Florida Senate - 2019                              CS for SB 796
       By the Committee on Innovation, Industry, and Technology; and
       Senators Gruters and Bracy
       580-02754-19                                           2019796c1
    1                        A bill to be entitled                      
    2         An act relating to public utility storm protection
    3         plans; creating s. 366.96, F.S.; providing legislative
    4         findings; defining terms; requiring public utilities
    5         to individually submit to the Public Service
    6         Commission, for review and approval, a transmission
    7         and distribution storm protection plan as part of the
    8         storm hardening plan required by the commission;
    9         requiring utilities to update their respective plans
   10         on a specified basis; requiring the commission to
   11         approve or modify submitted plans within a specified
   12         timeframe, taking into consideration specified
   13         factors; requiring the commission to conduct an annual
   14         proceeding to allow utilities to justify and recover
   15         certain costs through a storm protection cost recovery
   16         clause; providing that a party may challenge the
   17         prudence of certain costs; providing that utilities
   18         may not include certain costs in their base rates;
   19         providing for the allocation of such costs;
   20         authorizing utilities to recover depreciation on
   21         certain capital costs through the recovery clause;
   22         requiring the commission to adopt rules; providing an
   23         effective date.
   25  Be It Enacted by the Legislature of the State of Florida:
   27         Section 1. Section 366.96, Florida Statutes, is created to
   28  read:
   29         366.96Storm protection plan cost recovery.—
   30         (1)The Legislature finds that:
   31         (a)During extreme weather conditions, high winds can cause
   32  vegetation and debris to blow into and damage electrical
   33  transmission and distribution facilities, resulting in power
   34  outages.
   35         (b)A majority of the power outages that occurred during
   36  the recent extreme weather conditions in the state were caused
   37  by vegetation blown by the wind.
   38         (c)It is in the public interest to promote overhead
   39  hardening of electrical transmission and distribution
   40  facilities, the undergrounding of certain electrical
   41  distribution lines, and vegetation management in this state.
   42         (d)Protecting and strengthening transmission and
   43  distribution electric utility infrastructure from extreme
   44  weather conditions will reduce restoration costs and outage
   45  times to customers and improve overall service reliability for
   46  customers.
   47         (e)When considering costs, reliability, storm protection
   48  and restoration, and the public convenience, it is in the
   49  state’s best interest that utilities focus primarily on
   50  distribution laterals when undergrounding electric distribution
   51  lines.
   52         (f)It is in the public interest for each utility to
   53  mitigate additional costs to utility customers when developing
   54  transmission and distribution storm hardening plans.
   55         (g)All customers benefit the reduced costs of storm
   56  restoration.
   57         (2)As used in this section, the term:
   58         (a)“Transmission and distribution storm protection plan”
   59  or “plan” means a plan for the overhead hardening of electric
   60  transmission and distribution facilities, undergrounding of
   61  electric distribution facilities, and increased vegetation
   62  management.
   63         (b)“Transmission and distribution storm protection plan
   64  costs” means the reasonable and prudent costs to implement an
   65  approved transmission and distribution storm protection plan.
   66         (c)“Vegetation management” means the actions a public
   67  utility takes to prevent or curtail vegetation from interfering
   68  with public utility infrastructure. The term includes the mowing
   69  of vegetation, application of herbicides, trimming of trees, and
   70  removal of trees or brush near and around electric transmission
   71  and distribution facilities.
   72         (3)Each public utility shall file for commission review,
   73  as part of its storm hardening plan required by the commission
   74  under s. 366.04(2)(c), a transmission and distribution storm
   75  protection plan that covers 30 years. The commission must
   76  approve or modify the plan within 6 months after the public
   77  utility files the plan with the commission. The commission must
   78  give due consideration to whether:
   79         (a)The plan enhances reliability, strengthens
   80  infrastructure, and reduces restoration costs and outage times
   81  in a prudent, practical and cost-efficient manner. The plan
   82  should prioritize areas in order to generate the highest impact
   83  on system resiliency and efficiency and should focus on areas
   84  with large numbers of customers, high frequency outages, and
   85  lengthy outages.
   86         (b)Storm protection of transmission and distribution
   87  infrastructure is feasible, reasonable, or practical in certain
   88  areas of the utility’s service territory, including in flood
   89  zones and rural areas.
   90         (4)Each public utility must submit an updated transmission
   91  and distribution storm protection plan that covers, at a
   92  minimum, the 30-year period addressed in its initial
   93  transmission and distribution storm protection plan at least
   94  every 3 years after commission approval of its most recent plan.
   95  The commission shall approve or modify each updated plan
   96  pursuant to the criteria set forth in subsection (3).
   97         (5)(a)The commission shall conduct an annual proceeding to
   98  allow a public utility to justify and recover transmission
   99  distribution storm protection plan costs through a storm
  100  protection cost recovery clause.
  101         (b)Action taken by a public utility for storm protection
  102  of transmission and distribution facilities pursuant to a
  103  commission-approved plan is deemed prudent, but a party may
  104  challenge the commission’s determination of prudence.
  105         (6)The annual transmission and distribution storm
  106  protection plan costs recoverable through the storm protection
  107  cost recovery clause must be stated separately from the public
  108  utility’s base rates and must be allocated to customer classes
  109  pursuant to the rate design most recently approved by the
  110  commission.
  111         (7)If a capital expenditure cost is recoverable through a
  112  storm protection cost recovery clause, the public utility may
  113  recover the annual depreciation on such cost, calculated at the
  114  public utility’s current approved depreciation rates, and a
  115  return on the depreciated balance of the costs calculated at the
  116  public utility’s weighted average cost of capital using the
  117  return on equity last approved by the commission in a rate case
  118  or settlement order.
  119         (8)The commission shall adopt rules to implement and
  120  administer this section.
  121         Section 2. This act shall take effect July 1, 2019.