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. 403.502, F.S.; providing legislative |
9 | intent for the consideration of renewable energy sources |
10 | and technologies and conservation measures in actions |
11 | related to electrical power plant and transmission line |
12 | siting; amending s. 403.519, F.S.; providing requirements |
13 | and procedures for determination of need for integrated |
14 | gasification combined cycle power plants; requiring |
15 | consideration of renewable energy sources and technologies |
16 | and conservation measures in power plant siting |
17 | determinations; providing an exemption from purchased |
18 | power supply bid rules under certain circumstances; |
19 | providing an effective date. |
20 |
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21 | Be It Enacted by the Legislature of the State of Florida: |
22 |
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23 | Section 1. Section 366.93, Florida Statutes, is amended to |
24 | read: |
25 | 366.93 Cost recovery for the siting, design, licensing, |
26 | and construction of nuclear and integrated gasification combined |
27 | cycle power plants.-- |
28 | (1) As used in this section, the term: |
29 | (a) "Cost" includes, but is not limited to, all capital |
30 | investments, including rate of return, any applicable taxes, and |
31 | all expenses, including operation and maintenance expenses, |
32 | related to or resulting from the siting, licensing, design, |
33 | construction, or operation of the nuclear or integrated |
34 | gasification combined cycle power plant. |
35 | (b) "Electric utility" or "utility" has the same meaning |
36 | as that provided in s. 366.8255(1)(a). |
37 | (c) "Integrated gasification combined cycle power plant" |
38 | or "plant" is an electrical power plant as defined in s. |
39 | 403.503(13) that uses synthesis gas produced by integrated |
40 | gasification technology. |
41 | (d)(c) "Nuclear power plant" or "plant" is an electrical |
42 | power plant as defined in s. 403.503(13)(12) that uses nuclear |
43 | materials for fuel. |
44 | (e) "Power plant" or "plant" means a nuclear power plant |
45 | or an integrated gasification combined cycle power plant. |
46 | (f)(d) "Preconstruction" is that period of time after a |
47 | site has been selected through and including the date the |
48 | utility completes site clearing work. Preconstruction costs |
49 | shall be afforded deferred accounting treatment and shall accrue |
50 | a carrying charge equal to the utility's allowance for funds |
51 | during construction (AFUDC) rate until recovered in rates. |
52 | (2) Within 6 months after the enactment of this act, the |
53 | commission shall establish, by rule, alternative cost recovery |
54 | mechanisms for the recovery of costs incurred in the siting, |
55 | design, licensing, and construction of a nuclear or integrated |
56 | gasification combined cycle power plant. Such mechanisms shall |
57 | be designed to promote utility investment in nuclear or |
58 | integrated gasification combined cycle power plants and allow |
59 | for the recovery in rates of all prudently incurred costs, and |
60 | shall include, but are not limited to: |
61 | (a) Recovery through the capacity cost recovery clause of |
62 | any preconstruction costs. |
63 | (b) Recovery through an incremental increase in the |
64 | utility's capacity cost recovery clause rates of the carrying |
65 | costs on the utility's projected construction cost balance |
66 | associated with the nuclear or integrated gasification combined |
67 | cycle power plant. To encourage investment and provide |
68 | certainty, for nuclear or integrated gasification combined cycle |
69 | power plant need petitions submitted on or before December 31, |
70 | 2010, associated carrying costs shall be equal to the pretax |
71 | AFUDC in effect upon this act becoming law. For nuclear or |
72 | integrated gasification combined cycle power plants for which |
73 | need petitions are submitted after December 31, 2010, the |
74 | utility's existing pretax AFUDC rate is presumed to be |
75 | appropriate unless determined otherwise by the commission in the |
76 | determination of need for the nuclear or integrated gasification |
77 | combined cycle power plant. |
78 | (3) After a petition for determination of need is granted, |
79 | a utility may petition the commission for cost recovery as |
80 | permitted by this section and commission rules. |
81 | (4) When the nuclear or integrated gasification combined |
82 | cycle power plant is placed in commercial service, the utility |
83 | shall be allowed to increase its base rate charges by the |
84 | projected annual revenue requirements of the nuclear or |
85 | integrated gasification combined cycle power plant based on the |
86 | jurisdictional annual revenue requirements of the plant for the |
87 | first 12 months of operation. The rate of return on capital |
88 | investments shall be calculated using the utility's rate of |
89 | return last approved by the commission prior to the commercial |
90 | inservice date of the nuclear or integrated gasification |
91 | combined cycle power plant. If any existing generating plant is |
92 | retired as a result of operation of the nuclear or integrated |
93 | gasification combined cycle power plant, the commission shall |
94 | allow for the recovery, through an increase in base rate |
95 | charges, of the net book value of the retired plant over a |
96 | period not to exceed 5 years. |
97 | (5) The utility shall report to the commission annually |
98 | the budgeted and actual costs as compared to the estimated |
99 | inservice cost of the nuclear or integrated gasification |
100 | combined cycle power plant provided by the utility pursuant to |
101 | s. 403.519(4), until the commercial operation of the nuclear or |
102 | integrated gasification combined cycle power plant. The utility |
103 | shall provide such information on an annual basis following the |
104 | final order by the commission approving the determination of |
105 | need for the nuclear or integrated gasification combined cycle |
106 | power plant, with the understanding that some costs may be |
107 | higher than estimated and other costs may be lower. |
108 | (6) In the event the utility elects not to complete or is |
109 | precluded from completing construction of the nuclear or |
110 | integrated gasification combined cycle power plant, the utility |
111 | shall be allowed to recover all prudent preconstruction and |
112 | construction costs incurred following the commission's issuance |
113 | of a final order granting a determination of need for the |
114 | nuclear or integrated gasification combined cycle power plant. |
115 | The utility shall recover such costs through the capacity cost |
116 | recovery clause over a period equal to the period during which |
117 | the costs were incurred or 5 years, whichever is greater. The |
118 | unrecovered balance during the recovery period will accrue |
119 | interest at the utility's weighted average cost of capital as |
120 | reported in the commission's earnings surveillance reporting |
121 | requirement for the prior year. |
122 | Section 2. Subsection (4) is added to section 403.502, |
123 | Florida Statutes, to read: |
124 | 403.502 Legislative intent.--The Legislature finds that |
125 | the present and predicted growth in electric power demands in |
126 | this state requires the development of a procedure for the |
127 | selection and utilization of sites for electrical generating |
128 | facilities and the identification of a state position with |
129 | respect to each proposed site. The Legislature recognizes that |
130 | the selection of sites and the routing of associated |
131 | transmission lines will have a significant impact upon the |
132 | welfare of the population, the location and growth of industry, |
133 | and the use of the natural resources of the state. The |
134 | Legislature finds that the efficiency of the permit application |
135 | and review process at both the state and local level would be |
136 | improved with the implementation of a process whereby a permit |
137 | application would be centrally coordinated and all permit |
138 | decisions could be reviewed on the basis of standards and |
139 | recommendations of the deciding agencies. It is the policy of |
140 | this state that, while recognizing the pressing need for |
141 | increased power generation facilities, the state shall ensure |
142 | through available and reasonable methods that the location and |
143 | operation of electrical power plants will produce minimal |
144 | adverse effects on human health, the environment, the ecology of |
145 | the land and its wildlife, and the ecology of state waters and |
146 | their aquatic life and will not unduly conflict with the goals |
147 | established by the applicable local comprehensive plans. It is |
148 | the intent to seek courses of action that will fully balance the |
149 | increasing demands for electrical power plant location and |
150 | operation with the broad interests of the public. Such action |
151 | will be based on these premises: |
152 | (4) To assure the citizens of Florida that renewable |
153 | energy sources and technologies, as well as conservation |
154 | measures, are utilized to the extent practicable. |
155 | Section 3. Subsections (3) and (4) of section 403.519, |
156 | Florida 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 |
159 | determination of this matter, which accordingly shall not be |
160 | raised in any other forum or in the review of proceedings in |
161 | such other forum. In making its determination, the commission |
162 | shall take into account the need for electric system reliability |
163 | and integrity, the need for adequate electricity at a reasonable |
164 | cost, the need for fuel diversity and supply reliability, and |
165 | whether the proposed plant is the most cost-effective |
166 | alternative available, and whether renewable energy sources and |
167 | technologies, as well as conservation measures, are utilized to |
168 | the extent practicable. The commission shall also expressly |
169 | consider the conservation measures taken by or reasonably |
170 | available to the applicant or its members which might mitigate |
171 | the need for the proposed plant and other matters within its |
172 | jurisdiction which it deems relevant. The commission's |
173 | determination of need for an electrical power plant shall create |
174 | a presumption of public need and necessity and shall serve as |
175 | the commission's report required by s. 403.507(4). An order |
176 | entered pursuant to this section constitutes final agency |
177 | action. |
178 | (4) In making its determination on a proposed electrical |
179 | power plant using nuclear materials or synthesis gas produced by |
180 | integrated gasification combined cycle power plant as fuel, the |
181 | commission shall hold a hearing within 90 days after the filing |
182 | of the petition to determine need and shall issue an order |
183 | granting or denying the petition within 135 days after the date |
184 | of the filing of the petition. The commission shall be the sole |
185 | forum for the determination of this matter and the issues |
186 | addressed in the petition, which accordingly shall not be |
187 | reviewed in any other forum, or in the review of proceedings in |
188 | such other forum. In making its determination to either grant or |
189 | deny the petition, the commission shall consider the need for |
190 | electric system reliability and integrity, including fuel |
191 | diversity, the need for base-load generating capacity, and the |
192 | need for adequate electricity at a reasonable cost, and whether |
193 | renewable energy sources and technologies, as well as |
194 | conservation 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 |
198 | gasification combined cycle power plant will enhance the |
199 | reliability of electric power production within the state by |
200 | improving the balance of power plant fuel diversity and reducing |
201 | Florida's dependence on fuel oil and natural gas. |
202 | 3. A description of and a nonbinding estimate of the cost |
203 | of the nuclear or integrated gasification combined cycle power |
204 | plant. |
205 | 4. The annualized base revenue requirement for the first |
206 | 12 months of operation of the nuclear or integrated gasification |
207 | combined cycle power plant. |
208 | 5. Information on whether there were any discussions with |
209 | any electric utilities regarding ownership of a portion of the |
210 | nuclear or integrated gasification combined cycle power plant by |
211 | such electric utilities. |
212 | (b) In making its determination, the commission shall take |
213 | into account matters within its jurisdiction, which it deems |
214 | relevant, including whether the nuclear or integrated |
215 | gasification combined cycle power plant will: |
216 | 1. Provide needed base-load capacity. |
217 | 2. Enhance the reliability of electric power production |
218 | within the state by improving the balance of power plant fuel |
219 | diversity and reducing Florida's dependence on fuel oil and |
220 | natural gas. |
221 | 3. Provide the most cost-effective source of power, taking |
222 | into account the need to improve the balance of fuel diversity, |
223 | reduce Florida's dependence on fuel oil and natural gas, reduce |
224 | air emission compliance costs, and contribute to the long-term |
225 | stability and reliability of the electric grid. |
226 | (c) No provision of rule 25-22.082, Florida Administrative |
227 | Code, shall be applicable to a nuclear or integrated |
228 | gasification combined cycle power plant sited under this act, |
229 | including provisions for cost recovery, and an applicant shall |
230 | not otherwise be required to secure competitive proposals for |
231 | power supply prior to making application under this act or |
232 | receiving a determination of need from the commission. |
233 | (d) The commission's determination of need for a nuclear |
234 | or integrated gasification combined cycle power plant shall |
235 | create a presumption of public need and necessity and shall |
236 | serve as the commission's report required by s. 403.507(4)(a). |
237 | An order entered pursuant to this section constitutes final |
238 | agency action. Any petition for reconsideration of a final order |
239 | on a petition for need determination shall be filed within 5 |
240 | days after the date of such order. The commission's final order, |
241 | including any order on reconsideration, shall be reviewable on |
242 | appeal in the Florida Supreme Court. Inasmuch as delay in the |
243 | determination of need will delay siting of a nuclear or |
244 | integrated gasification combined cycle power plant or diminish |
245 | the opportunity for savings to customers under the federal |
246 | Energy Policy Act of 2005, the Supreme Court shall proceed to |
247 | hear and determine the action as expeditiously as practicable |
248 | and give the action precedence over matters not accorded similar |
249 | precedence by law. |
250 | (e) After a petition for determination of need for a |
251 | nuclear or integrated gasification combined cycle power plant |
252 | has been granted, the right of a utility to recover any costs |
253 | incurred prior to commercial operation, including, but not |
254 | limited to, costs associated with the siting, design, licensing, |
255 | or construction of the plant, shall not be subject to challenge |
256 | unless and only to the extent the commission finds, based on a |
257 | preponderance of the evidence adduced at a hearing before the |
258 | commission under s. 120.57, that certain costs were imprudently |
259 | incurred. Proceeding with the construction of the nuclear or |
260 | integrated gasification combined cycle power plant following an |
261 | order by the commission approving the need for the nuclear or |
262 | integrated gasification combined cycle power plant under this |
263 | act shall not constitute or be evidence of imprudence. |
264 | Imprudence shall not include any cost increases due to events |
265 | beyond the utility's control. Further, a utility's right to |
266 | recover costs associated with a nuclear or integrated |
267 | gasification combined cycle power plant may not be raised in any |
268 | other forum or in the review of proceedings in such other forum. |
269 | Costs incurred prior to commercial operation shall be recovered |
270 | pursuant to chapter 366. |
271 | Section 4. This act shall take effect upon becoming a law. |