Florida Senate - 2016 COMMITTEE AMENDMENT
Bill No. SB 840
Ì325140jÎ325140
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
02/23/2016 .
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The Committee on Communications, Energy, and Public Utilities
(Garcia) recommended the following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Subsection (19) is added to section 163.01,
6 Florida Statutes, to read:
7 163.01 Florida Interlocal Cooperation Act of 1969.—
8 (19)(a) Any entity created pursuant to this section that
9 supplies electricity through an interlocal agreement to its
10 member municipalities shall annually submit to the Public
11 Service Commission and each member municipality that
12 participates in the electric power project an independently
13 prepared financial statement for each individual generation
14 asset. The financial statement must include:
15 1. A balance sheet that reflects assets and liabilities
16 associated with each generation asset, including the plant in
17 service, accumulated additions and removals, net plant,
18 depreciation, operations and maintenance expenses, allocations,
19 and any other material asset and liability categories.
20 2. An income statement that reflects each generation
21 asset’s operational and financial activities for the reporting
22 period, including revenues, expenses, gains, and losses. Any
23 gains or losses from hedging activities associated with the
24 generation asset shall be separately itemized.
25 3. A statement of cash flows that identifies changes in the
26 generation asset’s cash flows during the reporting period.
27 4. The current fair market value for each generation asset.
28 The current fair market value shall be determined assuming the
29 price that a willing buyer would pay a willing seller for the
30 generation asset, with neither party being under any compulsion
31 to buy or sell and both having reasonable knowledge of relevant
32 facts, and assuming all risk of ownership, loss, and
33 decommissioning, as applicable. The current fair market value
34 statement shall include the overall fair market value of the
35 generation asset as a whole and each member municipality’s
36 equity position net of the entity’s debt, based on the current
37 fair market generation asset value. The current fair market
38 value statement shall include, after considering the market
39 value of the generation assets, the net return of equity or the
40 cost to exit the entity for each member municipality.
41 (b) To serve as a member of the governing body of an entity
42 created pursuant to this section for the purpose of supplying
43 electricity to its member municipalities, each member of the
44 governing body must be an elected official from one of the
45 entity’s member municipalities. Current members of a governing
46 body of such an entity who are not elected officials may
47 continue to serve until expiration of their terms but no later
48 than July 1, 2018.
49 Section 2. This act shall take effect July 1, 2016.
50
51 ================= T I T L E A M E N D M E N T ================
52 And the title is amended as follows:
53 Delete everything before the enacting clause
54 and insert:
55 A bill to be entitled
56 An act relating to municipal power regulation;
57 amending s. 163.01, F.S.; requiring certain entities
58 created under the Interlocal Cooperation Act of 1969
59 to submit independently prepared financial statements
60 for certain electric power projects to specified
61 public entities; providing statement requirements;
62 providing eligibility requirements for membership on
63 the governing body of certain entities created under
64 the Interlocal Cooperation Act of 1969; providing an
65 effective date.
66
67 WHEREAS, The Florida Municipal Power Agency is a joint-use
68 action agency created pursuant to a series of interlocal
69 agreements with the state’s municipalities to finance, acquire,
70 contract, manage, and operate its own electric power projects or
71 jointly accomplish the same purposes with other public or
72 private utilities, and
73 WHEREAS, the Florida Municipal Power Agency is governed by
74 a board of directors, consisting of one board member from each
75 member municipality, which decides all issues concerning each
76 project except for the “All-Requirements” power supply project,
77 and
78 WHEREAS, the All-Requirements power supply project is
79 governed by an executive committee, with each All-Requirements
80 project member municipality that purchases power from the
81 project appointing one executive committee member, and
82 WHEREAS, the Auditor General conducted an operational audit
83 of the Florida Municipal Power Agency and released Report No.
84 2015-165 to the Joint Legislative Auditing Committee on March
85 30, 2015, which included findings and recommendations, and
86 WHEREAS, the Auditor General found many of the Florida
87 Municipal Power Agency’s hedging activities to be inconsistent
88 with other joint-use action agencies, leading to net losses of
89 $247.6 million over the past 12 fiscal years, and
90 WHEREAS, the Auditor General concluded that several of the
91 Florida Municipal Power Agency’s personnel and payroll
92 administration activities may negatively affect future rates,
93 including the Chief Executive Officer’s employment contract that
94 provides severance pay and lifetime benefits even if employment
95 is terminated for cause, and
96 WHEREAS, the Florida Municipal Power Agency did not
97 consistently follow its own procurement and competitive
98 selection policies, one of which may increase the cost of future
99 bond issues, and
100 WHEREAS, the Florida Municipal Power Agency’s All
101 Requirements project agreement to curtail peak-shaving
102 activities is primarily voluntary, relies on self-reporting, and
103 contains no penalties for noncompliance, and
104 WHEREAS, certain All-Requirements project contract
105 provisions relating to the withdrawal of members are ambiguous,
106 use a fixed discount rate rather than one based on current
107 capital costs, and do not provide for independent verification
108 by a withdrawing member, and
109 WHEREAS, even though the Florida Municipal Power Agency is
110 a governmental entity, many of the laws that apply to local
111 governments do not apply to the agency, and
112 WHEREAS, the Florida Municipal Power Agency is not subject
113 to any rate-setting authority, including by the Public Service
114 Commission, and
115 WHEREAS, there exists a need to promote transparency and
116 consistency and to increase public understanding and confidence
117 in the operation of the Florida Municipal Power Agency by the
118 member municipalities and the public, including those electric
119 ratepayers who are not residents of the municipality supplying
120 electric power but who are subject to a municipality that is
121 receiving power from the agency, NOW, THEREFORE,