Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. CS for SB 888
Barcode 265040
CHAMBER ACTION
Senate House
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11 The Committee on Environmental Preservation (Dockery)
12 recommended the following amendment:
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14 Senate Amendment (with title amendment)
15 On page 24, between lines 19 and 20,
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17 insert:
18 Section 1. Section 366.91, Florida Statutes, is
19 amended to read:
20 366.91 Renewable energy.--
21 (1) The Legislature finds that it is in the public
22 interest to promote the development of renewable energy
23 resources in this state. Renewable energy resources have the
24 potential to help diversify fuel types to lessen meet
25 Florida's growing dependency on natural gas and fuel oil for
26 electric production, minimize the volatility of fuel costs,
27 encourage investment within the state, improve environmental
28 conditions, and make Florida a leader in new and innovative
29 technologies.
30 (2) As used in this section, the term:
31 (a) "Biomass" means a power source that is comprised
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. CS for SB 888
Barcode 265040
1 of, but not limited to, combustible residues or gases from
2 forest products manufacturing, agricultural and orchard crops,
3 waste products from livestock and poultry operations and food
4 processing, urban wood waste, municipal solid waste, municipal
5 liquid waste treatment operations, and landfill gas.
6 (b) "Renewable energy" means electrical energy
7 produced from a method that uses one or more of the following
8 fuels or energy sources: hydrogen produced from sources other
9 than fossil fuels, biomass, solar energy, geothermal energy,
10 wind energy, ocean energy, and hydroelectric power. The term
11 includes the alternative energy resource, waste heat, from
12 sulfuric acid manufacturing operations.
13 (c) "Renewable Florida energy" means renewable energy
14 that is produced or generated in Florida.
15 (d) "Affected utility" means each public utility, as
16 defined in s. 366.021(1), and each municipal electric utility
17 and rural electric cooperative subject to the provisions of s.
18 366.91(4).
19 (3) On or before January 1, 2006, Each public utility
20 shall must continuously offer one or more long term a purchase
21 contracts to producers of renewable energy. In addition, each
22 public utility shall continuously offer to purchase renewable
23 energy under the Cogeneration-1 tariff, as available energy
24 tariff. A renewable energy producer shall have the right to
25 choose between the long-term purchase contract, or the
26 Cogeneration-1 tariff, as available energy tariff, or a
27 combination of both, based on its own operational profile. The
28 commission shall establish requirements relating to the
29 purchase of renewable capacity and energy by public utilities
30 from renewable energy producers and may adopt rules to
31 administer this section. The contract shall contain payment
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. CS for SB 888
Barcode 265040
1 provisions for energy and capacity which are based upon the
2 utility's full avoided costs, as defined in s. 366.051;
3 however, capacity payments are not required if, due to the
4 operational characteristics of the renewable energy generator
5 or the anticipated peak and off-peak availability and capacity
6 factor of the utility's avoided unit, the producer is unlikely
7 to provide any capacity value to the utility or the electric
8 grid during the contract term. Each contract must provide a
9 contract term of at least 10 years. Prudent and reasonable
10 costs associated with a renewable energy contract shall be
11 recovered from the ratepayers of the contracting utility,
12 without differentiation among customer classes, through the
13 appropriate cost-recovery clause mechanism administered by the
14 commission.
15 (4) On or before January 1, 2006, Each municipal
16 electric utility and rural electric cooperative whose annual
17 sales, as of July 1, 1993, to retail customers were greater
18 than 2,000 gigawatt hours must continuously offer one or more
19 long term a purchase contracts contract to producers of
20 renewable energy containing payment provisions for energy and
21 capacity which are based upon the utility's or cooperative's
22 full avoided costs, as determined by the governing body of the
23 municipal utility or cooperative; however, capacity payments
24 are not required if, due to the operational characteristics of
25 the renewable energy generator or the anticipated peak and
26 off-peak availability and capacity factor of the utility's
27 avoided unit, the producer is unlikely to provide any capacity
28 value to the utility or the electric grid during the contract
29 term. Each contract must provide a contract term of at least
30 10 years.
31 (5) A contracting producer of renewable energy must
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. CS for SB 888
Barcode 265040
1 pay the actual costs of its interconnection with the
2 transmission grid or distribution system.
3 (6) The commission shall encourage and promote the
4 production of renewable Florida energy. Among other things,
5 the commission shall take the following actions:
6 (a) The commission shall determine goals for the
7 production and delivery of renewable Florida energy to Florida
8 customers and shall use this determination to establish goals
9 for each affected utility. The purpose of setting goals is to
10 encourage the development of all renewable Florida energy that
11 is or can become technically feasible while conforming to the
12 cost effectiveness standards set forth herein.
13 (b) A goal shall be the minimum amount of renewable
14 Florida energy that the affected utility shall deliver to its
15 customers in a given year. A goal shall be expressed in
16 megawatt hours per year.
17 (c) Each goal shall be established by the commission
18 in an equitable manner. Each goal shall be based on the
19 affected utility's pro rata share of statewide electricity
20 sales or other factors the commission deems appropriate.
21 (d) The commission shall establish each goal as
22 expeditiously as possible after this section is enacted into
23 law. The commission shall reevaluate and update each goal
24 periodically to ensure that all viable, cost effective sources
25 of renewable Florida energy are being developed and utilized,
26 subject to the other provisions of this section.
27 (e) The commission shall establish goals for the
28 future, based on a planning horizon of at least five years.
29 (f) When setting goals pursuant to subsection (6), the
30 commission shall include the electrical generating capacity of
31 all sources of renewable florida energy that are in operation
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. CS for SB 888
Barcode 265040
1 or under construction. The commission shall consider the
2 future electrical generating capacity of all sources of
3 renewable Florida energy that are reasonably likely to be
4 developed, given the relevant economic, regulatory, and
5 technological constraints affecting such sources. The
6 commission also shall solicit and consider all relevant
7 information from the affected utilities, the producers of
8 renewable Florida energy, and the public.
9 (7) The commission shall grant relief from the goals
10 in this section, if the commission finds that:
11 (a) the affected utility cannot comply because,
12 notwithstanding the affected utility's diligent efforts to
13 produce and purchase sufficient amounts of renewable florida
14 energy, there is an insufficient amount of renewable Florida
15 energy available to it;
16 (b) compliance would result in a significant
17 disruption of electrical service or cause an undue hardship to
18 the affected utility or its customers; or
19 (c) compliance cannot reasonably be achieved because
20 of other factors beyond the control of the affected utility.
21 (8) The commission may establish a trading program for
22 renewable Florida energy. The trading program shall be
23 designed to encourage and enable affected utilities to buy and
24 sell renewable Florida energy, or credits for such energy, and
25 thus readily satisfy the goals established pursuant to this
26 section.
27 (9) An affected utility may satisfy its goals pursuant
28 to this section, by producing its own renewable Florida energy
29 or by purchasing renewable Florida energy from others.
30 (a) When evaluating its options for obtaining
31 renewable Florida energy, an affected utility shall consider
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. CS for SB 888
Barcode 265040
1 the cost effectiveness of each option, the reliability of the
2 energy supply system and technology, the risk mitigation that
3 will be achieved by diversifying fuel and generation sources,
4 the environmental attributes of each option, and other factors
5 that the utility would normally consider when evaluating its
6 power supply options. The affected utility also shall
7 consider the contributions of each option to the objectives
8 set forth in subsection (1).
9 (b) An affected utility shall use fair, equal, and
10 consistent standards when comparing its ability to
11 self-generate renewable Florida energy and its ability to
12 purchase renewable Florida energy.
13 (c) An affected utility may develop standard contracts
14 and purchasing procedures, provided such standards and
15 procedures reasonably accommodate the economic and operating
16 characteristics associated with he production of renewable
17 Florida energy.
18 (d) Notwithstanding anything else contained in chapter
19 366, an affected utility may negotiate a bilateral contract of
20 any duration with a producer of renewable Florida energy,
21 without conducting a competitive procurement process, if the
22 producer is not a subsidiary of the affected utility, or an
23 affiliate, or otherwise related to the affected utility.
24 (10) The commission shall consider the following in
25 determining the cost effectiveness of a renewable Florida
26 energy resource:
27 (a) Notwithstanding anything else contained in chapter
28 366, the cost effectiveness of renewable Florida energy shall
29 be evaluated on the basis of the economic and operating
30 characteristics of renewable Florida energy resources and
31 shall not be evaluated in comparison to the affected utility's
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. CS for SB 888
Barcode 265040
1 avoided costs, as defined in s. 366.051.
2 (b) As a reference benchmark, the commission may
3 consider the cost of electricity produced in Florida by a base
4 load electrical power plant using abundant domestic fuels,
5 such as coal and nuclear. In addition, the commission should
6 consider the environmental and economic development benefits
7 of renewable Florida energy.
8 (c) The commission may presume that a project or
9 contract is not cost effective if the total cost of the
10 renewable Florida energy is more than ten cents per kilowatt
11 hour, levelized over the life of the project or contract. The
12 commission may reject this resumption cases where it is
13 demonstrated that the project or contact: is cost effective,
14 due to site specific or other extraordinary factors; offers
15 special benefits for the development of renewable Florida
16 energy; or otherwise warrants approval. The commission also
17 may periodically increase the limit of ten cents per kilowatt
18 hour, based on prevailing prices and market conditions, such
19 as the cost of electricity generated at base load power plants
20 in Florida that use coal or nuclear energy for fuel.
21 (11) The commission shall review, and approve or
22 reject, all tariffs and contracts for the purchase of
23 renewable Florida energy, and all proposed projects for the
24 self-generation of renewable Florida energy by affected
25 utilities, involving more than 10 megawatts of renewable
26 Florida energy. The commission shall determine whether the
27 rates, terms, and conditions of the contracts and projects are
28 fiar, just, and reasonable. Prudent and reasonable costs
29 associated with the production or purchase of renewable
30 Florida energy shall be recovered from the ratepayers of a
31 public utility, without differentiation between customer
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. CS for SB 888
Barcode 265040
1 classes, through the appropriate cost recovery clause
2 mechanism, as administered by the commission.
3 (12) The commission shall establish rules and
4 procedures for approving contracts for the production or
5 purchase of renewable Florida energy for purposes of enabling
6 affected utilities to qualify for the renewable energy tax
7 credit pursuant to s. 220.192. Such rules and procedures
8 shall ensure that the economic benefits of the tax credits
9 shall be used by the affected utility in a manner that fully
10 accrues to the benefit of the affected utility's ratepayers.
11 (13) The commission shall provide the Department of
12 Revenue with a copy of each renewable energy project or
13 contract approval granted by the commission. Each affected
14 utility shall annually provide the commission with records
15 identifying the amount of renewable Florida energy that the
16 affected utility provided pursuant to an approved renewable
17 energy project or contract.
18 (14) Each year the commission shall determine whether
19 the affected utilities have complied with the goals
20 established pursuant to subsection (6). If the commission
21 determines that an affected utility has not satisfied its goal
22 and is not entitled to relief pursuant to subsection (7), the
23 commission shall take appropriate action to ensure that the
24 objectives of this section are achieved.
25 (15) the commission shall establish the procedures for
26 implementing the provisions in subsections (7)-(14), and shall
27 take all necessary steps to ensure that these provisions are
28 implemented in compliance with the Legislature's intent, as
29 expressed herein. The commission may adopt rules to
30 administer these sections.
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. CS for SB 888
Barcode 265040
1 (Redesignate subsequent sections.)
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3
4 ================ T I T L E A M E N D M E N T ===============
5 And the title is amended as follows:
6 On page 1, line 25, delete that line
7
8 and insert:
9 amending s. 366.91, F.S.; providing
10 definitions; deleting certain requirements
11 concerning payments for electrical capacity and
12 energy based on a utility's avoided cost;
13 authorizing the Florida Public Service
14 Commission to establish annual goals for the
15 delivery of renewable Florida energy by certain
16 utilities to their customers; creating
17 procedures for the establishment of goals;
18 authorizing the Commission to grant relief from
19 the goals; authorizing the Commission to
20 establish a trading program for renewable
21 Florida energy; authorizing affected utilities
22 to satisfy the goals by producing or purchasing
23 renewable Florida energy, subject to certain
24 conditions; authorizing the Commission to
25 determine the cost effectiveness of renewable
26 Florida energy resources; authorizing the
27 Commission to approve contracts for the
28 purchase of renewable Florida energy;
29 authorizing the Commission to take appropriate
30 action if the goals are not met; authorizing
31 the Commission to establish the procedures for
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Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. CS for SB 888
Barcode 265040
1 implementation; authorizing the Commission to
2 adopt rules; creating s. 377.801, F.S.;
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