Florida Senate - 2023                             CS for SB 1162
       By the Committee on Regulated Industries; and Senator DiCeglie
       580-02858-23                                          20231162c1
    1                        A bill to be entitled                      
    2         An act relating to renewable energy cost recovery;
    3         amending s. 366.91, F.S.; revising the types of
    4         contracts which are eligible for cost recovery by a
    5         public utility under certain circumstances;
    6         authorizing a public utility to recover prudently
    7         incurred renewable natural gas or hydrogen-based fuel
    8         infrastructure project costs through an appropriate
    9         Florida Public Service Commission cost-recovery
   10         mechanism; providing that such costs are not subject
   11         to further actions except under certain circumstances;
   12         specifying eligible renewable natural gas and
   13         hydrogen-based fuel infrastructure projects; requiring
   14         that cost recovery for such projects be approved by
   15         the commission; providing requirements for the
   16         approval determination; prohibiting cost recovery
   17         until a facility is placed in service; providing that
   18         certain other regulatory accounting rules may apply to
   19         such cost recovery; providing an effective date.
   21  Be It Enacted by the Legislature of the State of Florida:
   23         Section 1. Subsection (9) of section 366.91, Florida
   24  Statutes, is amended, and subsections (10) and (11) are added to
   25  that section, to read:
   26         366.91 Renewable energy.—
   27         (9) A public utility’s The commission may approve cost
   28  recovery by a gas public utility for contracts for the purchase
   29  of renewable natural gas and hydrogen-based fuel in which the
   30  pricing provisions exceed the current market price of natural
   31  gas are eligible for cost recovery, but only if which are
   32  otherwise deemed reasonable and prudent by the commission finds
   33  that the contract meets the overall goals of subsection (1) by
   34  promoting the development or use of renewable energy resources
   35  in this state and providing fuel diversification and that the
   36  contract is otherwise reasonable.
   37         (10)A public utility may recover, through an appropriate
   38  cost-recovery mechanism administered by the commission,
   39  prudently incurred costs for renewable natural gas or hydrogen
   40  based fuel infrastructure projects. If the commission determines
   41  that such costs were reasonable, that the incremental bill
   42  impact will not result in an undue hardship to customers, and
   43  that the project will facilitate achieving the goals of
   44  subsection (1), those costs are not subject to disallowance or
   45  further prudence review except for fraud, perjury, or
   46  intentional withholding of key information by the public
   47  utility. For purposes of utility cost recovery pursuant to this
   48  subsection only, renewable natural gas may include a mixture of
   49  natural gas and renewable natural gas. Eligible renewable
   50  natural gas and hydrogen-based fuel infrastructure projects must
   51  be located in this state. Types of costs eligible for cost
   52  recovery include, but are not limited to, capital investment in
   53  projects necessary to prepare or produce renewable natural gas
   54  and hydrogen-based fuel for pipeline distribution and usage;
   55  capital investment in facilities, including pipelines, necessary
   56  to inject and deliver renewable natural gas and hydrogen-based
   57  fuel; renewable natural gas and hydrogen-based fuel storage
   58  facilities; operation and maintenance expenses associated with
   59  any such renewable natural gas and hydrogen-based fuel
   60  infrastructure projects; and an appropriate return on investment
   61  consistent with that allowed for other utility plants that
   62  provide service to customers.
   63         (11)Cost recovery for any renewable natural gas or
   64  hydrogen-based fuel infrastructure project sought pursuant to
   65  this section must be approved by the commission.
   66         (a) In assessing whether cost recovery for any renewable
   67  natural gas or hydrogen-based fuel infrastructure projects is
   68  appropriate, the commission shall consider whether the projected
   69  costs for such renewable natural gas or hydrogen-based fuel
   70  infrastructure projects are reasonable and consistent with
   71  subsection (10).
   72         (b)Recovery of costs incurred by a public utility for a
   73  renewable natural gas or hydrogen-based fuel infrastructure
   74  project approved for cost recovery under this section may not be
   75  allowed until such facility is placed in service. Upon approval
   76  of cost recovery by the commission, costs incurred before the
   77  facility is placed in service may be deferred on the public
   78  utility’s books for recovery once the facility is in service.
   79  This does not preclude application of any other regulatory
   80  accounting rules that are otherwise deemed appropriate,
   81  including, but not limited to, normal recovery of costs for
   82  construction work in progress.
   83         Section 2. This act shall take effect July 1, 2023.