Florida Senate - 2010 SB 2346 By Senator Altman 24-01031-10 20102346__ 1 A bill to be entitled 2 An act relating to renewable energy; creating s. 3 366.925, F.S.; providing a short title; defining 4 terms; requiring investor-owned electric utilities and 5 participating municipal electric utilities and rural 6 electric cooperatives to collect renewable energy fees 7 from retail electric customers; providing for the 8 deposit and use of such fees; providing procedures for 9 municipal electric utilities and rural electric 10 cooperatives to participate or terminate their 11 participation; providing for the continuation of 12 contract payments and the collection of renewable 13 energy fees after a participating electric utility 14 terminates its participation; providing eligibility 15 criteria and application requirements for renewable 16 energy facilities; authorizing the Florida Energy and 17 Climate Commission to issue and revoke certificates of 18 eligibility under certain circumstances and to adopt 19 rules; requiring participating electric utilities to 20 provide interconnection service and enter into 21 purchase contracts with producers of certain types of 22 renewable energy; providing requirements and limiting 23 fees for such interconnection service; requiring 24 certain provisions in purchase contracts; requiring 25 the Public Service Commission to disburse certain 26 funds for the payment of renewable energy incentives 27 to eligible facilities; requiring the Public Service 28 Commission to adopt a schedule of incentive payments 29 based on certain requirements; requiring producers to 30 provide certain proof related to their renewable 31 energy facilities; authorizing the Public Service 32 Commission to enter the premises and conduct 33 inspections of certain renewable energy facilities; 34 requiring that purchase contracts be approved by the 35 Public Service Commission; requiring temporary 36 reductions of incentive payments to cover shortfalls 37 in renewable energy fee collections; providing for the 38 termination of a facility’s incentive payments under 39 certain circumstances; amending s. 366.11, F.S.; 40 conforming provisions; providing an effective date. 41 42 WHEREAS, the Legislature recognizes the vital role that the 43 agricultural industry plays in the economy of this state and 44 that growth in this industry can translate to greater economic 45 benefits and job growth in this state, and 46 WHEREAS, the Legislature also recognizes that one area for 47 potential growth in the agricultural industry is to encourage 48 the use of agricultural plant materials, farm waste, and feed 49 stock to produce alternative energy resources that can be used 50 to generate electricity, and 51 WHEREAS, the Legislature recognizes that no opportunity 52 currently exists in this state to allow for farm byproducts and 53 other alternative resources to be used to create energy 54 resources to generate electricity, NOW, THEREFORE, 55 56 Be It Enacted by the Legislature of the State of Florida: 57 58 Section 1. Section 366.925, Florida Statutes, is created to 59 read: 60 366.925 Renewable energy incentives for biomass, solar, and 61 wind energy; retail electric customer fees.— 62 (1) SHORT TITLE.—This section may be cited as the “Florida 63 Farm to Energy Act.” 64 (2) DEFINITIONS.—As used in this section, the term: 65 (a) “Biomass” means a power source that is comprised of, 66 but not limited to, combustible residues or gases from forest 67 products manufacturing, waste, byproducts, or products from 68 agricultural and orchard crops, waste or coproducts from 69 livestock and poultry operations, waste or byproducts from food 70 processing, urban wood waste, municipal solid waste, municipal 71 liquid waste treatment operations, and landfill gas. 72 (b) “Biomass facility” means a facility that generates 73 electricity through the controlled combustion of biomass as 74 defined in s. 366.91 which is produced in the United States. 75 (c) “Eligible renewable energy facility” means a biomass, 76 solar, or wind energy facility that is issued a certificate of 77 eligibility by the Florida Energy and Climate Commission. 78 (d) “Interconnection service” means connection of a 79 producer’s eligible renewable energy facility to an electric 80 utility’s electric grid. 81 (e) “Participating electric utility” means an investor 82 owned electric utility or a municipal electric utility or rural 83 electric cooperative that chooses to participate under paragraph 84 (3)(c). 85 (f) “Purchase contract” means an agreement by which an 86 electric utility pays a producer for the electricity generated 87 by the producer’s eligible renewable energy facility and 88 delivered to the utility’s electric grid. 89 (g) “Solar energy facility” means a facility that generates 90 electricity by converting solar radiation into electricity. 91 (h) “Wind energy facility” means a facility that generates 92 electricity by converting the kinetic energy of wind into 93 electricity. 94 (3) RENEWABLE ENERGY FEES; PARTICIPATING ELECTRIC 95 UTILITIES.— 96 (a) Effective January 1, 2011, each investor-owned electric 97 utility, and each municipal electric utility or rural electric 98 cooperative that chooses to participate under paragraph (c), 99 shall impose a renewable energy fee upon each of its retail 100 electric service customers of a certain amount as determined by 101 the Public Service Commission. The fees shall be collected and 102 deposited monthly into the Florida Public Service Regulatory 103 Trust Fund according to rules adopted by the commission. 104 (b) Renewable energy fees collected from customers of an 105 investor-owned electric utility shall be used to pay renewable 106 energy incentives to facilities located within the territory 107 served by any investor-owned electric utility in the state. Fees 108 collected from customers of a municipal electric utility or 109 rural electric cooperative may be used only to pay renewable 110 energy incentives to facilities located within the territory 111 served by that respective utility or cooperative. 112 (c) A municipal electric utility or rural electric 113 cooperative that, upon approval of its governing authority, 114 chooses to participate shall notify the commission in the format 115 prescribed by the commission. Such notice must include the date 116 that the municipal electric utility or rural electric 117 cooperative will begin to impose and collect renewable energy 118 fees. 119 (d) A municipal electric utility or rural electric 120 cooperative that chooses to terminate its participation shall 121 notify the commission in the format prescribed by the 122 commission. Such notice must include the date that the municipal 123 electric utility or rural electric cooperative will cease to 124 impose renewable energy fees. The commission, upon receipt of 125 such notice, may not approve new purchase contracts for 126 additional facilities within the territory served by that 127 utility or cooperative. However, the municipal electric utility 128 or rural electric cooperative shall continue payments under any 129 previously approved purchase contract, and shall continue 130 collecting renewable energy fees needed for payment of 131 incentives pursuant to subsection (7), until expiration of the 132 contract. 133 (4) RENEWABLE ENERGY FACILITIES; CERTIFICATES OF 134 ELIGIBILITY.— 135 (a) A producer seeking a certificate of eligibility for the 136 producer’s biomass, solar, or wind energy facility shall apply 137 to the Florida Energy and Climate Commission. An application 138 must be submitted in the format prescribed by the Florida Energy 139 and Climate Commission and must include: 140 1. The location of the producer’s biomass, solar, or wind 141 energy facility. 142 2. A description of the primary energy input of the 143 producer’s facility, whether biomass, solar, or wind, and, if 144 the facility’s primary energy input is biomass, a description of 145 the type of biomass input, which may include, but is not limited 146 to, landfill gas, manure digester gas, municipal solid waste, 147 sewage digester gas, wood, or agricultural byproduct. 148 3. Proof that the producer’s facility has qualifying 149 facility status pursuant to 18 C.F.R. Part 292, whether self 150 certified or certified by the Federal Energy Regulatory 151 Commission. 152 (b) The Florida Energy and Climate Commission shall issue a 153 certificate of eligibility for a producer’s biomass, solar, or 154 wind energy facility if: 155 1. The application is complete and accompanied by an 156 application fee not to exceed $250. 157 2. The facility is located within the territory served by a 158 participating electric utility. 159 (c) The Florida Energy and Climate Commission shall revoke 160 a facility’s certificate of eligibility if the Federal Energy 161 Regulatory Commission revokes the facility’s qualifying facility 162 status. 163 (d) The Florida Energy and Climate Commission may adopt 164 rules to administer this subsection. 165 (5) INTERCONNECTION SERVICE.—Notwithstanding any other 166 provision of law: 167 (a) A participating electric utility that serves a 168 territory in which an eligible renewable energy facility is 169 located shall, within 60 days after the producer’s request, 170 provide the facility with interconnection service and enter into 171 a purchase contract with the producer. 172 (b) The interconnection service must comply with the 173 interconnection standards adopted by the commission and the 174 Florida Reliability Coordinating Council, Inc. 175 (c) The interconnection service must include installation 176 of supply oriented metering equipment that measures the 177 electricity generated by the producer’s eligible renewable 178 energy facility and delivered to the utility’s electric grid. 179 (d) An electric utility may not charge fees for 180 interconnection service that exceed the utility’s incremental 181 cost of providing such service. 182 (6) PURCHASE CONTRACTS.— 183 (a) A purchase contract must provide for the participating 184 electric utility’s purchase of the electricity generated by the 185 producer’s eligible renewable energy facility and delivered to 186 the utility’s electric grid. 187 (b) The Public Service Commission shall establish 188 requirements for the purchase of energy and capacity by 189 participating electric utilities from eligible renewable energy 190 facilities. A purchase contract shall contain payment provisions 191 for energy and capacity which are based upon the utility’s full 192 avoided costs as defined in s. 366.051; however, capacity 193 payments are not required if, due to the operational 194 characteristics of the renewable energy facility or the 195 anticipated peak and off-peak availability and capacity factor 196 of the utility’s avoided unit, the producer is unlikely to 197 provide any capacity value to the utility or the electric grid 198 during the contract term. 199 (c) Prudent and reasonable costs associated with a purchase 200 contract shall be recovered from the ratepayers of the 201 contracting utility, without differentiation among customer 202 classes, through the appropriate cost-recovery clause mechanism 203 administered by the commission. 204 (d) A purchase contract must provide a contract term of at 205 least 20 years. 206 (e) A purchase contract must provide for the renewable 207 energy facility’s environmental attributes, including, but not 208 limited to, greenhouse gas emissions credits and renewable 209 energy certificates to transfer to the contracting utility. 210 (7) RENEWABLE ENERGY INCENTIVES.— 211 (a) Effective January 1, 2011, the Public Service 212 Commission shall disburse to each participating electric utility 213 from among the renewable energy fees collected pursuant to 214 subsection (3) funds for the payment of renewable energy 215 incentives to eligible renewable energy facilities that have 216 entered into purchase contracts with the utility. 217 (b) The renewable energy incentives shall be paid according 218 to a schedule adopted by the Public Service Commission based on 219 market research of the various costs of generating renewable 220 energy. The incentive payment rates, together with the utility’s 221 full avoided costs paid under the purchase contract, must be 222 sufficient to ensure that the development of renewable energy 223 generation is cost-effective and profitable for producers. 224 (c) The schedule shall establish differentiated rates for 225 incentive payments based on a facility’s primary energy input as 226 described in subparagraph (4)(a)2., the methodology or 227 technology used by the facility to generate electricity, and the 228 size of the facility. 229 (d) A producer must provide proof of the primary energy 230 input and the quantity and origin of the resources used to 231 generate electricity at the producer’s renewable energy 232 facility. 233 (e) The commission or its duly authorized representatives 234 may during all reasonable hours enter the premises of a 235 renewable energy facility receiving incentive payments under 236 this section and may set up and use on the premises all 237 necessary apparatus and appliances for the purpose of making 238 investigations, inspections, examinations, and tests. The 239 facility has the right to be notified of and be represented 240 during such investigations, inspections, examinations, and 241 tests. 242 (8) FLORIDA ENERGY AND CLIMATE COMMISSION APPROVAL OF 243 PURCHASE CONTRACTS; FUND MANAGEMENT.— 244 (a) A purchase contract may not take effect until approved 245 by the commission. The commission may approve a purchase 246 contract only if: 247 1. The contracting utility is a participating electric 248 utility. 249 2. The producer’s renewable energy facility has a 250 certificate of eligibility issued by the Florida Energy and 251 Climate Commission. 252 3. The terms and conditions of the purchase contract comply 253 with the requirements of this section, including, but not 254 limited to, provisions for the utility’s payment of its full 255 avoided costs. 256 4. Based on the commission’s analysis, the renewable energy 257 fees collected pursuant to subsection (3) are estimated to 258 produce sufficient revenues to pay renewable energy incentives 259 to the facility through the end of the contract term. 260 (b) If the amount of renewable energy fees available for 261 disbursement to participating electric utilities is not 262 sufficient for payment of renewable energy incentives to all 263 renewable energy facilities whose purchase contracts are 264 approved by the commission, the commission shall: 265 1. Proportionately reduce each facility’s incentive 266 payments to cover the shortfall. 267 2. Not approve new purchase contracts for additional 268 facilities whose incentive payments would be paid from those 269 renewable energy fees. 270 3. As additional renewable energy fees become available for 271 disbursement, increase each facility’s incentive payments until 272 the payments are current and any amounts of unpaid incentives 273 caused by the payment reductions are paid. 274 (c) A renewable energy facility shall cease to receive 275 incentive payments if: 276 1. Its certificate of eligibility is revoked by the Florida 277 Energy and Climate Commission. 278 2. The Florida Energy and Climate Commission determines 279 that the facility has failed to provide proof of the primary 280 energy input and the quantity and origin of the resources used 281 to generate electricity at the facility. 282 Section 2. Subsection (1) of section 366.11, Florida 283 Statutes, is amended to read: 284 366.11 Certain exemptions.— 285 (1) No provision of this chapter shall apply in any manner, 286 other than as specified in ss. 366.04, 366.05(7) and (8), 287 366.051, 366.055, 366.093, 366.095, 366.14, 366.80-366.85,and288 366.91, and 366.925 to utilities owned and operated by 289 municipalities, whether within or without any municipality, or 290 by cooperatives organized and existing under the Rural Electric 291 Cooperative Law of the state, or to the sale of electricity, 292 manufactured gas, or natural gas at wholesale by any public 293 utility to, and the purchase by, any municipality or cooperative 294 under and pursuant to any contracts now in effect or which may 295 be entered into in the future, when such municipality or 296 cooperative is engaged in the sale and distribution of 297 electricity or manufactured or natural gas, or to the rates 298 provided for in such contracts. 299 Section 3. This act shall take effect July 1, 2010.