprehensive plans required by chapter 163. |
| 249 | (h)(i) The facility is in substantial compliance with its |
| 250 | permit, conditions of certification, and any agreements or |
| 251 | orders resulting from environmental enforcement actions by state |
| 252 | agencies. |
| 253 | Section 5. Requirements relating to solid waste disposal |
| 254 | facility permitting; feasibility study for waste-to-energy |
| 255 | facilities.-- |
| 256 | (1) The Legislature finds that it is in the public |
| 257 | interest to conduct feasibility studies for construction of |
| 258 | waste-to-energy facilities as an option to building or expanding |
| 259 | solid waste disposal facilities. Florida currently collects |
| 260 | about 28 million tons of solid waste per year. By 2018, |
| 261 | Florida's growing population will produce an estimated 38 |
| 262 | million tons of solid waste per year. Florida's growing |
| 263 | population also requires increased electric generation capacity. |
| 264 | Florida's utilities currently add approximately 1,500 megawatts |
| 265 | of new capacity each year. These capacity expansions are |
| 266 | primarily fueled by natural gas, which has shown greater price |
| 267 | volatility in recent years. |
| 268 | (2) The Department of Environmental Protection is directed |
| 269 | to adopt rules determining, based on a threshold of tons of |
| 270 | solid waste produced, which applicants for a permit to construct |
| 271 | or expand a solid waste disposal facility should be required to |
| 272 | perform a feasibility study for construction of a waste-to- |
| 273 | energy facility instead of or in conjunction with the |
| 274 | construction or expansion of the solid waste disposal facility. |
| 275 | When a feasibility study indicates that it is economically |
| 276 | feasible to construct a waste-to-energy facility as an |
| 277 | alternative to additional landfill space, the applicant must |
| 278 | construct and operate such a waste-to-energy facility. |
| 279 | Section 6. This act shall take effect October 1, 2004. |