Florida Senate - 2013                                    SB 1472
       
       
       
       By Senator Legg
       
       
       
       
       17-00675C-13                                          20131472__
    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; providing
    8         that a utility that elects not to complete
    9         construction of a nuclear power plant may not recover
   10         or retain any rate of return for such costs; making
   11         technical changes; providing for future review and
   12         repeal; requiring that the Florida Public Service
   13         Commission submit a report to the Legislature to be
   14         considered in the future review of s. 366.93, F.S.;
   15         specifying criteria for such report; providing an
   16         effective date.
   17  
   18  Be It Enacted by the Legislature of the State of Florida:
   19  
   20         Section 1. Section 366.93, Florida Statutes, is amended to
   21  read:
   22         366.93 Cost recovery for the siting, design, licensing, and
   23  construction of nuclear and integrated gasification combined
   24  cycle power plants.—
   25         (1) As used in this section, the term:
   26         (a) “Cost” includes, but is not limited to, all capital
   27  investments, including rate of return, any applicable taxes, and
   28  all expenses, including operation and maintenance expenses,
   29  related to or resulting from the siting, licensing, design,
   30  construction, or operation of the nuclear power plant, including
   31  new, expanded, or relocated electrical transmission lines or
   32  facilities of any size which that are necessary thereto, or of
   33  the integrated gasification combined cycle power plant.
   34         (b) “Electric utility” or “utility” has the same meaning as
   35  that provided in s. 366.8255(1)(a).
   36         (c) “Integrated gasification combined cycle power plant” or
   37  “plant” means an electrical power plant as defined in s.
   38  403.503(14) which that uses synthesis gas produced by integrated
   39  gasification technology.
   40         (d) “Nuclear power plant” or “plant” means an electrical
   41  power plant as defined in s. 403.503(14) which that uses nuclear
   42  materials for fuel.
   43         (e) “Power plant” or “plant” means a nuclear power plant or
   44  an integrated gasification combined cycle power plant.
   45         (f) “Preconstruction” is that period of time after a site,
   46  including any related electrical transmission lines or
   47  facilities, has been selected through and including the date the
   48  utility completes site clearing work. Preconstruction costs must
   49  shall be afforded deferred accounting treatment and shall accrue
   50  a carrying charge equal to the utility’s allowance for funds
   51  during construction (AFUDC) rate until recovered in rates.
   52         (2) Within 6 months after the enactment of this act, the
   53  commission shall establish, by rule, alternative cost recovery
   54  mechanisms for the recovery of costs incurred in the siting,
   55  design, licensing, and construction of a nuclear power plant,
   56  including new, expanded, or relocated electrical transmission
   57  lines and facilities that are necessary thereto, or of an
   58  integrated gasification combined cycle power plant. Such
   59  mechanisms must shall be designed to promote utility investment
   60  in nuclear or integrated gasification combined cycle power
   61  plants and allow for the recovery in rates of all prudently
   62  incurred costs, including and shall include, but not be limited
   63  to:
   64         (a) Recovery through the capacity cost recovery clause of
   65  any preconstruction costs.
   66         (b) Recovery through an incremental increase in the
   67  utility’s capacity cost recovery clause rates of the carrying
   68  costs on the utility’s projected construction cost balance
   69  associated with the nuclear or integrated gasification combined
   70  cycle power plant. To encourage investment and provide
   71  certainty, for nuclear or integrated gasification combined cycle
   72  power plant need petitions submitted on or before December 31,
   73  2010, associated carrying costs must shall be equal to the most
   74  recently approved pretax AFUDC at the time an increment of cost
   75  recovery is sought in effect upon this act becoming law. For
   76  nuclear or integrated gasification combined cycle power plants
   77  for which need petitions are submitted after December 31, 2010,
   78  the utility’s existing pretax AFUDC rate is presumed to be
   79  appropriate unless determined otherwise by the commission in the
   80  determination of need for the nuclear or integrated gasification
   81  combined cycle power plant.
   82         (3) After a petition for determination of need is granted,
   83  a utility may petition the commission for cost recovery as
   84  permitted by this section and commission rules.
   85         (4) When the nuclear or integrated gasification combined
   86  cycle power plant is placed in commercial service, the utility
   87  may shall be allowed to increase its base rate charges by the
   88  projected annual revenue requirements of the nuclear or
   89  integrated gasification combined cycle power plant based on the
   90  jurisdictional annual revenue requirements of the plant for the
   91  first 12 months of operation. The rate of return on capital
   92  investments is shall be calculated using the utility’s rate of
   93  return last approved by the commission before prior to the
   94  commercial inservice date of the nuclear or integrated
   95  gasification combined cycle power plant. If an any existing
   96  generating plant is retired as a result of operation of the
   97  nuclear or integrated gasification combined cycle power plant,
   98  the commission shall allow for the recovery, through an increase
   99  in base rate charges, of the net book value of the retired plant
  100  over a period not to exceed 5 years.
  101         (5) The utility shall report to the commission annually the
  102  budgeted and actual costs as compared to the estimated inservice
  103  cost of the nuclear or integrated gasification combined cycle
  104  power plant provided by the utility pursuant to s. 403.519(4),
  105  until the commercial operation of the nuclear or integrated
  106  gasification combined cycle power plant. The utility shall
  107  provide such information on an annual basis following the final
  108  order by the commission approving the determination of need for
  109  the nuclear or integrated gasification combined cycle power
  110  plant, with the understanding that some costs may be higher than
  111  estimated and other costs may be lower.
  112         (6) If the utility does elects not to complete or is
  113  precluded from completing construction of the nuclear power
  114  plant, including new, expanded, or relocated electrical
  115  transmission lines or facilities necessary thereto, or of the
  116  integrated gasification combined cycle power plant, the utility
  117  may shall be allowed to recover all prudent preconstruction and
  118  construction costs incurred following the commission’s issuance
  119  of a final order granting a determination of need for the
  120  nuclear power plant and electrical transmission lines and
  121  facilities necessary thereto or for the integrated gasification
  122  combined cycle power plant. The utility shall recover such costs
  123  through the capacity cost recovery clause over a period equal to
  124  the period during which the costs were incurred or 5 years,
  125  whichever is greater. The unrecovered balance during the
  126  recovery period will accrue interest at the utility’s weighted
  127  average cost of capital as reported in the commission’s earnings
  128  surveillance reporting requirement for the prior year. However,
  129  if the utility elects not to complete construction of the
  130  nuclear power plant, rather than being precluded from completing
  131  such construction, the utility may not recover or retain any
  132  rate of return. Any cost recovery after the date of the decision
  133  not to complete construction of the plant may not include a rate
  134  of return. A utility that elects not to complete construction
  135  shall refund to its customers the costs recovered before the
  136  date of the decision which are attributable to a recovery of a
  137  rate of return.
  138         (7) This section shall stand repealed on October 2, 2016,
  139  unless reviewed and saved from repeal through reenactment by the
  140  Legislature.
  141         Section 2. The Florida Public Service Commission shall
  142  submit a report by January 1, 2016, to the President of the
  143  Senate and the Speaker of the House of Representatives
  144  specifically describing any action taken by each public utility,
  145  as defined in s. 366.02, Florida Statutes, to develop a nuclear
  146  power plant and obtain cost recovery under s. 366.93, Florida
  147  Statutes. The report must include whether the public utility is
  148  making continuous, good faith efforts to construct a nuclear
  149  power plant and whether actual construction has begun. It is the
  150  intent of the Legislature that this report be used in
  151  determining whether to reenact s. 366.93, Florida Statutes, and
  152  that the statute be reenacted only if the utility’s progress
  153  indicates that construction will be completed.
  154         Section 3. This act shall take effect July 1, 2013.