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
    24-1574A-07




 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, 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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    Florida Senate - 2007                                  SB 2050
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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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    Florida Senate - 2007                                  SB 2050
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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  

19            *****************************************

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.)

28  

29  

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