Senate Bill sb2050
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    Florida Senate - 2007                                  SB 2050
    By Senator Posey
    24-1574A-07
  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. 366.208, F.S.;
30         encouraging competition in providing utility
31         construction services; amending s. 366.04,
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    Florida Senate - 2007                                  SB 2050
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 1         F.S.; declaring that the installation of
 2         underground electric distribution facilities to
 3         replace existing overhead facilities is in the
 4         public interest in the state; providing an
 5         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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    Florida Senate - 2007                                  SB 2050
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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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    Florida Senate - 2007                                  SB 2050
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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, 2008, 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, 2008, 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, 2009, 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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    Florida Senate - 2007                                  SB 2050
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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, 2008, 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 366.208, Florida Statutes, is
 9  created to read:
10         366.208  Encouraging competition in providing utility
11  construction services.--It is the policy of the state to
12  promote, to the maximum extent feasible and practicable,
13  competition in all economic activity in the state, including
14  the provision of utility construction services. Public
15  utilities shall pursue competitive alternatives from qualified
16  vendors and make such alternatives available to governmental
17  entities that desire to convert existing overhead facilities
18  to underground facilities.
19         Section 8.  Paragraph (e) of subsection (2) of section
20  366.04, Florida Statutes, is amended to read:
21         366.04  Jurisdiction of commission.--
22         (2)  In the exercise of its jurisdiction, the
23  commission shall have power over electric utilities for the
24  following purposes:
25         (e)  To resolve, upon petition of a utility or on its
26  own motion, any territorial dispute involving service areas
27  between and among rural electric cooperatives, municipal
28  electric utilities, and other electric utilities under its
29  jurisdiction. In resolving territorial disputes, the
30  commission may consider, but not be limited to consideration
31  of, the ability of the utilities to expand services within
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 1  their own capabilities and the nature of the area involved,
 2  including population, the degree of urbanization of the area,
 3  its proximity to other urban areas, and the present and
 4  reasonably foreseeable future requirements of the area for
 5  other utility services. The Legislature finds and declares
 6  that the installation of underground electric distribution
 7  facilities to replace existing overhead facilities is in the
 8  public interest and that such installation is not a
 9  duplication of existing overhead facilities.  Any governmental
10  entity that installs underground electric distribution
11  facilities to provide service within its geographic
12  jurisdiction, and subsequently, without violating any
13  then-effective franchise agreement, establishes a
14  governmentally-owned electric utility system and begins
15  operating such system, is not subject to the jurisdiction of
16  the commission over territorial disputes.
17         Section 9.  This act shall take effect July 1, 2007.
18  
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20                          SENATE SUMMARY
21    Creates the "Florida Reliable Electricity Enhancement
      Act." Provides that, as of a specified date, placement of
22    electric distribution facilities underground is the
      industry standard for new distribution facilities.
23    Requires public utilities to aggressively promote and
      encourage the timely and orderly conversion of existing
24    overhead distribution facilities to underground
      facilities. Details the general duties of a public
25    utility. Requires the Public Service Commission to ensure
      that only the minimum reasonable general and indirect
26    costs associated with underground facilities are included
      as costs of the underground facilities for any purpose.
27    (See bill for details.)
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29  
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