Florida Senate - 2019 CS for CS for CS for SB 796 By the Committees on Appropriations; Infrastructure and Security; and Innovation, Industry, and Technology; and Senators Gruters, Bracy, Montford, and Broxson 576-04170-19 2019796c3 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 utilities may not include 16 certain costs in their base rates; providing for the 17 allocation of such costs; authorizing utilities to 18 recover depreciation on certain capital costs through 19 the recovery clause; requiring the commission to adopt 20 rules; requiring the commission to propose a rule for 21 adoption within a specified timeframe; providing a 22 directive to the Division of Law Revision; providing 23 appropriations and authorizing positions; providing an 24 effective date. 25 26 Be It Enacted by the Legislature of the State of Florida: 27 28 Section 1. Section 366.96, Florida Statutes, is created to 29 read: 30 366.96 Storm protection plan cost recovery.— 31 (1) The Legislature finds that: 32 (a) During extreme weather conditions, high winds can cause 33 vegetation and debris to blow into and damage electrical 34 transmission and distribution facilities, resulting in power 35 outages. 36 (b) A majority of the power outages that occurred during 37 the recent extreme weather conditions in the state were caused 38 by vegetation blown by the wind. 39 (c) It is in the public interest to promote overhead 40 hardening of electrical transmission and distribution 41 facilities, the undergrounding of certain electrical 42 distribution lines, and vegetation management in this state. 43 (d) Protecting and strengthening transmission and 44 distribution electric utility infrastructure from extreme 45 weather conditions will reduce restoration costs and outage 46 times to customers and improve overall service reliability for 47 customers. 48 (e) When considering costs, reliability, storm protection 49 and restoration, and the public convenience, it is in the 50 state’s best interest that utilities focus primarily on 51 distribution laterals when undergrounding electric distribution 52 lines. 53 (f) It is in the public interest for each utility to 54 mitigate additional costs to utility customers when developing 55 transmission and distribution storm hardening plans. 56 (g) All customers benefit from the reduced costs of storm 57 restoration. 58 (2) As used in this section, the term: 59 (a) “Public utility” or “utility” has the same meaning as 60 “public utility” in s. 366.02(1), except that this section does 61 not apply to a gas utility. 62 (b) “Transmission and distribution storm protection plan” 63 or “plan” means a plan for the overhead hardening of electric 64 transmission and distribution facilities, undergrounding of 65 electric distribution facilities, and vegetation management. 66 (c) “Transmission and distribution storm protection plan 67 costs” means the reasonable and prudent costs to implement an 68 approved transmission and distribution storm protection plan. 69 (d) “Vegetation management” means the actions a public 70 utility takes to prevent or curtail vegetation from interfering 71 with public utility infrastructure. The term includes the mowing 72 of vegetation, application of herbicides, trimming of trees, and 73 removal of trees or brush near and around electric transmission 74 and distribution facilities. 75 (3) Each public utility shall file, pursuant to commission 76 rule and for commission review, a transmission and distribution 77 storm protection plan that covers the utility’s immediate 10 78 year planning period. The commission must approve or modify the 79 plan within 6 months after the public utility files the plan 80 with the commission. The commission must give due consideration 81 to all of the following: 82 (a) Whether the plan enhances reliability, strengthens 83 infrastructure, and reduces restoration costs and outage times 84 in a prudent, practical, and cost-efficient manner, including 85 whether the plan prioritizes areas of lower reliability 86 performance. 87 (b) Whether storm protection of transmission and 88 distribution infrastructure is feasible, reasonable, or 89 practical in certain areas of the utility’s service territory, 90 including in flood zones and rural areas. 91 (c) The estimated rate impact that will result from the 92 implementation of the public utility’s proposed transmission and 93 distribution storm protection plan during the first 3 years 94 addressed in the plan. 95 (4) Each public utility must submit an updated transmission 96 and distribution storm protection plan at least every 3 years 97 after commission approval of its most recent plan. The 98 commission shall approve or modify each updated plan pursuant to 99 the criteria set forth in subsection (3). 100 (5) After a storm protection plan has been approved, 101 proceeding with actions to implement the plan does not 102 constitute and is not evidence of imprudence. The commission 103 shall conduct an annual proceeding to allow a public utility to 104 recover prudently incurred transmission and distribution storm 105 protection plan costs through a storm protection cost recovery 106 clause. Once the commission determines that the costs were 107 prudently incurred, the costs are not subject to disallowance or 108 further prudence review, except for situations involving fraud, 109 perjury, or the intentional withholding of key information by 110 the public utility. 111 (6) The annual transmission and distribution storm 112 protection plan costs recoverable through the storm protection 113 cost recovery clause do not include costs recovered through the 114 public utility’s base rates and must be allocated to customer 115 classes pursuant to the rate design most recently approved by 116 the commission. 117 (7) If a capital expenditure cost is recoverable through a 118 storm protection cost recovery clause, the public utility may 119 recover the annual depreciation on such cost, calculated at the 120 public utility’s current approved depreciation rates, and a 121 return on the undepreciated balance of the costs calculated at 122 the public utility’s weighted average cost of capital using the 123 return on equity last approved by the commission in a rate case 124 or settlement order. 125 (8) The commission shall adopt rules to implement and 126 administer this section, and shall propose a rule for adoption 127 as soon as practicable after the effective date of this act, but 128 not later than October 31, 2019. 129 Section 2. The Division of Law Revision is directed to 130 replace the phrase “the effective date of this act” wherever it 131 occurs in this act with the date this act becomes a law. 132 Section 3. For the 2019-2020 fiscal year, the sums of 133 $261,270 in recurring funds and $15,020 in nonrecurring funds 134 from the Regulatory Trust Fund are appropriated to the Public 135 Service Commission, and four full-time equivalent positions with 136 an associated salary rate of 180,583 are authorized for the 137 purpose of implementing this act. 138 Section 4. This act shall take effect upon becoming a law.