Florida Senate - 2019 CS for CS for SB 796 By the Committees on Infrastructure and Security; and Innovation, Industry, and Technology; and Senators Gruters, Bracy, Montford, and Broxson 596-03300-19 2019796c2 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; requiring 8 utilities to update their respective plans on a 9 specified basis; requiring the commission to approve 10 or modify submitted plans within a specified 11 timeframe, taking into consideration specified 12 factors; requiring the commission to conduct an annual 13 proceeding to allow utilities to justify and recover 14 certain costs through a storm protection cost recovery 15 clause; providing that a party may challenge the 16 prudence of certain costs; providing that utilities 17 may not include certain costs in their base rates; 18 providing for the allocation of such costs; 19 authorizing utilities to recover depreciation on 20 certain capital costs through the recovery clause; 21 requiring the commission to adopt rules; providing an 22 effective date. 23 24 Be It Enacted by the Legislature of the State of Florida: 25 26 Section 1. Section 366.96, Florida Statutes, is created to 27 read: 28 366.96 Storm protection plan cost recovery.— 29 (1) The Legislature finds that: 30 (a) During extreme weather conditions, high winds can cause 31 vegetation and debris to blow into and damage electrical 32 transmission and distribution facilities, resulting in power 33 outages. 34 (b) A majority of the power outages that occurred during 35 the recent extreme weather conditions in the state were caused 36 by vegetation blown by the wind. 37 (c) It is in the public interest to promote overhead 38 hardening of electrical transmission and distribution 39 facilities, the undergrounding of certain electrical 40 distribution lines, and vegetation management in this state. 41 (d) Protecting and strengthening transmission and 42 distribution electric utility infrastructure from extreme 43 weather conditions will reduce restoration costs and outage 44 times to customers and improve overall service reliability for 45 customers. 46 (e) When considering costs, reliability, storm protection 47 and restoration, and the public convenience, it is in the 48 state’s best interest that utilities focus primarily on 49 distribution laterals when undergrounding electric distribution 50 lines. 51 (f) It is in the public interest for each utility to 52 mitigate additional costs to utility customers when developing 53 transmission and distribution storm hardening plans. 54 (g) All customers benefit from the reduced costs of storm 55 restoration. 56 (2) As used in this section, the term: 57 (a) “Public utility” or “utility” has the same meaning as 58 in s. 366.02(1), except that this section does not apply to a 59 gas utility. 60 (b) “Transmission and distribution storm protection plan” 61 or “plan” means a plan for the overhead hardening of electric 62 transmission and distribution facilities, undergrounding of 63 electric distribution facilities, and vegetation management. 64 (c) “Transmission and distribution storm protection plan 65 costs” means the reasonable and prudent costs to implement an 66 approved transmission and distribution storm protection plan. 67 (d) “Vegetation management” means the actions a public 68 utility takes to prevent or curtail vegetation from interfering 69 with public utility infrastructure. The term includes the mowing 70 of vegetation, application of herbicides, trimming of trees, and 71 removal of trees or brush near and around electric transmission 72 and distribution facilities. 73 (3) Each public utility shall file for commission review, a 74 transmission and distribution storm protection plan that covers 75 the utility’s immediate 10-year planning period. The commission 76 must 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 all of the following: 79 (a) Whether the plan enhances reliability, strengthens 80 infrastructure, and reduces restoration costs and outage times 81 in a prudent, practical, and cost-efficient manner, including 82 whether the plan prioritizes areas of lower reliability 83 performance. 84 (b) Whether storm protection of transmission and 85 distribution infrastructure is feasible, reasonable, or 86 practical in certain areas of the utility’s service territory, 87 including in flood zones and rural areas. 88 (c) The estimated rate impact that will result from the 89 implementation of the public utility’s proposed transmission and 90 distribution storm protection plan during the first 3 years 91 addressed in the plan. 92 (4) Each public utility must submit an updated transmission 93 and distribution storm protection plan at least every 3 years 94 after commission approval of its most recent plan. The 95 commission shall approve or modify each updated plan pursuant to 96 the criteria set forth in subsection (3). 97 (5) After a storm protection plan has been approved, costs 98 to implement the plan are not subject to challenge unless the 99 commission finds that certain costs were imprudently incurred. 100 Proceeding with actions to implement the plan does not 101 constitute and is not evidence of imprudence. The commission 102 shall conduct an annual proceeding to allow a public utility to 103 recover prudently incurred transmission and distribution storm 104 protection plan costs through a storm protection cost recovery 105 clause. Once the commission determines that the costs were 106 prudently incurred, the costs are not subject to disallowance or 107 further prudence review, except for situations involving fraud, 108 perjury, or the intentional withholding of key information by 109 the public utility. 110 (6) The annual transmission and distribution storm 111 protection plan costs recoverable through the storm protection 112 cost recovery clause do not include costs recovered through the 113 public utility’s base rates and must be allocated to customer 114 classes pursuant to the rate design most recently approved by 115 the commission. 116 (7) If a capital expenditure cost is recoverable through a 117 storm protection cost recovery clause, the public utility may 118 recover the annual depreciation on such cost, calculated at the 119 public utility’s current approved depreciation rates, and a 120 return on the undepreciated balance of the costs calculated at 121 the public utility’s weighted average cost of capital using the 122 return on equity last approved by the commission in a rate case 123 or settlement order. 124 (8) The commission shall adopt rules to implement and 125 administer this section. 126 Section 2. This act shall take effect July 1, 2019.