CS for CS for CS for SB 796                      First Engrossed
    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 submit to the Public Service Commission, for
    6         review, a transmission and distribution storm
    7         protection plan; specifying matters to be considered
    8         in the commission’s review of a plan; requiring the
    9         commission to approve, modify, or deny a plan within a
   10         specified timeframe; requiring a utility to update its
   11         plan on a specified basis, subject to commission
   12         review; requiring the commission to conduct an annual
   13         proceeding to allow utilities to recover certain costs
   14         through a storm protection plan cost recovery clause;
   15         providing that utilities may not include costs
   16         recovered through their base rates; providing that
   17         certain costs will not be subject to certain
   18         disallowances or reviews; providing for the allocation
   19         of such costs; authorizing utilities to recover
   20         depreciation and a return on certain capital costs
   21         through the recovery clause; requiring the commission
   22         to submit an annual report to the Governor and
   23         Legislature; requiring rulemaking; providing
   24         appropriations and authorizing positions; providing an
   25         effective date.
   27  Be It Enacted by the Legislature of the State of Florida:
   29         Section 1. Section 366.96, Florida Statutes, is created to
   30  read:
   31         366.96 Storm protection plan cost recovery.—
   32         (1) The Legislature finds that:
   33         (a) During extreme weather conditions, high winds can cause
   34  vegetation and debris to blow into and damage electrical
   35  transmission and distribution facilities, resulting in power
   36  outages.
   37         (b) A majority of the power outages that occur during
   38  extreme weather conditions in the state are caused by vegetation
   39  blown by the wind.
   40         (c) It is in the state’s interest to strengthen electric
   41  utility infrastructure to withstand extreme weather conditions
   42  by promoting the overhead hardening of electrical transmission
   43  and distribution facilities, the undergrounding of certain
   44  electrical distribution lines, and vegetation management.
   45         (d) Protecting and strengthening transmission and
   46  distribution electric utility infrastructure from extreme
   47  weather conditions can effectively reduce restoration costs and
   48  outage times to customers and improve overall service
   49  reliability for customers.
   50         (e) It is in the state’s interest for each utility to
   51  mitigate restoration costs and outage times to utility customers
   52  when developing transmission and distribution storm protection
   53  plans.
   54         (f) All customers benefit from the reduced costs of storm
   55  restoration.
   56         (2) DEFINITIONS.—As used in this section, the term:
   57         (a) “Public utility” or “utility” has the same meaning as
   58  set forth in s. 366.02(1), except that it does not include a gas
   59  utility.
   60         (b) “Transmission and distribution storm protection plan”
   61  or “plan” means a plan for the overhead hardening and increased
   62  resilience of electric transmission and distribution facilities,
   63  undergrounding of electric distribution facilities, and
   64  vegetation management.
   65         (c) “Transmission and distribution storm protection plan
   66  costs” means the reasonable and prudent costs to implement an
   67  approved transmission and distribution storm protection plan.
   68         (d) “Vegetation management” means the actions a public
   69  utility takes to prevent or curtail vegetation from interfering
   70  with public utility infrastructure. The term includes, but is
   71  not limited to, the mowing of vegetation, application of
   72  herbicides, tree trimming, and removal of trees or brush near
   73  and around electric transmission and distribution facilities.
   74         (3) Each public utility shall file, pursuant to commission
   75  rule, a transmission and distribution storm protection plan that
   76  covers the immediate 10-year planning period. Each plan must
   77  explain the systematic approach the utility will follow to
   78  achieve the objectives of reducing restoration costs and outage
   79  times associated with extreme weather events and enhancing
   80  reliability. The commission shall adopt rules to specify the
   81  elements that must be included in a utility’s filing for review
   82  of transmission and distribution storm protection plans.
   83         (4) In its review of each transmission and distribution
   84  storm protection plan filed pursuant to this section, the
   85  commission shall consider:
   86         (a) The extent to which the plan is expected to reduce
   87  restoration costs and outage times associated with extreme
   88  weather events and enhance reliability, including whether the
   89  plan prioritizes areas of lower reliability performance.
   90         (b) The extent to which storm protection of transmission
   91  and distribution infrastructure is feasible, reasonable, or
   92  practical in certain areas of the utility’s service territory,
   93  including, but not limited to, flood zones and rural areas.
   94         (c) The estimated costs and benefits to the utility and its
   95  customers of making the improvements proposed in the plan.
   96         (d) The estimated annual rate impact resulting from
   97  implementation of the plan during the first 3 years addressed in
   98  the plan.
   99         (5) No later than 180 days after a utility files a
  100  transmission and distribution storm protection plan that
  101  contains all of the elements required by commission rule, the
  102  commission shall determine whether it is in the public interest
  103  to approve, approve with modification, or deny the plan.
  104         (6) At least every 3 years after approval of a utility’s
  105  transmission and distribution storm protection plan, the utility
  106  must file for commission review an updated transmission and
  107  distribution storm protection plan that addresses each element
  108  specified by commission rule. The commission shall approve,
  109  modify, or deny each updated plan pursuant to the criteria used
  110  to review the initial plan.
  111         (7) After a utility’s transmission and distribution storm
  112  protection plan has been approved, proceeding with actions to
  113  implement the plan shall not constitute or be evidence of
  114  imprudence. The commission shall conduct an annual proceeding to
  115  determine the utility’s prudently incurred transmission and
  116  distribution storm protection plan costs and allow the utility
  117  to recover such costs through a charge separate and apart from
  118  its base rates, to be referred to as the storm protection plan
  119  cost recovery clause. If the commission determines that costs
  120  were prudently incurred, those costs will not be subject to
  121  disallowance or further prudence review except for fraud,
  122  perjury, or intentional withholding of key information by the
  123  public utility.
  124         (8) The annual transmission and distribution storm
  125  protection plan costs may not include costs recovered through
  126  the public utility’s base rates and must be allocated to
  127  customer classes pursuant to the rate design most recently
  128  approved by the commission.
  129         (9) If a capital expenditure is recoverable as a
  130  transmission and distribution storm protection plan cost, the
  131  public utility may recover the annual depreciation on the cost,
  132  calculated at the public utility’s current approved depreciation
  133  rates, and a return on the undepreciated balance of the costs
  134  calculated at the public utility’s weighted average cost of
  135  capital using the last approved return on equity.
  136         (10) Beginning December 1 of the year after the first full
  137  year of implementation of a transmission and distribution storm
  138  protection plan and annually thereafter, the commission shall
  139  submit to the Governor, the President of the Senate, and the
  140  Speaker of the House of Representatives a report on the status
  141  of utilities’ storm protection activities. The report shall
  142  include, but is not limited to, identification of all storm
  143  protection activities completed or planned for completion, the
  144  actual costs and rate impacts associated with completed
  145  activities as compared to the estimated costs and rate impacts
  146  for those activities, and the estimated costs and rate impacts
  147  associated with activities planned for completion.
  148         (11) The commission shall adopt rules to implement and
  149  administer this section and shall propose a rule for adoption as
  150  soon as practicable after the effective date of this act, but
  151  not later than October 31, 2019.
  152         Section 2. For the 2019-2020 fiscal year, the sums of
  153  $261,270 in recurring funds and $15,020 in nonrecurring funds
  154  from the Regulatory Trust Fund are appropriated to the Public
  155  Service Commission, and 4 full-time equivalent positions with
  156  associated salary rate of 180,583 are authorized for the purpose
  157  of implementing this act.
  158         Section 3. This act shall take effect upon becoming a law.