CS for CS for SB 1472                           Second Engrossed
       
       
       
       
       
       
       
       
       20131472e2
       
    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 the commission may not determine that a utility
   11         intends to complete construction of a power plant
   12         unless the utility proves its efforts by a
   13         preponderance of the evidence; providing that a
   14         utility that elects not to complete construction of a
   15         nuclear power plant may not recover any future rate of
   16         return for related costs; requiring a utility to
   17         provide notice of its election to the commission;
   18         providing for a penalty; exempting certain actions
   19         taken before this act takes effect; providing an
   20         effective date.
   21  
   22  Be It Enacted by the Legislature of the State of Florida:
   23  
   24         Section 1. Subsections (1), (2), (3), and (6) of section
   25  366.93, Florida Statutes, are amended to read:
   26         366.93 Cost recovery for the siting, design, licensing, and
   27  construction of nuclear and integrated gasification combined
   28  cycle power plants.—
   29         (1) As used in this section, the term:
   30         (a) “Cost” includes, but is not limited to, all capital
   31  investments, including rate of return, any applicable taxes, and
   32  all expenses, including operation and maintenance expenses,
   33  related to or resulting from the siting, licensing, design,
   34  construction, or operation of the nuclear power plant, including
   35  new, expanded, or relocated electrical transmission lines or
   36  facilities of any size which that are necessary thereto, or of
   37  the integrated gasification combined cycle power plant.
   38         (b) “Electric utility” or “utility” has the same meaning as
   39  that provided in s. 366.8255(1)(a).
   40         (c) “Integrated gasification combined cycle power plant” or
   41  “plant” means an electrical power plant as defined in s.
   42  403.503(14) which that uses synthesis gas produced by integrated
   43  gasification technology.
   44         (d) “Nuclear power plant” or “plant” means an electrical
   45  power plant as defined in s. 403.503(14) which that uses nuclear
   46  materials for fuel.
   47         (e) “Power plant” or “plant” means a nuclear power plant or
   48  an integrated gasification combined cycle power plant.
   49         (f) “Preconstruction” is that period of time after a site,
   50  including any related electrical transmission lines or
   51  facilities, has been selected through and including the date the
   52  utility completes site clearing work. Preconstruction costs must
   53  shall be afforded deferred accounting treatment and shall accrue
   54  a carrying charge equal to the utility’s allowance for funds
   55  during construction (AFUDC) rate until recovered in rates.
   56         (2) Within 6 months after the enactment of this act, the
   57  commission shall establish, by rule, alternative cost recovery
   58  mechanisms for the recovery of costs incurred in the siting,
   59  design, licensing, and construction of a nuclear power plant,
   60  including new, expanded, or relocated electrical transmission
   61  lines and facilities that are necessary thereto, or of an
   62  integrated gasification combined cycle power plant. Such
   63  mechanisms must shall be designed to promote utility investment
   64  in nuclear or integrated gasification combined cycle power
   65  plants and allow for the recovery in rates of all prudently
   66  incurred costs, including and shall include, but not be limited
   67  to:
   68         (a) Recovery through the capacity cost recovery clause of
   69  any preconstruction costs.
   70         (b) Recovery through an incremental increase in the
   71  utility’s capacity cost recovery clause rates of the carrying
   72  costs on the utility’s projected construction cost balance
   73  associated with the nuclear or integrated gasification combined
   74  cycle power plant. To encourage investment and provide
   75  certainty, for nuclear or integrated gasification combined cycle
   76  power plant need petitions submitted on or before December 31,
   77  2010, associated carrying costs must shall be equal to the most
   78  recently approved pretax AFUDC at the time an increment of cost
   79  recovery is sought in effect upon this act becoming law. For
   80  nuclear or integrated gasification combined cycle power plants
   81  for which need petitions are submitted after December 31, 2010,
   82  the utility’s existing pretax AFUDC rate is presumed to be
   83  appropriate unless determined otherwise by the commission in the
   84  determination of need for the nuclear or integrated gasification
   85  combined cycle power plant.
   86         (3)(a) After a petition for determination of need is
   87  granted, a utility may petition the commission for cost recovery
   88  as permitted by this section and commission rules.
   89         (b)During the time that a utility seeks to obtain a
   90  combined license from the Nuclear Regulatory Commission for a
   91  nuclear power plant or a certification for an integrated
   92  gasification combined cycle power plant, the utility may recover
   93  only costs related to, or necessary for, obtaining such
   94  licensing or certification.
   95         (c) After a utility obtains a license or certification, it
   96  must petition the commission for approval before proceeding with
   97  preconstruction work beyond those activities necessary to obtain
   98  or maintain a license or certificate.
   99         1. The only costs that a utility that has obtained a
  100  license or certification may recover before obtaining commission
  101  approval are those that are previously approved or necessary to
  102  maintain the license or certification.
  103         2. In order for the commission to approve preconstruction
  104  work on a plant, it must determine that:
  105         a. The plant remains feasible; and
  106         b. The projected costs for the plant are reasonable.
  107         (d) After a utility obtains approval to proceed with
  108  postlicensure or postcertification 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. Such petition shall be
  112  reviewed and completed in the annual Nuclear Cost Recovery
  113  Clause proceeding in which it is filed or in a separate
  114  proceeding by the utility.
  115         (e) A utility must petition the commission for approval
  116  before beginning the construction phase.
  117         1. The only costs that a utility that has obtained
  118  commission approval may recover before beginning construction
  119  work are those that are previously approved or necessary to
  120  maintain the license or certification.
  121         2. In order for the commission to approve proceeding with
  122  construction on a plant, it must determine that:
  123         a. The plant remains feasible; and
  124         b. The projected costs for the plant are reasonable.
  125         (f)1. If a utility has not begun construction of a plant
  126  within:
  127         a. Ten years after the date on which the utility obtains a
  128  combined license from the Nuclear Regulatory Commission for a
  129  nuclear power plant or a certification for an integrated
  130  gasification combined cycle power plant, the utility must
  131  petition the commission to preserve the opportunity for future
  132  recovery under this section for costs relating to that plant.
  133  The commission must determine whether the utility remains intent
  134  on building the plant.
  135         (I) If the commission finds that the utility remains intent
  136  on building the plant, the utility may continue to recover costs
  137  under this section.
  138         (II) If the commission finds a lack of such intent, it may
  139  enter an order prohibiting recovery of any future costs relating
  140  to the plant under this section.
  141         b. Twenty years after the date on which the utility obtains
  142  a combined license from the Nuclear Regulatory Commission for a
  143  nuclear power plant or a certification for an integrated
  144  gasification combined cycle power plant, the utility may not,
  145  under this section, recover future costs relating to that plant.
  146         2. Consistent with subsection (4), nothing in this section
  147  shall preclude a utility from recovering the full revenue
  148  requirements of the nuclear power plant or integrated
  149  gasification combined cycle power plant in base rates upon the
  150  commercial in-service date.
  151         3. Beginning January 1, 2014, in making its determination
  152  for any cost recovery under this paragraph, the commission may
  153  find that a utility intends to construct a nuclear or integrated
  154  gasification combined cycle power plant only if the utility
  155  proves by a preponderance of the evidence that it has committed
  156  sufficient, meaningful, and available resources to enable the
  157  project to be completed and that its intent is realistic and
  158  practical.
  159         (6) If the utility does elects not to complete or is
  160  precluded from completing construction of the nuclear power
  161  plant, including new, expanded, or relocated electrical
  162  transmission lines or facilities necessary thereto, or of the
  163  integrated gasification combined cycle power plant, the utility
  164  shall be allowed to recover all prudent preconstruction and
  165  construction costs incurred following the commission’s issuance
  166  of a final order granting a determination of need for the
  167  nuclear power plant and electrical transmission lines and
  168  facilities necessary thereto or for the integrated gasification
  169  combined cycle power plant. The utility shall recover such costs
  170  through the capacity cost recovery clause over a period equal to
  171  the period during which the costs were incurred or 5 years,
  172  whichever is greater. The unrecovered balance during the
  173  recovery period will accrue interest at the utility’s weighted
  174  average cost of capital as reported in the commission’s earnings
  175  surveillance reporting requirement for the prior year. However,
  176  if the utility elects not to complete construction of the
  177  nuclear power plant, rather than being precluded from completing
  178  such construction, the utility may not recover any further rate
  179  of return under this section. The utility must provide written
  180  notice of this election to the commission within 14 days after
  181  making the election. Failure by the utility to timely notify the
  182  commission is a violation of this section and punishable under
  183  s. 350.127. Any cost recovery after the date of the election not
  184  to complete construction of the plant may not include a rate of
  185  return.
  186         Section 2. This act does not apply to costs incurred, or
  187  contracts or settlement agreements entered into, before July 1,
  188  2013. It also does not apply if, on or before that date, the
  189  Public Service Commission receives written notice that a utility
  190  has elected not to complete construction of a power plant.
  191         Section 3. This act shall take effect July 1, 2013.