HB 1551

1
A bill to be entitled
2An act relating to renewable energy; creating s. 366.91,
3F.S.; providing a popular name; providing legislative
4findings; providing definitions; requiring the Public
5Service Commission to require public utilities to offer a
6purchase contract to facilities that produce qualified
7renewable resources; providing requirements for such
8contracts; providing for cost recovery; providing for
9sales of renewable energy to a utility other than the host
10utility; authorizing the commission to adopt rules;
11creating s. 366.95, F.S.; providing definitions;
12establishing and providing for a minimum renewable energy
13purchase requirement; providing for cost recovery;
14providing for rules; providing penalties; requiring a
15report to the Legislature; amending s. 403.7061, F.S.;
16deleting a permit requirement for a waste-to-energy
17facility; establishing new requirements for solid waste
18management; providing an effective date.
19
20Be It Enacted by the Legislature of the State of Florida:
21
22     Section 1.  Section 366.91, Florida Statutes, is created to
23read:
24     366.91  Renewable energy standard offer contract.--
25     (1)  POPULAR NAME.--This section may be known by the
26popular name the "Renewable Electric Energy Production Act."
27     (2)  LEGISLATIVE FINDINGS.--The Legislature finds that it
28is in the public interest to promote the development of
29renewable electric resources in this state. Renewable electric
30resources have the potential to help diversify Florida's growing
31dependency on natural gas for electric production, minimize the
32volatility of fuel costs, encourage investment within this
33state, improve environmental conditions, and make Florida a
34leader in new and innovative technologies. However, the
35Legislature acknowledges that, at this time, renewable electric
36resources cost more than traditional generating technologies and
37fuels. Therefore, a greater deployment of renewable electric
38resources must be balanced against any adverse impacts on
39electric rates. To balance these objectives, the Legislature
40authorizes the Public Service Commission to require public
41utilities to make available a renewable generation contract for
42purposes of encouraging greater deployment of renewable electric
43resources.
44     (3)  DEFINITIONS.--As used in this section, the term:
45     (a)  "Biomass" means a power source that is comprised of,
46but not limited to, combustible residues or gases from forest
47products manufacturing, agricultural and orchard crops, waste
48products from livestock and poultry operations and food
49processing, urban wood waste, municipal solid waste, municipal
50liquid waste treatment operations, and landfill gas.
51     (b)  "Qualified renewable resource" means energy produced
52from any method or process that uses one or more of the
53following fuels or processes: fuel cells, biomass, solar
54photovoltaic energy, municipal solid waste, geothermal energy,
55wind energy, hydroelectric or thermal ocean energy,
56hydroelectric energy, landfill gas, agricultural products and
57byproducts, and waste heat from nonfossil-fueled exothermic
58reactions.
59     (4)  RENEWABLE GENERATION CONTRACTS.--The commission shall
60require public utilities to offer to facilities that produce
61qualified renewable resources a renewable generation contract
62that allows such facilities to sell any electric output to any
63public utility in this state. To achieve the purposes of this
64chapter, such a contract may contain payment provisions that
65offer financial incentives for qualified renewable resources
66based on the construction and operation of utility-owned
67generating facilities that provide for fuel diversity and fuel
68cost stabilization for that public utility. The commission may
69use a statewide generating facility in determining the financial
70incentives to be contained in the contract. The commission shall
71establish standards relating to the terms, conditions, and
72payment schedules of such contracts to reflect the actual
73operational performance and capacity factors associated with a
74utility-owned generating facility that provides for fuel
75diversity and fuel cost stabilization. The commission may adjust
76capacity payment schedules according to the extent that
77operational performance, reliability, risks, and capacity
78factors of a facility producing qualified renewable resources
79differ from the performance and capacity factors of a utility
80generating unit. Each contract must provide a minimum contract
81term of 5 years and be approved by the commission. Prudent and
82reasonable costs associated with a renewable generation contract
83shall be recovered from the ratepayers of the contracting
84utility. The commission may periodically review and establish
85new payment schedules, identify the most current selected
86utility-owned generating or statewide generating unit that
87provides for fuel diversity and fuel cost stabilization, and
88review the terms and conditions for prospective renewable
89generation contracts to minimize the cost impacts of such
90contracts on ratepayers.
91     (5)  TRANSMISSION.--A facility that produces qualified
92renewable resources for sale to a public utility must pay the
93actual construction costs of its interconnection with the
94transmission grid. A facility that produces qualified renewable
95resources may elect to sell its electric output to a utility
96outside the service territory of the host utility in which the
97facility is geographically located. Any costs for transmitting
98the output to another utility are to be borne by the facility
99requesting the transmission service.
100     (6)  RULEMAKING.--The commission may adopt rules to
101administer this section.
102     Section 2.  Section 366.95, Florida Statutes, is created to
103read:
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,
107but not limited to, combustible residues or gases from forest
108products manufacturing, agricultural and orchard crops, waste
109products from livestock and poultry operations and food
110processing, urban wood waste, municipal solid waste, municipal
111liquid waste treatment operations, and landfill gas.
112     (b)  "New sources of renewable energy" means sources of
113renewable energy constructed or put into production after the
114effective date of this act or new contracts entered into after
115that date for a source of generation in production prior to that
116date.
117     (c)  "Renewable energy" means energy produced from any
118method or process that uses one or more of the following sources
119of energy: fuel cells, biomass, solar thermal or solar
120photovoltaic energy, municipal solid waste, geothermal energy,
121wind energy, hydroelectric or thermal ocean energy,
122hydroelectric energy, landfill gas, agricultural products and
123byproducts, and waste heat from nonfossil-fueled exothermic
124reactions.
125     (d)  "Renewable energy credit" means a tradable unit that
126represents the commodity formed by unbundling the environmental
127attributes of a unit of renewable energy from the underlying
128electricity.
129     (2)  MINIMUM RENEWABLE ENERGY PURCHASE REQUIREMENT.--
130     (a)  Beginning in 2006, each public utility must ensure
131that it produces or purchases from new sources of renewable
132energy in Florida an amount of renewable energy that is
133equivalent to at least 0.5 percent of its amount of annual net
134energy for load. Each year thereafter, this required percentage
135amount is to increase by 0.5 percent until a total of 4 percent
136of 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
139pursuant to s. 366.91;
140     2.  Purchasing energy from qualified renewable resources in
141a transaction other than a renewable generation contract;
142     3.  Purchasing renewable energy credits from utilities that
143have qualified renewable resources in excess of the requirements
144of paragraph (a);
145     4.  Using renewable energy through a program approved by
146the commission to produce verifiable or estimated reductions in
147a customer's energy consumption, including net metering
148programs; or
149     5.  Contributing to the Florida Alternative Energy
150Technology Center.
151     (c)  Each public utility must produce or purchase the
152renewable energy credits through the least cost alternative
153available, with costs being prudent and reasonably incurred.
154     (3)  COST RECOVERY.--Any increased costs to a public
155utility are to be recovered, without differentiation between
156customer classes, through the appropriate cost recovery clause
157mechanism administered by the commission. If at the end of a
158year a utility fails to meet the minimum renewable energy
159requirement, the utility may remedy this shortfall by making a
160contribution to the Florida Alternative Energy Technology Center
161in the amount of the shortfall. The commission shall determine
162the amount of the shortfall and the associated payment by April
1631 of the following year.
164     (4)  COMMISSION RULES.--The commission must adopt rules
165governing the creation, valuation, and trading of renewable
166energy credits. These rules must address all means by which a
167public utility may obtain credit. Credits are to be based on
168one-megawatt-hour units. The value of a credit for a
169contribution to the Florida Alternative Energy Technology Center
170must be the amount of the financial incentives determined under
171s. 366.91. If the amount of the financial incentives differs
172among the contracts offered by public utilities, the value of a
173credit must be the average amount of these financial incentives.
174The commission may adopt rules to ensure that the purchase of
175renewable energy credits or certificates by utilities is
176conducted in a fair and impartial manner, consistent with the
177goals set forth in this section.
178     (5)  PENALTIES.--Upon a finding by the commission that a
179utility has violated this section, the commission may impose the
180penalties provided in s. 366.095.
181     Section 3.  The Public Service Commission must submit a
182report to the President of the Senate and the Speaker of the
183House of Representatives by October 1, 2009, describing:
184     (1)  The total amount of new renewable energy that has been
185developed in Florida.
186     (2)  The amount of this new renewable energy that is under
187a renewable generation contract pursuant to s. 366.91, Florida
188Statutes, and the average price for this new renewable energy.
189     (3)  The amount of new renewable energy, other than new
190renewable energy provided for in subsection (2), made available
191and the average price.
192     (4)  The amount of public utility contributions to the
193Florida Alternative Energy Technology Center for which credits
194were obtained.
195     (5)  An estimate of the economic effect on the state.
196     Section 4.  Subsection (3) of section 403.7061, Florida
197Statutes, is amended to read:
198     403.7061  Requirements for review of new waste-to-energy
199facility capacity by the Department of Environmental
200Protection.--
201     (3)  An applicant must provide reasonable assurance that
202the construction of a new waste-to-energy facility or the
203expansion of an existing waste-to-energy facility will comply
204with the following paragraphs subsections:
205     (a)  The facility is a necessary part of the local
206government's integrated solid waste management program in the
207jurisdiction where the facility is located and cannot be avoided
208through feasible and practical efforts to use recycling or waste
209reduction.
210     (b)  The use of capacity at existing waste-to-energy
211facilities within reasonable transportation distance of the
212proposed facility must have been evaluated and found not to be
213economically feasible when compared to the use of the proposed
214facility for the expected life of the proposed facility. This
215paragraph does not apply to:
216     1.  Applications to build or expand waste-to-energy
217facilities received by the department before March 1, 1993, or
218amendments to such applications that do not increase combustion
219capacity beyond that requested as of March 1, 1993; or
220     2.  Any modification to waste-to-energy facility
221construction or operating permits or certifications or
222conditions thereto, including certifications under ss. 403.501-
223403.518, that do not increase combustion capacity above that
224amount applied for before March 1, 1993.
225     (c)  The county in which the facility is located will
226achieve the 30-percent waste reduction goal set forth in s.
227403.706(4) by the time the facility begins operation. For the
228purposes of this section, the provisions of s. 403.706(4)(c) for
229counties with populations of 75,000 or less do not apply.
230     (c)(d)  The local government in which the facility is
231located has implemented a mulching, composting, or other waste
232reduction program for yard trash.
233     (d)(e)  The local governments served by the facility will
234have implemented or participated in a separation program
235designed to remove small-quantity generator and household
236hazardous waste, mercury containing devices, and mercuric-oxide
237batteries from the waste stream prior to incineration, by the
238time the facility begins operation.
239     (e)(f)  The local government in which the facility is
240located has implemented a program to procure products or
241materials with recycled content, pursuant to s. 403.7065.
242     (f)(g)  A program will exist in the local government in
243which the facility is located for collecting and recycling
244recovered material from the institutional, commercial, and
245industrial sectors by the time the facility begins operation.
246     (g)(h)  The facility will be in compliance with applicable
247local ordinances and with the approved state and local
248comprehensive plans required by chapter 163.
249     (h)(i)  The facility is in substantial compliance with its
250permit, conditions of certification, and any agreements or
251orders resulting from environmental enforcement actions by state
252agencies.
253     Section 5.  Requirements relating to solid waste disposal
254facility permitting; feasibility study for waste-to-energy
255facilities.--
256     (1)  The Legislature finds that it is in the public
257interest to conduct feasibility studies for construction of
258waste-to-energy facilities as an option to building or expanding
259solid waste disposal facilities. Florida currently collects
260about 28 million tons of solid waste per year. By 2018,
261Florida's growing population will produce an estimated 38
262million tons of solid waste per year. Florida's growing
263population also requires increased electric generation capacity.
264Florida's utilities currently add approximately 1,500 megawatts
265of new capacity each year. These capacity expansions are
266primarily fueled by natural gas, which has shown greater price
267volatility in recent years.
268     (2)  The Department of Environmental Protection is directed
269to adopt rules determining, based on a threshold of tons of
270solid waste produced, which applicants for a permit to construct
271or expand a solid waste disposal facility should be required to
272perform a feasibility study for construction of a waste-to-
273energy facility instead of or in conjunction with the
274construction or expansion of the solid waste disposal facility.
275When a feasibility study indicates that it is economically
276feasible to construct a waste-to-energy facility as an
277alternative to additional landfill space, the applicant must
278construct and operate such a waste-to-energy facility.
279     Section 6.  This act shall take effect October 1, 2004.


CODING: Words stricken are deletions; words underlined are additions.