CS for CS for CS for SB 796 First Engrossed 2019796e1 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 submit to the Public Service Commission, for 6 review, a transmission and distribution storm 7 protection plan; specifying matters to be considered 8 in the commission’s review of a plan; requiring the 9 commission to approve, modify, or deny a plan within a 10 specified timeframe; requiring a utility to update its 11 plan on a specified basis, subject to commission 12 review; requiring the commission to conduct an annual 13 proceeding to allow utilities to recover certain costs 14 through a storm protection plan cost recovery clause; 15 providing that utilities may not include costs 16 recovered through their base rates; providing that 17 certain costs will not be subject to certain 18 disallowances or reviews; providing for the allocation 19 of such costs; authorizing utilities to recover 20 depreciation and a return on certain capital costs 21 through the recovery clause; requiring the commission 22 to submit an annual report to the Governor and 23 Legislature; requiring rulemaking; providing 24 appropriations and authorizing positions; providing an 25 effective date. 26 27 Be It Enacted by the Legislature of the State of Florida: 28 29 Section 1. Section 366.96, Florida Statutes, is created to 30 read: 31 366.96 Storm protection plan cost recovery.— 32 (1) The Legislature finds that: 33 (a) During extreme weather conditions, high winds can cause 34 vegetation and debris to blow into and damage electrical 35 transmission and distribution facilities, resulting in power 36 outages. 37 (b) A majority of the power outages that occur during 38 extreme weather conditions in the state are caused by vegetation 39 blown by the wind. 40 (c) It is in the state’s interest to strengthen electric 41 utility infrastructure to withstand extreme weather conditions 42 by promoting the overhead hardening of electrical transmission 43 and distribution facilities, the undergrounding of certain 44 electrical distribution lines, and vegetation management. 45 (d) Protecting and strengthening transmission and 46 distribution electric utility infrastructure from extreme 47 weather conditions can effectively reduce restoration costs and 48 outage times to customers and improve overall service 49 reliability for customers. 50 (e) It is in the state’s interest for each utility to 51 mitigate restoration costs and outage times to utility customers 52 when developing transmission and distribution storm protection 53 plans. 54 (f) All customers benefit from the reduced costs of storm 55 restoration. 56 (2) DEFINITIONS.—As used in this section, the term: 57 (a) “Public utility” or “utility” has the same meaning as 58 set forth in s. 366.02(1), except that it does not include a gas 59 utility. 60 (b) “Transmission and distribution storm protection plan” 61 or “plan” means a plan for the overhead hardening and increased 62 resilience of electric transmission and distribution facilities, 63 undergrounding of electric distribution facilities, and 64 vegetation management. 65 (c) “Transmission and distribution storm protection plan 66 costs” means the reasonable and prudent costs to implement an 67 approved transmission and distribution storm protection plan. 68 (d) “Vegetation management” means the actions a public 69 utility takes to prevent or curtail vegetation from interfering 70 with public utility infrastructure. The term includes, but is 71 not limited to, the mowing of vegetation, application of 72 herbicides, tree trimming, and removal of trees or brush near 73 and around electric transmission and distribution facilities. 74 (3) Each public utility shall file, pursuant to commission 75 rule, a transmission and distribution storm protection plan that 76 covers the immediate 10-year planning period. Each plan must 77 explain the systematic approach the utility will follow to 78 achieve the objectives of reducing restoration costs and outage 79 times associated with extreme weather events and enhancing 80 reliability. The commission shall adopt rules to specify the 81 elements that must be included in a utility’s filing for review 82 of transmission and distribution storm protection plans. 83 (4) In its review of each transmission and distribution 84 storm protection plan filed pursuant to this section, the 85 commission shall consider: 86 (a) The extent to which the plan is expected to reduce 87 restoration costs and outage times associated with extreme 88 weather events and enhance reliability, including whether the 89 plan prioritizes areas of lower reliability performance. 90 (b) The extent to which storm protection of transmission 91 and distribution infrastructure is feasible, reasonable, or 92 practical in certain areas of the utility’s service territory, 93 including, but not limited to, flood zones and rural areas. 94 (c) The estimated costs and benefits to the utility and its 95 customers of making the improvements proposed in the plan. 96 (d) The estimated annual rate impact resulting from 97 implementation of the plan during the first 3 years addressed in 98 the plan. 99 (5) No later than 180 days after a utility files a 100 transmission and distribution storm protection plan that 101 contains all of the elements required by commission rule, the 102 commission shall determine whether it is in the public interest 103 to approve, approve with modification, or deny the plan. 104 (6) At least every 3 years after approval of a utility’s 105 transmission and distribution storm protection plan, the utility 106 must file for commission review an updated transmission and 107 distribution storm protection plan that addresses each element 108 specified by commission rule. The commission shall approve, 109 modify, or deny each updated plan pursuant to the criteria used 110 to review the initial plan. 111 (7) After a utility’s transmission and distribution storm 112 protection plan has been approved, proceeding with actions to 113 implement the plan shall not constitute or be evidence of 114 imprudence. The commission shall conduct an annual proceeding to 115 determine the utility’s prudently incurred transmission and 116 distribution storm protection plan costs and allow the utility 117 to recover such costs through a charge separate and apart from 118 its base rates, to be referred to as the storm protection plan 119 cost recovery clause. If the commission determines that costs 120 were prudently incurred, those costs will not be subject to 121 disallowance or further prudence review except for fraud, 122 perjury, or intentional withholding of key information by the 123 public utility. 124 (8) The annual transmission and distribution storm 125 protection plan costs may not include costs recovered through 126 the public utility’s base rates and must be allocated to 127 customer classes pursuant to the rate design most recently 128 approved by the commission. 129 (9) If a capital expenditure is recoverable as a 130 transmission and distribution storm protection plan cost, the 131 public utility may recover the annual depreciation on the cost, 132 calculated at the public utility’s current approved depreciation 133 rates, and a return on the undepreciated balance of the costs 134 calculated at the public utility’s weighted average cost of 135 capital using the last approved return on equity. 136 (10) Beginning December 1 of the year after the first full 137 year of implementation of a transmission and distribution storm 138 protection plan and annually thereafter, the commission shall 139 submit to the Governor, the President of the Senate, and the 140 Speaker of the House of Representatives a report on the status 141 of utilities’ storm protection activities. The report shall 142 include, but is not limited to, identification of all storm 143 protection activities completed or planned for completion, the 144 actual costs and rate impacts associated with completed 145 activities as compared to the estimated costs and rate impacts 146 for those activities, and the estimated costs and rate impacts 147 associated with activities planned for completion. 148 (11) The commission shall adopt rules to implement and 149 administer this section and shall propose a rule for adoption as 150 soon as practicable after the effective date of this act, but 151 not later than October 31, 2019. 152 Section 2. For the 2019-2020 fiscal year, the sums of 153 $261,270 in recurring funds and $15,020 in nonrecurring funds 154 from the Regulatory Trust Fund are appropriated to the Public 155 Service Commission, and 4 full-time equivalent positions with 156 associated salary rate of 180,583 are authorized for the purpose 157 of implementing this act. 158 Section 3. This act shall take effect upon becoming a law.