CS for CS for SB 1472 Second Engrossed
20131472e2
1 A bill to be entitled
2 An act relating to nuclear and integrated gasification
3 combined cycle power plants; amending s. 366.93, F.S.;
4 modifying an alternative cost recovery mechanism for
5 the recovery of costs for the siting, design,
6 licensing, and construction of nuclear and integrated
7 gasification combined cycle power plants; establishing
8 a procedure and requirements for cost recovery based
9 on preconstruction and construction phases; providing
10 that the commission may not determine that a utility
11 intends to complete construction of a power plant
12 unless the utility proves its efforts by a
13 preponderance of the evidence; providing that a
14 utility that elects not to complete construction of a
15 nuclear power plant may not recover any future rate of
16 return for related costs; requiring a utility to
17 provide notice of its election to the commission;
18 providing for a penalty; exempting certain actions
19 taken before this act takes effect; providing an
20 effective date.
21
22 Be It Enacted by the Legislature of the State of Florida:
23
24 Section 1. Subsections (1), (2), (3), and (6) of section
25 366.93, Florida Statutes, are amended to read:
26 366.93 Cost recovery for the siting, design, licensing, and
27 construction of nuclear and integrated gasification combined
28 cycle power plants.—
29 (1) As used in this section, the term:
30 (a) “Cost” includes, but is not limited to, all capital
31 investments, including rate of return, any applicable taxes, and
32 all expenses, including operation and maintenance expenses,
33 related to or resulting from the siting, licensing, design,
34 construction, or operation of the nuclear power plant, including
35 new, expanded, or relocated electrical transmission lines or
36 facilities of any size which that are necessary thereto, or of
37 the integrated gasification combined cycle power plant.
38 (b) “Electric utility” or “utility” has the same meaning as
39 that provided in s. 366.8255(1)(a).
40 (c) “Integrated gasification combined cycle power plant” or
41 “plant” means an electrical power plant as defined in s.
42 403.503(14) which that uses synthesis gas produced by integrated
43 gasification technology.
44 (d) “Nuclear power plant” or “plant” means an electrical
45 power plant as defined in s. 403.503(14) which that uses nuclear
46 materials for fuel.
47 (e) “Power plant” or “plant” means a nuclear power plant or
48 an integrated gasification combined cycle power plant.
49 (f) “Preconstruction” is that period of time after a site,
50 including any related electrical transmission lines or
51 facilities, has been selected through and including the date the
52 utility completes site clearing work. Preconstruction costs must
53 shall be afforded deferred accounting treatment and shall accrue
54 a carrying charge equal to the utility’s allowance for funds
55 during construction (AFUDC) rate until recovered in rates.
56 (2) Within 6 months after the enactment of this act, the
57 commission shall establish, by rule, alternative cost recovery
58 mechanisms for the recovery of costs incurred in the siting,
59 design, licensing, and construction of a nuclear power plant,
60 including new, expanded, or relocated electrical transmission
61 lines and facilities that are necessary thereto, or of an
62 integrated gasification combined cycle power plant. Such
63 mechanisms must shall be designed to promote utility investment
64 in nuclear or integrated gasification combined cycle power
65 plants and allow for the recovery in rates of all prudently
66 incurred costs, including and shall include, but not be limited
67 to:
68 (a) Recovery through the capacity cost recovery clause of
69 any preconstruction costs.
70 (b) Recovery through an incremental increase in the
71 utility’s capacity cost recovery clause rates of the carrying
72 costs on the utility’s projected construction cost balance
73 associated with the nuclear or integrated gasification combined
74 cycle power plant. To encourage investment and provide
75 certainty, for nuclear or integrated gasification combined cycle
76 power plant need petitions submitted on or before December 31,
77 2010, associated carrying costs must shall be equal to the most
78 recently approved pretax AFUDC at the time an increment of cost
79 recovery is sought in effect upon this act becoming law. For
80 nuclear or integrated gasification combined cycle power plants
81 for which need petitions are submitted after December 31, 2010,
82 the utility’s existing pretax AFUDC rate is presumed to be
83 appropriate unless determined otherwise by the commission in the
84 determination of need for the nuclear or integrated gasification
85 combined cycle power plant.
86 (3)(a) After a petition for determination of need is
87 granted, a utility may petition the commission for cost recovery
88 as permitted by this section and commission rules.
89 (b) During the time that a utility seeks to obtain a
90 combined license from the Nuclear Regulatory Commission for a
91 nuclear power plant or a certification for an integrated
92 gasification combined cycle power plant, the utility may recover
93 only costs related to, or necessary for, obtaining such
94 licensing or certification.
95 (c) After a utility obtains a license or certification, it
96 must petition the commission for approval before proceeding with
97 preconstruction work beyond those activities necessary to obtain
98 or maintain a license or certificate.
99 1. The only costs that a utility that has obtained a
100 license or certification may recover before obtaining commission
101 approval are those that are previously approved or necessary to
102 maintain the license or certification.
103 2. In order for the commission to approve preconstruction
104 work on a plant, it must determine that:
105 a. The plant remains feasible; and
106 b. The projected costs for the plant are reasonable.
107 (d) After a utility obtains approval to proceed with
108 postlicensure or postcertification preconstruction work, it must
109 petition the commission for approval of any preconstruction
110 materials or equipment purchases that exceed 1 percent of the
111 total projected cost for the project. Such petition shall be
112 reviewed and completed in the annual Nuclear Cost Recovery
113 Clause proceeding in which it is filed or in a separate
114 proceeding by the utility.
115 (e) A utility must petition the commission for approval
116 before beginning the construction phase.
117 1. The only costs that a utility that has obtained
118 commission approval may recover before beginning construction
119 work are those that are previously approved or necessary to
120 maintain the license or certification.
121 2. In order for the commission to approve proceeding with
122 construction on a plant, it must determine that:
123 a. The plant remains feasible; and
124 b. The projected costs for the plant are reasonable.
125 (f)1. If a utility has not begun construction of a plant
126 within:
127 a. Ten years after the date on which the utility obtains a
128 combined license from the Nuclear Regulatory Commission for a
129 nuclear power plant or a certification for an integrated
130 gasification combined cycle power plant, the utility must
131 petition the commission to preserve the opportunity for future
132 recovery under this section for costs relating to that plant.
133 The commission must determine whether the utility remains intent
134 on building the plant.
135 (I) If the commission finds that the utility remains intent
136 on building the plant, the utility may continue to recover costs
137 under this section.
138 (II) If the commission finds a lack of such intent, it may
139 enter an order prohibiting recovery of any future costs relating
140 to the plant under this section.
141 b. Twenty years after the date on which the utility obtains
142 a combined license from the Nuclear Regulatory Commission for a
143 nuclear power plant or a certification for an integrated
144 gasification combined cycle power plant, the utility may not,
145 under this section, recover future costs relating to that plant.
146 2. Consistent with subsection (4), nothing in this section
147 shall preclude a utility from recovering the full revenue
148 requirements of the nuclear power plant or integrated
149 gasification combined cycle power plant in base rates upon the
150 commercial in-service date.
151 3. Beginning January 1, 2014, in making its determination
152 for any cost recovery under this paragraph, the commission may
153 find that a utility intends to construct a nuclear or integrated
154 gasification combined cycle power plant only if the utility
155 proves by a preponderance of the evidence that it has committed
156 sufficient, meaningful, and available resources to enable the
157 project to be completed and that its intent is realistic and
158 practical.
159 (6) If the utility does elects not to complete or is
160 precluded from completing construction of the nuclear power
161 plant, including new, expanded, or relocated electrical
162 transmission lines or facilities necessary thereto, or of the
163 integrated gasification combined cycle power plant, the utility
164 shall be allowed to recover all prudent preconstruction and
165 construction costs incurred following the commission’s issuance
166 of a final order granting a determination of need for the
167 nuclear power plant and electrical transmission lines and
168 facilities necessary thereto or for the integrated gasification
169 combined cycle power plant. The utility shall recover such costs
170 through the capacity cost recovery clause over a period equal to
171 the period during which the costs were incurred or 5 years,
172 whichever is greater. The unrecovered balance during the
173 recovery period will accrue interest at the utility’s weighted
174 average cost of capital as reported in the commission’s earnings
175 surveillance reporting requirement for the prior year. However,
176 if the utility elects not to complete construction of the
177 nuclear power plant, rather than being precluded from completing
178 such construction, the utility may not recover any further rate
179 of return under this section. The utility must provide written
180 notice of this election to the commission within 14 days after
181 making the election. Failure by the utility to timely notify the
182 commission is a violation of this section and punishable under
183 s. 350.127. Any cost recovery after the date of the election not
184 to complete construction of the plant may not include a rate of
185 return.
186 Section 2. This act does not apply to costs incurred, or
187 contracts or settlement agreements entered into, before July 1,
188 2013. It also does not apply if, on or before that date, the
189 Public Service Commission receives written notice that a utility
190 has elected not to complete construction of a power plant.
191 Section 3. This act shall take effect July 1, 2013.