Florida Senate - 2013                      CS for CS for SB 1472
       
       
       
       By the Committees on Community Affairs; and Communications,
       Energy, and Public Utilities; and Senators Legg, Latvala,
       Simpson, and Brandes
       
       
       578-04468-13                                          20131472c2
    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; establishing
    8         a procedure and requirements for cost recovery based
    9         on preconstruction and construction phases; providing
   10         that a utility that elects not to complete
   11         construction of a nuclear power plant may not recover
   12         or retain any rate of return for related costs;
   13         requiring the Public Service Commission to review the
   14         circumstances surrounding a proposed nuclear power
   15         plant if the anticipated cost and completion date
   16         exceed the original cost and completion date by a
   17         certain amount or period; specifying factors to be
   18         considered and dates by which the review must commence
   19         and be completed; providing an effective date.
   20  
   21  Be It Enacted by the Legislature of the State of Florida:
   22  
   23         Section 1. Subsections (1), (2), (3), and (6) of section
   24  366.93, Florida Statutes, are amended to read:
   25         366.93 Cost recovery for the siting, design, licensing, and
   26  construction of nuclear and integrated gasification combined
   27  cycle power plants.—
   28         (1) As used in this section, the term:
   29         (a) “Cost” includes, but is not limited to, all capital
   30  investments, including rate of return, any applicable taxes, and
   31  all expenses, including operation and maintenance expenses,
   32  related to or resulting from the siting, licensing, design,
   33  construction, or operation of the nuclear power plant, including
   34  new, expanded, or relocated electrical transmission lines or
   35  facilities of any size which that are necessary thereto, or of
   36  the integrated gasification combined cycle power plant.
   37         (b) “Electric utility” or “utility” has the same meaning as
   38  that provided in s. 366.8255(1)(a).
   39         (c) “Integrated gasification combined cycle power plant” or
   40  “plant” means an electrical power plant as defined in s.
   41  403.503(14) which that uses synthesis gas produced by integrated
   42  gasification technology.
   43         (d) “Nuclear power plant” or “plant” means an electrical
   44  power plant as defined in s. 403.503(14) which that uses nuclear
   45  materials for fuel.
   46         (e) “Power plant” or “plant” means a nuclear power plant or
   47  an integrated gasification combined cycle power plant.
   48         (f) “Preconstruction” is that period of time after a site,
   49  including any related electrical transmission lines or
   50  facilities, has been selected through and including the date the
   51  utility completes site clearing work. Preconstruction costs must
   52  shall be afforded deferred accounting treatment and shall accrue
   53  a carrying charge equal to the utility’s allowance for funds
   54  during construction (AFUDC) rate until recovered in rates.
   55         (2) Within 6 months after the enactment of this act, the
   56  commission shall establish, by rule, alternative cost recovery
   57  mechanisms for the recovery of costs incurred in the siting,
   58  design, licensing, and construction of a nuclear power plant,
   59  including new, expanded, or relocated electrical transmission
   60  lines and facilities that are necessary thereto, or of an
   61  integrated gasification combined cycle power plant. Such
   62  mechanisms must shall be designed to promote utility investment
   63  in nuclear or integrated gasification combined cycle power
   64  plants and allow for the recovery in rates of all prudently
   65  incurred costs, including and shall include, but not be limited
   66  to:
   67         (a) Recovery through the capacity cost recovery clause of
   68  any preconstruction costs.
   69         (b) Recovery through an incremental increase in the
   70  utility’s capacity cost recovery clause rates of the carrying
   71  costs on the utility’s projected construction cost balance
   72  associated with the nuclear or integrated gasification combined
   73  cycle power plant. To encourage investment and provide
   74  certainty, for nuclear or integrated gasification combined cycle
   75  power plant need petitions submitted on or before December 31,
   76  2010, associated carrying costs must shall be equal to the most
   77  recently approved pretax AFUDC at the time an increment of cost
   78  recovery is sought in effect upon this act becoming law. For
   79  nuclear or integrated gasification combined cycle power plants
   80  for which need petitions are submitted after December 31, 2010,
   81  the utility’s existing pretax AFUDC rate is presumed to be
   82  appropriate unless determined otherwise by the commission in the
   83  determination of need for the nuclear or integrated gasification
   84  combined cycle power plant.
   85         (3)(a) After a petition for determination of need is
   86  granted, a utility may petition the commission for cost recovery
   87  as permitted by this section and commission rules.
   88         (b) During the time that a utility seeks to obtain a
   89  combined license from the Nuclear Regulatory Commission for a
   90  nuclear power plant or a certification for an integrated
   91  gasification combined cycle power plant, the utility may recover
   92  only costs related to, or necessary for, obtaining such
   93  licensing or certification.
   94         (c) After a utility obtains a license or certification, it
   95  must petition the commission for approval before proceeding with
   96  preconstruction work beyond those activities necessary to obtain
   97  or maintain a license or certificate.
   98         1. The only costs that a utility that has obtained a
   99  license or certification may recover before obtaining commission
  100  approval are those that are previously approved or necessary to
  101  maintain the license or certification.
  102         2. In order for the commission to approve preconstruction
  103  work on a plant, it must determine that:
  104         a. There is still a need for the plant; and
  105         b. The projected costs for the plant are reasonable and
  106  prudent.
  107         (d) After a utility obtains approval to proceed with post
  108  licensing or post-certification preconstruction work, it must
  109  petition the commission for approval of any preconstruction
  110  materials or equipment purchases that exceed 1 percent of the
  111  total projected cost for the project.
  112         (e) A utility must petition the commission for approval
  113  before beginning the construction phase.
  114         1. The only costs that a utility that has obtained
  115  commission approval may recover before beginning construction
  116  work are those that are previously approved or necessary to
  117  maintain the license or certification.
  118         2. In order for the commission to approve proceeding with
  119  construction on a plant, it must determine that:
  120         a. There is still a need for the plant; and
  121         b. The projected costs for the plant are reasonable and
  122  prudent.
  123         (f) If a utility has not begun construction of a plant
  124  within:
  125         1. Ten years after the date on which it obtains a combined
  126  license from the Nuclear Regulatory Commission for a nuclear
  127  power plant or a certification for an integrated gasification
  128  combined cycle power plant, it must petition the commission to
  129  preserve the opportunity for future recovery under this section
  130  for costs relating to that plant. The commission must determine
  131  whether the utility remains intent on building the plant.
  132         a. If the commission finds that the utility remains intent
  133  on building the plant, the utility may continue to recover
  134  costs.
  135         b. If the commission finds a lack of such intent, it may
  136  enter an order prohibiting recovery of any future costs relating
  137  to the plant, notwithstanding any other provision of law.
  138         2. Twenty years after the date on which it obtains a
  139  combined license from the Nuclear Regulatory Commission for a
  140  nuclear power plant or a certification for an integrated
  141  gasification combined cycle power plant, the utility may not
  142  recover future costs relating to that plant under this or
  143  another section, notwithstanding any other provision of law.
  144         (6) If the utility does elects not to complete or is
  145  precluded from completing construction of the nuclear power
  146  plant, including new, expanded, or relocated electrical
  147  transmission lines or facilities necessary thereto, or of the
  148  integrated gasification combined cycle power plant, the utility
  149  may shall be allowed to recover all prudent preconstruction and
  150  construction costs incurred following the commission’s issuance
  151  of a final order granting a determination of need for the
  152  nuclear power plant and electrical transmission lines and
  153  facilities necessary thereto or for the integrated gasification
  154  combined cycle power plant. The utility shall recover such costs
  155  through the capacity cost recovery clause over a period equal to
  156  the period during which the costs were incurred or 5 years,
  157  whichever is greater. The unrecovered balance during the
  158  recovery period will accrue interest at the utility’s weighted
  159  average cost of capital as reported in the commission’s earnings
  160  surveillance reporting requirement for the prior year. However,
  161  if the utility elects not to complete construction of the
  162  nuclear power plant, rather than being precluded from completing
  163  such construction, the utility may not recover or retain any
  164  rate of return. Any cost recovery after the date of the decision
  165  not to complete construction of the plant may not include a rate
  166  of return. A utility that elects not to complete construction
  167  shall refund to its customers the costs recovered before the
  168  date of the decision which are attributable to a recovery of a
  169  rate of return.
  170         Section 2. The Public Service Commission shall perform a
  171  comprehensive review of the continuing prudency, cost
  172  effectiveness, and need for any proposed nuclear power plant for
  173  which cost recovery under section 366.93, Florida Statutes, has
  174  been authorized if the currently anticipated inservice date for
  175  the plant has been extended more than 6 years beyond the
  176  original proposed inservice date and if the most recent estimate
  177  of the plant’s total cost has increased by more than 50 percent
  178  of the original cost estimate for the plant. In making this
  179  determination, the commission must consider all relevant
  180  factors, including, but not limited to, the utility’s need for
  181  the plant, technology and fuel choices, applicable federal and
  182  state licensing and permitting factors, and short- and long-term
  183  costs to ratepayers. Based on its review, the commission shall
  184  determine whether to authorize for cost recovery under section
  185  366.93, Florida Statutes, any new or future costs for which cost
  186  recovery has not already been authorized. Such review shall
  187  commence on or before June 1, 2013, and shall be completed by
  188  February 1, 2014.
  189         Section 3. This act shall take effect July 1, 2013.