HB 549

1
A bill to be entitled
2An act relating to power plants; amending s. 366.93, F.S.;
3revising definitions related to certain power plants to
4include integrated gasification combined cycle power
5plants; requiring the Public Service Commission to
6implement rules related to integrated gasification
7combined cycle power plant cost recovery; requiring a
8report; amending s. 403.502, F.S.; providing legislative
9intent for the consideration of renewable energy sources
10and technologies and conservation measures in actions
11related to electrical power plant and transmission line
12siting; amending s. 403.519, F.S.; providing requirements
13and procedures for determination of need for integrated
14gasification combined cycle power plants; requiring
15consideration of renewable energy sources and technologies
16and conservation measures in power plant siting
17determinations; providing an exemption from purchased
18power supply bid rules under certain circumstances;
19providing an effective date.
20
21Be It Enacted by the Legislature of the State of Florida:
22
23     Section 1.  Section 366.93, Florida Statutes, is amended to
24read:
25     366.93  Cost recovery for the siting, design, licensing,
26and construction of nuclear and integrated gasification combined
27cycle power plants.--
28     (1)  As used in this section, the term:
29     (a)  "Cost" includes, but is not limited to, all capital
30investments, including rate of return, any applicable taxes, and
31all expenses, including operation and maintenance expenses,
32related to or resulting from the siting, licensing, design,
33construction, or operation of the nuclear or integrated
34gasification combined cycle power plant.
35     (b)  "Electric utility" or "utility" has the same meaning
36as that provided in s. 366.8255(1)(a).
37     (c)  "Integrated gasification combined cycle power plant"
38or "plant" is an electrical power plant as defined in s.
39403.503(13) that uses synthesis gas produced by integrated
40gasification technology.
41     (d)(c)  "Nuclear power plant" or "plant" is an electrical
42power plant as defined in s. 403.503(13)(12) that uses nuclear
43materials for fuel.
44     (e)  "Power plant" or "plant" means a nuclear power plant
45or an integrated gasification combined cycle power plant.
46     (f)(d)  "Preconstruction" is that period of time after a
47site has been selected through and including the date the
48utility completes site clearing work. Preconstruction costs
49shall be afforded deferred accounting treatment and shall accrue
50a carrying charge equal to the utility's allowance for funds
51during construction (AFUDC) rate until recovered in rates.
52     (2)  Within 6 months after the enactment of this act, the
53commission shall establish, by rule, alternative cost recovery
54mechanisms for the recovery of costs incurred in the siting,
55design, licensing, and construction of a nuclear or integrated
56gasification combined cycle power plant. Such mechanisms shall
57be designed to promote utility investment in nuclear or
58integrated gasification combined cycle power plants and allow
59for the recovery in rates of all prudently incurred costs, and
60shall include, but are not limited to:
61     (a)  Recovery through the capacity cost recovery clause of
62any preconstruction costs.
63     (b)  Recovery through an incremental increase in the
64utility's capacity cost recovery clause rates of the carrying
65costs on the utility's projected construction cost balance
66associated with the nuclear or integrated gasification combined
67cycle power plant. To encourage investment and provide
68certainty, for nuclear or integrated gasification combined cycle
69power plant need petitions submitted on or before December 31,
702010, associated carrying costs shall be equal to the pretax
71AFUDC in effect upon this act becoming law. For nuclear or
72integrated gasification combined cycle power plants for which
73need petitions are submitted after December 31, 2010, the
74utility's existing pretax AFUDC rate is presumed to be
75appropriate unless determined otherwise by the commission in the
76determination of need for the nuclear or integrated gasification
77combined cycle power plant.
78     (3)  After a petition for determination of need is granted,
79a utility may petition the commission for cost recovery as
80permitted by this section and commission rules.
81     (4)  When the nuclear or integrated gasification combined
82cycle power plant is placed in commercial service, the utility
83shall be allowed to increase its base rate charges by the
84projected annual revenue requirements of the nuclear or
85integrated gasification combined cycle power plant based on the
86jurisdictional annual revenue requirements of the plant for the
87first 12 months of operation. The rate of return on capital
88investments shall be calculated using the utility's rate of
89return last approved by the commission prior to the commercial
90inservice date of the nuclear or integrated gasification
91combined cycle power plant. If any existing generating plant is
92retired as a result of operation of the nuclear or integrated
93gasification combined cycle power plant, the commission shall
94allow for the recovery, through an increase in base rate
95charges, of the net book value of the retired plant over a
96period not to exceed 5 years.
97     (5)  The utility shall report to the commission annually
98the budgeted and actual costs as compared to the estimated
99inservice cost of the nuclear or integrated gasification
100combined cycle power plant provided by the utility pursuant to
101s. 403.519(4), until the commercial operation of the nuclear or
102integrated gasification combined cycle power plant. The utility
103shall provide such information on an annual basis following the
104final order by the commission approving the determination of
105need for the nuclear or integrated gasification combined cycle
106power plant, with the understanding that some costs may be
107higher than estimated and other costs may be lower.
108     (6)  In the event the utility elects not to complete or is
109precluded from completing construction of the nuclear or
110integrated gasification combined cycle power plant, the utility
111shall be allowed to recover all prudent preconstruction and
112construction costs incurred following the commission's issuance
113of a final order granting a determination of need for the
114nuclear or integrated gasification combined cycle power plant.
115The utility shall recover such costs through the capacity cost
116recovery clause over a period equal to the period during which
117the costs were incurred or 5 years, whichever is greater. The
118unrecovered balance during the recovery period will accrue
119interest at the utility's weighted average cost of capital as
120reported in the commission's earnings surveillance reporting
121requirement for the prior year.
122     Section 2.  Subsection (4) is added to section 403.502,
123Florida Statutes, to read:
124     403.502  Legislative intent.--The Legislature finds that
125the present and predicted growth in electric power demands in
126this state requires the development of a procedure for the
127selection and utilization of sites for electrical generating
128facilities and the identification of a state position with
129respect to each proposed site. The Legislature recognizes that
130the selection of sites and the routing of associated
131transmission lines will have a significant impact upon the
132welfare of the population, the location and growth of industry,
133and the use of the natural resources of the state. The
134Legislature finds that the efficiency of the permit application
135and review process at both the state and local level would be
136improved with the implementation of a process whereby a permit
137application would be centrally coordinated and all permit
138decisions could be reviewed on the basis of standards and
139recommendations of the deciding agencies. It is the policy of
140this state that, while recognizing the pressing need for
141increased power generation facilities, the state shall ensure
142through available and reasonable methods that the location and
143operation of electrical power plants will produce minimal
144adverse effects on human health, the environment, the ecology of
145the land and its wildlife, and the ecology of state waters and
146their aquatic life and will not unduly conflict with the goals
147established by the applicable local comprehensive plans. It is
148the intent to seek courses of action that will fully balance the
149increasing demands for electrical power plant location and
150operation with the broad interests of the public. Such action
151will be based on these premises:
152     (4)  To assure the citizens of Florida that renewable
153energy sources and technologies, as well as conservation
154measures, are utilized to the extent practicable.
155     Section 3.  Subsections (3) and (4) of section 403.519,
156Florida Statutes, are amended to read:
157     403.519  Exclusive forum for determination of need.--
158     (3)  The commission shall be the sole forum for the
159determination of this matter, which accordingly shall not be
160raised in any other forum or in the review of proceedings in
161such other forum. In making its determination, the commission
162shall take into account the need for electric system reliability
163and integrity, the need for adequate electricity at a reasonable
164cost, the need for fuel diversity and supply reliability, and
165whether the proposed plant is the most cost-effective
166alternative available, and whether renewable energy sources and
167technologies, as well as conservation measures, are utilized to
168the extent practicable. The commission shall also expressly
169consider the conservation measures taken by or reasonably
170available to the applicant or its members which might mitigate
171the need for the proposed plant and other matters within its
172jurisdiction which it deems relevant. The commission's
173determination of need for an electrical power plant shall create
174a presumption of public need and necessity and shall serve as
175the commission's report required by s. 403.507(4). An order
176entered pursuant to this section constitutes final agency
177action.
178     (4)  In making its determination on a proposed electrical
179power plant using nuclear materials or synthesis gas produced by
180integrated gasification combined cycle power plant as fuel, the
181commission shall hold a hearing within 90 days after the filing
182of the petition to determine need and shall issue an order
183granting or denying the petition within 135 days after the date
184of the filing of the petition. The commission shall be the sole
185forum for the determination of this matter and the issues
186addressed in the petition, which accordingly shall not be
187reviewed in any other forum, or in the review of proceedings in
188such other forum. In making its determination to either grant or
189deny the petition, the commission shall consider the need for
190electric system reliability and integrity, including fuel
191diversity, the need for base-load generating capacity, and the
192need for adequate electricity at a reasonable cost, and whether
193renewable energy sources and technologies, as well as
194conservation measures, are utilized to the extent practicable.
195     (a)  The applicant's petition shall include:
196     1.  A description of the need for the generation capacity.
197     2.  A description of how the proposed nuclear or integrated
198gasification combined cycle power plant will enhance the
199reliability of electric power production within the state by
200improving the balance of power plant fuel diversity and reducing
201Florida's dependence on fuel oil and natural gas.
202     3.  A description of and a nonbinding estimate of the cost
203of the nuclear or integrated gasification combined cycle power
204plant.
205     4.  The annualized base revenue requirement for the first
20612 months of operation of the nuclear or integrated gasification
207combined cycle power plant.
208     5.  Information on whether there were any discussions with
209any electric utilities regarding ownership of a portion of the
210nuclear or integrated gasification combined cycle power plant by
211such electric utilities.
212     (b)  In making its determination, the commission shall take
213into account matters within its jurisdiction, which it deems
214relevant, including whether the nuclear or integrated
215gasification combined cycle power plant will:
216     1.  Provide needed base-load capacity.
217     2.  Enhance the reliability of electric power production
218within the state by improving the balance of power plant fuel
219diversity and reducing Florida's dependence on fuel oil and
220natural gas.
221     3.  Provide the most cost-effective source of power, taking
222into account the need to improve the balance of fuel diversity,
223reduce Florida's dependence on fuel oil and natural gas, reduce
224air emission compliance costs, and contribute to the long-term
225stability and reliability of the electric grid.
226     (c)  No provision of rule 25-22.082, Florida Administrative
227Code, shall be applicable to a nuclear or integrated
228gasification combined cycle power plant sited under this act,
229including provisions for cost recovery, and an applicant shall
230not otherwise be required to secure competitive proposals for
231power supply prior to making application under this act or
232receiving a determination of need from the commission.
233     (d)  The commission's determination of need for a nuclear
234or integrated gasification combined cycle power plant shall
235create a presumption of public need and necessity and shall
236serve as the commission's report required by s. 403.507(4)(a).
237An order entered pursuant to this section constitutes final
238agency action. Any petition for reconsideration of a final order
239on a petition for need determination shall be filed within 5
240days after the date of such order. The commission's final order,
241including any order on reconsideration, shall be reviewable on
242appeal in the Florida Supreme Court. Inasmuch as delay in the
243determination of need will delay siting of a nuclear or
244integrated gasification combined cycle power plant or diminish
245the opportunity for savings to customers under the federal
246Energy Policy Act of 2005, the Supreme Court shall proceed to
247hear and determine the action as expeditiously as practicable
248and give the action precedence over matters not accorded similar
249precedence by law.
250     (e)  After a petition for determination of need for a
251nuclear or integrated gasification combined cycle power plant
252has been granted, the right of a utility to recover any costs
253incurred prior to commercial operation, including, but not
254limited to, costs associated with the siting, design, licensing,
255or construction of the plant, shall not be subject to challenge
256unless and only to the extent the commission finds, based on a
257preponderance of the evidence adduced at a hearing before the
258commission under s. 120.57, that certain costs were imprudently
259incurred. Proceeding with the construction of the nuclear or
260integrated gasification combined cycle power plant following an
261order by the commission approving the need for the nuclear or
262integrated gasification combined cycle power plant under this
263act shall not constitute or be evidence of imprudence.
264Imprudence shall not include any cost increases due to events
265beyond the utility's control. Further, a utility's right to
266recover costs associated with a nuclear or integrated
267gasification combined cycle power plant may not be raised in any
268other forum or in the review of proceedings in such other forum.
269Costs incurred prior to commercial operation shall be recovered
270pursuant to chapter 366.
271     Section 4.  This act shall take effect upon becoming a law.


CODING: Words stricken are deletions; words underlined are additions.