HB 1349

A bill to be entitled
2An act relating to renewable energy; amending s. 212.08,
3F.S.; requiring that solar energy systems have a certain
4percentage of components manufactured in Florida or the
5United States in order to be eligible for the exemption
6from the sales tax; amending s. 220.192, F.S.; extending
7the date of eligibility for the renewable energy
8technologies investment tax credit; revising the annual
9limits for the investment tax credits; defining the term
10"solar energy system"; providing requirement for a solar
11electric generating facility to be eligible to receive the
12tax credit; providing for unused amounts of the tax credit
13to be carried forward; amending s. 220.193, F.S.;
14extending until 2017 the Florida renewable energy
15production tax credit; amending s. 366.02, F.S.; revising
16the exceptions to the definition of the term "public
17utility" to include the developer of certain renewable
18energy generation facilities; creating s. 366.90, F.S.;
19providing legislative intent with respect to the
20production of electricity using renewable energy; amending
21s. 366.91, F.S.; redefining the terms "biomass," "net
22metering," and "renewable energy"; amending s. 366.92,
23F.S.; revising legislative intent; deleting and revising
24definitions; deleting provisions for the renewable
25portfolio standard and renewable energy credits; providing
26a mechanism for providers to recover costs to produce or
27purchase specified amounts of renewable energy through the
28environmental cost-recovery clause under certain
29conditions; providing for a competitive auction; providing
30for recovery of certain costs; providing for terms and
31conditions of a standard form contract; providing criteria
32for development deposits; providing criteria for
33termination of the project; providing for required and
34allowable purchase of renewable energy as a percentage of
35the provider's total revenue; providing for minimum
36purchase of the various types of renewable energy;
37providing limits on the amount of recoverable costs;
38requiring certain information be provided to the Public
39Service Commission for cost recovery proceedings;
40providing conditions when a seller surrenders attributes;
41requiring that certain revenues received by a provider be
42shared with ratepayers; exempting certain renewable energy
43generating facilities from the Florida Electrical Power
44Plant Siting Act; requiring providers to submit certain
45information to the commission in their 10-year site plans;
46exempting certain expansions of existing renewable
47electric generating facilities from a determination of
48need by the commission; authorizing the developer of a
49solar energy generation facility to locate the facility on
50the premises of a host consumer under certain
51circumstances; requiring the commission to adopt rules and
52submit reports to the Legislature; exempting the expansion
53of existing renewable energy electric generating
54facilities from requirements for a determination of need
55under certain circumstances; amending s. 377.601, F.S.;
56revising legislative intent relating to the state's energy
57policy; amending s. 377.703, F.S.; conforming cross-
58references; amending s. 377.809, F.S.; directing the
59Department of Community Affairs to implement an Energy
60Economic Zone Pilot Program for attracting renewable
61energy, energy efficiency, and biofuel technology
62industries to an area; requiring the Office of Tourism,
63Trade, and Economic Development to provide technical
64assistance; providing for an application process;
65providing criteria to grant at least one application;
66amending s. 403.503, F.S.; redefining the term "electrical
67power plant" for purposes of the Florida Electrical Power
68Plant Siting Act; providing for severability; providing an
69effective date.
71Be It Enacted by the Legislature of the State of Florida:
73     Section 1.  Paragraph (hh) of subsection (7) of section
74212.08, Florida Statutes, is amended to read:
75     212.08  Sales, rental, use, consumption, distribution, and
76storage tax; specified exemptions.-The sale at retail, the
77rental, the use, the consumption, the distribution, and the
78storage to be used or consumed in this state of the following
79are hereby specifically exempt from the tax imposed by this
81     (7)  MISCELLANEOUS EXEMPTIONS.-Exemptions provided to any
82entity by this chapter do not inure to any transaction that is
83otherwise taxable under this chapter when payment is made by a
84representative or employee of the entity by any means,
85including, but not limited to, cash, check, or credit card, even
86when that representative or employee is subsequently reimbursed
87by the entity. In addition, exemptions provided to any entity by
88this subsection do not inure to any transaction that is
89otherwise taxable under this chapter unless the entity has
90obtained a sales tax exemption certificate from the department
91or the entity obtains or provides other documentation as
92required by the department. Eligible purchases or leases made
93with such a certificate must be in strict compliance with this
94subsection and departmental rules, and any person who makes an
95exempt purchase with a certificate that is not in strict
96compliance with this subsection and the rules is liable for and
97shall pay the tax. The department may adopt rules to administer
98this subsection.
99     (hh)  Solar energy systems.-Also exempt are solar energy
100systems, or any component thereof, as provided in this
101paragraph. The Florida Solar Energy Center shall from time to
102time certify to the department a list of equipment and requisite
103hardware considered to be a solar energy system or a component
104thereof. A solar energy system, or component thereof, having a
105minimum of 50 percent of its materials manufactured in Florida,
106as measured by the cost of such materials, or a minimum of 80
107percent of its materials manufactured in the United States, as
108measured by the cost of such materials, is exempt from the tax
109imposed by this chapter.
110     Section 2.  Paragraphs (c), (f), and (g) of subsection (1)
111and subsection (2) of section 220.192, Florida Statutes, are
112amended to read:
113     220.192  Renewable energy technologies investment tax
115     (1)  DEFINITIONS.-For purposes of this section, the term:
116     (c)  "Eligible costs" means:
117     1.  Seventy-five percent of all capital costs, operation
118and maintenance costs, and research and development costs
119incurred between July 1, 2006, and June 30, 2016 2010, up to a
120limit of $25 $3 million per state fiscal year for all taxpayers,
121in connection with an investment in hydrogen-powered vehicles
122and hydrogen vehicle fueling stations in the state, including,
123but not limited to, the costs of constructing, installing, and
124equipping such technologies in the state.
125     2.  Seventy-five percent of all capital costs, operation
126and maintenance costs, and research and development costs
127incurred between July 1, 2006, and June 30, 2016 2010, up to a
128limit of $25 $1.5 million per state fiscal year for all
129taxpayers, and limited to a maximum of $12,000 per fuel cell, in
130connection with an investment in commercial stationary hydrogen
131fuel cells in the state, including, but not limited to, the
132costs of constructing, installing, and equipping such
133technologies in the state.
134     3.  Seventy-five percent of all capital costs, operation
135and maintenance costs, and research and development costs
136incurred between July 1, 2006, and June 30, 2016 2010, up to a
137limit of $6 $6.5 million per state fiscal year for all
138taxpayers, in connection with an investment in the production,
139storage, and distribution of biodiesel (B10-B100) and ethanol
140(E10-E100) in the state, including the costs of constructing,
141installing, and equipping such technologies in the state.
142Gasoline fueling station pump retrofits for ethanol (E10-E100)
143distribution qualify as an eligible cost under this
145     4.  Fifty percent of all capital costs incurred between
146July 1, 2010, and June 30, 2016, in connection with an
147investment in solar energy systems in the state, up to a limit
148of $500,000 per system and up to a limit of $250 million per
149state fiscal year for all taxpayers. To be eligible, such system
150must comply with state interconnection standards as required by
151the rules of the Public Service Commission. The eligible costs
152shall be reapportioned equally over 5 years.
153     (f)  "Solar energy system" means equipment that provides
154for the collection and use of incident solar energy for water
155heating, space heating or cooling, or other applications that
156would normally require a conventional source of energy such as
157petroleum products, natural gas, or electricity that performs
158primarily with solar energy. In other systems in which solar
159energy is used in a supplemental way, only those components that
160collect and transfer solar energy are included in this
162     (g)(f)  "Taxpayer" includes a corporation as defined in
163paragraph (b) or s. 220.03.
164     (2)  TAX CREDIT.-
165     (a)  For tax years beginning on or after January 1, 2007, a
166credit against the tax imposed by this chapter shall be granted
167in an amount equal to the eligible costs defined in
168subparagraphs (1)(c)1.-3. For a solar electric generating
169facility to be eligible to receive the investment tax credit
170provided by this section, the renewable energy supplier's
171facility must be located in Florida and contain at least 60
172percent, as a percentage of the total installed cost including
173construction labor costs, of materials that are manufactured in
174Florida. For other renewable electric generating facilities to
175be eligible to receive the investment tax credit provided by
176this section, the renewable energy supplier's facility must be
177located in Florida and contain at least 30 percent, as a
178percentage of the total installed cost including construction
179labor costs, of materials that are manufactured in Florida. The
180credits may be used in tax years beginning January 1, 2007, and
181ending December 31, 2016 2010, after which the credit shall
182expire. If the credit is not fully used in any one tax year
183because of insufficient tax liability on the part of the
184corporation, the unused amount may be carried forward and used
185in tax years beginning January 1, 2007, and ending December 31,
1862018 2012, after which the credit carryover expires and may not
187be used. A taxpayer that files a consolidated return in this
188state as a member of an affiliated group under s. 220.131(1) may
189be allowed the credit on a consolidated return basis up to the
190amount of tax imposed upon the consolidated group. Any eligible
191cost for which a credit is claimed and which is deducted or
192otherwise reduces federal taxable income shall be added back in
193computing adjusted federal income under s. 220.13.
194     (b)  For tax years beginning on or after January 1, 2011, a
195credit against the tax imposed by this chapter shall be granted
196in an amount equal to the eligible costs defined in subparagraph
197(1)(c)4. The credits may be used in tax years beginning January
1981, 2011, and ending December 31, 2016, after which the credit
199shall expire. If the credit is not fully used in any one tax
200year because of insufficient tax liability on the part of the
201corporation, the unused amount may be carried forward and used
202in tax years beginning January 1, 2010, and ending December 31,
2032021, after which the credit carryover expires and may not be
204used. A taxpayer that files a consolidated return in this state
205as a member of an affiliated group under s. 220.131(1) may be
206allowed the credit on a consolidated return basis up to the
207amount of tax imposed upon the consolidated group. Any eligible
208cost for which a credit is claimed and which is deducted or
209otherwise reduces federal taxable income shall be added back in
210computing adjusted federal income under s. 220.13.
211     Section 3.  Paragraphs (b) and (g) of subsection (3) of
212section 220.193, Florida Statutes, are amended to read:
213     220.193  Florida renewable energy production credit.-
214     (3)  An annual credit against the tax imposed by this
215section shall be allowed to a taxpayer, based on the taxpayer's
216production and sale of electricity from a new or expanded
217Florida renewable energy facility. For a new facility, the
218credit shall be based on the taxpayer's sale of the facility's
219entire electrical production. For an expanded facility, the
220credit shall be based on the increases in the facility's
221electrical production that are achieved after May 1, 2006.
222     (b)  The credit may be claimed for electricity produced and
223sold on or after January 1, 2007. Beginning in 2008 and
224continuing until 2017 2011, each taxpayer claiming a credit
225under this section must first apply to the department by
226February 1 of each year for an allocation of available credit.
227The department, in consultation with the commission, shall
228develop an application form. The application form shall, at a
229minimum, require a sworn affidavit from each taxpayer certifying
230the increase in production and sales that form the basis of the
231application and certifying that all information contained in the
232application is true and correct.
233     (g)  Notwithstanding any other provision of this section,
234credits for the production and sale of electricity from a new or
235expanded Florida renewable energy facility may be earned between
236January 1, 2007, and June 30, 2017 2010. The combined total
237amount of tax credits which may be granted for all taxpayers
238under this section is limited to $250 $5 million per state
239fiscal year.
240     Section 4.  Subsection (1) of section 366.02, Florida
241Statutes, is amended to read:
242     366.02  Definitions.-As used in this chapter:
243     (1)  "Public utility" means every person, corporation,
244partnership, association, or other legal entity and their
245lessees, trustees, or receivers supplying electricity or gas
246(natural, manufactured, or similar gaseous substance) to or for
247the public within this state.; but The term "public utility"
248does not include: either
249     (a)  A cooperative now or hereafter organized and existing
250under the Rural Electric Cooperative Law of the state;
251     (b)  A municipality or any agency thereof;
252     (c)  Any dependent or independent special natural gas
253district, including special natural gas districts;
254     (d)  Any natural gas transmission pipeline company making
255only sales or transportation delivery of natural gas at
256wholesale and to direct industrial consumers;
257     (e)  Any entity selling or arranging for sales of natural
258gas which neither owns nor operates natural gas transmission or
259distribution facilities within the state; or
260     (f)  A person supplying liquefied petroleum gas, in either
261liquid or gaseous form, irrespective of the method of
262distribution or delivery, or owning or operating facilities
263beyond the outlet of a meter through which natural gas is
264supplied for compression and delivery into motor vehicle fuel
265tanks or other transportation containers, unless such person
266also supplies electricity or manufactured or natural gas; or.
267     (g)  The developer of a renewable energy generation
268facility that has an aggregate gross power rating of 5
269megawatts, measured on an alternating current basis, or less;
270that is located on the premises of a host consumer or group of
271host consumers, including, without limitation, residential,
272commercial, industrial, institutional, or agricultural host
273customers located on the same or contiguous property, all
274subject to the aggregate gross power limitation; and that
275supplies electricity exclusively for sale to the host consumer
276or consumers for consumption on the premises only and contiguous
277property owned or leased by the host consumer or consumers,
278regardless of interruptions in contiguity caused by easements,
279public thoroughfares, transportation rights-of-way, or utility
281     Section 5.  Section 366.90, Florida Statutes, is created to
283     366.90  Renewable energy for electricity production.-In
284furtherance of the energy policy goals established in s.
285377.601, the Legislature finds that it is in the public interest
286to promote the development of renewable energy resources in the
287state, for purposes of electricity production, through the
288provisions of ss. 366.91 and 366.92. The Legislature further
289finds that renewable energy resources have the potential to help
290diversify fuel types to alleviate the state's growing dependence
291on natural gas and other fossil fuels for the production of
292electricity, minimize the volatility of fuel costs, encourage
293investment within the state, promote the state's energy
294independence and long-term economic and environmental
295sustainability, reduce the net outflow of energy expenditures,
296improve environmental conditions, and make the state a leader in
297new and innovative technologies.
298     Section 6.  Subsection (2) of section 366.91, Florida
299Statutes, is amended to read:
300     366.91  Renewable energy.-
301     (2)  As used in this section, the term:
302     (a)  "Biomass," when used as means a power source, means
303any organic material that is available on a renewable or
304recurring basis and that is comprised of, but is not limited to,
305combustible residues or gases from forest products
306manufacturing, waste, byproducts, or products from agricultural
307and orchard crops, waste or coproducts from livestock and
308poultry operations, waste or byproducts from food processing,
309recycling byproducts from the recycling of source materials that
310are not derived from fossil fuels, urban wood waste, municipal
311solid waste, municipal liquid waste treatment operations, and
312landfill gas.
313     (b)  "Customer-owned renewable generation" means an
314electric generating system located on a customer's premises that
315is primarily intended to offset part or all of the customer's
316electricity requirements with renewable energy.
317     (c)  "Net metering" means a metering and billing
318methodology whereby customer-owned renewable generation is
319allowed to offset the customer's electricity consumption on
320site, and the customer's site includes all of the customer's
321energy usage accounts located on contiguous property owned by
322the same customer.
323     (d)  "Renewable energy" means electrical energy produced
324from a method that uses one or more of the following fuels or
325energy sources: hydrogen produced from sources other than fossil
326fuels, biomass, solar energy, geothermal energy, wind energy,
327ocean energy, and hydroelectric power. The term includes the
328alternative energy resource, waste heat, from sulfuric acid
329manufacturing operations and electrical energy produced using
330pipeline-quality synthetic gas produced from waste petroleum
331coke with carbon capture and sequestration.
332     Section 7.  Section 366.92, Florida Statutes, is amended to
334     366.92  Florida renewable energy policy.-
335     (1)  It is the intent of the Legislature to promote the
336development of renewable energy; protect the economic viability
337of Florida's existing renewable energy facilities; diversify the
338types of fuel used to generate electricity in Florida; lessen
339Florida's dependence on natural gas and fuel oil for the
340production of electricity; minimize the volatility of fuel
341costs; encourage investment within the state; improve
342environmental conditions; and, at the same time, minimize the
343costs of the conventional and renewable power supply to electric
344utilities and their customers while promoting Florida-based
345renewable energy production consistent with the state's energy
347     (2)  As used in this section, the term:
348     (a)  "Florida renewable energy resources" means renewable
349energy, as defined in s. 377.803, that is produced in Florida.
350     (b)  "Provider" means a "utility" as defined in s.
352     (c)  "Renewable energy" means renewable energy as defined
353in s. 366.91(2)(d) which is produced in this state.
354     (d)  "Renewable energy credit" or "REC" means a product
355that represents the unbundled, separable, renewable attribute of
356renewable energy produced in Florida and is equivalent to 1
357megawatt-hour of electricity generated by a source of renewable
358energy located in Florida.
359     (e)  "Renewable portfolio standard" or "RPS" means the
360minimum percentage of total annual retail electricity sales by a
361provider to consumers in Florida that shall be supplied by
362renewable energy produced in Florida.
363     (3)  Subject to the provisions of this subsection, in order
364to provide for the most cost-effective development and
365deployment of renewable energy resources in this state, the
366commission shall provide for the full cost recovery under the
367environmental cost-recovery clause of all reasonable and prudent
368costs incurred by a provider to produce or purchase, pursuant to
369the provisions of this section, renewable energy for the
370purposes of supplying electrical energy to its retail customers.
371     (a)  Each provider shall purchase renewable energy pursuant
372to a standard form contract for the purchase of renewable energy
373from different types of renewable energy facilities located in
375     1.  The price to be paid for renewable energy purchased
376through a standard form contract shall be expressed in a
377levelized, or constant, price per kilowatt hour for the term of
378the contract. The price shall be determined by a competitive
379auction conducted by an independent auction administrator
380engaged by the commission to ensure the objectivity and fairness
381of the auction. The provider shall reimburse the commission for
382the cost for the independent auction administrator, and the cost
383is recoverable by the provider through the environmental cost-
384recovery clause.
385     2.  The terms and conditions of the standard form contract
386shall be determined pursuant to the hearing conducted by the
387commission before the issuance of such contract and the conduct
388of the auction provided for in this paragraph.
389     3.  For a renewable electric generating facility to be
390eligible to participate in the auction, a renewable energy
391supplier's facility must be located in Florida.
392     4.  To ensure the timely construction of renewable energy
393projects, the standard contract must contain the following
395     a.  A $20 per kilowatt development deposit for systems of
396100 kilowatts or less, payable within 30 days after the contract
397is executed by both the supplier and the purchasing utility.
398     b.  A $30 per kilowatt development deposit for systems
399above 100 kilowatts, payable within 30 days after the contract
400is executed by both the supplier and the purchasing utility.
401     5.  Solar projects that are not operational within 18
402months after the contract is executed and non-solar projects
403that are not operational within 36 months after the contract is
404executed are subject to contract termination. Termination is not
405automatic, and notice and the opportunity for a hearing must be
406provided prior to termination. Project delays due to regulatory
407processes outside the developer's control may not be the basis
408for contract termination.
409     6.  A contract shall be for a minimum term of 20 years and
410a maximum term of 30 years, with the term in years to be among
411the terms and conditions to be established by the commission
412pursuant to the hearing provided for in this paragraph.
413     (b)  Each provider must offer, as its minimum, a standard
414form contract for each of the following types and size classes
415of renewable energy technologies:
416     1.  Large (greater than 1,000 kilowatts), medium (greater
417than 100 kilowatts but less than or equal to 999 kilowatts) and
418small (less than or equal to 100 kilowatts) solar electric
419technologies, including photovoltaic, solar thermoelectric, and
420solar thermal generating technologies, as well as other electric
421production technologies that convert solar energy into
422electricity, and also including fuel cells that are fueled by
423hydrogen produced from hydrolysis of water using electricity
424produced by solar technologies;
425     2.  Large (greater than 100 kilowatts) and small (less than
426or equal to 100 kilowatts) wind technologies;
427     3.  Large (greater than 100 kilowatts) and small (less than
428or equal to 100 kilowatts) hydroelectric technologies, including
429technologies that utilize the energy in waves, ocean currents,
430and thermal energy differentials;
431     4.  Large (greater than or equal to 10 megawatts), medium-
432sized (greater than 100 kilowatts but less than 10 megawatts),
433and small (less than or equal to 100 kilowatts) biomass
434technologies and applications of no more than 10 megawatts net
435output capacity; and
436     5.  Large (greater than 100 kilowatts) and small (less than
437or equal to 100 kilowatts) waste heat technologies.
438     (c)  Each provider shall purchase in 2012 and in each
439calendar year thereafter 2 percent of the provider's total
440retail revenues for renewable energy. The purchase is in
441addition to the provider's avoided as-available energy cost for
442the energy purchased. The provider's total retail revenues
443include all cost adjustment, cost recovery, and similar add-on
444charges collected by the provider in the preceding calendar
445year. However, the total retail revenues exclude only franchise
446fee revenues. Ten percent of the amount designated for each
447technology type shall be reserved for small renewable energy
448production facilities of the respective technology. A provider
449may expend in any year up to an additional 1 percent above the
450minimum amounts required in this subsection of the provider's
451total retail revenues, including all cost adjustment, cost
452recovery, and similar add-on charges, collected by the provider
453in the preceding calendar year, excluding only franchise fee
455     (d)1.  The commission shall require that a minimum of 25
456percent of the total funding to be expended by each provider on
457the purchase of solar energy. Each utility shall make available
458a minimum of 10 percent of the utility's applicable amount for
459small solar suppliers and a minimum of 20 percent of the
460utility's applicable amount for medium solar suppliers. The
461commission may establish minimum percentages of the funding that
462is to be expended for renewable energy for wind energy and other
463renewable energy technologies.
464     2.  If the bids received from the auction are insufficient
465to expend the total amount of funds available, the residual
466funds are available for either technologies other than the
467under-subscribed technologies or to be carried forward and
468expended on a pro rata basis over the succeeding 4 years.
469     (e)  Each provider may elect to provide up to, but no more
470than, 25 percent of the total amount of renewable energy to be
471purchased for each technology type listed in paragraph (b). If
472the provider elects this option, the provider's cost recovery
473shall be limited to the lowest price bid by any respondent in
474the auction for supplying renewable energy of the respective
475technology type for the life of the commitment.
476     (f)  After a contract is executed or the provider has
477elected to provide a portion of the renewable energy under
478paragraph (c), the provider may not recover costs any greater
479than the contract price or the price determined under paragraph
481     (g)  Each provider may recover through the environmental
482cost-recovery clause an amount equal to 0.005 percent of all
483moneys paid to unaffiliated renewable energy producers to
484purchase renewable energy.
485     (h)  A provider may recover only the costs for new
486construction or conversion projects for which construction
487commenced on or after July 1, 2011, and for purchases made on or
488after that date. All renewable energy projects for which costs
489are approved by the commission for recovery through the
490environmental cost-recovery clause before July 1, 2011, are not
491subject to or included in the calculation pursuant to paragraph
493     (i)  In a proceeding to recover costs, a provider must
494provide to the commission all cost information, hourly energy
495production information, and other information deemed relevant by
496the commission with respect to each project.
497     (j)  If a provider purchases renewable energy at a cost in
498excess of its full avoided cost, the seller must surrender to
499the provider all renewable attributes of the renewable energy
501     (k)  Revenues derived from any renewable energy credit,
502carbon credit, green tag credit, renewable energy attribute, or
503any other mechanism that attributes value to the production of
504renewable energy, either existing or hereafter devised, and
505received by a provider by virtue of the production or purchase
506of renewable energy for which cost recovery is approved, shall
507be shared with the provider's ratepayers such that the
508ratepayers are credited at least 95 percent of such revenues.
509However, the provider is not required to share with its
510ratepayers any value derived from credits received by the
511provider by virtue of the purchase of renewable energy from a
512third-party generating facility in the state which does not
513exceed 2 megawatts in capacity and is not a regulated utility or
514its unregulated affiliate.
515     (l)  A renewable energy generating facility that is
516constructed by a renewable energy supplier or by a provider to
517provide renewable energy is not subject to s. 403.519. The
518commission is not required to submit a report for the project
519pursuant to s. 403.507(4)(a).
520     (4)  Each provider shall, in its 10-year site plan
521submitted to the commission, provide the following information:
522     (a)  The amount of renewable energy resources the provider
523produces or purchases.
524     (b)  The amount of renewable energy resources the provider
525plans to produce or purchase over the 10-year planning horizon
526and the means by which such production or purchases will be
528     (c)  A statement indicating how the production and purchase
529of renewable energy resources impact the provider's present and
530future capacity and energy needs.
531     (3)  The commission shall adopt rules for a renewable
532portfolio standard requiring each provider to supply renewable
533energy to its customers directly, by procuring, or through
534renewable energy credits. In developing the RPS rule, the
535commission shall consult the Department of Environmental
536Protection and the Florida Energy and Climate Commission. The
537rule shall not be implemented until ratified by the Legislature.
538The commission shall present a draft rule for legislative
539consideration by February 1, 2009.
540     (a)  In developing the rule, the commission shall evaluate
541the current and forecasted levelized cost in cents per kilowatt
542hour through 2020 and current and forecasted installed capacity
543in kilowatts for each renewable energy generation method through
545     (b)  The commission's rule:
546     1.  Shall include methods of managing the cost of
547compliance with the renewable portfolio standard, whether
548through direct supply or procurement of renewable power or
549through the purchase of renewable energy credits. The commission
550shall have rulemaking authority for providing annual cost
551recovery and incentive-based adjustments to authorized rates of
552return on common equity to providers to incentivize renewable
553energy. Notwithstanding s. 366.91(3) and (4), upon the
554ratification of the rules developed pursuant to this subsection,
555the commission may approve projects and power sales agreements
556with renewable power producers and the sale of renewable energy
557credits needed to comply with the renewable portfolio standard.
558In the event of any conflict, this subparagraph shall supersede
559s. 366.91(3) and (4). However, nothing in this section shall
560alter the obligation of each public utility to continuously
561offer a purchase contract to producers of renewable energy.
562     2.  Shall provide for appropriate compliance measures and
563the conditions under which noncompliance shall be excused due to
564a determination by the commission that the supply of renewable
565energy or renewable energy credits was not adequate to satisfy
566the demand for such energy or that the cost of securing
567renewable energy or renewable energy credits was cost
569     3.  May provide added weight to energy provided by wind and
570solar photovoltaic over other forms of renewable energy, whether
571directly supplied or procured or indirectly obtained through the
572purchase of renewable energy credits.
573     4.  Shall determine an appropriate period of time for which
574renewable energy credits may be used for purposes of compliance
575with the renewable portfolio standard.
576     5.  Shall provide for monitoring of compliance with and
577enforcement of the requirements of this section.
578     6.  Shall ensure that energy credited toward compliance
579with the requirements of this section is not credited toward any
580other purpose.
581     7.  Shall include procedures to track and account for
582renewable energy credits, including ownership of renewable
583energy credits that are derived from a customer-owned renewable
584energy facility as a result of any action by a customer of an
585electric power supplier that is independent of a program
586sponsored by the electric power supplier.
587     8.  Shall provide for the conditions and options for the
588repeal or alteration of the rule in the event that new
589provisions of federal law supplant or conflict with the rule.
590     (c)  Beginning on April 1 of the year following final
591adoption of the commission's renewable portfolio standard rule,
592each provider shall submit a report to the commission describing
593the steps that have been taken in the previous year and the
594steps that will be taken in the future to add renewable energy
595to the provider's energy supply portfolio. The report shall
596state whether the provider was in compliance with the renewable
597portfolio standard during the previous year and how it will
598comply with the renewable portfolio standard in the upcoming
600     (4)  In order to demonstrate the feasibility and viability
601of clean energy systems, the commission shall provide for full
602cost recovery under the environmental cost-recovery clause of
603all reasonable and prudent costs incurred by a provider for
604renewable energy projects that are zero greenhouse gas emitting
605at the point of generation, up to a total of 110 megawatts
606statewide, and for which the provider has secured necessary
607land, zoning permits, and transmission rights within the state.
608Such costs shall be deemed reasonable and prudent for purposes
609of cost recovery so long as the provider has used reasonable and
610customary industry practices in the design, procurement, and
611construction of the project in a cost-effective manner
612appropriate to the location of the facility. The provider shall
613report to the commission as part of the cost-recovery
614proceedings the construction costs, in-service costs, operating
615and maintenance costs, hourly energy production of the renewable
616energy project, and any other information deemed relevant by the
617commission. Any provider constructing a clean energy facility
618pursuant to this section shall file for cost recovery no later
619than July 1, 2009.
620     (5)  Each municipal electric utility and rural electric
621cooperative shall develop standards for the promotion,
622encouragement, and expansion of the use of renewable energy
623resources and energy conservation and efficiency measures. On or
624before April 1, 2009, and annually thereafter, each municipal
625electric utility and electric cooperative shall submit to the
626commission a report that identifies such standards.
627     (6)  Nothing in this section shall be construed to impede
628or impair terms and conditions of existing contracts.
629     (7)  To further promote renewable energy, any expansion of
630an existing renewable energy electric generating facility,
631subject to a total of up to 200 net megawatts statewide, for
632which a site certification application is filed before January
6331, 2011, and which is owned by a local government entity, does
634not require a determination of need pursuant to s. 403.519.
635     (8)(a)  A developer of renewable energy generation may
636locate, own, and operate a renewable energy generation facility
637that has an aggregate gross power rating of 5 megawatts or less,
638measured on an alternating current basis, on the premises of a
639host consumer or group of host consumers, including, without
640limitation, residential, commercial, industrial, institutional,
641or agricultural host customers located on the same or contiguous
642property, all subject to the aggregate gross power limitation,
643and supply electricity exclusively for sale to the host consumer
644for consumption only on the premises or contiguous property
645owned or leased by the host consumer, regardless of
646interruptions in contiguity caused by easements, public
647thoroughfares, transportation rights-of-way, or utility rights-
649     (b)  Interconnection, metering, and standby and
650supplemental service must be available to the host consumer
651served by renewable generation facilities on the same basis as
652if the host consumer owned and operated the renewable generation
653facilities themselves.
654     (c)  The developer of renewable energy must annually
655provide to the commission the following information:
656     1.  The size and location of each renewable energy
657generation facility planned.
658     2.  The identity and historical and projected load
659characteristics of each host consumer.
660     3.  The actual production and use of renewable electricity
661by facilities installed.
662     (d)  Beginning January 1, 2013, and at least once every 12
663months thereafter, the commission shall report to the President
664of the Senate and the Speaker of the House of Representatives on
665activity under this subsection and the impacts of renewable
666energy generation activity on the electric power grid of the
667state, the individual utility systems, and each utility's
668general body of ratepayers, and shall make recommendations
669concerning implementation of this program.
670     (9)(7)  The commission may adopt rules to administer and
671implement the provisions of this section.
672     Section 8.  Section 377.601, Florida Statutes, is amended
673to read:
674     377.601  Legislative intent.-
675     (1)  The purpose of the state's energy policy is to ensure
676adequate, reliable, cost-effective, and sustainable energy
677supplies for the state in a manner that: promotes sustainable
678economic growth; reduces Florida's dependence on fuels from
679outside the state; maximizes, within the limitations set forth
680in applicable provisions of law, the use of Florida-based
681renewable energy resources to produce electricity and
682transportation fuels; ensures that renewable energy resources
683are procured, to the maximum extent possible, using fair,
684transparent, and competitive purchase systems; and minimizes and
685mitigates any adverse impacts on human health and welfare, and
686on Florida's environment, to the maximum extent practicable and
687subject to the limitations set forth in applicable provisions of
688state law. The Legislature intends that the state's energy
689policy, and all decisions made by all state agencies impacting
690the state's energy policy, be efficiently directed toward
691achieving these purposes.
692     (2)  In furtherance of these purposes, the state's energy
693policy shall be implemented through effective, efficient, and
694reliable governance and shall be guided by the following goals
695in order of their priority:
696     (a)  Ensuring an affordable energy supply.
697     (b)  Ensuring an adequate and sustainable energy supply and
698a Florida-based energy production capacity.
699     (c)  Ensuring a secure and reliable energy supply.
700     (d)  Minimizing energy cost volatility and the state's
701long-term exposure to volatility and increases in world energy
703     (e)  Minimizing the negative impacts of energy production
704on the state's environment, social fabric, and the public health
705and welfare.
706     (f)  Maximizing economic synergies for the state associated
707with its energy policy.
708     (g)  Reducing the net export of energy expenditures by
709maximizing the use of Florida-based renewable energy resources
710to meet the state's energy needs.
711     (3)(1)  The Legislature finds that the state's energy
712security can be increased by lessening dependence on foreign
713oil; that the impacts of global climate change can be reduced
714through the reduction of greenhouse gas emissions; and that the
715implementation of alternative energy technologies can be a
716source of new jobs and employment opportunities for many
717Floridians. The Legislature further finds that the state is
718positioned at the front line against potential impacts of global
719climate change. Human and economic costs of those impacts can be
720averted by global actions and, where necessary, adapted to by a
721concerted effort to make Florida's communities more resilient
722and less vulnerable to these impacts. In focusing the
723government's policy and efforts to benefit and protect our
724state, its citizens, and its resources, the Legislature believes
725that a single government entity with a specific focus on energy
726and climate change is both desirable and advantageous. Further,
727the Legislature finds that energy infrastructure provides the
728foundation for secure and reliable access to the energy supplies
729and services on which Florida depends. Therefore, there is
730significant value to Florida consumers that comes from
731investment in Florida's energy infrastructure that increases
732system reliability, enhances energy independence and
733diversification, stabilizes energy costs, and reduces greenhouse
734gas emissions.
735     (4)(2)  It is further the policy of the state of Florida
737     (a)  Develop and promote the effective use of energy in the
738state, discourage all forms of energy waste, and recognize and
739address the potential of global climate change wherever
741     (b)  Play a leading role in developing and instituting
742energy management programs aimed at promoting energy
743conservation, energy security, and the reduction of greenhouse
744gas emissions.
745     (c)  Include energy considerations consistent with the
746state's energy policy in all state, regional, and local planning
747decisions, as well as in all decisions by state agencies.
748     (d)  Utilize and manage effectively energy resources used
749within state agencies.
750     (e)  Encourage local governments to include energy
751considerations in all planning and to support their work in
752promoting energy management programs.
753     (f)  Include the full participation of citizens in the
754development and implementation of energy programs.
755     (g)  Consider in its decisions the energy needs of each
756economic sector, including residential, industrial, commercial,
757agricultural, and governmental uses, and reduce those needs
758whenever possible.
759     (h)  Promote energy education and the public dissemination
760of information on the use and consumption of energy and its
761environmental, economic, and social impacts impact.
762     (i)  Encourage the research, development, demonstration,
763and application of alternative energy resources, particularly
764renewable energy resources.
765     (j)  Consider, in its decisionmaking, the social, economic,
766and environmental impacts of energy-related activities,
767including the whole-life-cycle impacts of any potential energy
768use choices, so that detrimental effects of these activities are
769understood and minimized.
770     (k)  Develop and maintain energy emergency preparedness
771plans to minimize the effects of an energy shortage within
773     Section 9.  Subsection (1) and paragraph (f) of subsection
774(2) of section 377.703, Florida Statutes, are amended to read:
775     377.703  Additional functions of the Florida Energy and
776Climate Commission.-
777     (1)  LEGISLATIVE INTENT.-Recognizing that energy supply and
778demand questions have become a major area of concern to the
779state which must be dealt with by effective and well-coordinated
780state action, it is the intent of the Legislature to promote the
781efficient, effective, and economical management of energy
782problems, centralize energy coordination responsibilities,
783pinpoint responsibility for conducting energy programs, and
784ensure the accountability of state agencies for the
785implementation of s. 377.601 s. 377.601(2), the state energy
786policy. It is the specific intent of the Legislature that
787nothing in this act shall in any way change the powers, duties,
788and responsibilities assigned by the Florida Electrical Power
789Plant Siting Act, part II of chapter 403, or the powers, duties,
790and responsibilities of the Florida Public Service Commission.
792commission shall perform the following functions consistent with
793the development of a state energy policy:
794     (f)  The commission shall submit an annual report to the
795Governor and the Legislature reflecting its activities and
796making recommendations of policies for improvement of the
797state's response to energy supply and demand and its effect on
798the health, safety, and welfare of the people of Florida. The
799report shall include a report from the Florida Public Service
800Commission on electricity and natural gas and information on
801energy conservation programs conducted and underway in the past
802year and shall include recommendations for energy conservation
803programs for the state, including, but not limited to, the
804following factors:
805     1.  Formulation of specific recommendations for improvement
806in the efficiency of energy utilization in governmental,
807residential, commercial, industrial, and transportation sectors.
808     2.  Collection and dissemination of information relating to
809energy conservation.
810     3.  Development and conduct of educational and training
811programs relating to energy conservation.
812     4.  An analysis of the ways in which state agencies are
813seeking to implement s. 377.601 s. 377.601(2), the state energy
814policy, and recommendations for better fulfilling this policy.
815     Section 10.  Present subsections (3) and (4) of section
816377.809, Florida Statutes, are renumbered as subsections (4) and
817(5), respectively, and a new subsection (3) is added to that
818section to read:
819     377.809  Energy Economic Zone Pilot Program.-
820     (3)  The Department of Community Affairs, in consultation
821with the Florida Energy and Climate Commission, shall implement
822an Energy Economic Zone Pilot Program for the purpose of
823developing a model to assist communities in attracting renewable
824energy technology, energy efficiency technology, and biofuel
825technology industries that are focused on bringing research and
826development projects to large-scale production. The Office of
827Tourism, Trade, and Economic Development shall provide technical
828assistance in obtaining additional or supplemental financing and
829in developing and administering the program.
830     (a)  The application for the pilot project shall:
831     1.  Identify the proposed location of the energy economic
832zone, which must have a significant workforce population that is
833at risk as a result of reduced or eliminated federal funding.
834     2.  Present a proposed strategic plan for development and
835redevelopment in the energy economic zone.
836     3.  Demonstrate consistency of the strategic plan with the
837local comprehensive plan or include proposed plan amendments
838necessary to achieve consistency.
839     (b)  The Department of Community Affairs must grant at
840least one application if the application meets the requirements
841of this subsection and the community has demonstrated a prior
842commitment to technology development. The Department of
843Community Affairs, the Florida Energy and Climate Commission,
844and the Office of Tourism, Trade, and Economic Development shall
845provide the pilot community with technical assistance in
846identifying and qualifying for eligible grants and credits in
847job creation, energy development, and other areas of
848development, and encourage businesses to locate within the
849energy economic zone.
850     Section 11.  Subsection (14) of section 403.503, Florida
851Statutes, is amended to read:
852     403.503  Definitions relating to Florida Electrical Power
853Plant Siting Act.-As used in this act:
854     (14)  "Electrical power plant" means, for the purpose of
855certification, any steam or solar electrical generating facility
856using any process or fuel, including nuclear materials, except
857that this term does not include any steam or solar electrical
858generating facility of less than 75 megawatts in capacity or any
859solar or biomass electrical generating facility of any sized
860capacity unless the applicant for such a facility elects to
861apply for certification under this act. This term also includes
862the site; all associated facilities that will be owned by the
863applicant that are physically connected to the site; all
864associated facilities that are indirectly connected to the site
865by other proposed associated facilities that will be owned by
866the applicant; and associated transmission lines that will be
867owned by the applicant which connect the electrical power plant
868to an existing transmission network or rights-of-way to which
869the applicant intends to connect. At the applicant's option,
870this term may include any offsite associated facilities that
871will not be owned by the applicant; offsite associated
872facilities that are owned by the applicant but that are not
873directly connected to the site; any proposed terminal or
874intermediate substations or substation expansions connected to
875the associated transmission line; or new transmission lines,
876upgrades, or improvements of an existing transmission line on
877any portion of the applicant's electrical transmission system
878necessary to support the generation injected into the system
879from the proposed electrical power plant.
880     Section 12.  If any provision of this act or the
881application thereof to any person or circumstance is held
882invalid, the invalidity does not affect other provisions or
883applications of the act that may be given effect without the
884invalid provision or application, and to this end the provisions
885of this act are declared to be severable.
886     Section 13.  This act shall take effect upon becoming a

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