Florida Senate - 2019                       CS for CS for SB 796
       By the Committees on Infrastructure and Security; and
       Innovation, Industry, and Technology; and Senators Gruters,
       Bracy, Montford, and Broxson
       596-03300-19                                           2019796c2
    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; requiring
    8         utilities to update their respective plans on a
    9         specified basis; requiring the commission to approve
   10         or modify submitted plans within a specified
   11         timeframe, taking into consideration specified
   12         factors; requiring the commission to conduct an annual
   13         proceeding to allow utilities to justify and recover
   14         certain costs through a storm protection cost recovery
   15         clause; providing that a party may challenge the
   16         prudence of certain costs; providing that utilities
   17         may not include certain costs in their base rates;
   18         providing for the allocation of such costs;
   19         authorizing utilities to recover depreciation on
   20         certain capital costs through the recovery clause;
   21         requiring the commission to adopt rules; providing an
   22         effective date.
   24  Be It Enacted by the Legislature of the State of Florida:
   26         Section 1. Section 366.96, Florida Statutes, is created to
   27  read:
   28         366.96Storm protection plan cost recovery.—
   29         (1)The Legislature finds that:
   30         (a)During extreme weather conditions, high winds can cause
   31  vegetation and debris to blow into and damage electrical
   32  transmission and distribution facilities, resulting in power
   33  outages.
   34         (b)A majority of the power outages that occurred during
   35  the recent extreme weather conditions in the state were caused
   36  by vegetation blown by the wind.
   37         (c)It is in the public interest to promote overhead
   38  hardening of electrical transmission and distribution
   39  facilities, the undergrounding of certain electrical
   40  distribution lines, and vegetation management in this state.
   41         (d)Protecting and strengthening transmission and
   42  distribution electric utility infrastructure from extreme
   43  weather conditions will reduce restoration costs and outage
   44  times to customers and improve overall service reliability for
   45  customers.
   46         (e)When considering costs, reliability, storm protection
   47  and restoration, and the public convenience, it is in the
   48  state’s best interest that utilities focus primarily on
   49  distribution laterals when undergrounding electric distribution
   50  lines.
   51         (f)It is in the public interest for each utility to
   52  mitigate additional costs to utility customers when developing
   53  transmission and distribution storm hardening plans.
   54         (g)All customers benefit from the reduced costs of storm
   55  restoration.
   56         (2)As used in this section, the term:
   57         (a)“Public utility” or “utility” has the same meaning as
   58  in s. 366.02(1), except that this section does not apply to a
   59  gas utility.
   60         (b)“Transmission and distribution storm protection plan”
   61  or “plan” means a plan for the overhead hardening of electric
   62  transmission and distribution facilities, undergrounding of
   63  electric distribution facilities, and vegetation management.
   64         (c)“Transmission and distribution storm protection plan
   65  costs” means the reasonable and prudent costs to implement an
   66  approved transmission and distribution storm protection plan.
   67         (d)“Vegetation management” means the actions a public
   68  utility takes to prevent or curtail vegetation from interfering
   69  with public utility infrastructure. The term includes the mowing
   70  of vegetation, application of herbicides, trimming of trees, and
   71  removal of trees or brush near and around electric transmission
   72  and distribution facilities.
   73         (3)Each public utility shall file for commission review, a
   74  transmission and distribution storm protection plan that covers
   75  the utility’s immediate 10-year planning period. The commission
   76  must 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 all of the following:
   79         (a)Whether the plan enhances reliability, strengthens
   80  infrastructure, and reduces restoration costs and outage times
   81  in a prudent, practical, and cost-efficient manner, including
   82  whether the plan prioritizes areas of lower reliability
   83  performance.
   84         (b)Whether storm protection of transmission and
   85  distribution infrastructure is feasible, reasonable, or
   86  practical in certain areas of the utility’s service territory,
   87  including in flood zones and rural areas.
   88         (c)The estimated rate impact that will result from the
   89  implementation of the public utility’s proposed transmission and
   90  distribution storm protection plan during the first 3 years
   91  addressed in the plan.
   92         (4)Each public utility must submit an updated transmission
   93  and distribution storm protection plan at least every 3 years
   94  after commission approval of its most recent plan. The
   95  commission shall approve or modify each updated plan pursuant to
   96  the criteria set forth in subsection (3).
   97         (5)After a storm protection plan has been approved, costs
   98  to implement the plan are not subject to challenge unless the
   99  commission finds that certain costs were imprudently incurred.
  100  Proceeding with actions to implement the plan does not
  101  constitute and is not evidence of imprudence. The commission
  102  shall conduct an annual proceeding to allow a public utility to
  103  recover prudently incurred transmission and distribution storm
  104  protection plan costs through a storm protection cost recovery
  105  clause. Once the commission determines that the costs were
  106  prudently incurred, the costs are not subject to disallowance or
  107  further prudence review, except for situations involving fraud,
  108  perjury, or the intentional withholding of key information by
  109  the public utility.
  110         (6)The annual transmission and distribution storm
  111  protection plan costs recoverable through the storm protection
  112  cost recovery clause do not include costs recovered through the
  113  public utility’s base rates and must be allocated to customer
  114  classes pursuant to the rate design most recently approved by
  115  the commission.
  116         (7)If a capital expenditure cost is recoverable through a
  117  storm protection cost recovery clause, the public utility may
  118  recover the annual depreciation on such cost, calculated at the
  119  public utility’s current approved depreciation rates, and a
  120  return on the undepreciated balance of the costs calculated at
  121  the public utility’s weighted average cost of capital using the
  122  return on equity last approved by the commission in a rate case
  123  or settlement order.
  124         (8)The commission shall adopt rules to implement and
  125  administer this section.
  126         Section 2. This act shall take effect July 1, 2019.