Florida Senate - 2019 CS for SB 796 By the Committee on Innovation, Industry, and Technology; and Senators Gruters and Bracy 580-02754-19 2019796c1 1 A bill to be entitled 2 An act relating to public utility storm protection 3 plans; creating s. 366.96, F.S.; providing legislative 4 findings; defining terms; requiring public utilities 5 to individually submit to the Public Service 6 Commission, for review and approval, a transmission 7 and distribution storm protection plan as part of the 8 storm hardening plan required by the commission; 9 requiring utilities to update their respective plans 10 on a specified basis; requiring the commission to 11 approve or modify submitted plans within a specified 12 timeframe, taking into consideration specified 13 factors; requiring the commission to conduct an annual 14 proceeding to allow utilities to justify and recover 15 certain costs through a storm protection cost recovery 16 clause; providing that a party may challenge the 17 prudence of certain costs; providing that utilities 18 may not include certain costs in their base rates; 19 providing for the allocation of such costs; 20 authorizing utilities to recover depreciation on 21 certain capital costs through the recovery clause; 22 requiring the commission to adopt rules; providing an 23 effective date. 24 25 Be It Enacted by the Legislature of the State of Florida: 26 27 Section 1. Section 366.96, Florida Statutes, is created to 28 read: 29 366.96 Storm protection plan cost recovery.— 30 (1) The Legislature finds that: 31 (a) During extreme weather conditions, high winds can cause 32 vegetation and debris to blow into and damage electrical 33 transmission and distribution facilities, resulting in power 34 outages. 35 (b) A majority of the power outages that occurred during 36 the recent extreme weather conditions in the state were caused 37 by vegetation blown by the wind. 38 (c) It is in the public interest to promote overhead 39 hardening of electrical transmission and distribution 40 facilities, the undergrounding of certain electrical 41 distribution lines, and vegetation management in this state. 42 (d) Protecting and strengthening transmission and 43 distribution electric utility infrastructure from extreme 44 weather conditions will reduce restoration costs and outage 45 times to customers and improve overall service reliability for 46 customers. 47 (e) When considering costs, reliability, storm protection 48 and restoration, and the public convenience, it is in the 49 state’s best interest that utilities focus primarily on 50 distribution laterals when undergrounding electric distribution 51 lines. 52 (f) It is in the public interest for each utility to 53 mitigate additional costs to utility customers when developing 54 transmission and distribution storm hardening plans. 55 (g) All customers benefit the reduced costs of storm 56 restoration. 57 (2) As used in this section, the term: 58 (a) “Transmission and distribution storm protection plan” 59 or “plan” means a plan for the overhead hardening of electric 60 transmission and distribution facilities, undergrounding of 61 electric distribution facilities, and increased vegetation 62 management. 63 (b) “Transmission and distribution storm protection plan 64 costs” means the reasonable and prudent costs to implement an 65 approved transmission and distribution storm protection plan. 66 (c) “Vegetation management” means the actions a public 67 utility takes to prevent or curtail vegetation from interfering 68 with public utility infrastructure. The term includes the mowing 69 of vegetation, application of herbicides, trimming of trees, and 70 removal of trees or brush near and around electric transmission 71 and distribution facilities. 72 (3) Each public utility shall file for commission review, 73 as part of its storm hardening plan required by the commission 74 under s. 366.04(2)(c), a transmission and distribution storm 75 protection plan that covers 30 years. The commission must 76 approve or modify the plan within 6 months after the public 77 utility files the plan with the commission. The commission must 78 give due consideration to whether: 79 (a) The plan enhances reliability, strengthens 80 infrastructure, and reduces restoration costs and outage times 81 in a prudent, practical and cost-efficient manner. The plan 82 should prioritize areas in order to generate the highest impact 83 on system resiliency and efficiency and should focus on areas 84 with large numbers of customers, high frequency outages, and 85 lengthy outages. 86 (b) Storm protection of transmission and distribution 87 infrastructure is feasible, reasonable, or practical in certain 88 areas of the utility’s service territory, including in flood 89 zones and rural areas. 90 (4) Each public utility must submit an updated transmission 91 and distribution storm protection plan that covers, at a 92 minimum, the 30-year period addressed in its initial 93 transmission and distribution storm protection plan at least 94 every 3 years after commission approval of its most recent plan. 95 The commission shall approve or modify each updated plan 96 pursuant to the criteria set forth in subsection (3). 97 (5)(a) The commission shall conduct an annual proceeding to 98 allow a public utility to justify and recover transmission 99 distribution storm protection plan costs through a storm 100 protection cost recovery clause. 101 (b) Action taken by a public utility for storm protection 102 of transmission and distribution facilities pursuant to a 103 commission-approved plan is deemed prudent, but a party may 104 challenge the commission’s determination of prudence. 105 (6) The annual transmission and distribution storm 106 protection plan costs recoverable through the storm protection 107 cost recovery clause must be stated separately from the public 108 utility’s base rates and must be allocated to customer classes 109 pursuant to the rate design most recently approved by the 110 commission. 111 (7) If a capital expenditure cost is recoverable through a 112 storm protection cost recovery clause, the public utility may 113 recover the annual depreciation on such cost, calculated at the 114 public utility’s current approved depreciation rates, and a 115 return on the depreciated balance of the costs calculated at the 116 public utility’s weighted average cost of capital using the 117 return on equity last approved by the commission in a rate case 118 or settlement order. 119 (8) The commission shall adopt rules to implement and 120 administer this section. 121 Section 2. This act shall take effect July 1, 2019.