Senate Bill sb2122

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    Florida Senate - 2006                                  SB 2122

    By Senator Atwater





    25-1214-06

  1                      A bill to be entitled

  2         An act relating to underground electric

  3         distribution facilities; creating s. 366.201,

  4         F.S.; creating the "Reliable Electricity

  5         Enhancement Act"; creating s. 366.202, F.S.;

  6         providing legislative intent; creating s.

  7         366.203, F.S.; providing that as of a specified

  8         date placement of electric distribution

  9         facilities underground is the industry standard

10         for new distribution facilities; providing an

11         exception; requiring public utilities to

12         aggressively promote and encourage the timely

13         and orderly conversion of existing overhead

14         distribution facilities to underground

15         facilities; creating s. 366.204, F.S.;

16         providing additional duties of a public

17         utility; requiring certain reports; providing a

18         penalty; creating s. 366.205, F.S.; requiring

19         the Public Service Commission to ensure that

20         only the minimum reasonable general and

21         indirect costs associated with underground

22         facilities are included as costs of the

23         underground facilities for any purpose;

24         creating 366.206, F.S.; encouraging the use of

25         rights-of-way for the location of underground

26         facilities; providing a rebuttable presumption

27         that rights-of-way are sufficient for the

28         location of underground facilities; providing

29         an exception; creating s. 366.207, F.S.;

30         encouraging the use of rear yards as locations

31         for placing underground utilities; creating s.

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 1         366.208, F.S.; encouraging competition in

 2         providing utility construction services;

 3         creating ss. 125.3402, 166.261, 189.4052, and

 4         190.018, F.S.; declaring that it is the policy

 5         of the state that counties, municipalities,

 6         special districts, and community development

 7         districts convert electric distribution,

 8         telephone, and cable television facilities from

 9         overhead systems to underground facilities;

10         providing that if a county, municipality,

11         special district, or community development

12         district pays for part or all of the cost of

13         converting overhead facilities to underground

14         facilities, it must receive fair credit for the

15         payments if and when the entity elects to

16         establish an electric utility, telephone, or

17         cable television system; creating ss. 125.3403,

18         166.262, 189.4053, and 190.019, F.S.; providing

19         the contractual terms that must be included in

20         a utility franchise; prohibiting a governmental

21         entity from giving or granting a franchise

22         without reserving to the governmental entity

23         the right to purchase the utility at the

24         expiration of the franchise; providing that the

25         utility franchise is void under certain

26         circumstances; amending s. 364.03, F.S.;

27         directing the commission and the entities that

28         provide service in this state to consistently

29         and continuously promote and encourage all

30         reasonable means to enhance the reliability of

31         the telecommunications system in the state;

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 1         amending s. 366.04, F.S.; declaring that the

 2         installation of underground electric

 3         distribution facilities to replace existing

 4         overhead facilities is in the public interest

 5         in the state; providing an effective date.

 6  

 7  Be It Enacted by the Legislature of the State of Florida:

 8  

 9         Section 1.  Section 366.201, Florida Statutes, is

10  created to read:

11         366.201  Short title.--Sections 366.201-366.208 may be

12  cited as the "Reliable Electricity Enhancement Act."

13         Section 2.  Section 366.202, Florida Statutes, is

14  created to read:

15         366.202  Legislative findings and intent.--

16         (1)  The Legislature finds that:

17         (a)  More than two-thirds of all new electric

18  distribution facilities currently being installed in this

19  state are being installed as underground facilities;

20         (b)  More than one-third of all electric distribution

21  facilities currently in service in this state are underground

22  facilities, and that approximately one-half of all customers

23  served by public utilities are served from underground

24  facilities;

25         (c)  Underground distribution service is the preferred

26  standard of service in this state and that underground service

27  is, in fact, becoming the general standard of service for

28  public utilities;

29         (d)  Many reports indicate that areas served by

30  underground distribution facilities had less severe and less

31  

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 1  prolonged losses of electric service during the hurricanes

 2  that struck the state in 2004 and 2005; and

 3         (e)  A significant number of meteorological experts are

 4  predicting that more hurricanes are likely to strike the state

 5  with significantly greater frequency over the foreseeable

 6  future than the state experienced in the 50-year period before

 7  2004.

 8         (2)  The Legislature further finds that reliability of

 9  electric service is critical to the public health, safety, and

10  welfare of the residents of the state, and that minimizing the

11  severity, extent, and duration of outages of electric service

12  is likewise critical to the health, safety, and welfare.

13  Accordingly, the Legislature directs the Public Service

14  Commission and the public utilities that provide service in

15  this state to consistently and continuously seek, promote, and

16  encourage all reasonable means of enhancing and maximizing the

17  reliability of the electric supply system, including

18  distribution systems as well as transmission and generation

19  systems. Further, the Legislature directs the commission and

20  all public utilities to aggressively promote and encourage the

21  installation of underground distribution facilities to the

22  maximum extent feasible, and to aggressively promote and

23  encourage the timely and orderly conversion of existing

24  overhead facilities to underground facilities.

25         (3)  The mandatory provisions of ss. 366.201-366.208

26  apply only to public utilities as defined in s. 366.02.

27  Municipal and cooperative utilities providing electric service

28  in the state are encouraged to seek and implement all

29  reasonable means of enhancing electric service reliability in

30  the state, and to install underground electric distribution

31  

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 1  facilities to the maximum extent feasible, giving due

 2  consideration to the unique circumstances of each utility.

 3         Section 3.  Section 366.203, Florida Statutes, is

 4  created to read:

 5         366.203  Standard of service.--

 6         (1)  Effective January 1, 2007, underground electric

 7  distribution is presumed to constitute the standard for new

 8  electric distribution service in this state. This presumption

 9  is rebuttable in specific cases if, in proceedings before the

10  commission, a clear and convincing showing is made that, in a

11  particular application, underground electric distribution is

12  less desirable than overhead facilities. To rebut the

13  presumption, the commission must consider the relevant

14  factors, including the relative reliability of underground

15  compared to overhead systems in the particular application,

16  the installation costs for underground and overhead

17  facilities, the operating and maintenance costs for overhead

18  and underground facilities, and any other identifiable costs

19  associated with overhead and underground facilities. The

20  commission must also consider, without limitation:

21         (a)  The overall cost of accidental electrocutions and

22  temporary and permanent disabilities to utility employees and

23  the public;

24         (b)  The overall cost of vehicular accidents involving

25  distribution facilities;

26         (c)  Ascertainable and measurable costs of adverse

27  health effects;

28         (d)  The costs associated with rights-of-way and

29  easements;

30         (e)  The total operating and maintenance costs,

31  including costs of tree trimming for overhead facilities;

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 1         (f)  The total costs incurred and losses sustained by

 2  utility customers as a result of outages due to storm damage;

 3  and

 4         (g)  The costs of associated insurance, attorney's

 5  fees, and legal settlements and costs.

 6  

 7  In any proceedings before the commission, the commission shall

 8  specifically include, as an estimated cost of the overhead

 9  facilities being considered, the costs of having to remove and

10  replace a new overhead system due to storm damage at least

11  once during its projected useful life.

12         (2)  Effective July 1, 2006, all public utilities are

13  directed to aggressively seek, promote, and encourage the

14  timely and orderly conversion of existing overhead

15  distribution facilities to underground facilities, so that the

16  majority of persons served by public utilities will come to

17  enjoy the reliability benefits of underground distribution

18  service. Specifically, it is the intent of the Legislature

19  that, to the maximum extent feasible, existing overhead

20  facilities be converted to underground systems in a timely and

21  orderly way, with preference and priority given to overhead

22  facilities and systems that are being relocated due to

23  road-widening or other similar activities, and to overhead

24  systems that are at or near the end of their useful lives.

25         (3)  The commission shall adopt rules to encourage and

26  promote, to the maximum extent feasible, the conversion of

27  existing overhead systems to underground facilities in a

28  timely and orderly manner giving due consideration to the

29  factors deemed relevant by the commission and consistent with

30  the public interest, including:

31  

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 1         (a)  The overall cost of accidental electrocutions and

 2  temporary and permanent disabilities to both utility employees

 3  and others;

 4         (b)  The overall cost of vehicular accidents involving

 5  distribution facilities;

 6         (c)  Ascertainable and measurable costs of adverse

 7  health effects;

 8         (d)  The costs associated with rights-of-way and

 9  easements;

10         (e)  The total operating and maintenance costs,

11  including, without limitation, costs of tree trimming for

12  overhead facilities;

13         (f)  The total costs incurred and losses sustained by

14  utility customers as a result of outages due to storm damage;

15  and

16         (g)  The costs of associated insurance, attorney's

17  fees, and legal settlements and costs.

18         Section 4.  Section 366.204, Florida Statutes, is

19  created to read:

20         366.204  Duties of public utilities.--

21         (1)  In addition to the general duties set forth in s.

22  366.03, each public utility shall:

23         (a)  Maintain adequate and accurate records and data

24  regarding the relative reliability of overhead and underground

25  facilities, including the number, frequency, and duration of

26  all outages on the distribution system; whether each outage

27  was the result of an event directly affecting overhead or

28  underground facilities; and any other information that the

29  commission may prescribe by rule to be maintained.

30         (b)  At least once every 2 years, prepare a

31  comprehensive and detailed report concerning the relative

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 1  reliability of overhead and underground systems, including

 2  summaries of the number, frequency, and duration of all

 3  outages on the distribution system and the causes of the

 4  outages; whether the outages resulted from events directly

 5  affecting overhead or underground facilities; and any other

 6  information that the commission may prescribe by rule as

 7  appropriate for inclusion in the reports.

 8         (c)  Maintain accurate records regarding the costs of

 9  installing, maintaining, and operating overhead and

10  underground systems and facilities, such that the original

11  cost, approximate depreciated value, and operating and

12  maintenance costs of underground and overhead facilities, and

13  also the removal cost of overhead facilities, can be readily

14  compiled and calculated separately and comparably for overhead

15  and underground facilities.

16         (d)  Timely prepare and provide, at the request of any

17  local governmental unit, a report concerning the relative

18  reliability of the electric distribution systems providing

19  service within the geographic jurisdiction of the governmental

20  unit, at no cost to the governmental unit.

21         (e)  Timely prepare and provide, at the request of any

22  local governmental unit, a report showing in reasonable and

23  understandable detail the estimated original cost, approximate

24  depreciated value, and operating and maintenance costs of

25  underground and overhead facilities, and also the removal cost

26  of overhead facilities, at no cost to the governmental unit.

27         (f)  Work cooperatively, proactively, promptly,

28  diligently, and in good faith with any local governmental unit

29  or homeowners' association that wishes to participate in

30  converting existing overhead systems to underground

31  facilities.

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 1         (2)  By January 1, 2007, each public utility shall

 2  prepare a detailed report regarding:

 3         (a)  The damage to overhead and underground facilities

 4  on each public utility's distribution system caused by the

 5  hurricanes that struck the state in 2004 and 2005, in order

 6  that the extent and cost of damage to overhead and underground

 7  facilities can be readily and fairly compared; and

 8         (b)  The outages sustained by each public utility's

 9  customers due to damage to the utility's distribution systems

10  caused by the hurricanes that struck the state in 2004 and

11  2005, in order that the causes of the outages, the points on

12  the distribution system at which the outages originated, and

13  the duration of the outages can be readily and fairly compared

14  as between overhead and underground facilities.

15         (3)  A public utility may not willfully discourage or

16  fail to seek, promote, and encourage the installation of new

17  underground utility facilities or the conversion of existing

18  overhead systems to underground systems. Any public utility

19  that violates this subsection is subject to the penalties set

20  forth in s. 350.127.

21         Section 5.  Section 366.205, Florida Statutes, is

22  created to read:

23         366.205  Limitation on inclusion of general and

24  indirect costs in determining costs or payments for

25  underground facilities.--In any proceedings in which the cost

26  of, or payment for, underground facilities is at issue, the

27  commission shall ensure that only the minimum reasonable

28  general and indirect costs associated with underground

29  facilities, whether such facilities are contemplated or have

30  been installed, are included as costs of the underground

31  facilities for any purpose. This section shall be strictly

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 1  construed to ensure that no general or indirect costs are

 2  assigned or allocated to underground facilities, or accounted

 3  for in such a way as to provide a disincentive to the

 4  installation of underground facilities, unless the general or

 5  indirect costs are properly attributable to the costs of

 6  underground facilities.

 7         Section 6.  Section 366.206, Florida Statutes, is

 8  created to read:

 9         366.206  Rights-of-way; easements.--

10         (1)  The use of rights-of-way for the location of

11  underground facilities is encouraged to the maximum extent

12  feasible, consistent with safety and cost considerations. It

13  is presumed, subject to a rebuttal by clear and convincing

14  evidence in a specific proceeding before the commission, that

15  rights-of-way are sufficient for the location of underground

16  facilities. If a municipality, county, special district, or

17  other governmental entity agrees to be responsible for the

18  costs associated with a future relocation of facilities

19  located within the governmental entity's rights-of-way, the

20  issue of future relocation costs to the public utility is

21  irrelevant when determining whether the governmental entity's

22  right-of-way is sufficient for the location of underground

23  facilities or if an easement is required for the facilities.

24         (2)  All easements granted to public utilities on or

25  after July 1, 2006, must state that all permanent rights

26  granted by the easement vest in the governmental entity in

27  whose geographic jurisdiction the easement exists, with the

28  public utility having the rights that are granted by the

29  easement only for so long as it holds a franchise to provide

30  service within the governmental entity's jurisdiction. Each

31  easement must provide specifically that the easement, and the

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 1  rights thereunder, transfer automatically, by operation of the

 2  provisions of the easement itself, to the respective

 3  governmental entity upon termination or expiration of any

 4  franchise granted to the public utility, or upon the

 5  governmental entity's establishing an electric utility system

 6  to serve within any part, or all, of its geographic

 7  jurisdiction.

 8         Section 7.  Section 366.207, Florida Statutes, is

 9  created to read:

10         366.207  Use of rear yard easements encouraged.--If

11  existing overhead facilities are located within rear yard

12  easements, using rear yard easements for the installation of

13  new underground facilities is encouraged. The utility may

14  require that the easements be kept clear of obstructions in

15  order to ensure access to the underground facilities.

16         Section 8.  Section 366.208, Florida Statutes, is

17  created to read:

18         366.208  Encouraging competition in providing utility

19  construction services.--It is the policy of the state to

20  promote, to the maximum extent feasible and practicable,

21  competition in all economic activity in the state, including

22  the provision of utility construction services. Public

23  utilities shall pursue competitive alternatives from qualified

24  vendors and make such alternatives available to governmental

25  entities that desire to convert existing overhead facilities

26  to underground facilities.

27         Section 9.  Section 125.3402, Florida Statutes, is

28  created to read:

29         125.3402  Credits to counties for contributions paid

30  toward the cost of underground distribution facilities.--

31  

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 1         (1)  It is the policy of the state to encourage

 2  counties to convert electric distribution, telephone, and

 3  cable television facilities providing service within their

 4  geographic jurisdictions from overhead systems to underground

 5  facilities in order to secure for their residents the benefits

 6  of such underground facilities and systems. It is further the

 7  policy of the state to ensure that, if a county pays for part

 8  or all of the cost of converting overhead facilities to

 9  underground facilities, it receive fair credit for such

10  payments if and when the county elects to establish a

11  county-owned electric utility, telephone, or cable television

12  systems.

13         (2)  If a county has paid a differential cost

14  reflecting the difference in cost between the cost of the

15  underground facilities installed and the cost of equivalent

16  new overhead facilities for the installation of new

17  underground facilities, and the county subsequently decides to

18  purchase the public utility's or other provider's facilities

19  as part of establishing a county-owned electric utility,

20  telephone, or cable television system, whether under eminent

21  domain or other proceedings, at the county's option:

22         (a)  In any proceedings to determine the purchase price

23  for the facilities being purchased, the county shall receive

24  full credit for such differential payments made; or

25         (b)  The county shall have the right to purchase the

26  underground system by paying the public utility or other

27  provider the difference between the cost of the new

28  underground system installed and the payment that the county

29  made.

30  

31  

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 1  In order for a county to receive fair credit for the value

 2  that it contributed to convert overhead facilities to

 3  underground facilities, this section applies to payments made

 4  by the county before or after July 1, 2006. This section

 5  applies whether the county paid the public utility or other

 6  provider to install the new underground facilities or engaged

 7  a private contractor to install the underground facilities and

 8  received a credit from the public utility or other provider.

 9         (3)  If a county pays the full cost of installing new

10  underground facilities without any credit from the public

11  utility or other provider for the cost of an equivalent new

12  overhead facility, the county has a vested fee simple

13  ownership right in the underground facilities along with any

14  easements and easement rights associated with the underground

15  facilities. However, the public utility or other provider

16  retains sufficient rights of access in order to operate and

17  maintain the underground facilities under the terms and

18  conditions agreed upon by the county and the public utility or

19  other provider. When considering such terms and conditions,

20  the Legislature finds and states that a leasehold interest of

21  the public utility, at an annual lease payment of $1 per year

22  for all facilities and property, including any applicable

23  easement rights, located within the county's geographic area

24  is sufficient for this purpose. The Legislature further finds

25  and declares that, alternatively, the public utility or other

26  provider has a vested time-limited ownership interest with the

27  fee simple title remaining vested in the county. This interest

28  may not exceed the duration of any franchise agreement and is

29  deemed sufficient to satisfy the public utility's or other

30  provider's need for an ownership interest to allow it adequate

31  access to the underground facilities in order to operate and

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 1  maintain the systems. If the public utility or other provider

 2  and the county are unable to agree on this matter, the county,

 3  in its sole discretion, shall determine which of the ownership

 4  structures shall apply.

 5         Section 10.  Section 125.3403, Florida Statutes, is

 6  created to read:

 7         125.3403  Terms for which a utility franchise may be

 8  granted; conditions.--

 9         (1)(a)  A county may not give or grant any franchise or

10  right to use a street for operating along or across the street

11  a street railroad, water works, telephone, cable television,

12  gas or electric business, or other business requiring the use

13  of mains, pipes, wires, or similar facilities in any street

14  for a term exceeding 30 years. At the sole option and

15  discretion of the county, any county that is negotiating for a

16  new franchise, or in which a renewal franchise agreement is

17  being negotiated as the current franchise is about to expire

18  or has expired, may require that any new franchise agreement

19  be for a period of 5 years.

20         (b)  If the entity with whom the county is negotiating

21  refuses or delays in negotiating a franchise term of 5 years,

22  or longer at the county's option, the county may file a civil

23  action in circuit court for a declaratory judgment,

24  reformation, or injunctive relief, or any such other relief as

25  the court finds appropriate, requiring that the franchise term

26  be set at 5 years or such longer term as prayed by the county.

27  If the county is successful, the entity with whom the county

28  is negotiating is liable to the county for all of the county's

29  reasonable attorney's fees and costs of bringing the action.

30         (2)  A county may not give or grant any franchise

31  governed by this section without reserving to the county the

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 1  right to purchase the street railroad, water works, telephone,

 2  cable television, gas or electric business, or other business

 3  at the expiration of the franchise. The right of reservation

 4  includes all related property used under or in connection with

 5  the franchise or right, or any such part of the property which

 6  the county may desire to purchase. The value of the franchise

 7  property, real and personal, desired by the county shall be

 8  fixed by arbitration as may be provided by law.

 9         (3)  A franchise may not be granted which contains or

10  includes a provision that prohibits a county from competing

11  with any street railroad, water works, telephone, cable

12  television, gas or electric business, or other similar

13  business obtaining a franchise from the county for a period

14  longer than 5 years.

15         (4)  Any franchise or right granted for a period longer

16  than 30 years, granted without the right to purchase the

17  franchise as set forth in this section, or including a

18  provision intended to limit competition with the county for a

19  period longer than 5 years, is void. Notwithstanding the

20  voiding of any such franchise, the entity to whom the

21  franchise had been granted shall continue to be liable to pay

22  any applicable franchise fees, which would otherwise have been

23  due under the franchise, to the county for so long as the

24  entity continues to operate and conduct its business in the

25  county.

26         Section 11.  Section 166.261, Florida Statutes, is

27  created to read:

28         166.261  Credits to municipalities for contributions

29  paid toward the cost of underground distribution facilities.--

30         (1)  It is the policy of the state to encourage

31  municipalities to convert electric distribution, telephone,

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 1  and cable television facilities providing service within their

 2  geographic jurisdictions from overhead systems to underground

 3  facilities in order to secure for their residents the benefits

 4  of such underground facilities and systems. It is further the

 5  policy of the state to ensure that, if a municipality pays for

 6  part or all of the cost of converting overhead facilities to

 7  underground facilities, it receive fair credit for such

 8  payments if and when the municipality elects to establish a

 9  municipality-owned electric utility, telephone, or cable

10  television systems.

11         (2)  If a municipality, corporate entity, individual

12  citizen, or group of citizens, including, without limitation,

13  a civic association, neighborhood association, homeowners'

14  association, or similar group, has paid a differential cost

15  reflecting the difference in cost between the cost of the

16  underground facilities installed and the cost of equivalent

17  new overhead facilities for the installation of new

18  underground facilities, and the municipality subsequently

19  decides to purchase the public utility's or other provider's

20  facilities as part of establishing a municipality-owned

21  electric utility, telephone, or cable television system,

22  whether under eminent domain or other proceedings, at the

23  municipality's option:

24         (a)  In any proceedings to determine the purchase price

25  for the facilities being purchased, the municipality shall

26  receive full credit for such differential payments made,

27  whether by the municipality, a corporate entity, an individual

28  citizen, or a group of citizens; or

29         (b)  The municipality shall have the right to purchase

30  the underground system by paying the public utility or other

31  provider the difference between the cost of the new

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 1  underground system installed and the payment that the

 2  municipality or others made.

 3  

 4  In order for a municipality and its citizens to receive fair

 5  credit for the value that they contributed to convert overhead

 6  facilities to underground facilities, this section applies to

 7  payments made by the municipality or its citizens before and

 8  after July 1, 2006. This section applies whether the

 9  municipality paid the public utility or other provider to

10  install the new underground facilities or engaged a private

11  contractor to install the underground facilities and received

12  a credit from the public utility or other provider.

13         (3)  If the full cost of installing new underground

14  facilities is paid by a municipality or its citizens without

15  any credit from the public utility or other provider for the

16  cost of an equivalent new overhead facility, the municipality

17  has a vested fee simple ownership right in the underground

18  facilities along with any easements and easement rights

19  associated with the underground facilities. However, the

20  public utility or other provider retains sufficient rights of

21  access in order to operate and maintain the underground

22  facilities under the terms and conditions agreed upon by the

23  municipality and the public utility or other provider. When

24  considering such terms and conditions, the Legislature finds

25  and states that a leasehold interest of the public utility, at

26  an annual lease payment of $1 per year for all facilities and

27  property, including any applicable easement rights, located

28  within the municipality's geographic area is sufficient for

29  this purpose. The Legislature further finds and declares that,

30  alternatively, the public utility or other provider has a

31  vested time-limited ownership interest with the fee simple

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 1  title remaining vested in the municipality. This interest may

 2  not exceed the duration of any franchise agreement and is

 3  deemed sufficient to satisfy the public utility's or other

 4  provider's need for an ownership interest to allow it adequate

 5  access to the underground facilities in order to operate and

 6  maintain the systems. If the public utility or other provider

 7  and the municipality are unable to agree on this matter, the

 8  municipality, in its sole discretion, shall determine which of

 9  the ownership structures shall apply.

10         Section 12.  Section 166.262, Florida Statutes, is

11  created to read:

12         166.262  Terms for which a utility franchise may be

13  granted; conditions.--

14         (1)(a)  A municipality may not give or grant any

15  franchise or right to use a street for operating along or

16  across the street a street railroad, water works, telephone,

17  cable television, gas or electric business, or other business

18  requiring the use of mains, pipes, wires, or similar

19  facilities in any street for a term exceeding 30 years. At the

20  sole option and discretion of the municipality, a municipality

21  that is negotiating for a new franchise, or in which a renewal

22  franchise agreement is being negotiated as the current

23  franchise is about to expire or has expired, may require that

24  any new franchise agreement be for a period of 5 years.

25         (b)  If the entity with whom the municipality is

26  negotiating refuses or delays in negotiating a franchise term

27  of 5 years, or longer at the municipality's option, the

28  municipality may file a civil action in circuit court for a

29  declaratory judgment, reformation, or injunctive relief, or

30  any such other relief as the court finds appropriate,

31  requiring that the franchise term be set at 5 years or such

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 1  longer term as prayed by the municipality. If the municipality

 2  is successful, the entity with whom the municipality is

 3  negotiating is liable to the municipality for all of the

 4  municipality's reasonable attorney's fees and costs of

 5  bringing the action.

 6         (2)  A municipality may not give or grant any franchise

 7  governed by this section without reserving to the municipality

 8  the right to purchase the street railroad, water works,

 9  telephone, cable television, gas or electric business, or

10  other business at the expiration of the franchise. The right

11  of reservation includes all related property used under or in

12  connection with the franchise or right, or any such part of

13  the property which the municipality may desire to purchase.

14  The value of the franchise property, real and personal,

15  desired by the municipality shall be fixed by arbitration as

16  may be provided by law.

17         (3)  A franchise may not be granted which contains or

18  includes a provision that prohibits a municipality from

19  competing with any street railroad, water works, telephone,

20  cable television, gas or electric business, or other similar

21  business obtaining a franchise from the municipality for a

22  period longer than 5 years.

23         (4)  Any franchise or right granted for a period longer

24  than 30 years, granted without the right to purchase the

25  franchise as set forth in this section, or including a

26  provision intended to limit competition with the municipality

27  for a period longer than 5 years, is void. Notwithstanding the

28  voiding of any such franchise, the entity to whom the

29  franchise had been granted shall continue to be liable to pay

30  any applicable franchise fees, which would otherwise have been

31  due under the franchise, to the municipality for so long as

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 1  the entity continues to operate and conduct its business in

 2  the municipality.

 3         Section 13.  Section 189.4052, Florida Statutes, is

 4  created to read:

 5         189.4052  Credits to special districts for

 6  contributions paid toward the cost of underground distribution

 7  facilities.--

 8         (1)  It is the policy of the state to encourage special

 9  districts to convert electric distribution, telephone, and

10  cable television facilities providing service within their

11  geographic jurisdictions from overhead systems to underground

12  facilities in order to secure for their residents the benefits

13  of such underground facilities and systems. It is further the

14  policy of the state to ensure that, if a special district pays

15  for part or all of the cost of converting overhead facilities

16  to underground facilities, the special district receives fair

17  credit for such payments if and when the special district

18  elects to establish a special district-owned electric utility,

19  telephone, or cable television systems.

20         (2)  If a special district has paid a differential cost

21  reflecting the difference in cost between the cost of the

22  underground facilities installed and the cost of equivalent

23  new overhead facilities for the installation of new

24  underground facilities, and the special district subsequently

25  decides to purchase the public utility's or other provider's

26  facilities as part of establishing a special district-owned

27  electric utility, telephone, or cable television system,

28  whether under eminent domain or other proceedings, at the

29  special district's option:

30  

31  

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 1         (a)  In any proceedings to determine the purchase price

 2  for the facilities being purchased, the special district shall

 3  receive full credit for the differential payments made; or

 4         (b)  The special district has the right to purchase the

 5  underground system by paying the public utility or other

 6  provider the difference between the cost of the new

 7  underground system installed and the payment that the special

 8  district made.

 9  

10  In order for a special district to receive fair credit for the

11  value that it contributed to convert overhead facilities to

12  underground facilities, this section applies to payments made

13  by the special district before and after July 1, 2006. This

14  section applies whether the special district paid the public

15  utility or other provider to install the new underground

16  facilities or engaged a private contractor to install the

17  underground facilities and received a credit from the public

18  utility or other provider.

19         (3)  If a special district pays the full cost of

20  installing new underground facilities without any credit from

21  the public utility or other provider for the cost of an

22  equivalent new overhead facility, it has a vested fee simple

23  ownership right in the underground facilities along with any

24  easements and easement rights associated with the underground

25  facilities. However, the public utility or other provider

26  retains sufficient rights of access in order to operate and

27  maintain the underground facilities under the terms and

28  conditions agreed upon by the special district and the public

29  utility or other provider. When considering such terms and

30  conditions, the Legislature finds and states that a leasehold

31  interest of the public utility, at an annual lease payment of

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 1  $1 per year for all facilities and property, including any

 2  applicable easement rights, located within the special

 3  district's geographic area is sufficient for this purpose. The

 4  Legislature further finds and declares that, alternatively,

 5  the public utility or other provider has a vested time-limited

 6  ownership interest with the fee simple title remaining vested

 7  in the special district. This interest may not exceed the

 8  duration of any franchise agreement and is deemed sufficient

 9  to satisfy the public utility's or other provider's need for

10  an ownership interest to allow it adequate access to the

11  underground facilities in order to operate and maintain the

12  systems. If the public utility or other provider and the

13  special district are unable to agree on this matter, the

14  special district, in its sole discretion, shall determine

15  which of the ownership structures shall apply.

16         Section 14.  Section 189.4053, Florida Statutes, is

17  created to read:

18         189.4053  Terms for which a utility franchise may be

19  granted; conditions.--

20         (1)(a)  Special districts created under this chapter

21  shall have, to the extent allowed by law, the power to grant

22  franchises to entities that wish to operate a street railroad,

23  water works, telephone, cable television, gas or electric

24  business, or other business requiring the use of mains, pipes,

25  wires, or similar facilities in any street in the district.

26  However, a special district may not give or grant any

27  franchise or right to use a street for operating along or

28  across the street a street railroad, water works, telephone,

29  cable television, gas or electric business, or other business

30  requiring the use of mains, pipes, wires, or similar

31  facilities in any street for a term exceeding 30 years. At the

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 1  sole option and discretion of the special district, a special

 2  district that is negotiating for a new franchise, or in which

 3  a renewal franchise agreement is being negotiated as the

 4  current franchise is about to expire or has expired, may

 5  require that any new franchise agreement be for a period of 5

 6  years.

 7         (b)  If the entity with whom the special district is

 8  negotiating refuses or delays in negotiating a franchise term

 9  of 5 years, or longer at the special district's option, the

10  special district may file a civil action in circuit court for

11  a declaratory judgment, reformation, or injunctive relief, or

12  any such other relief as the court finds appropriate,

13  requiring that the franchise term be set at 5 years or such

14  longer term as prayed by the special district. If the special

15  district is successful, the entity with whom the special

16  district is negotiating is liable to the special district for

17  all of the special district's reasonable attorney's fees and

18  costs of bringing the action.

19         (2)  A special district may not give or grant any

20  franchise governed by this section without reserving to the

21  special district the right to purchase the street railroad,

22  water works, telephone, cable television, gas or electric

23  business, or other business at the expiration of the

24  franchise. The right of reservation includes all related

25  property used under or in connection with the franchise or

26  right, or any such part of the property which the special

27  district may desire to purchase. The value of the franchise

28  property, real and personal, desired by the special district

29  shall be fixed by arbitration as may be provided by law.

30         (3)  A franchise may not be granted which contains or

31  includes a provision that prohibits a special district from

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 1  competing with any street railroad, water works, telephone,

 2  cable television, gas or electric business, or other similar

 3  business obtaining a franchise from the special district for a

 4  period longer than 5 years.

 5         (4)  Any franchise or right granted for a period longer

 6  than 30 years, granted without the right to purchase the

 7  franchise as set forth in this section, or including a

 8  provision intended to limit competition with the special

 9  district for a period longer than 5 years, is void.

10  Notwithstanding the voiding of any such franchise, the entity

11  to whom the franchise had been granted shall continue to be

12  liable to pay any applicable franchise fees, which would

13  otherwise have been due under the franchise, to the special

14  district for so long as the entity continues to operate and

15  conduct its business in the special district.

16         Section 15.  Section 190.018, Florida Statutes, is

17  created to read:

18         190.018  Credits to community development districts for

19  contributions paid toward the cost of underground distribution

20  facilities.--

21         (1)  It is the policy of the state to encourage

22  community development districts to convert electric

23  distribution, telephone, and cable television facilities

24  providing service within their geographic jurisdictions from

25  overhead systems to underground facilities in order to secure

26  for their residents the benefits of such underground

27  facilities and systems. It is further the policy of the state

28  to ensure that, if a community development district pays for

29  part or all of the cost of converting overhead facilities to

30  underground facilities, the community development district

31  receives fair credit for such payments if and when the

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 1  community development district elects to establish a community

 2  development district-owned electric utility, telephone, or

 3  cable television system.

 4         (2)  If a community development district has paid a

 5  differential cost reflecting the difference in cost between

 6  the cost of the underground facilities installed and the cost

 7  of equivalent new overhead facilities for the installation of

 8  new underground facilities, and the community development

 9  district subsequently decides to purchase the public utility's

10  or other provider's facilities as part of establishing a

11  community development district-owned electric utility,

12  telephone, or cable television system, whether under eminent

13  domain or other proceedings, at the community development

14  district's option:

15         (a)  In any proceedings to determine the purchase price

16  for the facilities being purchased, the community development

17  district shall receive full credit for the differential

18  payments made; or

19         (b)  The community development district has the right

20  to purchase the underground system by paying the public

21  utility or other provider the difference between the cost of

22  the new underground system installed and the payment that the

23  district made.

24  

25  In order for a community development district to receive fair

26  credit for the value that it contributed to convert overhead

27  facilities to underground facilities, this section applies to

28  payments made by the community development district before and

29  after July 1, 2006. This section applies whether the community

30  development district paid the public utility or other provider

31  to install the new underground facilities or engaged a private

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 1  contractor to install the underground facilities and received

 2  a credit from the public utility or other provider.

 3         (3)  If a community development district pays the full

 4  cost of installing new underground facilities without any

 5  credit from the public utility or other provider for the cost

 6  of an equivalent new overhead facility, the community

 7  development district has a vested fee simple ownership right

 8  in the underground facilities along with any easements and

 9  easement rights associated with the underground facilities.

10  However, the public utility or other provider retains

11  sufficient rights of access in order to operate and maintain

12  the underground facilities under the terms and conditions

13  agreed upon by the community development district and the

14  public utility or other provider. When considering such terms

15  and conditions, the Legislature finds and states that a

16  leasehold interest of the public utility, at an annual lease

17  payment of $1 per year for all facilities and property,

18  including any applicable easement rights, located within the

19  community development district's geographic area is sufficient

20  for this purpose. The Legislature further finds and declares

21  that, alternatively, the public utility or other provider has

22  a vested time-limited ownership interest with the fee simple

23  title remaining vested in the district. This interest may not

24  exceed the duration of any franchise agreement and is deemed

25  sufficient to satisfy the public utility's or other provider's

26  need for an ownership interest to allow it adequate access to

27  the underground facilities to operate and maintain the

28  systems. If the public utility or other provider and the

29  community development district are unable to agree on this

30  matter, the community development district, in its sole

31  

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 1  discretion, shall determine which of the ownership structures

 2  shall apply.

 3         Section 16.  Section 190.019, Florida Statutes, is

 4  created to read:

 5         189.019  Terms for which a utility franchise may be

 6  granted; conditions.--

 7         (1)(a)  A community development district may not give

 8  or grant any franchise or right to use a street for operating

 9  along or across the street a street railroad, water works,

10  telephone, cable television, gas or electric business, or

11  other business requiring the use of mains, pipes, wires, or

12  similar facilities in any street for a term exceeding 30

13  years. At the sole option and discretion of the community

14  development district, a community development district that is

15  negotiating for a new franchise, or in which a renewal

16  franchise agreement is being negotiated as the current

17  franchise is about to expire or has expired, may require that

18  any new franchise agreement be for a period of 5 years.

19         (b)  If the entity with whom the community development

20  district is negotiating refuses or delays in negotiating a

21  franchise term of 5 years, or longer at the community

22  development district's option, the district may file a civil

23  action in circuit court for a declaratory judgment,

24  reformation, or injunctive relief, or any such other relief as

25  the court finds appropriate, requiring that the franchise term

26  be set at 5 years or such longer term as prayed by the

27  community development district. If the district is successful,

28  the entity with whom the community development district is

29  negotiating is liable to the community development district

30  for all of the district's reasonable attorney's fees and costs

31  of bringing the action.

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 1         (2)  A community development district may not give or

 2  grant any franchise governed by this section without reserving

 3  to the district the right to purchase the street railroad,

 4  water works, telephone, cable television, gas or electric

 5  business, or other business at the expiration of the

 6  franchise. The right of reservation includes all related

 7  property used under or in connection with the franchise or

 8  right, or any such part of the property which the community

 9  development district may desire to purchase. The value of the

10  franchise property, real and personal, desired by the district

11  shall be fixed by arbitration as may be provided by law.

12         (3)  A franchise may not be granted which contains or

13  includes a provision that prohibits a community development

14  district from competing with any street railroad, water works,

15  telephone, cable television, gas or electric business, or

16  other similar business obtaining a franchise from the district

17  for a period longer than 5 years.

18         (4)  Any franchise or right granted for a period longer

19  than 30 years, granted without the right to purchase the

20  franchise as set forth in this section, or including a

21  provision intended to limit competition with the community

22  development district for a period longer than 5 years, is

23  void. Notwithstanding the voiding of any such franchise, the

24  entity to whom the franchise had been granted shall continue

25  to be liable to pay any applicable franchise fees, which would

26  otherwise have been due under the franchise, to the community

27  development district for so long as the entity continues to

28  operate and conduct its business in the community development

29  district.

30         Section 17.  Subsection (4) is added to section 364.03,

31  Florida Statutes, to read:

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 1         364.03  Rates to be reasonable; performance of service;

 2  maintenance of telecommunications facilities.--

 3         (4)  The reliability of telecommunications service is

 4  critical to the public health, safety, and welfare, and

 5  minimizing the severity, extent, and duration of outages of

 6  telecommunications service is likewise critical to the public

 7  health, safety, and welfare. Accordingly, the Legislature

 8  directs the commission and the entities that provide such

 9  service in this state to consistently and continuously seek,

10  promote, and encourage all reasonable means of enhancing and

11  maximizing the reliability of the telecommunications system.

12  Further, the Legislature directs the commission and all such

13  entities in this state to aggressively promote and encourage

14  the installation of underground facilities, where applicable

15  and to the maximum extent feasible, and to aggressively

16  promote and encourage the timely and orderly conversion of

17  existing overhead facilities to underground facilities.

18  Consistent with the Florida Reliable Electricity Enhancement

19  Act, ss. 366.201-366.208, effective January 1, 2007, it is

20  presumed that underground service constitutes the standard for

21  new telecommunication service in this state and that

22  underground service shall constitute modern, adequate,

23  sufficient, and efficient service within the meaning of this

24  section. The commission shall adopt rules to the extent of its

25  jurisdiction encouraging and promoting, to the maximum extent

26  feasible, the conversion of existing overhead facilities to

27  underground facilities on a priority basis, in coordination

28  with any conversion of electric facilities to underground

29  service, giving due consideration to the overall cost of

30  vehicular accidents involving poles and other overhead

31  facilities, as well as to corresponding facilities that

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 1  provide underground service, the costs associated with

 2  rights-of-way and easements, the total operating and

 3  maintenance costs, including, without limitation, costs of

 4  tree-trimming for overhead facilities, the total costs

 5  incurred and losses sustained by consumers as a result of

 6  outages due to storm damage, and the costs of associated

 7  insurance, attorney's fees, and legal settlement and costs.

 8         Section 18.  Paragraph (e) of subsection (2) of section

 9  366.04, Florida Statutes, is amended to read:

10         366.04  Jurisdiction of commission.--

11         (2)  In the exercise of its jurisdiction, the

12  commission shall have power over electric utilities for the

13  following purposes:

14         (e)  To resolve, upon petition of a utility or on its

15  own motion, any territorial dispute involving service areas

16  between and among rural electric cooperatives, municipal

17  electric utilities, and other electric utilities under its

18  jurisdiction. In resolving territorial disputes, the

19  commission may consider, but not be limited to consideration

20  of, the ability of the utilities to expand services within

21  their own capabilities and the nature of the area involved,

22  including population, the degree of urbanization of the area,

23  its proximity to other urban areas, and the present and

24  reasonably foreseeable future requirements of the area for

25  other utility services. The Legislature finds and declares

26  that the installation of underground electric distribution

27  facilities to replace existing overhead facilities is in the

28  public interest and that such installation is not a

29  duplication of existing overhead facilities.  Any governmental

30  entity that installs underground electric distribution

31  facilities to provide service within its geographic

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 1  jurisdiction, and subsequently, without violating any

 2  then-effective franchise agreement, establishes a

 3  governmentally-owned electric utility system and begins

 4  operating such system, is not subject to the jurisdiction of

 5  the commission over territorial disputes.

 6         Section 19.  This act shall take effect July 1, 2006.

 7  

 8            *****************************************

 9                          SENATE SUMMARY

10    Creates the "Florida Reliable Electricity Enhancement
      Act." Provides that, as of a specified date, placement of
11    electric distribution facilities underground is the
      industry standard for new distribution facilities.
12    Requires public utilities to aggressively promote and
      encourage the timely and orderly conversion of existing
13    overhead distribution facilities to underground
      facilities. Details the general duties of a public
14    utility. Requires the Public Service Commission to ensure
      that only the minimum reasonable general and indirect
15    costs associated with underground facilities are included
      as costs of the underground facilities for any purpose.
16    Encourages the use of rights-of-way and rear yards as
      suitable locations for underground facilities. Declares
17    that it is the policy of the state that counties,
      municipalities, special districts, and community
18    development districts convert electric distribution,
      telephone, and cable television facilities from overhead
19    systems to underground facilities. Requires that certain
      contractual terms be included in a utility franchise.
20    Prohibits a governmental entity from giving or granting a
      franchise without reserving to itself the right to
21    purchase the utility at the expiration of the franchise
      or without reserving to itself the right to compete with
22    the private utility for a time period greater than 5
      years. (See bill for details.)
23  

24  

25  

26  

27  

28  

29  

30  

31  

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