| 1 | A bill to be entitled |
| 2 | An act relating to power plants; amending s. 366.93, F.S.; |
| 3 | revising definitions related to certain power plants to |
| 4 | include integrated gasification combined cycle power |
| 5 | plants; requiring the Public Service Commission to |
| 6 | implement rules related to integrated gasification |
| 7 | combined cycle power plant cost recovery; requiring a |
| 8 | report; amending s. 403.519, F.S.; providing requirements |
| 9 | and procedures for determination of need for integrated |
| 10 | gasification combined cycle power plants; providing an |
| 11 | exemption from purchased power supply bid rules under |
| 12 | certain circumstances; providing an effective date. |
| 13 |
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| 14 | Be It Enacted by the Legislature of the State of Florida: |
| 15 |
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| 16 | Section 1. Section 366.93, Florida Statutes, is amended to |
| 17 | read: |
| 18 | 366.93 Cost recovery for the siting, design, licensing, |
| 19 | and construction of nuclear and integrated gasification combined |
| 20 | cycle power plants.-- |
| 21 | (1) As used in this section, the term: |
| 22 | (a) "Cost" includes, but is not limited to, all capital |
| 23 | investments, including rate of return, any applicable taxes, and |
| 24 | all expenses, including operation and maintenance expenses, |
| 25 | related to or resulting from the siting, licensing, design, |
| 26 | construction, or operation of the nuclear or integrated |
| 27 | gasification combined cycle power plant. |
| 28 | (b) "Electric utility" or "utility" has the same meaning |
| 29 | as that provided in s. 366.8255(1)(a). |
| 30 | (c) "Integrated gasification combined cycle power plant" |
| 31 | or "plant" is an electrical power plant as defined in s. |
| 32 | 403.503(13) that uses synthesis gas produced by integrated |
| 33 | gasification technology. |
| 34 | (d)(c) "Nuclear power plant" or "plant" is an electrical |
| 35 | power plant as defined in s. 403.503(13)(12) that uses nuclear |
| 36 | materials for fuel. |
| 37 | (e) "Power plant" or "plant" means a nuclear power plant |
| 38 | or an integrated gasification combined cycle power plant. |
| 39 | (f)(d) "Preconstruction" is that period of time after a |
| 40 | site has been selected through and including the date the |
| 41 | utility completes site clearing work. Preconstruction costs |
| 42 | shall be afforded deferred accounting treatment and shall accrue |
| 43 | a carrying charge equal to the utility's allowance for funds |
| 44 | during construction (AFUDC) rate until recovered in rates. |
| 45 | (2) Within 6 months after the enactment of this act, the |
| 46 | commission shall establish, by rule, alternative cost recovery |
| 47 | mechanisms for the recovery of costs incurred in the siting, |
| 48 | design, licensing, and construction of a nuclear or integrated |
| 49 | gasification combined cycle power plant. Such mechanisms shall |
| 50 | be designed to promote utility investment in nuclear or |
| 51 | integrated gasification combined cycle power plants and allow |
| 52 | for the recovery in rates of all prudently incurred costs, and |
| 53 | shall include, but are not limited to: |
| 54 | (a) Recovery through the capacity cost recovery clause of |
| 55 | any preconstruction costs. |
| 56 | (b) Recovery through an incremental increase in the |
| 57 | utility's capacity cost recovery clause rates of the carrying |
| 58 | costs on the utility's projected construction cost balance |
| 59 | associated with the nuclear or integrated gasification combined |
| 60 | cycle power plant. To encourage investment and provide |
| 61 | certainty, for nuclear or integrated gasification combined cycle |
| 62 | power plant need petitions submitted on or before December 31, |
| 63 | 2010, associated carrying costs shall be equal to the pretax |
| 64 | AFUDC in effect upon this act becoming law. For nuclear or |
| 65 | integrated gasification combined cycle power plants for which |
| 66 | need petitions are submitted after December 31, 2010, the |
| 67 | utility's existing pretax AFUDC rate is presumed to be |
| 68 | appropriate unless determined otherwise by the commission in the |
| 69 | determination of need for the nuclear or integrated gasification |
| 70 | combined cycle power plant. |
| 71 | (3) After a petition for determination of need is granted, |
| 72 | a utility may petition the commission for cost recovery as |
| 73 | permitted by this section and commission rules. |
| 74 | (4) When the nuclear or integrated gasification combined |
| 75 | cycle power plant is placed in commercial service, the utility |
| 76 | shall be allowed to increase its base rate charges by the |
| 77 | projected annual revenue requirements of the nuclear or |
| 78 | integrated gasification combined cycle power plant based on the |
| 79 | jurisdictional annual revenue requirements of the plant for the |
| 80 | first 12 months of operation. The rate of return on capital |
| 81 | investments shall be calculated using the utility's rate of |
| 82 | return last approved by the commission prior to the commercial |
| 83 | inservice date of the nuclear or integrated gasification |
| 84 | combined cycle power plant. If any existing generating plant is |
| 85 | retired as a result of operation of the nuclear or integrated |
| 86 | gasification combined cycle power plant, the commission shall |
| 87 | allow for the recovery, through an increase in base rate |
| 88 | charges, of the net book value of the retired plant over a |
| 89 | period not to exceed 5 years. |
| 90 | (5) The utility shall report to the commission annually |
| 91 | the budgeted and actual costs as compared to the estimated |
| 92 | inservice cost of the nuclear or integrated gasification |
| 93 | combined cycle power plant provided by the utility pursuant to |
| 94 | s. 403.519(4), until the commercial operation of the nuclear or |
| 95 | integrated gasification combined cycle power plant. The utility |
| 96 | shall provide such information on an annual basis following the |
| 97 | final order by the commission approving the determination of |
| 98 | need for the nuclear or integrated gasification combined cycle |
| 99 | power plant, with the understanding that some costs may be |
| 100 | higher than estimated and other costs may be lower. |
| 101 | (6) In the event the utility elects not to complete or is |
| 102 | precluded from completing construction of the nuclear or |
| 103 | integrated gasification combined cycle power plant, the utility |
| 104 | shall be allowed to recover all prudent preconstruction and |
| 105 | construction costs incurred following the commission's issuance |
| 106 | of a final order granting a determination of need for the |
| 107 | nuclear or integrated gasification combined cycle power plant. |
| 108 | The utility shall recover such costs through the capacity cost |
| 109 | recovery clause over a period equal to the period during which |
| 110 | the costs were incurred or 5 years, whichever is greater. The |
| 111 | unrecovered balance during the recovery period will accrue |
| 112 | interest at the utility's weighted average cost of capital as |
| 113 | reported in the commission's earnings surveillance reporting |
| 114 | requirement for the prior year. |
| 115 | Section 2. Subsection (4) of section 403.519, Florida |
| 116 | Statutes, is amended to read: |
| 117 | 403.519 Exclusive forum for determination of need.-- |
| 118 | (4) In making its determination on a proposed electrical |
| 119 | power plant using nuclear materials or synthesis gas produced by |
| 120 | integrated gasification combined cycle power plant as fuel, the |
| 121 | commission shall hold a hearing within 90 days after the filing |
| 122 | of the petition to determine need and shall issue an order |
| 123 | granting or denying the petition within 135 days after the date |
| 124 | of the filing of the petition. The commission shall be the sole |
| 125 | forum for the determination of this matter and the issues |
| 126 | addressed in the petition, which accordingly shall not be |
| 127 | reviewed in any other forum, or in the review of proceedings in |
| 128 | such other forum. In making its determination to either grant or |
| 129 | deny the petition, the commission shall consider the need for |
| 130 | electric system reliability and integrity, including fuel |
| 131 | diversity, the need for base-load generating capacity, and the |
| 132 | need for adequate electricity at a reasonable cost. |
| 133 | (a) The applicant's petition shall include: |
| 134 | 1. A description of the need for the generation capacity. |
| 135 | 2. A description of how the proposed nuclear or integrated |
| 136 | gasification combined cycle power plant will enhance the |
| 137 | reliability of electric power production within the state by |
| 138 | improving the balance of power plant fuel diversity and reducing |
| 139 | Florida's dependence on fuel oil and natural gas. |
| 140 | 3. A description of and a nonbinding estimate of the cost |
| 141 | of the nuclear or integrated gasification combined cycle power |
| 142 | plant. |
| 143 | 4. The annualized base revenue requirement for the first |
| 144 | 12 months of operation of the nuclear or integrated gasification |
| 145 | combined cycle power plant. |
| 146 | 5. Information on whether there were any discussions with |
| 147 | any electric utilities regarding ownership of a portion of the |
| 148 | nuclear or integrated gasification combined cycle power plant by |
| 149 | such electric utilities. |
| 150 | (b) In making its determination, the commission shall take |
| 151 | into account matters within its jurisdiction, which it deems |
| 152 | relevant, including whether the nuclear or integrated |
| 153 | gasification combined cycle power plant will: |
| 154 | 1. Provide needed base-load capacity. |
| 155 | 2. Enhance the reliability of electric power production |
| 156 | within the state by improving the balance of power plant fuel |
| 157 | diversity and reducing Florida's dependence on fuel oil and |
| 158 | natural gas. |
| 159 | 3. Provide the most cost-effective source of power, taking |
| 160 | into account the need to improve the balance of fuel diversity, |
| 161 | reduce Florida's dependence on fuel oil and natural gas, reduce |
| 162 | air emission compliance costs, and contribute to the long-term |
| 163 | stability and reliability of the electric grid. |
| 164 | (c) No provision of rule 25-22.082, Florida Administrative |
| 165 | Code, shall be applicable to a nuclear or integrated |
| 166 | gasification combined cycle power plant sited under this act, |
| 167 | including provisions for cost recovery, and an applicant shall |
| 168 | not otherwise be required to secure competitive proposals for |
| 169 | power supply prior to making application under this act or |
| 170 | receiving a determination of need from the commission. |
| 171 | (d) The commission's determination of need for a nuclear |
| 172 | or integrated gasification combined cycle power plant shall |
| 173 | create a presumption of public need and necessity and shall |
| 174 | serve as the commission's report required by s. 403.507(4)(a). |
| 175 | An order entered pursuant to this section constitutes final |
| 176 | agency action. Any petition for reconsideration of a final order |
| 177 | on a petition for need determination shall be filed within 5 |
| 178 | days after the date of such order. The commission's final order, |
| 179 | including any order on reconsideration, shall be reviewable on |
| 180 | appeal in the Florida Supreme Court. Inasmuch as delay in the |
| 181 | determination of need will delay siting of a nuclear or |
| 182 | integrated gasification combined cycle power plant or diminish |
| 183 | the opportunity for savings to customers under the federal |
| 184 | Energy Policy Act of 2005, the Supreme Court shall proceed to |
| 185 | hear and determine the action as expeditiously as practicable |
| 186 | and give the action precedence over matters not accorded similar |
| 187 | precedence by law. |
| 188 | (e) After a petition for determination of need for a |
| 189 | nuclear or integrated gasification combined cycle power plant |
| 190 | has been granted, the right of a utility to recover any costs |
| 191 | incurred prior to commercial operation, including, but not |
| 192 | limited to, costs associated with the siting, design, licensing, |
| 193 | or construction of the plant, shall not be subject to challenge |
| 194 | unless and only to the extent the commission finds, based on a |
| 195 | preponderance of the evidence adduced at a hearing before the |
| 196 | commission under s. 120.57, that certain costs were imprudently |
| 197 | incurred. Proceeding with the construction of the nuclear or |
| 198 | integrated gasification combined cycle power plant following an |
| 199 | order by the commission approving the need for the nuclear or |
| 200 | integrated gasification combined cycle power plant under this |
| 201 | act shall not constitute or be evidence of imprudence. |
| 202 | Imprudence shall not include any cost increases due to events |
| 203 | beyond the utility's control. Further, a utility's right to |
| 204 | recover costs associated with a nuclear or integrated |
| 205 | gasification combined cycle power plant may not be raised in any |
| 206 | other forum or in the review of proceedings in such other forum. |
| 207 | Costs incurred prior to commercial operation shall be recovered |
| 208 | pursuant to chapter 366. |
| 209 | Section 3. This act shall take effect upon becoming a law. |