Florida Senate - 2026 CS for SB 126
By the Committee on Regulated Industries; and Senators Gaetz and
Bradley
580-01755A-26 2026126c1
1 A bill to be entitled
2 An act relating to the Florida Public Service
3 Commission; amending s. 350.01, F.S.; revising the
4 membership of the Florida Public Service Commission;
5 creating s. 350.0615, F.S.; requiring a group of
6 parties to certain proceedings to negotiate the terms
7 of a settlement with the Public Counsel before
8 presenting such settlement to the commission; creating
9 s. 350.129, F.S.; requiring that orders issued by the
10 commission contain adequate support and rationale for
11 any conclusions made by the commission; requiring the
12 commission to provide an explanation and a discussion
13 of major elements and the rationale of the settlement
14 when the commission issues an order accepting or
15 denying certain settlement agreements; providing that
16 the Public Counsel is not a required party to any such
17 settlements; prohibiting the commission from approving
18 certain settlements that are not negotiated with the
19 Public Counsel; creating s. 350.130, F.S.; authorizing
20 certain persons to make a motion to intervene in a
21 pending commission proceeding; providing requirements
22 for an association’s motion to intervene in certain
23 commission proceedings; requiring the commission to
24 make certain rulings in a specified timeframe to avoid
25 certain expenses; creating s. 350.131, F.S.; requiring
26 the commission to consider and address the
27 affordability of proceedings that have certain
28 potential impacts; amending s. 366.06, F.S.;
29 authorizing the commission to fix affordable, in
30 addition to fair, just, and reasonable, rates;
31 requiring that certain applications for changes in
32 rates be made according to a certain schedule and
33 procedure; requiring that certain requests for a
34 change in return on equity be made according to a
35 certain schedule and procedure; conforming provisions
36 to changes made by the act; providing requirements for
37 any financial model used by the commission to set and
38 evaluate the return on equity for a public utility;
39 requiring the commission to consider and address
40 certain financial benefits and reductions of certain
41 risks provided by specified cost financing systems or
42 other processes when setting and evaluating the return
43 on equity for a public utility; amending s. 366.07,
44 F.S.; conforming provisions to changes made by the
45 act; requiring the commission to establish a schedule
46 by which requests for changes to a public utility’s
47 return on equity may be submitted to the commission by
48 each public utility company; prohibiting the
49 commission from accepting certain requests from a
50 public utility to modify its return on equity outside
51 of its schedule; providing an exception; authorizing a
52 public utility to petition the commission to deviate
53 from the return on equity revision schedule; requiring
54 the commission to grant the petition under certain
55 circumstances; requiring the commission to adopt
56 rules; creating s. 366.077, F.S.; requiring the
57 commission to provide a report to the Governor and the
58 Legislature by a specified date annually; providing
59 requirements for the report; creating s. 366.8261,
60 F.S.; defining terms; requiring the commission to
61 permit an electric utility to implement a certain
62 charge within a specified timeframe after the electric
63 utility files a certain petition, subject to specified
64 conditions; requiring the commission to establish a
65 recovery period for interim storm-recovery costs,
66 based upon a reasonable balancing of certain factors;
67 subjecting certain funds to true-up; providing
68 construction; requiring the commission to adopt rules;
69 amending s. 367.081, F.S.; providing requirements for
70 financial models used by the commission in setting and
71 evaluating the return on equity for a utility;
72 conforming provisions to changes made by the act;
73 amending s. 377.814, F.S.; conforming a cross
74 reference; providing an effective date.
75
76 Be It Enacted by the Legislature of the State of Florida:
77
78 Section 1. Subsection (1) of section 350.01, Florida
79 Statutes, is amended to read:
80 350.01 Florida Public Service Commission; terms of
81 commissioners; vacancies; election and duties of chair; quorum;
82 proceedings; public records and public meetings exemptions.—
83 (1) The Florida Public Service Commission shall be composed
84 consist of seven five commissioners appointed pursuant to s.
85 350.031. One member must be a certified public accountant, and
86 one member must be a chartered financial analyst.
87 Section 2. Section 350.0615, Florida Statutes, is created
88 to read:
89 350.0615 Public Counsel; requirement to negotiate.—For
90 proceedings before the commission in which the Public Counsel is
91 participating as a party, any other group of parties to the
92 proceeding, before presenting a settlement of the proceeding to
93 the commission, must negotiate in good faith with the Public
94 Counsel the terms of such settlement.
95 Section 3. Section 350.129, Florida Statutes, is created to
96 read:
97 350.129 Orders of the Florida Public Service Commission.—
98 (1) All orders issued by the commission must contain
99 adequate support and rationale for the commission’s conclusions,
100 including the specific facts and factors on which the
101 conclusions are based. While the commission may make conclusions
102 based upon the public interest, it shall specify in its orders a
103 rationale for such conclusions.
104 (2) For commission orders that affect substantial interests
105 pursuant to s. 120.569, when issuing an order accepting or
106 denying a settlement agreement reached by any of the parties to
107 a proceeding, all of the following requirements apply:
108 (a) The commission shall provide a reasoned explanation,
109 citing the specific facts and factors on which it relied. The
110 commission shall provide in its order a discussion of the major
111 elements of the settlement and a rationale for its conclusions.
112 (b) The Public Counsel is not a required party to such a
113 settlement. However, the commission may not approve a settlement
114 presented by parties that have not negotiated the terms of such
115 settlement in good faith with the Public Counsel.
116 Section 4. Section 350.130, Florida Statutes, is created to
117 read:
118 350.130 Intervention into commission proceedings.—Persons
119 other than the original parties to a pending commission
120 proceeding, whose substantial interest will be affected by the
121 commission proceeding and who desire to become parties to the
122 proceeding, may make a motion to the commission for leave to
123 intervene in the proceeding pursuant to chapter 120.
124 (1) Any trade, professional, or similar association seeking
125 to intervene in a commission proceeding on the basis of the
126 impact of such proceeding on the association’s membership must
127 include in such motion the nature of the association’s
128 membership, the manner in which such membership will be
129 substantially impacted by the proceeding, and the number and
130 percentage of total members who will be substantially impacted
131 by the proceeding.
132 (2) In order to avoid any unnecessary rate case expense
133 resulting from a party participating in a proceeding in which it
134 does not have standing, the commission shall rule on any
135 challenge to a party’s intervention in a proceeding on the basis
136 of standing on a timely basis and, at a minimum, within 30 days
137 after receiving such challenge.
138 Section 5. Section 350.131, Florida Statutes, is created to
139 read:
140 350.131 Affordability.—The commission must consider and
141 address affordability in any proceeding before it that has the
142 potential to impact utility rates.
143 Section 6. Present subsection (4) of section 366.06,
144 Florida Statutes, is redesignated as subsection (5), a new
145 subsection (4) is added to that section, and subsections (1) and
146 (2) of that section are amended, to read:
147 366.06 Rates; procedure for fixing and changing.—
148 (1) A public utility shall not, directly or indirectly,
149 charge or receive any rate not on file with the commission for
150 the particular class of service involved, and no change shall be
151 made in any schedule. All applications for changes in rates
152 shall be made to the commission in writing under rules and
153 regulations prescribed, and the commission shall have the
154 authority to determine and fix affordable, fair, just, and
155 reasonable rates that may be requested, demanded, charged, or
156 collected by any public utility for its service. Any application
157 for a change in rates which also includes a request for a change
158 in return on equity must be made according to the schedule and
159 procedure established by the commission pursuant to s. 366.07.
160 The commission shall investigate and determine the actual
161 legitimate costs of the property of each utility company,
162 actually used and useful in the public service, and shall keep a
163 current record of the net investment of each public utility
164 company in such property which value, as determined by the
165 commission, shall be used for ratemaking purposes and shall be
166 the money honestly and prudently invested by the public utility
167 company in such property used and useful in serving the public,
168 less accrued depreciation, and shall not include any goodwill or
169 going-concern value or franchise value in excess of payment made
170 therefor. In fixing affordable, fair, just, and reasonable rates
171 for each customer class, the commission shall, to the extent
172 practicable, consider the cost of providing service to the
173 class, as well as the rate history, value of service, and
174 experience of the public utility; the consumption and load
175 characteristics of the various classes of customers; and public
176 acceptance of rate structures.
177 (2) Whenever the commission finds, upon request made or
178 upon its own motion, that the rates demanded, charged, or
179 collected by any public utility for public utility service, or
180 that the rules, regulations, or practices of any public utility
181 affecting such rates, are unaffordable, unjust, unreasonable,
182 unjustly discriminatory, or in violation of law; that such rates
183 are insufficient to yield reasonable compensation for the
184 services rendered; that such rates yield excessive compensation
185 for services rendered; or that such service is inadequate or
186 cannot be obtained, the commission shall order and hold a public
187 hearing, giving notice to the public and to the public utility,
188 and shall thereafter determine affordable, just, and reasonable
189 rates to be thereafter charged for such service and promulgate
190 rules and regulations affecting equipment, facilities, and
191 service to be thereafter installed, furnished, and used. Any
192 request made by a public utility pursuant to this section which
193 involves a request for a change in return on equity must be made
194 according to the schedule and procedure established by the
195 commission pursuant to s. 366.07.
196 (4) In setting and evaluating the return on equity for a
197 public utility as part of a rate proceeding:
198 (a) Any financial model used by the commission must be:
199 1. Financially logical; and
200 2. Generally used and accepted by finance practitioners
201 both within and outside of the regulated utility industry; and
202 (b) The commission shall specifically consider and address
203 the financial benefits and the reduction in regulatory, weather,
204 disaster, and general financial risk to the public utility
205 provided by all of the following which are relevant to the
206 public utility:
207 1. Environmental cost recovery under s. 366.8255.
208 2. Storm-recovery financing under s. 366.8260.
209 3. Interim storm-recovery cost recovery under s. 366.8261.
210 4. Cost recovery for the siting, design, licensing, and
211 construction of nuclear and integrated gasification combined
212 cycle power plants under s. 366.93.
213 5. Financing for certain nuclear generating asset
214 retirement or abandonment costs under s. 366.95.
215 6. Storm protection plan cost recovery under s. 366.96.
216 7. Public utility liability arising out of emergencies and
217 disasters under s. 366.98.
218 8. Natural gas facilities relocation costs under s. 366.99.
219 Section 7. Section 366.07, Florida Statutes, is amended to
220 read:
221 366.07 Rates; adjustment.—
222 (1) Whenever the commission, after public hearing either
223 upon its own motion or upon complaint, shall find the rates,
224 rentals, charges or classifications, or any of them, proposed,
225 demanded, observed, charged or collected by any public utility
226 for any service, or in connection therewith, or the rules,
227 regulations, measurements, practices or contracts, or any of
228 them, relating thereto, are unaffordable, unjust, unreasonable,
229 insufficient, excessive, or unjustly discriminatory or
230 preferential, or in anywise in violation of law, or any service
231 is inadequate or cannot be obtained, the commission shall
232 determine and by order fix the affordable, fair, and reasonable
233 rates, rentals, charges or classifications, and reasonable
234 rules, regulations, measurements, practices, contracts or
235 service, to be imposed, observed, furnished or followed in the
236 future.
237 (2) The commission shall establish a schedule by which
238 requests for changes to a public utility’s return on equity may
239 be submitted to the commission by each public utility. The
240 commission may not accept a request from a public utility to
241 modify its return on equity outside of this established
242 schedule, except as provided in subsection (3).
243 (3) A public utility may petition the commission to deviate
244 from the return on equity revision schedule established by the
245 commission under subsection (2). The commission shall grant such
246 petition if:
247 (a) The public utility’s rates are insufficient to yield
248 reasonable compensation for the services it is rendering;
249 (b) This insufficiency is due to circumstances that are
250 outside of the control of the public utility; and
251 (c) Such circumstances were not reasonably foreseeable by
252 the public utility during the last proceeding in which its
253 return on equity was approved by the commission.
254 (4) The commission shall adopt rules to implement this
255 section.
256 Section 8. Section 366.077, Florida Statutes, is created to
257 read:
258 366.077 Report on rates.—The commission shall submit an
259 annual report to the Governor and the Legislature by March 1.
260 (1) The report must include all of the following:
261 (a) An investigation of contemporary economic analyses
262 related to rate changes in this state.
263 (b) An analysis of potential cost impacts to utility
264 customers in this state if excess returns on equity have
265 occurred and, if such excess returns have not occurred at a
266 significant rate, any resulting cost savings to such customers.
267 (c) An analysis of returns on equity models presented by
268 public utilities and used by the commission to determine
269 approved returns on equity for public utilities in this state.
270 Such analysis must:
271 1. Compare models used by federal agencies and other state
272 utility regulatory bodies with those used by the commission;
273 2. Determine whether the models used are generally
274 financially logical; and
275 3. Determine whether the models used comport with generally
276 accepted economic theory both inside and outside of the utility
277 industry.
278 (d) An assessment of long-term impacts, including the
279 economic repercussions of rising rates of returns on equity, to
280 utilities and their future customers.
281 (e) A summary providing detailed information regarding the
282 compensation of the executive officers of each public utility
283 providing service to the residents of this state, or the
284 executive officers of a public utility’s affiliated companies or
285 parent company. Such information must include, but need not be
286 limited to, salaries, benefits, stock options, bonuses, stock
287 buybacks, and other taxable payments, expressed both as dollar
288 amounts and as a percentage of the entity’s total revenue. The
289 summary must include the profits and losses of each entity as
290 reported in its financial statements and highlight any
291 compensation that exceeds the industry average. The commission
292 shall also include any rationale provided by a public utility
293 justifying compensation exceeding the industry average and, for
294 each public utility, an explanation as to the manner in which
295 specific data gathered during the compiling of information
296 informed the commission’s decisions on the public utility’s rate
297 change requests.
298 (2) The report must provide benchmarking, comparing public
299 utilities providing service to the residents of this state with
300 public utilities providing service to the residents of other
301 states, and include commentary on all findings.
302 Section 9. Section 366.8261, Florida Statutes, is created
303 to read:
304 366.8261 Interim storm-recovery cost.—
305 (1) As used in this section, the term:
306 (a) “Electric utility” has the same meaning as in s.
307 366.8255.
308 (b) “Storm” has the same meaning as in s. 366.8260.
309 (c) “Storm-recovery charge” has the same meaning as in s.
310 366.8260.
311 (d) “Storm-recovery costs” has the same meaning as in s.
312 366.8260.
313 (2) The commission shall permit an electric utility to
314 implement a storm-recovery charge to recover reasonably
315 estimated storm-recovery costs within 60 days after filing a
316 petition with the commission for the recovery from one or more
317 storms, subject to all of the following conditions:
318 (a) Such charge must be on an interim basis. The
319 commission’s approval of interim storm-recovery costs and a
320 related storm-recovery charge must be on a preliminary basis and
321 is subject to refund pending further review once the total
322 actual storm-recovery costs are known. After the actual costs
323 are reviewed for prudence and reasonableness and are compared to
324 the actual amount recovered through the interim storm-recovery
325 charge, the commission shall determine whether any over or under
326 recovery has occurred. The disposition of any over or under
327 recovery, and associated interest, must be considered by the
328 commission at a separate true-up proceeding.
329 (b) Storm-recovery costs may not include any expenses
330 already being recovered by the utility in its base rates.
331 (c) The commission may require a utility to secure funds
332 collected pursuant to this section to ensure timely refund to
333 customers in the event of over recovery.
334 (3) In approving an application for interim storm-recovery
335 costs pursuant to subsection (2), the commission shall also
336 establish a recovery period for such interim costs. This
337 recovery period shall be based upon a reasonable balancing of
338 all of the following factors:
339 (a) The financial impact of the length of the recovery
340 period on the utility.
341 (b) Timeliness of recovery.
342 (c) Affordability to ratepayers.
343 (d) Avoiding sudden substantial bill increases to
344 ratepayers.
345 (4) Funds collected pursuant to this section are subject to
346 true-up. The commission shall require that any refund to or
347 additional collection from ratepayers made as a part of the
348 true-up include interest.
349 (5) Nothing in this section shall be construed to prevent a
350 public utility from applying for, or the commission approving,
351 storm-recovery financing pursuant to s. 366.8260.
352 (6) The commission shall adopt rules to implement this
353 section as soon as practicable, but no later than January 1,
354 2027.
355 Section 10. Paragraph (a) of subsection (2) and subsection
356 (3) of section 367.081, Florida Statutes, are amended to read:
357 367.081 Rates; procedure for fixing and changing.—
358 (2)(a)1. The commission shall, either upon request or upon
359 its own motion, fix rates which are affordable, just,
360 reasonable, compensatory, and not unfairly discriminatory. In
361 every such proceeding, the commission shall consider the value
362 and quality of the service and the cost of providing the
363 service, which shall include, but not be limited to, debt
364 interest; the requirements of the utility for working capital;
365 maintenance, depreciation, tax, and operating expenses incurred
366 in the operation of all property used and useful in the public
367 service; and a fair return on the investment of the utility in
368 property used and useful in the public service. However, the
369 commission shall not allow the inclusion of contributions-in
370 aid-of-construction in the rate base of any utility during a
371 rate proceeding, nor shall the commission impute prospective
372 future contributions-in-aid-of-construction against the
373 utility’s investment in property used and useful in the public
374 service; and accumulated depreciation on such contributions-in
375 aid-of-construction shall not be used to reduce the rate base,
376 nor shall depreciation on such contributed assets be considered
377 a cost of providing utility service.
378 2. For purposes of such proceedings, the commission shall
379 consider utility property, including land acquired or facilities
380 constructed or to be constructed within a reasonable time in the
381 future, not to exceed 24 months after the end of the historic
382 base year used to set final rates unless a longer period is
383 approved by the commission, to be used and useful in the public
384 service, if:
385 a. Such property is needed to serve current customers;
386 b. Such property is needed to serve customers 5 years after
387 the end of the test year used in the commission’s final order on
388 a rate request as provided in subsection (6) at a growth rate
389 for equivalent residential connections not to exceed 5 percent
390 per year; or
391 c. Such property is needed to serve customers more than 5
392 full years after the end of the test year used in the
393 commission’s final order on a rate request as provided in
394 subsection (6) only to the extent that the utility presents
395 clear and convincing evidence to justify such consideration.
396
397 Notwithstanding the provisions of this paragraph, the commission
398 shall approve rates for service which allow a utility to recover
399 from customers the full amount of environmental compliance
400 costs. Such rates may not include charges for allowances for
401 funds prudently invested or similar charges. For purposes of
402 this requirement, the term “environmental compliance costs”
403 includes all reasonable expenses and fair return on any prudent
404 investment incurred by a utility in complying with the
405 requirements or conditions contained in any permitting,
406 enforcement, or similar decisions of the United States
407 Environmental Protection Agency, the Department of Environmental
408 Protection, a water management district, or any other
409 governmental entity with similar regulatory jurisdiction.
410 (3) The commission, in fixing rates, may determine the
411 prudent cost of providing service during the period of time the
412 rates will be in effect following the entry of a final order
413 relating to the rate request of the utility and may use such
414 costs to determine the revenue requirements that will allow the
415 utility to earn a fair rate of return on its rate base. Any
416 financial model used by the commission in setting and evaluating
417 the return on equity for a utility as part of a proceeding
418 fixing rates must be:
419 (a) Financially logical; and
420 (b) Generally used and accepted by finance practitioners
421 both within and outside of the regulated utility industry.
422 Section 11. Paragraph (b) of subsection (5) of section
423 377.814, Florida Statutes, is amended to read:
424 377.814 Municipal Solid Waste-to-Energy Program.—
425 (5) FUNDING.—
426 (b) Funds awarded under the grant programs set forth in
427 this section may not be used to support, subsidize, or enable
428 the sale of electric power generated by a municipal solid waste
429 to-energy facility to any small electric utility eligible to
430 petition the commission under s. 366.06(5) s. 366.06(4).
431 Section 12. This act shall take effect July 1, 2026.