User manual | IA-01-23

I.
Meeting Packet
State of Florida
Public Service Commission
INTERNAL AFFAIRS AGENDA
Thursday, January 23, 2014
9:30 am
Room 105 - Gerald L. Gunter Building
1. Presentation by Matt McCaffree, Director of State Regulatory Relations, National
Association of Water Companies. (Attachment 1)
2. Summary of Staff Training Initiative Funded by the U.S. Department of Energy
Grant. Briefing Only (Attachment 2)
3. Draft Report on Activities Pursuant to the Florida Energy Efficiency and
Conservation Act. Approval is sought. (Attachment 3)
4. Legislative Update. (No Attachment)
5. Executive Director’s Report. (No Attachment)
6. Other Matters. (No Attachment)
BB/mj
OUTSIDE PERSONS WISHING TO ADDRESS THE COMMISSION ON
ANY OF THE AGENDAED ITEMS SHOULD CONTACT THE
OFFICE OF THE EXECUTIVE DIRECTOR AT (850) 413-6463.
Attachment 1
Matt McCaffree
Director of State Regulatory Relations
NAWC
Regulatory Challenges &
The National Landscape
for the Regulated Water
Industry
1
2011 Eastern Rate School
NAWC: Who we are
National Water Sector Overview
Industry Challenges
Regulatory Responses & Recent
Developments
Importance of the Regulatory Environment
National Association of Water Companies
•
•
•
•
•
Agenda
National Association of Water Companies
• Key member services include regulatory, governmental and
water service solutions
• Private water companies own and operate 17% of the
nation’s community water systems
• Nearly 73 million Americans receive water service from a
privately owned water utility or a municipal utility operating
under a public-private partnership
• Trade association representing the private water service
industry
National Association of Water
Companies (NAWC)
National Association of Water Companies
• Highly fragmented (50K systems) and highly variable costs
• Least expensive to consumers, but costs continue to rise
• Costly to transport, cannot be compressed, and no
substitutes
• Quality and environmental standards are increasingly stringent
• All utilities subject to same environmental standards
• No federal agency (i.e., FERC for energy or FCC for communications)
• Environmentally regulated: Must be safe regardless of cost
• Key role in society
• The only utility service that is physically ingested
Water Compared
National Association of Water Companies
Source: Institute of Public Utilities, 2010
Consumer Utility Expenditures
Capital Invested per $1
of Revenue
$0.86
Electric
National Association of Water Companies
Gas-Dist Telephone
$1.18
Water is the most capital
intensive of regulated utilities
$2.06
•
o
Water
$3.81
Water
6
Source: 2009 AUS Utility Reports
Elec.
Tel.
Water sector
has the lowest
depreciation
rate
Gas-Dist
•
EPA, 2013: $384 Billion needed by 2030 for drinking water infrastructure (2009: $355B;
2008: $298B)
ASCE (2013): $1 Trillion needed for water & wastewater infrastructure over next 25
years
3.8%
o
Major investment in critical water infrastructure needed
11.3%
4.0%
•
Significant Capital Requirements for Water
Infrastructure
2.8%
National Association of Water Companies
+ Limited Growth
+ Increasing Expenses
+ Declining Consumption
+ Scarce Supply
+ Tight Credit Markets
+ Growing EPA Mandates
+ Aging Infrastructure
Capital Intensive Industry
The Industry is in a Perfect Storm
7
National Association of Water Companies
Allowed vs. Earned ROE (RW Baird, 2012)
National Association of Water Companies
Regulated water utilities are underearning primarily due to regulatory
lag.
A Growing Challenge for Investment
9
Nothing
Subsidies from other jurisdictions
Reductions in O&M
Deploy capital & resources to other jurisdictions
Capital spend below current depreciation
Not fill vacant positions
Can greatly impact customers & local economies
o
o
o
Long term
o
o
o
Short term
National Association of Water Companies
•
•
•
What happens when a utility earns below
authorized ROE?
10
5% increase in O&M
10% decrease in consumption
1 year capex at 3x depreciation
9.5%
8.4%
8.2%
10.0%
11
Combined effect
5.8%
So the ability to earn the allowed ROE is gone even before the new rates
are implemented (often by several hundred basis points).
o
o
o
Test Year allowed ROE
National Association of Water Companies
•
•
•
Regulatory Lag Illustrated…
o
o
-
“…electric and natural gas delivery industries have in place a larger
number and a greater variety of alternative regulation policies compared
to the water industry.”
Significant progress made in recent years (specifically
DSICs & FTY)
Water remains well behind regulated energy counterparts:
In 2013, NAWC investigated mechanisms that allow
timely recovery for aging assets and rising costs
First study of its kind; data confirms assumptions of
regulatory treatment of water utilities
Conclusions
National Association of Water Companies
•
•
•
Addressing Regulatory Lag:
Alternative Regulation
34
17
Comprehensive Alternative Ratemaking: Mechanisms that
move beyond the general rate cases of cost of service
regulation and integrate future costs from investment projects
and other sources.
Examples: Formula rates, multi-year rate mechanisms
Alternative Ratemaking for Capital Expenditures:
Mechanisms designed to collect the costs of standard
investments to maintain the integrity of distribution systems.
Examples: DSIC and CapEx riders
National Association of Water Companies
27
Revenue Stabilization: Mechanisms that adjust base
revenues without addressing costs between rate cases.
Examples: Conservation adjustments, decoupling, LRAM
Electricity
22
18
30
Natural
Gas
15
4
5
Water
Alternative Regulation Survey Results
Small system rate applications are very expensive
per customer
Small system rate applications are complicated and
time consuming limiting timely filings
Large percentage of CIAC plant reduces rate base
Capital not readily available for emergencies
National Association of Water Companies
•
•
•
•
Regulatory Challenges for Small Systems
14
Unsustainable
revenues
(Inadequate rates
limited access to
capital)
Underinvestment
in system;
underserved
customers
National Association of Water Companies
Discouraged by
lengthy, resource
intensive rate
application
process
Small company
facing revenue
shortfall
(repairs,
environmental
compliance,
infrastructure)
Small Systems: Breaking the Cycle of
Underinvestment
15
National Association of Water Companies
RECENT POLICY
DEVELOPMENTS
16
Regulatory approach has reversed course in several
states (e.g., NC, AZ, NV)
o
o
o
Recognizing role of alternative regulation
Recognizing ROE gaps across water industry
Identifying best practices in the regulation of small water
systems
Three NARUC Resolutions Passed:
o
Significant policy momentum toward alternative
regulation in the past two years
National Association of Water Companies
•
•
Recent Developments & Regulatory
Response
17
“Traditional cost of service ratemaking, which has worked reasonably
well… no longer adequately addresses the challenges of today and
tomorrow.”
Negative, little or no growth and high, nonrevenue producing capital
requirements
“unlikely to encourage the necessary future investment in infrastructure
replacement…”
Electric and gas alternative regulation much more advanced
“Alternative regulatory mechanisms can enhance the efficiency and
effectiveness of water and wastewater utility regulation”; reduced
regulatory costs, rate gradualism, predictability and rate certainty
RESOLVED: NARUC “supports consideration of alternative regulation
plans and mechanisms” in addition to 2005 Best Practices
National Association of Water Companies
•
•
•
•
•
•
November 2013: NARUC Resolution
Recognizing Role of Alt Regulation
National Association of Water Companies
NARUC recognizes:
•
The “Regulatory Compact”—still alive and well;
•
the unique challenges facing the water industry, especially the need for
capital;
•
the ROE Gap;
•
“traditional” ratemaking practices no longer entirely adequate to ensure
long term quality water service;
•
the need for coordinated regulatory/legislative action;
•
the need to reduce the frequency and cost of rate proceedings.
And resolves:
•
Best Practices are “a critical component of a water and/or wastewater
utility’s reasonable ability to earn its authorized rate of return.”
•
Regulators should carefully consider implementing Best Practices.
•
NARUC Water Committee will assist and “monitor progress…until
satisfactorily improved.”
July 2013: NARUC Recognizes ROE
Gap Issue
Need for regulatory changes discussed with
NARUC for decades
Many commissions have innovative practices for
small systems that are not used effectively
In recent years, some commissions have
implemented best practices for small systems
NARUC passes best practices for small system
regulation resolution in July, 2013
National Association of Water Companies
•
•
•
•
Identifying Best Practices for Small
Systems
20
o
o
o
o
o
o
Simplified rate applications; use of annual report to fulfill majority of rate application
process
Electronic filing procedures
Simplified rate-of-return mechanisms
Cost of living adjustments
Facilitating emergency infrastructure funds
Limiting use of CIAC
Identifies 10 core regulatory practices and 3 general management
practices
All mechanisms and policies are in place in at least one state
Primary aim is to alter the ratemaking effort to match the scope of the
impact
Mechanisms can lessen the regulatory burden on system owners and
ultimately help ratepayer
Examples:
National Association of Water Companies
•
•
•
•
•
July 2013: Resolution Supporting Regulatory Best
Practices for Small Water Systems
21
National Association of Water Companies
2011 Eastern Rate School
• Expanding water service to those who need it
• Compliance with water quality standards
• Capacity to maintain and replace aging
infrastructure
• Utilities ability to attract capital
Fair Return on Equity and Predictable Regulatory
Climate Essential To…
Regulation is Essential to Investment
Cooperation does not displace diligence
Access to capital
Efficient operation
Creativity
Expertise
Solid management
23
Measured by its output – less frequent rate cases, significant
customer participation, avoidance of rate shock and
regulatory lag
Customers receive reliable and safe service from its utility at
the best available price
Requires from the utility:
o
Cooperative regulatory practices
National Association of Water Companies
•
•
•
•
Productive Regulatory Environment
Correlation between future test years, cost trackers,
DSIC, and increased investment
Examples of companies deploying AMR (increased
reliability, significant long-term customer benefit) in states
with DSIC, delayed investment in non-best practice states
o
o
90% of the jobs created by infrastructure investment are
middle-class jobs
Create more jobs than tax cuts (500% more than temp.
business tax cuts, 40% more than economy-wide cuts)
Infrastructure Investment = Jobs
o
o
NAWC member companies invest in best practice
states
National Association of Water Companies
•
•
Investment Flows to States with Best
Practices, Productive Environment
National Association of Water Companies
Matt McCaffree
[email protected]
202-466-3331
www.nawc.org > Knowledge Center > State Utility
Regulation
Download the resolutions, report and other resources:
Thank you
25
National Association of Water Companies
APPENDIX
26
0
50
100
150
200
Utility 1
Utility 2
Miles of line replaced per year in Pennsylvania since implementation of DSIC
Average time between rate cases has increased 66%
National Association of Water Companies
•
•
Infrastructure Investment with DSIC
ISRS Legislation Passed
Investment in water infrastructure in Missouri has steadily increased
since implementation of ISRS (DSIC equivalent)
Average time between rate cases has doubled
National Association of Water Companies
•
•
Infrastructure Investment with DSIC
(continued)
Attachment 2
State of Florida
lflublie~mxtt~ C!Lnnnnission
CAPITAL CIRCLE OFFICE CENTER • 2540 SHUMARD OAK BOULEVARD
TALLAHASSEE, FLORIDA 32399-0850
-M-E-M-0-R-A-N-D-U-MDATE:
January 14, 2014
TO:
Braulio L. Baez, Executive Director
FROM:
Diana Marr, Public Utility Analyst II, Office of Industry Development and Market ~
Analysis
Mark A. Futrell, Director, Office of Industry Development and Market AnalysisfJ!1'
RE:
Summary of Staff Training Initiative Funded by the U.S. Department of Energy
Grant
Critical Information: BRIEFING ONLY- Please place on the January 23, 2014,
Internal Affairs - No action requested.
Background
In 2009, the United States Department of Energy (DOE) offered grant opportunities to state
public utility commissions (PUC) to manage the anticipated increase in workload resulting from
the electricity-related initiatives of the American Recovery and Reinvestment Act (ARRA).
DOE designated $46 million to fund grants for 50 state PUCs and the District of Columbia. The
amount to be allocated to each state was based on its population.
Electricity-related initiatives funded by the ARRA included renewable energy, smart grid,
energy storage, electric and hybrid-electric vehicles, demand response equipment, coal with
carbon capture and storage, and transmission. It was anticipated, with additional funding, state
PUCs could better implement these electricity-related ARRA initiatives. States were to use the
grant to supplement, not supplant, existing regulatory expenditures.
At the July 14, 2009 Internal Affairs meeting, the Commission directed staff to pursue this grant
opportunity. The Commission specified that the grant funds, if awarded, be used to provide
enhanced training for staff in utility regulation and electricity-related activities. Staff submitted a
grant application to the DOE on August 27, 2009. The Florida Public Service Commission
(FPSC) received an award of $1,217,160 on December 8, 2009. The term of the grant was
through November 30, 2013.
Reporting Requirements
Accepting DOE grant funds meant that the FPSC would be required to comply with quarterly
reporting requirements:
Summary of Staff Training Initiative
January 14, 2014
•
Financial – reported the amount spent and the amount remaining in the grant allocation
•
Progress – detailed the grant activities occurring in the quarter and included a recap of the
funds expended per budget category
•
Case Management – cumulative report of the electricity-related dockets opened and the
orders entered
Staff has timely complied with the quarterly reporting schedule.
The final reporting requirement will be a “close-out” report that is due February 28, 2014. This
close-out report will be cumulative and will provide a final accounting of the funds used from the
grant, an overview of the accomplishments funded by the grant, and a report of any tangible
property purchased with grant funds.
Accountability
To ensure accountability, state purchasing guidelines were followed. Fiscal and administrative
checks and balances were also incorporated into the plan to ensure full accountability.
Training Funded by the Grant
The training plan adopted by the Commission was designed to enhance overall staff knowledge
in utility regulation and the ARRA electricity-related activities. A variety of training
opportunities were used. Attendance at The Institute of Public Utility’s (IPU) Camp NARUC
and the NARUC Rate School provided solid regulatory training. In addition, FPSC staff
members were able to attend specialized technical courses, such as the Gas Safety Training
Courses presented by the U.S. Pipeline Hazard Material Safety Administration (PHMSA), and
the Argonne National Laboratory Facility Decommissioning Training.
Numerous training seminars were also presented to staff on-site. Subject matter experts in smart
grid, utility depreciation, cost of capital, and forecasting and econometrics, among others,
traveled to Tallahassee and made comprehensive presentations to staff. The Public Utility
Research Center from the Warrington College of Business of the University of Florida presented
various seminars, such as Fundamentals of Utility Regulation, Electric Fuel Procurement, and
Current Energy Issues. Unlike generic seminars, several on-site lessons referenced specific
Florida Statutes and Rules to make training more pertinent to staff. For example, Dr. Joel Berk
used past docket records in the Utility Finance & Accounting Seminar, and Dr. Ronald White of
Foster and Associates referenced Rule 25-6.0436, Florida Administrative Code, in his discussion
of utility depreciation studies. On-site training seminars were used as much as possible to
maximize the benefits from the training dollars.
One of the most meaningful training opportunities for staff was the observation of electricity
generation first-hand through various site visits. For example, staff visited solar farms, a nuclear
power plant, a cogeneration facility, combined cycle power plants and coal fueled plants. Staff
also had the opportunity to visit an integrated gasification combined cycle (IGCC) power plant
2
Summary of Staff Training Initiative
January 14, 2014
that uses a gasifier to turn coal into syngas, which is then used as fuel to generate electricity.
Another site visit was to the Florida Reliability Coordinating Council (FRCC) offices in Tampa,
Florida, where staff learned about transmission planning in Florida.
Various other training approaches were acquired, such as video trainings, books and DVDs.
Staff will be able to use these items for months and years to come and leverage the grant funded
training assets beyond the foreseeable time. Finally, other tangible assets, such as forecasting
software and netbooks, were purchased for staff use.
As of November 30, 2013, $767,900.63 of the grant was expended. The funds not used,
$449,259.37, will revert back to the DOE.
Key Achievements
•
•
•
•
234 technical staff participated in 121 training events
Each staff member attended an average of 5 training events
Staff received an average of 90 hours of training
19% of training events were held on-site
The ARRA grant enhanced the existing staff training program and expedited the training of the
gas pipeline safety inspectors. Many staff received advanced training in their program areas, and
a number of staff were able to cross train in the electricity-related issues.
3
Attachment 3
State of Florida
Juhlir~:erfrir:e C!Inmmissinn
CAPITAL CIRCLE OFFICE CENTER • 2540 SHUMARD OAK BOULEVARD
TALLAHASSEE, FLORIDA 32399-0850
-M-E-M-0-R-A-N-D-U-MDATE:
January 14, 2014
TO:
Braulio L. Baez, Executive Director
FROM:
Shevie B. Brown, Economic Analyst, Division of Economics
RE:
Draft Report on Activities Pursuant to the Florida Energy Efficiency and
Conservation Act (FEECA). Due March 1 to Governor and Legislature.
~&~
Critical Information: Please place this item on the January 23, 2014 Internal
Affairs. Report is due March 1, 2014. Approval of the FEECA report is sought.
Section 366.82, (1 0), Florida Statutes, requires the Commission to submit an annual report to the
Governor and Legislature on utility progress towards meeting goals established by the
Commission pursuant to Florida Energy Efficiency and Conservation Act (FEECA). The report
is due by March 1 of each year. Attached is the draft report for the 20 12 reporting period which
upon approval, will be submitted to the Governor, President of the Senate, Speaker of the House,
and the Commissioner of Agriculture. Please place this item on the January 23, 2014, Internal
Affairs as approval of the report is necessary before transmittal.
Please let me know if additional information is needed.
cc: Lisa Harvey
Apryl Lynn
S. Curtis Kiser
Florida Public Service Commission
Annual Report on
Activities
Pursuant
to the
Florida
Energy
Efficiency and
Conservation
Act
As Required
by Sections 366.82(10),
377.703(2)(f), and 553.975, Florida Statutes
February 2014
DRAFT FEECA REPORT 1-14-2014
Table of Contents
Executive Summary ...................................................................................................................... 2
Conclusion .................................................................................................................................. 4
Section 1. The Florida Energy Efficiency and Conservation Act ............................................ 5
1.1 History of FEECA................................................................................................................ 5
1.2 Conservation Tools and DSM Savings ................................................................................ 7
1.3 Conservation Cost Recovery.............................................................................................. 10
Section 2. Analytics for Setting Demand-Side Management Goals ....................................... 13
2.1 Cost-Effectiveness ............................................................................................................. 13
2.2 Commission-Established Goals ......................................................................................... 15
2.3 Assessing Goal Achievement ............................................................................................ 16
2.4 Additional DSM and Goal Setting Activities .................................................................... 19
Section 3. Overview of Florida’s Electricity Market .............................................................. 22
3.1 Energy Demand in Florida ................................................................................................. 22
3.2 Florida’s Electric Generating Resources ........................................................................... 23
Section 4. Educating Florida’s Consumers on Conservation.................................................. 25
4.1 Related Web Sites ............................................................................................................... 30
Appendix 1. Conservation Activities of FEECA Utilities ....................................................... 32
A. Florida Power & Light Company........................................................................................ 32
B. Duke Energy Florida, Inc .................................................................................................... 34
C. Gulf Power Company .......................................................................................................... 36
D. Tampa Electric Company (TECO) ..................................................................................... 38
E. Florida Public Utilities Company ........................................................................................ 40
F. Orlando Utilities Commission ............................................................................................. 42
G. JEA ...................................................................................................................................... 45
1
DRAFT FEECA REPORT 1-14-2014
Executive Summary
Reducing Florida’s peak electric demand and energy consumption became a statutory
objective in 1980, when the Florida Energy Efficiency and Conservation Act (FEECA) was
enacted. Codified in Sections 366.80 through 366.85 and Section 403.519, Florida Statutes
(F.S.), FEECA emphasizes reducing the growth rates of weather-sensitive peak demand,
reducing and controlling the growth rates of electricity consumption, and reducing the
consumption of scarce resources, such as petroleum fuels. Section 366.82(2), F.S., requires the
Public Service Commission (Commission or PSC) to set appropriate goals for the seven electric
utilities subject to FEECA at least every five years. Commission rules have defined goals with
respect to annual electric peak demand and energy savings over a ten-year period, with a reset
every five years. The seven utilities currently subject to FEECA are Florida Power & Light
Company (FPL), Duke Energy Florida, Inc. (DEF), Tampa Electric Company (TECO), Gulf
Power Company (Gulf), Florida Public Utilities Company (FPUC), Orlando Utilities Company
(OUC), and JEA. Once goals are established, the utilities must submit for Commission approval,
cost-effective demand-side management (DSM) plans, which contain the DSM programs
designed to meet these goals.
This report fulfills three Commission statutory obligations. The Commission is required
by Section 366.82(10), F.S., to provide an annual report to the Legislature and the Governor
summarizing the adopted goals and progress achieved toward those goals.
Section
377.703(2)(f), F.S., requires the Commission to file information on electricity and natural gas
energy programs with the Department of Agriculture and Consumer Services. Section 553.975,
F.S., requires the Commission to submit a biennial report to the Governor, President of the
Senate and President of the House regarding the effect of state energy standards on conservation.
Section 1 of this report provides a history of FEECA, highlights savings produced by
utility programs since 1980, and provides a description of existing tools for increasing
conservation throughout the state. Section 2 discusses current goals and achievements of the
FEECA utilities. For context, Section 3 provides an overview of Florida’s electricity market.
Section 4 discusses methods the Commission has used to educate consumers about conservation
and provides a list of related web sites. Finally, Appendix 1 provides a description of the
conservation programs currently offered by the FEECA utilities.
Conservation Achievements
Over the last thirty-three years, the FEECA utilities’ DSM programs in total have reduced
winter peak demand by an estimated 6,465 megawatts (MW) and summer peak demand by an
estimated 6,737 MW. The demand savings from these programs have resulted in the deferral or
avoidance of a substantial fleet of baseload, intermediate, and peaking power plants. These
programs have also reduced total electric energy consumption by an estimated 8,937 gigawatthours (GWh).
Since 1981, Florida’s investor-owned electric utilities have recovered over $5.7 billion of
conservation expenditures for DSM programs through the Energy Conservation Cost Recovery
(ECCR) clause. Approximately $2.9 billion of the total conservation program expenditures
2
DRAFT FEECA REPORT 1-14-2014
recovered have occurred in the last ten years. In 2012, Florida’s investor-owned electric utilities
recovered over $387 million in conservation program expenditures, performed more than
206,000 residential audits, and offered over 100 conservation programs for residential and
commercial customers.
Consumer choice plays an important role in reducing the growth rates of electrical
demand and energy in Florida. Consumers may support electric energy conservation through a
variety of actions including constructing smaller, more efficient homes, buying energy-efficient
appliances, installing energy-efficiency upgrades to existing homes and increasing the use of the
most cost-effective demand-side renewable systems. The Commission’s consumer education
program offers several tools to promote consumer awareness of conservation and energy
efficiency opportunities.
Conversely, prescriptive mandates play a major role in conservation. Building code
requirements established by the Florida Building Commission in 2008, per legislative directive, have
increased the energy performance of new buildings by at least 20 percent compared to the 2007
Energy Efficiency Code. State and Federal minimum efficiency standards for residential appliances
and commercial equipment, along with building construction standards, complement state level
utility-sponsored DSM programs that consumers may participate in on a voluntary basis. For
example, in 2013, the U.S. Department of Energy (DOE) issued an update for the energy
conservation standards for residential microwave ovens which could reduce energy consumption
by up to 75 percent in standby mode and revised energy conservation standards for residential
room air conditioners. The DOE also initiated rulemaking to amend testing procedures for
residential refrigerators and freezers to account for ice-making energy use and to update energy
use for other features. Once finalized, the new standards for Energy Star certified refrigerators
and freezers would use approximately 10 percent less energy than models meeting the current
2014 standards. Lighting standards have changed as well, with various watts of incandescent
bulbs being phased out and becoming no longer available for purchase. On January 1, 2012,
traditional 100 watt incandescent light bulbs were phased out. Similarly, 75 watt incandescent
bulbs were phased out as of January 1, 2013, and as of January 1, 2014, 60 watt and 40 watt
incandescent bulbs are no longer available.
Section 2 of this report compares the FEECA utilities’ demand and energy savings to the
goals set by the Commission. In 2010, the Commission approved DSM plans for OUC, JEA,
FPUC, and TECO. Gulf’s DSM plan was approved in February 2011. The Commission voted
to modify the proposed DSM plans of FPL and DEF on June 26, 2011. The modification
included the notation that the approved plans for FPL and DEF would consist of the existing
programs in effect on the date of the Orders.
Section 366.82(8), F.S., also provides authority for the Commission to assign financial
rewards and penalties to investor-owned utilities (IOUs). The Commission was authorized by
2008 legislation to allow an IOU to receive an additional return on equity of up to 50 basis points
for exceeding 20 percent of its annual load growth through energy efficiency and conservation
measures. Specifically, to FPL and DEF, the Commission ruled that if their achievements
surpassed their established goals, the utilities could be eligible for a financial award.
Conversely, if FPL and DEF’s achievements fell below the savings projected under their
modified DSM plans, the utilities could be financially penalized. To date, the Commission has
3
DRAFT FEECA REPORT 1-14-2014
not awarded financial awards or assessed penalties for IOUs subject to FEECA. Such actions
could be decided in a limited proceeding as established by the Commission in Order No. PSC09-0855-FOF-EG.
On July 26, 2013, the Commission opened dockets for each of the seven FEECA utilities
to file new goals.1 The utilities will submit testimony beginning April 2014. FPUC and OUC
received approval to submit goals based on proxy methodologies of Gulf (FPUC) and TECO
(OUC). Both FPUC and OUC are required to file their goal calculations within ten days of the
Commission’s approval of the goals for the respective proxy utility. Both FPUC and OUC will
also be excused from participating in the hearing of the new goals proceedings.
An assessment of the 2012 annual goals compared to each utility’s annual achievements
during 2012 reveals that Gulf, OUC, and JEA exceeded their demand and energy savings goals
in every category. FPL, DEF, TECO, and FPUC did not surpass their demand and annual goals
in some categories for at least one customer sector during 2012. The primary reasons given by
these utilities for not meeting their goals included lower than expected consumer participation
due to weak economic conditions, unexpected delays in implementing new programs, and the
need for increased marketing efforts.
Conclusion
The potential demand and energy savings from utility-sponsored conservation programs
are affected by consumer education and behavior, building codes, and appliance efficiency
standards. Consumer actions to implement energy efficiency measures outside of utility
programs as well as codes and efficiency standards, create a baseline for a new program’s costeffectiveness and reduce the amount of incremental energy savings available from utility
programs. Utility programs are designed to incent behavior that exceeds current building codes
and minimum efficiency standards. It should be noted that the savings from these programs are
somewhat uncertain because they depend on voluntary participation from customers. However,
the expense is shared by all customers. As such, customer participation in utility-offered DSM
and energy conservation programs, along with individual efforts to use electrical energy wisely,
remain fundamental elements for reducing the demand for energy.
Conservation and renewable energy are expected to continue to play an important role in
Florida’s energy future. The Commission will continue its efforts to encourage cost-effective
conservation and renewable energy to reduce the use of fossil fuels and defer the need for new
generating capacity to ensure a balanced mix of resources that reliably and cost-effectively meet
the needs of Florida’s ratepayers.
1
See Docket Nos. 130199-EI through 130205-EI.
4
DRAFT FEECA REPORT 1-14-2014
Section 1. The Florida Energy Efficiency and Conservation Act
1.1 History of FEECA
The Florida Energy Efficiency and Conservation Act (FEECA) has emphasized three key
areas in reducing the growth rates of weather-sensitive peak demand, reducing the growth rates
of electricity consumption and reducing the consumption of limited resources such as petroleum
fuels since it was enacted in 1980. The Commission is required to establish goals, to which
electric utilities are required to respond via demand-side management (DSM) programs, with an
aim of accomplishing these statutory requirements.
Originally, all electric utilities in Florida were subject to FEECA. However, in 1989,
two key changes were made to the law. The first change limited the required electric utilities
subject to the law to those with more than 500 gigawatt-hours (GWh) of annual retail sales.
During that period, the requirement included 12 utilities which produced 94 percent of Florida’s
retail electricity sales combined. The second change to the law included language which
encouraged cogeneration.
In 1996, municipal and cooperative utilities’ minimum retail sales thresholds were raised
by the Legislature to 2,000 GWh. Retail sales for these utilities were measured as of July 1,
1993, and two municipal utilities’ sales fell within the boundaries of the new law: JEA and OUC.
In addition to these two utilities, all five Florida investor-owned utilities (IOU) must comply
with FEECA regardless of sales. No rural electric cooperatives are subject to FEECA.
FEECA utilities currently account for more than 90 percent of all Florida energy sales as
shown below in Table 1. The table reflects 2012 energy sales by each FEECA utility, as well as
all non-FEECA utilities. In addition, the table also includes the percentage of Florida’s total
energy sales for each FEECA utility along with a total percentage allocation for the non-FEECA
utilities.
Table 1. Energy Sales by Florida's FEECA Utilities in 2012
Energy
% of Total
Florida's FEECA Utilities
Sales
Energy
GWh
Sales
Florida Power & Light Company
102,226
48.1
Duke Energy Florida
36,381
17.9
Tampa Electric Company
18,412
8.8
Gulf Power Company
10,663
5.2
Florida Public Utilities Company
661
0.3
JEA
11,663
5.9
Orlando Utilities Commission
5,916
2.8
FEECA Utilities’ Total
185,922
90.4
Non-FEECA Utilities’ Total
29,969
9.6
Statewide Total
215,891
100.0
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DRAFT FEECA REPORT 1-14-2014
In March 2012, the Florida Legislature tasked the Commission, in collaboration with the
Florida Department of Agriculture and Consumer Services (DACS), to evaluate whether the Act
was still in the public interest. Academic institutions were identified as being best able to meet
the criterion that the evaluation be conducted via independent contract. Of 19 potential academic
contractors with expertise in energy, the electric utility industry, and energy efficiency and
conservation, a team of researchers from the University of Florida and the National Regulatory
Research Institute was ultimately selected to perform the study. Results were distributed to the
Governor and the Legislature on January 7, 2013. The research team concluded that FEECA
remains in the public interest for the following reasons:

Customer contributions to FEECA utility-sponsored conservation programs
provide a positive net benefit. Florida’s conservation program costs are in line
with costs in similarly situated states;

Conservation programs which use information and financial incentives to
encourage less consumption act to offset imperfect price signals inherent in
traditional rate structures;

The FPSC applies appropriate and commonly used cost-effectiveness tests to
evaluate the costs and benefits of conservation programs. The cost of
conservation programs does not appear to be an undue burden on consumers; and

The utilities’ roles in promoting energy conservation are appropriate.
A copy of the report can be found using the following link:
http://warrington.ufl.edu/centers/purc/docs/FEECA_FinalReport2012.pdf. The Legislature also
required the Commission to serve as consultants to the DACS Office of Energy along with the
Florida Building Commission, and the Florida Energy System Consortium to develop
information regarding cost savings associated with various energy efficiency and conservation
measures. This information is posted on the DACS website to facilitate consumers’ energy
efficiency decisions.
In May 2013, the Commission’s Office of Auditing and Performance Analysis completed
a report titled Review of Administrative Efficiency of Utility Demand-Side Management
Programs. As the title implies, an audit was performed to examine the administrative efficiency
of the DSM programs of the four major investor-owned electric utilities in Florida: FPL, DEF,
TECO, and Gulf. The purpose of the audit was to review each utility’s processes to efficiently
develop, measure, analyze and improve its DSM programs. Staff also examined how each utility
evaluates DSM program efficiencies and cost-effectiveness, including how each utility tracks
costs associated with implementing the DSM programs, how each utility evaluates programs for
modification or replacement, and how each utility utilizes industry or peer-to-peer analysis to
evaluate or improve its DSM programs. The audit revealed that no major causes for concern
exist regarding the manner in which the IOUs utilize their resources towards running their DSM
programs.
A copy of the report is available on the Commission’s website at
http://www.floridapsc.com/publications/pdf/electricgas/DSMReviewReport.pdf.
6
DRAFT FEECA REPORT 1-14-2014
1.2 Conservation Tools and DSM Savings
As potential sites for power plants and transmission corridors become more scarce, the
need to defer future generating units and transmission units grows in importance. Though utilitysponsored DSM programs are unquestionably important, consumer choice and mandatory
efficiency standards are keys to reducing demand and energy growth rates in Florida.
Consumers respond to price signals by buying smaller, more energy-efficient homes, installing
efficiency upgrades, using more cost-effective demand-side renewable systems, behavioral
changes, and a host of other actions. The Commission’s actions to educate Florida’s consumers
on conservation opportunities are discussed further in Section 4 of this report.
Home and business energy audits serve as the basis for all DSM and conservation
programs by allowing utilities the opportunity to evaluate conservation opportunities for their
customers. Pursuant to 366.82(11), F.S., all FEECA utilities are required to offer energy audits
to residential customers. During 2012, Florida’s investor-owned utilities performed more than
206,000 residential energy audits. Through their demand-side management plans the FEECA
utilities currently offer more than 100 conservation programs for residential, commercial, and
industrial customers.
Table 3 illustrates that since FEECA’s enactment in 1980, DSM programs are estimated
to have reduced winter peak demand by an estimated 6,465 MW and reduced annual energy
consumption by an estimated 8,937 GWh. The demand savings from these programs have
resulted in the deferral or avoidance of a substantial fleet of baseload, intermediate and peaking
power plants.
Table 3. Estimated Cumulative DSM Savings Since 1980
Summer Peak Demand
Winter Peak Demand
Annual Energy Reduction
Savings
6,737 MW
6,465 MW
8,937 GWh
Utility programs are designed to incent behavior that exceeds current building codes and
minimum efficiency standards. The potential demand and energy savings from utility-sponsored
conservation programs are affected by consumer education and behavior, building codes, and
appliance efficiency standards. Consumer actions to implement energy efficiency measures
outside of utility programs as well as codes and efficiency standards, create a baseline for a new
program’s cost-effectiveness and reduce the amount of incremental energy available to count
towards savings. At the state level, building code requirements established by the Florida Building
Commission in 2008, per legislative directive, have increased the energy performance of new
buildings by at least 20 percent compared to the 2007 Energy Efficiency Code. State and Federal
minimum efficiency standards for residential appliances and commercial equipment, along with
7
DRAFT FEECA REPORT 1-14-2014
building construction standards, complement state level utility-sponsored DSM programs for which
consumer participation is voluntary.2
At the federal level, the U.S. Department of Energy (DOE) establishes minimum energy
efficiency standards for more than 50 categories of appliances and equipment representing
approximately 90 percent of home energy use, 60 percent of commercial building use, and 29
percent of industrial energy use. Throughout 2013, the DOE completed more than 30
rulemaking actions, including four final rules on new energy efficiency standards. Table 2
outlines the expected timeframe for changes in appliance standards for those appliances where
rulemaking has begun.
The DOE’s final rules issued in 2013 included an update for the energy conservation
standards for residential microwave ovens in standby mode and off mode and revised energy
conservation standards for residential room air conditioners. The DOE also initiated rulemaking
to amend testing procedures for residential refrigerators and freezers to account for ice making
energy use and to update energy use for other features. Once finalized, the new standards for
Energy Star certified refrigerators and freezers would use approximately 10 percent less energy
than models meeting the current 2014 standards.
The new standards for microwave ovens will go into effect starting in 2016, and are
expected to save U.S. households approximately $3 billion on their energy bills through 2030.
The DOE estimates that the changes in the energy efficiency standards for microwave ovens will
reduce energy consumption in standby mode by 75 percent in countertop microwave ovens and
over-the-range microwave ovens without convection features, and by 51 percent for over-therange microwave ovens with convection.
Lighting standards have changed as well, with various watts of incandescent bulbs being
phased out and becoming no longer available for purchase. Beginning January 1, 2012,
traditional 100 watt incandescent light bulbs were phased out. Similarly, 75 watt incandescent
bulbs were phased out as of January 1, 2013 and as of January 1, 2014, 60 watt and 40 watt
incandescent bulbs will no longer be available.
2
Pursuant to Section 553.975, F.S., the Commission must report the effectiveness of state energy conservation
standards established by Sections 553.951 – 553.973, F.S. Florida’s appliance efficiency standards are mandatory
efficiency improvements but have not been updated since 1993, and therefore have likely been superseded by more
recent federal efficiency standards.
8
DRAFT FEECA REPORT 1-14-2014
Table 2: Federal Appliance Standards
Product Category
Approximate Rule
Initiation Date
Final Action
Date
Heating Products Rulemaking
Fiscal Year (FY) 2013,
Furnace Fans
Quarter (Q)2
Single-Package Vertical Air Conditioner (AC) and Heat Pump (HP)
FY 2012, Q1
Commercial and Industrial Fans and Blowers
FY 2011, Q3
Commercial Warm Air Furnaces
FY 2013, Q1
Residential Boilers
FY 2013, Q1
Commercial Packaged Boilers
FY 2013, Q2
Residential Water Heaters
FY 2013, Q2
Residential Direct Heating Equipment and Pool Heaters
FY 2014, Q1
Residential Furnace
FY 2015, Q1
Transformers, Motors, and Pumps Rulemakings
Electric Motors
FY 2010, Q2
Commercial and Industrial Pumps
FY 2011, Q2
Lighting Rulemaking
General Service Fluorescent Lamps and Incandescent Reflector Lamps*
FY 2011, Q2
Metal Halide Lamp Fixtures
FY 2009, Q2
High-Intensity Discharge Lamps
FY 2010, Q3
General Service Incandescent Lamps and Compact Fluorescent Lamps,
General Service LEDs, and General Service Organic Light-Emitting Diodes
(OLEDs)
FY 2014, Q2
Ceiling Fans and Ceiling Fan Light Kits
FY 2012, Q4
Elliptical Reflector (ER), Bulge Reflector (BR), and Small-Diameter
Incandescent Reflector Lamp**
FY 2010, Q1
Home Appliance Rulemakings
Commercial Clothes Washers
FY 2012, Q2
Wine Chillers and Miscellaneous Refrigeration Products
FY 2011, Q3
Kitchen Ranges and Ovens
FY 2014, Q1
Dehumidifiers
FY 2013, Q1
Space Cooling Rulemakings
Commercial Packaged Air Conditioning and Heating Equipment
FY 2013, Q1
Packaged Terminal Air Conditioners and Heat Pump
FY 2013, Q2
Commercial Refrigeration Rulemaking
Walk-In Coolers and Walk-In Freezers
FY 2009, Q1
Commercial Refrigeration Equipment
FY 2010, Q2
Commercial Automatic Ice Makers
FY 2011, Q3
* DOE has revised the scope of this rulemaking activity.
**DOE has ceased work on this rulemaking activity.
Dec. 2013
Apr. 2014
Sept. 2015
Dec. 2015
Jul. 2016
Dec. 2016
Mar. 2018
Mar. 2018
Jun. 2019
May 2014
Aug. 2015
Sept. 2014
May 2014
Jul. 2014
Dec. 2016
Dec. 2016
TBD
Jan. 2015
Jan. 2016
Mar. 2017
Mar. 2017
Dec. 2015
Sept. 2016
Jan. 2014
Feb. 2014
May 2014
Utility programs offer rebates and incentives for appliances that exceed federally
established minimum efficiency standards, thereby avoiding duplicate savings estimates.
Increases in federal efficiency standards, independent conservation efforts by consumers, and
9
DRAFT FEECA REPORT 1-14-2014
general conservation practices may increase utilities’ challenges in achieving enough increased
savings through DSM programs to meet the rising goal levels. Moreover, participation rates in
utility programs are driven by the anticipated payback to the participating customer. While utility
incentives will tend to increase the customers “take rate” in programs, the cost of electricity is
included in each customer’s calculations to participate. Thus low or declining electric prices reduce
the market participation in DSM programs.
1.3 Conservation Cost Recovery
Administrative costs, equipment, and incentive payments to participants all are costs of
implementing a DSM program. IOUs are allowed to recoup prudent and reasonable expenses for
DSM programs approved by the Commission through the Energy Conservation Cost Recovery
(ECCR) clause. Before attempting to recover costs through the ECCR, utilities must prove their
DSM programs are cost-effective and therefore benefit ratepayers in general. Utilities must also
obtain Commission approval for program modifications before seeking cost recovery.
IOUs have recovered more than $5.7 billion in conservation expenditures via the ECCR
clause since 1981; approximately $2.9 billion of these funds have been recovered in the last 10
years. Table 4 shows the annual DSM expenditures recovered from customers by Florida’s
IOUs. As shown in Table 4, the IOUs’ annual expenditures demonstrated general stability from
2003 to 2007, primarily because DSM programs reached saturation in participation levels and
became less cost-effective due to reduced cost of new generating units. From 2008 through
2011, IOUs saw growth in DSM expenditures due to adding and/or changing some programs,
including programs designed to encourage consumers to install new energy efficiency
technology, and increased incentive levels.
Table 4. DSM Expenditures Recovered Through the ECCR Clause
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Total
FPL
$150,026,657
$145,679,192
$144,192,696
$146,205,249
$146,204,978
$180,016,994
$186,051,381
$216,568,331
$228,293,641
$224,033,740
DEF
$62,156,585
$60,072,362
$59,143,076
$59,543,107
$67,109,815
$77,593,960
$80,954,071
$85,354,923
$91,738,039
$93,728,108
TECO
Gulf
FPUC
$17,518,874 $7,313,033 $381,563
$16,357,137 $7,619,637 $382,504
$15,583,727 $8,826,754 $473,610
$14,099,638 $9,562,098 $456,162
$13,652,585 $9,107,952 $515,022
$16,989,411 $9,257,740 $534,350
$32,243,415 $10,576,197 $540,433
$43,371,442 $9,859,407 $693,331
$43,349,092 $15,003,596 $941,462
$46,593,831 $22,925,503 $651,145
Total
$237,396,712
$230,110,832
$228,219,863
$229,866,254
$236,589,592
$284,392,455
$310,365,497
$355,847,434
$379,325,830
$387,932,327
$2,880,047,556
10
DRAFT FEECA REPORT 1-14-2014
During the annual ECCR proceedings, the Commission decides on an energy
conservation cost recovery factor for application to the energy portion of each customer’s bill for
the following calendar year. These factors are set based on each utility’s estimated conservation
costs for the next calendar year, along with a reconciliation for any actual conservation cost
under- or over-recovery for the previous year. The Commission most recently set conservation
cost recovery factors in November 2013.3 These factors take effect with the first billing cycle of
2014.
Table 5 illustrates the IOUs’ conservation cost recovery factors for application to
residential customer bills. These factors were applied to a bill based on 1,200 kilowatt-hour
(kWh) energy usage to estimate the impact on a typical residential customer’s monthly bill.
Table 5. Residential Conservation Cost Recovery Factors in 2014
Residential ECCR Factor
Monthly Bill Impact
Utility
(cents/kWh)
(based on 1,200 kWh)
FPL
0.337
$4.04
DEF
0.402
$4.82
TECO
0.295
$3.54
Gulf
0.226
$2.71
FPUC
0.100
$1.20
Natural gas local distribution companies (LDC) also offer conservation programs to their
customers although currently, the Commission does not set goals for these companies. Natural
gas programs typically include the provision of incentives for the replacement of less efficient
appliances with more efficient versions. As a result, LDCs have historically spent the majority
of their conservation program costs promoting the use of natural gas to residential home builders
and home owners. These actions are achieved by providing rebates that support the installation
of energy efficient appliances. Recently, the natural gas LDCs received approval from the
Commission to offer natural gas programs to their commercial customers.4 The programs will
allow the LDCs to incentivize new construction, retrofit, or retention commercial customers who
use efficient end-use natural gas appliances, similar to what is offered to residential customers.
During the analysis of the LDC’s petition seeking to offer new commercial natural gas
conservation programs, staff noted that the Commission’s electric rules on energy conservation
contain more guidelines than those currently encompassed in the natural gas conservation rules.
The Commission has authorized staff to conduct workshops in the near future to initiate
discussions with the industry to determine whether the current natural gas conservation rules
should be revised in order to be more consistent with the filing requirements for the electric
utilities.
3
See Order No. PSC-13-0614-FOF-EG, issued November 20, 2013, in Docket No. 130002-EG, In re: Energy
Conservation Cost Recovery Clause.
4
See Docket No. 130167-EG; Petition for approval of natural gas energy conservation programs for commercial
customers, by Associated Gas Distributors of Florida.
11
DRAFT FEECA REPORT 1-14-2014
Commission Rule 25-17.015, F.A.C., permits natural gas distribution companies to seek
recovery for their conservation programs. The Commission most recently set conservation cost
recovery factors in November 2013.5 These factors took effect with the first billing cycle of
2014. Table 6 displays the local distribution companies’ conservation cost recovery factors
which will be applied to a typical residential customer’s bill using 20 therms of natural gas per
month.
Table 6. Residential Natural Gas Cost Recovery Factors in 2014
Utility
Chesapeake Utilities
Florida City Gas
Florida Public Utilities
Peoples Gas System
St. Joe Natural Gas
Indiantown Gas Company
Sebring Gas System
ECCR Factor
(cents/therm)
21.947
13.084
9.256
8.253
23.774
2.4690
11.993
Monthly Bill Impact
(based on 20 therms)
$4.39
$2.62
$1.85
$1.65
$4.75
$0.49
$2.40
5
See Order No. PSC-13-0613-FOF-GU; issued November 20, 2013; in Docket No. 130004-GU; In re: Natural Gas
Conservation Cost Recovery.
12
DRAFT FEECA REPORT 1-14-2014
Section 2. Analytics for Setting Demand-Side Management Goals
2.1 Cost-Effectiveness
In general, utility-sponsored DSM programs can benefit the general body of electric
ratepayers because of the programs’ ability to offset the need for future power plant construction.
These programs therefore can reduce costs to ratepayers by postponing capital expenditures and
reducing current energy production costs, including fuel and variable operating and maintenancerelated costs, and by improving reliability. On the other hand, the deferral of new power plants
can forgo the benefits of more efficient power production and lower emission rates for certain
regulated pollutants.
Section 366.82, F.S., requires utility-sponsored conservation programs to be costeffective. This requirement is codified in Rule 25-17.008, F.A.C., which identifies cost-effective
methodologies to be used, as well as cost and benefit information utilities must provide the
Commission whenever an assessment of an existing, new or modified conservation program is
requested. In order to be eligible to qualify for cost-recovery, utilities are required to provide a
cost-effectiveness analysis of each program. This analysis is done via three tests: the Participants
test, the Ratepayer Impact Measure (RIM) test, and the Total Resource Cost (TRC) test. The
tests are summarized below.
Participants test. The Participants test analyzes costs and benefits from a program
participant’s point of view and ignores the impact on the utility and other ratepayers not
participating in the program. The costs customers pay for equipment and maintenance are
considered under the Participants test. Benefits considered in the test include incentives that are
paid by the utility to the customers and a reduction in customer bills.
RIM test. The RIM test includes the costs associated with incentive payments to
participants and decreased revenues to the utility which typically must be recovered from the
general body of ratepayers at the time of a rate case. In particular, the RIM test is designed to
ensure that all ratepayers, not just the program’s participants, will benefit from a proposed DSM
program. A DSM program that passes the RIM test ensures that all customer rates are lower than
they otherwise would have been without the DSM program.
TRC test. The TRC test measures the overall economic efficiency of a DSM program
from a social perspective. This test measures the net costs of a DSM program based on its total
costs, including both the participant’s and the utility’s costs. Unlike the RIM test, customer
incentives and decreased revenues are not included as costs in the TRC test; instead, these factors
are treated as transfer payments among ratepayers. Moreover, certain external costs and benefits
such as environmental impacts are appropriate for inclusion under the TRC test.
13
DRAFT FEECA REPORT 1-14-2014
Table 7 below further illustrates the costs and benefits considered in the three
Commission-approved cost-effectiveness methodologies:
Table 7. Summary of Cost-Effectiveness Methodologies
Participants
RIM
TRC
X
X
X
X
X
X
X
X
X
X
Benefits
Bill Reduction
Incentives Received
Avoided Generation
(Capital and O&M)
Avoided
Transmission
(Capital and O&M)
Fuel savings
X
X
Costs
Program Costs
System Fuel Cost
Increase
Incentives Paid
Lost Revenues
Participant’s Costs
(Capital and O&M)
X
X
X
X
IOUs also are required by the Commission to assess programs regularly. When programs
prove no longer cost-effective, utilities must petition the Commission for modification or
discontinuation of the program. In contrast, if new efficiency measures become available which
are cost-effective, the utility may petition the Commission for approval of a new program.
Legislation enacted in 2008 amended the FEECA statute, placing upon the Commission
additional responsibilities when adopting goals. These responsibilities include the consideration
of benefits and costs to program participants and ratepayers as a whole as well as the need for
energy efficiency incentives for customers and utilities. The Commission must also evaluate the
costs imposed by state and federal regulations on greenhouse gas emissions. The Commission is
also responsible for assessing the cost-effectiveness of all demand-side and supply-side energy
conservation measures, including demand-side renewable energy systems. The Commission’s
most recent goal-setting proceeding, initiated in 2008, was the first implementation of these
modifications. Additionally, the statute was amended to allow the Commission to provide
appropriate financial rewards and/or penalties to the utilities over which it has rate-setting
authority. Finally, the 2008 legislation authorized the Commission to allow an IOU to receive an
additional return on equity of up to 50 basis points for exceeding 20 percent of its annual load
growth through energy efficiency and conservation measures. To date, the Commission has not
awarded financial awards or assessed penalties for IOUs subject to FEECA.
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DRAFT FEECA REPORT 1-14-2014
2.2 Commission-Established Goals
In Order No. PSC-09-0855-FOF-EG,6 issued December 30, 2009, the Commission
established annual numeric goals for FEECA utilities for reductions in summer peak demand,
winter peak demand, and annual energy for the period from 2010 through 2019. The
Commission based the annual numeric DSM goals for the IOUs (FPL, DEF, TECO, Gulf, and
FPUC) on the enhanced TRC (E-TRC) test and the top ten residential energy savings measures
with a two-year or less payback. The E-TRC, like the TRC test, measures the overall economic
efficiency of a DSM program from a social perspective and also includes the addition of
projected future carbon costs. The Commission found that OUC’s and JEA’s annual numeric
goals were to be based on their current program levels so their general body of ratepayers are not
subjected to increased rates. DSM goals of DEF and JEA subsequently were amended based on
updated information provided through the utilities’ discovery responses.7 Table 8 shows the
summer demand, winter demand, and annual reduction energy goals ultimately approved for
FEECA utilities by the Commission.
Table 8. Commission-Approved DSM Goals (2010-2019)
Summer
Winter
Annual Energy
Demand Goals
Demand Goals
Goals (GWH)
(MW)
(MW)
1,498
605
3,082
FPL
1,134
1,058
3,205
DEF
138
109
360
TECO
144
110
574
Gulf
4
2
13
FPUC
12
9
36
OUC
18
14
155
JEA
2,948
1,907
7,425
Total
The Commission’s last goal-setting process occurred during 2009. After setting the
annual numeric goals, the Commission directed utilities to file DSM plans designed to meet their
goals as outlined by Section 366.82(7), F.S. On March 30, 2010, the FEECA utilities filed
petitions requesting approval of their respective DSM plan for the 10-year period from 2010 to
2019. OUC, JEA, FPUC, and TECO’s proposed plans were approved by the Commission in
2010.8 Gulf’s proposed plan was approved in February 2011.9 The Commission modified and
6
See Order No. PSC-09-0855-FOF-EG, in Docket Nos. 080407-EG, 080408-EG, 080409-EG, 080410-EG, 080411EG, 080412-EG, and 080413-EG, issued December 30, 2009.
7
See Order No. PSC-10-0198-FOF-EG, in Docket Nos. 080408-EG and 080413-EG, issued March 31, 2010.
8
See Order No. PSC-10-0554-PAA-EG, in Docket No. 100161-EG, issued September 3, 2010; Order No. PSC-100609-PAA-EG, in Docket No. 100157-EG, issued October 4, 2010; Order No. PSC-10-0678-PAA-EG, in Docket
No. 100158-EG, issued November 12, 2010; Order No. PSC-10-0736-PAA-EG, in Docket No. 100159-EG, issued
December 20, 2010.
9
See Order No. PSC-11-0114-PAA-EG, in Docket No. 100159-EG, issued February 11, 2011.
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DRAFT FEECA REPORT 1-14-2014
approved the plans of FPL and DEF in 2011. The Commission determined that FPL and DEF
should continue existing programs due to the determination that these programs would still
produce significant energy savings while minimizing the overall increase in the bills of all
ratepayers.10 These orders also clarified how the Commission would view FPL’s and DEF’s
future performance with regard to potential rewards and penalties contemplated under Section
366.82(8), F.S. The Commission decided that neither FPL nor DEF would be eligible for any
financial reward unless it exceeds the established goals, nor would either utility be subject to any
financial penalty barring failure to achieve savings projected in their approved DSM plans.
2.3 Assessing Goal Achievement
Commission rules require separate goals be set for residential and commercial/industrial
(C/I) customers, assigning context to measuring goal achievement within these two primary
customer categories. Each utility’s achievements in these categories are also combined and
compared against total goals as the value of a system’s demand and energy savings has no
relation to the sector—business or residential—in which the savings occur.
FEECA utilities are required by Rule 25-17.0021, F.A.C., to file annual reports that
summarize their individual demand and energy savings for approved DSM plans. Year 2010,
was the first year in which goals were revised and the Commission concluded that achievement
should be viewed on an annual basis. In a separate analysis, staff used data collected from the
utilities through staff data requests to assess the success of cumulative achievements from the
2004 goal setting process combined with annual achievements from the 2009 goal setting
process.
Monitoring annual achievements enables the Commission to enhance understanding of
which utility programs are working and which may need to be modified. Staff submitted data
requests relating to FEECA utilities’ ability to meet performance levels; these requests asked
utilities to include explanations about factors that prevented them from achieving participation
levels, including information specific to which programs in the residential and
commercial/industrial sectors contributed to their achieving or falling short of projected
participation levels.
Table 9 illustrates 2012 annual residential, C/I and total goal and savings figures for each
FEECA utility. The bold numbers indicate instances in which a corresponding utility did not
achieve its goals in a particular category.
10
Order No. PSC-11-0346-PAA-EG, in Docket No. 100155-EG, issued August 16, 2011; and Order No. PSC-110347-PAA-EG, in Docket No. 100160-EG, issued August 16, 2011.
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DRAFT FEECA REPORT 1-14-2014
Table 9. DSM Goals Compared to Annual (2012) Achievements
Winter (MW)
Summer (MW)
Annual (GWh)
Utility
Goals
Reduction
Goals
Reduction
FPL
Residential
50.3
90.2
40.7
88.5
Commercial/Industrial
11.6
30.3
76.3
51.4
Total
61.9
71.0
166.5
139.9
DEF
Residential
91.0
85.0
73.0
35.0
Commercial/Industrial
11.0
21.0
26.0
28.0
Total
102.0
111.0
95.0
63.0
TECO
Residential
10.2
10.9
8.4
9.7
Commercial/Industrial
1.4
3.6
4.3
6.3
Total
11.6
14.5
12.7
16.0
Gulf
Residential
7.4
19.5
9.4
19.3
Commercial/Industrial
0.8
7.6
2.1
14.5
Total
8.2
27.1
11.5
33.8
FPUC
Residential
0.1
0.3
0.2
0.5
Commercial/Industrial
0.1
0.1
0.2
0.1
Total
0.2
0.4
0.4
0.6
JEA
Residential
1.0
3.1
1.2
2.5
Commercial/Industrial
0.4
2.1
0.6
1.6
Total
1.4
5.2
1.8
4.1
OUC
Residential
0.2
0.5
0.5
0.6
Commercial/Industrial
0.7
1.8
0.7
1.7
Total
0.9
2.3
1.2
2.3
*Bold numbers indicate the utility did not meet its annual goals.
Goals
Reduction
168.8
191.5
360.3
140.9
70.1
211.0
277.0
36.0
313.0
48.0
67.0
115.0
17.7
15.4
33.1
21.0
10.5
31.5
40.6
7.7
48.3
63.7
12.6
76.3
0.5
0.8
1.3
1.2
0.2
1.4
5.3
10.1
15.4
19.2
18.7
37.9
1.8
1.8
3.6
1.9
7.3
9.2
The results of the 2012 achievements towards the 2010 goals illustrated that Gulf, JEA,
and OUC surpassed all demand and energy savings goals in every category. FPL, DEF, TECO,
and FPUC did not meet goals in every category in 2012. Of the utilities that did not achieve their
annual Commission approved goals, most noted that while they failed to meet the goal
requirements on an annual level, they were able to meet the requirements on a cumulative level
when using both the 2004 and 2009 goal proceeding requirements. The Commission must
establish new goals for the FEECA utilities by the end of December 2014. During the new
proceedings the Commission will evaluate the FEECA utilities’ proposed energy saving targets.
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DRAFT FEECA REPORT 1-14-2014
These proposed targets may or may not change, but should reflect what the utilities learned from
the prior five-year period. Each utility’s performance in 2012 is discussed below.
On a system-wide basis, FPL did not meet annual goals in most categories with the
exception of its C/I demand goals and its residential annual energy goals. It should be noted that
in Order No. PSC-09-0855-FOF-EG, issued December 30, 2009, in Docket No. 080407-EG, the
Commission established annual numeric goals for FPL. FPL’s March 30, 2010, initial DSM
filing to meet the established goals was insufficient. As a result, the Commission directed FPL
to file specific program modifications or additions needed for the company’s DSM Plan to
comply with the goals established in the Order. FPL filed a modified plan on March 25, 2011,
that would modify certain programs to comply with the goals set by the Commission. However,
the modified plan, while complying with the Order, would cause a significant increase in the
rates paid by FPL customers. Consequently, the Commission directed FPL to continue with
approved programs based on its 2004 DSM plan, which yielded significant increases in
conservation and decreases in the growth of energy and peak demand. The Commission will set
new goals for FPL and the remaining FEECA utilities before the end of December 2014.
DEF did not meet annual goals in most categories with the exception of winter and
summer C/I demand reduction and its C/I annual energy goals. In the residential sector, DEF
was not able to meet its goals in any category due to lower participation levels, specifically in the
Home Energy Check and Home Improvement Programs. In Order No. PSC-09-0855-FOF-EG,
issued December 30, 2009, in Docket No 080408-EG, the Commission established annual
numeric goals for DEF. DEF’s March 30, 2010, initial DSM filing to meet the established goals
was insufficient. As a result, the Commission directed DEF to file specific program
modifications or additions needed for the company’s DSM Plan to reduce the consumer rate
impact in addition to the DSM plan to meet the original goals set by the Commission. DEF’s
modified plan also failed to meet the goals established by the Commission and caused a
significant increase in DEF’s customer rates. Consequently, the Commission directed DEF to
continue with approved programs based on its 2004 DSM plan, which yielded significant
increases in conservation and decreases in the growth of energy and peak demand.
TECO surpassed its annual winter demand and summer demand goals. TECO failed to
meet its C/I annual energy goal. In response to staff data requests, TECO states that participation
in a commercial/industrial program hinges on the need for equipment to be replaced due to
failure or planned replacement as a matter of planned retirement. Thus, business decisions will
dictate when participation occurs in the commercial/industrial sector. Such decisions could have
an effect on whether or not projected goals are achieved. Lastly, TECO explains that the actual
savings per participant can vary from one year to the next depending on the size of the
commercial/industrial customer. TECO further explains that the number of participants in the
commercial/industrial sector is not the only factor for DSM goal achievement. It is the savings
per participant that is critical and it is TECO’s opinion that the more reasonable approach for
evaluating goals is on a cumulative basis, rather than on an annual basis.
Table 9 reflects that Gulf exceeded its winter demand, summer demand, and annual
energy goals in every category for both the residential and commercial/industrial sectors. Gulf’s
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DRAFT FEECA REPORT 1-14-2014
DSM achievements have improved compared to previous years. Furthermore, as shown in Table
4, Gulf’s expenditures on DSM have increased significantly since 2010.
FPUC was able to meet its residential winter demand, summer demand and annual energy
goals, but fell short of C/I goals in the summer demand and failed to meet its C/I annual energy
goals. FPUC explains the lack of participation in some of its commercial programs contributed
to its inability to meet its C/I goals. FPUC stated that it will place additional marketing efforts in
programs where goals were not achieved.
JEA and OUC exceeded their winter demand, summer demand and annual energy goals
on a system-wide basis and exceeded the goals in every category for both residential and C/I
customers, as shown in Table 9.
2.4 Additional DSM and Goal Setting Activities
On July 26, 2013, the Commission opened a docket for each FEECA utility to set new
goals.11 To meet the statutory requirement that specifies goals are set at least every five years,
the Commission must establish goals for the FEECA utilities by December 2014. Once the new
goals and plans are approved by the Commission, the IOUs will be required to submit program
standards providing detailed descriptions of how each DSM plan is administered; the
Commission must approve standards before implementation begins.
On August 23, 2013, FPUC filed a petition requesting to establish its numeric goals by
use of a proxy methodology and to waive the filing requirements of the Commission’s Order
Establishing Procedure (OEP) and be excused from participating in the hearing regarding
establishing new goals. FPUC proposed using Gulf as its proxy utility because the two utilities
share similar geographic territories and customer bases.
On August, 28, 2013, OUC filed a petition for temporary waiver of Rules 25-17.0021(2)
and (3), F.A.C., and stipulation to conservation goals. OUC later withdrew its petition for rule
waiver on October 2, 2013, and filed a petition requesting to establish its numeric goals by use of
a proxy methodology, similar to the request filed by FPUC. OUC also requested permission to
waive the filing requirements of the OEP and to be excused from participating in the hearing
regarding establishing new goals.
Both FPUC and OUC stated that costs associated with updating the 2009 Technical
Potential Study, performing the subsequent analyses required by the Order Establishing
Procedure, and putting on testimony in support of the analyses would represent a hardship to
them and their ratepayers due to their small size. On, August 4, 2013, the Commission voted to
approve the proxy methodologies and excuse FPUC and OUC from participating in the goalsetting hearing.12 FPUC will use Gulf as its proxy utility to establish its 2014 goals. For the first
five-year period (2015 through 2019), a percentage comparison will be made between Gulf’s
existing 2009 goals and the goals that will be established for Gulf as a result of the 2014 FEECA
proceeding. The percentage difference will be multiplied by FPUC’s existing goals to determine
11
12
See Docket Nos. 130199-EI through 130205-EI.
See Order No. PSC-13-0645-PAA-EU, in Docket Nos. 130204-EM and 130205-EI, issued December 4, 2013.
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DRAFT FEECA REPORT 1-14-2014
FPUC’s annual numeric conservation goal for the years 2015 through 2019. For the remaining
five-year period (2020 through 2024), the values would be based on the average growth rate in
annual goals for Gulf, the proxy utility. FPUC is required to submit its goal calculations ten days
from the date of the Final Order in which Gulf’s goals are established. Furthermore, FPUC is
required to file its demand-side management plan within 90 days of the Final Order establishing
goals for Gulf, its proxy utility.
OUC will use TECO as its proxy utility to establish its 2014 goals. For the first five-year
period (2015 through 2019), a percentage comparison would be made between TECO’s existing
2009 goals and the goals that will be established for TECO as a result of the 2014 FEECA
proceeding. The percentage difference will be multiplied by OUC’s existing goals to determine
OUC’s annual numeric conservation goal for the years 2015 through 2019. For the remaining
five-year period (2020 through 2024), the values will be based on the average growth rate in
annual goals for TECO, the proxy utility. OUC is required to submit its goal calculations ten
days from the date of the Commission’s Final Order in which TECO’s goals are established.
Furthermore, OUC is required to file its DSM plan within 90 days of the Commission’s Final
Order establishing goals for TECO, its proxy utility.
During the 2009 goal-setting proceeding, non-numeric goals were established for the
investor-owned FEECA utilities which required the utilities to file pilot solar water heating and
solar photovoltaic programs. Moreover, the utilities were required to spend ten percent of the
average annual recovery through the clause on the development of solar. No non-numeric goals
were set for the municipal FEECA utilities. As such, because FPUC and OUC will use proxy
methodologies of their respective chosen utilities, each would be required to file updated
modified or updated non-numeric goals if the Commission requires such in the 2014 goal setting
proceedings.
Solar Programs
FEECA utilities are encouraged pursuant to Section 366.82(2), F.S., to further develop
demand-side renewable energy resources. In response to this statute, IOUs were instructed by
the Commission to spend 10 percent of their historic energy conservation cost recovery
expenditures as an annual cap for solar water heating (WH) and solar photovoltaic (PV) pilot
programs.13 As part of their proposed DSM plans, each IOU also proposed solar programs,
which, with the exception of FPL, were approved by the Commission in 2010; subsequently in
2011, FPL’s solar programs were approved. All of these solar programs were approved as
“pilots” as the Commission implemented the objectives of 366.82(2), F.S., because none of the
programs were determined to be cost-effective. Table 10 represents the Commission approval of
utilities’ annual expenditures for solar technologies.
13
See Order No. PSC-09-855-FOF-EG, in Docket Nos. 080407-EG, 080408-EG, 080409-EG, 080410-EG, 080411EG, 080412-EG, and 080413-EG, In re: Conservation review of numeric conservation goals.
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DRAFT FEECA REPORT 1-14-2014
Table 10. Commission-Approved Annual Expenditures
for Solar Technologies
Utility
Commission-Approved Annual Expense
FPL
Gulf
DEF
TECO
FPUC
Total
$ 15,536,870
$
900,338
$ 6,467,592
$ 1,531,018
$
47,233
$ 24,483,051
By the end of 2012, FEECA IOU utilities have provided rebates for over 2,300 solar PV
and water heating facilities in the residential, commercial, and school sectors combined. Many
of the programs offering rebates for installing residential solar PV systems were subscribed to
capacity just hours after approval, demonstrating high customer demand for subsidies for this
type of solar technology. The subscription rate additionally implies that financial incentives
offered to customers who install PV systems could still be effective, even at a reduced incentive
level. Solar pilot programs using annual funding also include solar thermal (water heating),
energy education and PV panels for schools. Table 11 below further reflects the quantity of PV
and solar water heating installations funded by the five IOUs in both residential and commercial
sectors.
Table 11. Solar Pilot Program Installations in 2012
Installations
Residential Solar Water Heating
FPL
DEF
TECO
Gulf
FPUC
Total
1,258
384
30
51
2
1,725
22
N/A
N/A
N/A
N/A
22
Residential Photovoltaic
225
132
70
46
8
481
Commercial Photovoltaic
66
11
N/A
N/A
N/A
77
1,571
527
100
97
10
2,305
Commercial Solar Water Heating
Total WH/PV Installations
Total WH/PV Expenditures
$9,253,594 $2,785,020 $1,516,551 $517,824 $44,297 $14,117,286
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DRAFT FEECA REPORT 1-14-2014
Section 3. Overview of Florida’s Electricity Market
3.1 Energy Demand in Florida
Florida’s total energy consumption ranks among the highest in the country largely
because of its sizeable population and climate-induced high demand for cooling. Florida’s
unique patterns of electrical demand and energy consumption are the result of the state’s largely
residential customer base. Understanding this pattern and why it occurs—high summer airconditioning loads and electricity use during winter months—is imperative to comprehending the
importance of conservation in Florida. Table 12 shows residential customers make up nearly 89
percent of Florida’s electricity customers and purchase 52 percent of its electrical energy.
Florida’s commercial electrical usage rates comprise about 38 percent, while industrial
customers purchase the remaining 10 percent.
Table 12. Florida’s Electric Customers by Class and Consumption in 2012
Energy Sales
Customer
Number of
% of
(gigawatt% of
Class
Customers
Customers
hours)
Sales
Residential
Commercial
Industrial
Total
8,421,235
1,046,733
27,351
9,495,319
88.7
11.0
0.3
100.0
109,182
80,216
20,293
209,691
52.1
38.3
9.6
100.0
The effects of Florida’s high temperatures and humidity include fluctuation in residential
customers’ electrical usage throughout the day. In the summer, residential energy use peaks in
early evening; in the winter it peaks mid-morning and late evening. These peaks contrast with
industrial use, which tends to demonstrate more uniformity throughout the day. These usage
patterns cause greater trough to peak variation in the demand for energy consumed in Florida
than in other states with more industrial customers.
Figure 1 shows the daily load shape curves for typical Florida summer and winter days.
In the summer, air-conditioning demand starts to increase in the morning and peaks in the early
evening, a pattern which aligns with the sun’s heating of buildings. In comparison, the winter
load curve has two peaks—the largest in mid-morning, followed by a smaller peak in the late
evening—both of which correspond to heating loads.
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DRAFT FEECA REPORT 1-14-2014
Hourly Average Demand (% Seasonal Peak)
Figure 1. Typical Florida Daily Electric Load Shapes
100%
95%
90%
85%
80%
75%
70%
65%
60%
55%
50%
1
2
3
4
5
6
7
8
9
10
11
12
Summer
13
14
15
16
17
18
19
20
21
22
23
24
Winter
Florida is typically a summer-peaking state, which means summer peak demand
generally controls the amount of generation required. Florida’s 2012 summer peak demand—
47,093 MW—surpassed winter peak demand, which was 38,561 MW.
3.2 Florida’s Electric Generating Resources
Electric utilities’ resource-planning process aims to guarantee enough installed capacity
is available to meet projected customer demand and provide a contingency reserve. At the point
in the planning process that the timing of capacity additions is known, the appropriate
technology and fuel type to provide the energy is determined. Generating plants typically are
categorized as base load, peaking, or intermediate. Aside from planned outages, base load units
operate continuously. Peaking units supplement this power, operating less frequently during
high-demand periods. Intermediate units generate power to follow load for periods longer than
do peaking units, but not as continuously as base load units. Utility-sponsored conservation
programs help to reduce peak demand and energy consumption, offsetting the need for new
generating capacity.
Florida’s mix of electric utilities is made up of five IOUs, 33 municipally-owned electric
utilities and 18 rural electric cooperatives. Together, these utilities currently have 52,381 MW of
summer electric generating capacity and 56,126 MW of winter generating capacity. Non-utility
generators in the state provide an additional 5,073 MW of summer electric generating capacity
and 5,475 MW of winter generating capacity. Supplementary capacity is purchased from out-ofstate utilities over the Florida-Georgia transmission interties.
Historically, Florida’s electric utilities endeavored to achieve fuel diversity by
maintaining a balanced fuel supply with a mix of energy generation from coal, nuclear, natural
gas, oil, and other sources. However, natural gas usage continues to rise and has been the
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DRAFT FEECA REPORT 1-14-2014
preferred new generation capacity fuel. In 2012, natural gas provided 64.8 percent of energy
generation. That number is projected to fall to approximately 58.8 percent in 2022. The
projected natural gas consumption decline by 2022 may be the result of planned increases in
nuclear generation and a limited impact of new environmental compliance requirements.
In an attempt to reduce natural gas consumption, Florida’s utilities are encouraged to use
other energy resources including renewable energy and nuclear generation. Approximately
1,470 MW of firm and non-firm renewable generation is currently operating in Florida.
Approximately 434 MW are considered firm based on either operational characteristics or
contractual agreement. Municipal solid waste, biomass, and waste heat represent the majority of
Florida’s renewable generation. Other major types of renewable generation operating in Florida
include hydroelectric, landfill gas and solar.
Florida does not have any new nuclear generation scheduled until 2022, when FPL’s
Turkey Point Unit 6 is scheduled to come on-line followed by Turkey Point Unit 7 in 2023.
Duke has elected to discontinue construction of its Levy Nuclear plants. The utilities’ uprates, or
increase in the amount of power output, of the five existing nuclear units began May 2012, and
resulted in an additional 600 MW of base load capacity in addition to over 2900 MW of summer
capacity.
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DRAFT FEECA REPORT 1-14-2014
Section 4. Educating Florida’s Consumers on Conservation
While the Commission has statutory authority to require conservation efforts by the
regulated utilities, as part of the agency’s outreach program, the Commission complements these
utility efforts with its own conservation related activities. To effectively reach as many
consumers as possible, the Commission’s consumer education program uses a variety of tools to
share conservation information, including the FPSC website, public events, brochure
distribution, press releases, Twitter, and e-mail. Conservation information is also available to
consumers through other governmental and utility websites. Section 4.1 lists related websites
belonging to state and federal agencies, investor-owned electric utilities, and local gas
distribution companies to further assist consumers. Most of the data in this section covers
January through September 2013, due to the report’s publication date.
Electronic Outreach
An assortment of information is available on the FPSC website to help consumers save
energy. According to data from Google Analytics, total page views for the entire website for
January through October 10, 2013 was 1,048,459. Of these, total page views for the consumer
assistance pages accounted for 79,771. One of the more popular website destinations is the
FPSC’s Conservation House. The interactive graphic provides informative “point and click”
conservation tips for the home, helping consumers discover ways to reduce their monthly utility
bills. The Conservation House is located at: http://www.floridapsc.com/consumers/house/.
The Commission also features several energy conservation brochures online and in print
to help consumers save energy. Brochures may be viewed and printed directly from the website,
http://www.floridapsc.com/publications/, ordered free via an online order system, or requested
by mail or phone. From January through September 2013, 73,121 brochures were requested to
be sent by mail.
With its interactive design, the FPSC’s quarterly Consumer Connection E-Newsletter
features current energy and water conservation topics, consumer tips, and general Commission
information. In text and on video, consumer tips highlighted in 2013 include Conservation Tips
for College Students, Love Saving Energy?, and Five Ways to Contact the FPSC. The Consumer
Connection E-Newsletter is tweeted and sent to interested consumers, who can subscribe to the
free newsletter at: http://www.floridapsc.com/consumers/newsletter/newsletterspublic.aspx.
Additionally, conservation topics are often highlighted in the FPSC Chairman’s monthly
Commission Update e-newsletter. During 2013, Chairman Ronald A. Brisé’s newsletters
featured energy and water conservation in several articles, including Take the FPSC 2013 Energy
Saving Challenge, Florida’s Conservation Initiatives Are Working, May Conservation
Campaigns Urge Wise Water Ways, Meeting Your Energy Needs Line by Line, and FPSC Acts
on Conservation Message during Energy Action Month. The Chairman’s newsletter is distributed
to state and local government officials, tweeted, and can be accessed on the FPSC website,
www.FloridaPSC.com, under Hot Topics.
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DRAFT FEECA REPORT 1-14-2014
National Consumer Protection Week
National Consumer Protection Week (NCPW), highlighting consumer protection and
education efforts, was important to the FPSC’s 2013 conservation education efforts. For the 15th
Annual NCPW (March 3-9, 2013), Chairman Brisé kicked off the week by hosting a Love Saving
Energy? press conference highlighting ENERGY STAR appliances at Mays-Munroe, a local
Tallahassee appliance store, to bring practical, energy saving ideas to consumers.
Joining the Chairman at the press conference were State Representative Alan Williams;
Leon County Commissioner Mary Ann Lindley; Brenda Buchan, Florida Department of
Agricultural and Consumer Services; and Mike Munroe, owner of Mays-Munroe Appliance
Store. These state and community leaders shared their energy saving practices, along with
additional conservation tips to keep consumer energy costs down.
Also during NCPW, FPSC staff made presentations to consumers in Pembroke Pines,
Hollywood, Orlando, Kissimmee, Sanford, and Belle Glade, showing them how to save money
through energy and water conservation.
Older Americans Month
For the second year, the FPSC participated in Older Americans Month, a national project
celebrated each May to honor and recognize older Americans for the contributions they make to
their families, communities, and society. Unleash the Power of Age was this year’s theme, and
the FPSC held educational sessions at Florida senior centers in Eustis, Tavares, Groveland,
Leesburg, Miami, and Miami Beach, showing seniors ways to conserve energy and water. FPSC
staff also attended the Jacksonville Expo, which attracts more than 5,000 seniors. An FPSC
article outlining the importance of Older Americans Month, the Commission’s outreach
activities, and conservation efforts was featured in the January 2013 edition of the Florida
Department of Elder Affairs’ Elder Update.
Energy Action Month
Each October, the U.S. Department of Energy sponsors National Energy Action Month
to promote smart energy choices, while also highlighting economic and job growth,
environmental protection, and increased energy independence. The FPSC observes Energy
Action Month annually with events to promote energy efficiency and conservation.
FPSC Chairman Brisé and Tallahassee Mayor John Marks knocked on several
Tallahassee residents’ doors to provide homeowners with energy-saving measures and
installations–free of charge–during the 2012 Energy Action Month.
At a jointly-sponsored press conference, Chairman Brisé and Mayor Marks highlighted
the City of Tallahassee’s nationally-recognized REACH program as an example of “energy
action.” Following the news event, they accompanied a City crew during its scheduled doorto-door visit in a local neighborhood to install energy-saving products, seal leaks, and offer
hands-on energy efficiency education. As part of the City’s Energy Smart Plus (e+)
initiative, Neighborhood REACH helps eligible utility customers save energy and money by
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DRAFT FEECA REPORT 1-14-2014
making their homes more energy and water efficient—all at no cost to the customer.
Also in October for Energy Action Month, Chairman Brisé and senior staff from the
PSC exchanged their suits for jeans and participated in a locally-sponsored Big Bend Habitat
for Humanity (BBHH) “build.” By assisting BBHH, the Commission highlighted Habitat’s
mission to build energy-efficient, affordable homes for low-income consumers in the
community. This event also recognized the National Association of Regulatory Utility
Commissioners’ (NARUC) partnership with Habitat for Humanity established in January
2012 as part of its “Anybody Can Serve, So Let’s Conserve” campaign. NARUC
Commissioners were encouraged to “volunteer at various Habitat projects around the country
and share their expertise on energy issues.”
Community Events
The FPSC continuously seeks existing and new community events, venues, and
opportunities where conservation materials can be distributed and discussed with citizens. This
year, the FPSC participated in consumer programs and distributed energy and water conservation
materials through partnerships with governmental entities, consumer groups, and many other
service organizations. Examples of events where conservation information was shared during
2013 include:
 Ambassadors for Aging Day

Active Living Expo

Earth Day at the Capitol

Technology Lifeline Community event in Chipley

Florida Department of Elder Affairs and Big Bend Task Force’s Falls Prevention
Seminar

Florida Department of Elder Affairs SAFE Homes Program Workshop

FAMU Developmental Research School

Northeast Community Action Agency

Florida Forest Festival

Jackson County Senior Citizens Organization

Leroy Clemons Senior Center, Maxwell Senior Center, Orange Park Senior
Center; Middleburg/Wiegel Senior Center, Enoch Senior Center, Pinellas Park
Senior Center, St. Giles Manor Senior Center, Gadsden County Senior Center,
Chattahoochee Senior Center, Green Cove Springs Senior Center, Mid County
Senior Center, North County Senior Center, and Sadkin Senior Center
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DRAFT FEECA REPORT 1-14-2014

Marianna Housing Authority, Renaissance at Washington Ridge Housing
Authority, Manor at West Bartow Housing Authority, Villas of Lake Bonnet
Housing Authority, and Colton Meadow Housing Authority

Community Days in the cities of Jacksonville, Pembroke Pines, and Miami

Senior Days in Lake Jackson, Miccosukee, Bradfordville, Ft. Braden, Jake
Gaither Park, and Woodville
Hearings and Customer Meetings
As an ongoing outreach initiative, the Commission supplies conservation brochures to
consumers at FPSC hearings and customer meetings across the state. From January through
September 2013, Commission staff distributed information and addressed consumer questions at
15 FPSC public hearings and meetings. Consumers who file a complaint with the Commission
about high electric or natural gas bills also receive conservation information.
Library Outreach Program
Each year, the FPSC provides educational brochures to Florida public libraries for
consumer distribution. This year, the Commission increased its Library Outreach Campaign
participants from 333 to 583, to provide library patrons with FPSC publications that feature
practical energy and water conservation tips. Following the Campaign, many additional
publication requests from program participants have been filled.
In 2013, over 42,359 brochures were sent to, or requested by, Florida’s libraries. Past
annual survey results from library administrators indicate their continuing support for the
program and their willingness to partner with the Commission on future outreach projects.
Media Outreach
News releases are distributed to the media on major Commission decisions, meetings,
and public events. The Office of Consumer Assistance & Outreach also issues news releases
urging conservation. For instance, in March a release touted the federal government’s Fix a Leak
Week, where several water and energy conservation strategies were shared. In April, a release to
promote conservation on Earth Day and every day was shared with consumers, agencies, local
organizations, and businesses. In May, the Commission published a release on the growing
number of Floridians and businesses using renewables to generate their own electricity and a
release for Older Americans Month outlining the importance of seniors learning to conserve
resources and save money.
Each month in 2013, the PSC issued a press release offering energy saving tips for
consumers as a tribute to the Florida’s Viva 500 anniversary celebration. Residents who
participate in the PSC’s monthly Energy Saving Challenge can save 500 kilowatt hours or more
of energy through December 2013, saving customers’ money and saving the state’s resources.
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DRAFT FEECA REPORT 1-14-2014
Recognizing the PSC as a Viva Florida 500 partner, Florida Secretary of State Ken Detzner said,
“The PSC’s Energy Challenge will help future generations of Floridians enjoy the great state we
call home.”
Youth Education
The Commission emphasizes conservation education for Florida’s young consumers. In
2013, the FPSC participated in the Earth Day celebration at the Florida Capitol, and staff
provided students and their teachers with energy and water conservation tips to use on campus
and at home.
During 2013, the FPSC continued to produce its Get Wise and Conserve Florida! student
resource booklet to teach children about energy and water conservation. The booklet has been
distributed to all public libraries through the Library Outreach Program and is available at all
Commission outreach events. The student resource book has also become a favorite during
senior events.
Two conservation plays, Turn It On, Turn It Off and Water Wiser, were developed by the
FPSC to be performed by teen drama groups or young school children for their classmates,
thereby increasing the students’ interest in learning about conservation. The FPSC helped
produce both plays in recent years, and the Commission continues to work with school programs
interested in producing these plays. Both plays are included in the Arts in Education Directory,
produced by the Tallahassee-Leon County Council on Culture and Arts, that serves as a resource
guide for teachers seeking information about educational programs available in the area.
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DRAFT FEECA REPORT 1-14-2014
4.1 Related Web Sites
State Agencies and Organizations
Florida Public Service Commission – http://www.floridapsc.com/
Florida Department of Environmental Protection – http://www.dep.state.fl.us
The Office of Energy – http://www.freshfromflorida.com/Divisions-Offices/Energy
Florida Solar Energy Center – http://www.fsec.ucf.edu/
Florida Weatherization Assistance – http://www.floridajobs.org/job-seekers-communityservices/community-services/weatherization-assistance-program
Florida’s Local Weatherization Agencies List – http://www.floridajobs.org/job-seekerscommunity-services/community-services/weatherization-assistance-program/contact-your-localweatherization-office-for-help
U.S. Agencies and National Organizations
National Energy Foundation – http://www.nef1.org/
U.S. Energy Star Program – http://www.energystar.gov/
U.S. Department of Energy – Energy Efficiency and Renewable Energy Information http://www.eere.energy.gov/
U.S. Department of Energy – Consumer Energy Efficiency Tips –
http://www.eere.energy.gov/consumer/your_home/
Florida’s Electric Utilities Subject to FEECA
Florida Power & Light Company – http:/www.fpl.com
Florida Public Utilities Company – http://www.fpuc.com/
Tampa Electric Company – http://www.tampaelectric.com/
Gulf Power Company – http://www.gulfpower.com/
Duke Energy Florida, Inc. – http://www.duke-energy.com/
Orlando Utilities Commission – http://www.ouc.com/
JEA – http://www.jea.com/
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DRAFT FEECA REPORT 1-14-2014
Florida’s Investor-Owned Natural Gas Utilities
Chesapeake Utilities Corporation (Central Florida Gas) – http://www.cfgas.com/
Florida City Gas – http://www.floridacitygas.com/
Florida Public Utilities Company – http://www.fpuc.com/
Peoples Gas System – http://www.peoplesgas.com/
St. Joe Natural Gas Company – http://www.stjoenaturalgas.com/
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DRAFT FEECA REPORT 1-14-2014
Appendix 1. Conservation Activities of FEECA Utilities
A. Florida Power & Light Company
Residential Programs
Residential Building Envelope. This program encourages qualified customers to install energyefficient building envelope measures that cost-effectively reduce FPL’s coincident peak airconditioning load and customer energy consumption.
Duct System Testing and Repair Program. This program identifies air conditioning duct system
leaks and has qualified contractors repair those leaks.
Residential Air Conditioning Program. This program provides financial incentives for
residential customers to purchase a more efficient unit when replacing an existing air
conditioning system.
Residential Load Management Program (On Call Program). This program offers voluntary load
control to residential customers.
Residential New Construction Program (BuildSmart). The program’s objective is to encourage
the design and construction of energy-efficient homes that cost-effectively reduce FPL’s
coincident peak load and customer energy consumption.
Residential Low Income Weatherization Program. This program employs a combination of
energy audits and incentives to encourage low-income housing administrators to perform tuneups of Heating and Ventilation Air Conditioning (HVAC) systems and install reduced air
infiltration energy efficiency measures.
Commercial/Industrial Programs
Business Heating, Ventilating, and Air Conditioning Program. This program reduces the current
and future growth of coincident peak demand and energy consumption of business customers by
increasing the use of high efficiency heating, ventilating and air conditioning (HVAC) systems.
Business Efficient Lighting. This program encourages the installation of energy efficient lighting
measures in business facilities.
Business Customer Incentive. This program assists FPL’s business customers achieve electric
demand and energy savings that are cost-efficient to all FPL customers. FPL provides incentives
to qualifying customers who purchase, install, and successfully operate cost-effective energy
efficiency measures not covered by other FPL programs.
Business Building Envelope Program. This program encourages eligible business customers to
increase the efficiency of the qualifying portion of their building’s envelope to reduce HVAC
energy consumption and demand.
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DRAFT FEECA REPORT 1-14-2014
Business On Call Program. This program offers voluntary load control of central air
conditioning to General Service and General Service Demand customers.
Commercial Demand Reduction. This program reduces coincident peak demand by controlling
customer loads of 200 kW or greater during periods of extreme demand or capacity shortages.
Business Energy Evaluation. This program provides evaluations of business customers’ existing
and proposed facilities and encourages energy efficiency by identifying DSM opportunities and
providing recommendations to the customer.
Commercial/Industrial Load Control. This program reduces coincident peak demand by
controlling customer loads of 200 kW or greater during periods of extreme demand or capacity
shortages.
Cogeneration and Small Power Production. This program facilitates the installation of
cogeneration and small power production facilities.
Business Water Heating. This program encourages business customers to install qualifying Heat
Recovery Units (HRU) or Heat Pump Water Heater (HPWR) equipment.
Business Refrigeration Program. This program encourages eligible business customers to install
energy-saving equipment to reduce or eliminate the use of electric heating elements needed to
prevent condensation on display case doors and to defrost freezer doors.
Research and Development and Pilot Programs
Conservation Research and Development Program. This program evaluates emerging
conservation technologies to determine which are worthy of further evaluation as candidates for
program development.
Residential Thermostat Load Control Pilot Project. This project provides participating
residential customers a programmable thermostat and the option of overriding FPL’s control of
their central air conditioning and heating appliances via telephone or the Internet.
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DRAFT FEECA REPORT 1-14-2014
B. Duke Energy Florida, Inc.
Residential Programs
Home Energy Check. This program provides Duke Energy Florida Inc.’s (DEF) residential
customers with an analysis of energy consumption and recommendations on energy efficiency
improvements. Acting as a motivational tool to identify, evaluate, and inform consumers on cost
effective energy saving measures, the Home Energy Check is the foundation of the residential
Home Energy Improvement program and is a program requirement for participation. Seven
types of energy audits are available: the free walk-through, the paid walk-through ($15 charge),
the energy rating (Energy Gauge), the mail-in audit, an Internet option, a phone-assisted audit,
and a student audit.
Home Energy Improvement. This efficiency program provides existing residential customers
incentives for energy efficient heating, air conditioning, insulation upgrades, duct leakage repair,
reflective roofing products, high performance windows, window film, and solar screens.
Low-Income Weatherization Assistance Program. This program’s goal is to integrate DEF’s
DSM program measures with the Department of Community Affairs (DCA) and local
weatherization providers to deliver energy efficiency measures to low-income families. Through
this partnership, DEF assists local weatherization agencies by providing energy education
materials and financial incentives to weatherize the homes of low-income families.
Energy Management (Residential and Commercial).
This load management program
incorporates direct radio control of selected customer equipment to reduce system demand
during peak capacity periods and/or emergency conditions by temporarily interrupting selected
consumer appliances for special periods of time. Customers have a choice of options and receive
a credit on their monthly electric bills depending on the options selected and their monthly kWh
usage.
Neighborhood Energy Saver. This program assists low-income families with escalating energy
costs by implementing a comprehensive package of electric conservation measures at no cost to
eligible customers. In addition to installing these measures, DEF seeks to achieve three
important goals: educate participating families on proper energy efficiency techniques and best
practices, change their energy-use behavior, and manage their energy usage.
Renewable Energy Program. This program consists of two areas that are designed to encourage
the installation of renewable energy systems:
(1) Solar Water Heater with EnergyWise. This measure encourages residential
customers to install a solar thermal water heating system. The customer must have whole house
electric cooling, electric water heating and electric heating to be eligible for this program.
(2) Solar Photovoltaics with EnergyWise. This measure promotes environmental
stewardship and renewable energy education through the installation of solar energy systems at
schools within DEF’s service territory. Customers participating in the Winter-Only EnergyWise
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DRAFT FEECA REPORT 1-14-2014
or Year-Round EnergyWise Program can elect to donate their monthly credit toward the Solar
Photovoltaics with EnergyWise Fund.
All proceeds collected from participating customers and their associated monthly credits, are
used to promote photovoltaics and renewable energy educational opportunities.
Commercial/Industrial Programs
Business Energy Check. This free audit for non-residential customers can be completed at the
facility by an auditor or online by the business customer. A paid audit provides a more thorough
energy analysis for non-residential facilities. The program acts as a motivational tool to identify,
evaluate, and inform consumers on cost-effective energy saving measures for their facilities.
The Business Energy Check is the foundation of the Better Business Program and a requirement
for participation.
Better Business. This efficiency program provides incentives to existing commercial and
industrial customers for heating, air conditioning, motors, water heaters, roof installation
upgrade, direct leakage and repair, window film, cool roof, and lighting.
Commercial/Industrial New Construction. This efficiency program provides incentives for the
design and construction of energy efficient commercial and industrial facilities, including energy
efficient heating, air conditioning, motors, water heating, window film, insulation, leak free
ducts, cool roof, and lighting.
Innovation Incentive. The program encourages conservation efforts that are not supported by
DEF’s other programs. Major equipment replacement or other actions that substantially reduce
DEF’s peak demand requirements are evaluated to determine their impact on DEF’s system. If
cost-effective, these actions may qualify for an economic incentive in order to shorten the
payback time of the project.
Standby Generation. This program provides an incentive for customers to voluntarily operate
their on-site generation during times of system peak.
Interruptible Service Program. This program is a rate tariff which allows DEF to switch off
electrical service to customers during times of capacity shortages. The signal to operate the
automatic switch is operated by the Energy Control Center. In return for this interruption, the
customers receive a monthly rebate on their kW demand charge.
Curtailable Service Program. This program is a dispatchable DSM program in which customers
contract to curtail or shut down a portion of their load during times of capacity shortages. The
curtailment is done voluntarily by the customer when notified by DEF. In return for this
cooperation, the customer receives a monthly rebate for the curtailable portion of their load.
Technology Development Program. This program allows DEF to undertake certain development
and demonstration projects which have promise to become cost-effective conservation and
energy efficiency programs.
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DRAFT FEECA REPORT 1-14-2014
C. Gulf Power Company
Residential Programs
GoodCents Select Program. This program provides the customer with a means of conveniently
and automatically controlling and monitoring his/her energy purchases in response to prices that
vary during the day and by season in relation to Gulf’s cost of producing or purchasing energy.
Residential Geothermal Heat Pump Program. The program’s purpose is to reduce the demand
and energy requirements of new and existing residential customers through the promotion and
installation of geothermal systems.
Residential Energy Survey Program. This program offers energy conservation advice to
individuals and contractors building new homes. In addition the program advises existing
residential customers to implement efficiency measures resulting in energy savings. Owners of
existing homes may choose to have a Gulf Power representative conduct an on-site survey of
their home, or they may opt to participate in either a mail-in or online interactive version of the
survey, the Energy Check Up. Qualifying new home owners and contractors may request a
survey of their final construction plans. Regardless of the option chosen, these surveys provide
customers with specific whole-house energy recommendations.
Commercial Programs
GoodCents Commercial Buildings Program. This program educates commercial and industrial
customers on the most cost-effective methods of designing new and improving existing
buildings. The program stresses efficient heating and cooling equipment, improved thermal
envelope, operation and maintenance, lighting, cooking, and water heating. Field representatives
work with architects, engineers, consultants, contractors, equipment suppliers, building owners,
and occupants to encourage them to make the most efficient use of all energy sources and
available technologies.
Commercial Geothermal Heat Pump Program. The program’s objective is to reduce the demand
and energy requirements of new and existing commercial/industrial customers through the
promotion and installation of advanced and emerging geothermal systems.
Commercial/Industrial Energy Analysis. This program provides advice to Gulf Power’s existing
commercial and industrial customers on how to reduce and make the most efficient use of
energy. The program includes semi-annual and annual follow-ups with the customer to verify
conservation measures installed and to reinforce the need to continue with more conservation
efforts. Customers may participate by requesting a basic Energy Analysis Audit through either
an on-site survey or a direct mail survey. A more comprehensive analysis can be provided
through a Technical Assistance Audit.
Energy Services Program. This program establishes the capability and process to offer advanced
energy services and energy efficient end-use equipment customized to meet the individual needs
of large customers. Potential projects are evaluated on a case-by-case basis and must be cost36
DRAFT FEECA REPORT 1-14-2014
effective to qualify for incentives or rebates. Types of projects covered under this program
include demand reduction or efficiency improvement retrofits, such as lighting (fluorescent and
incandescent), motor replacements, HVAC retrofit (including geothermal applications), and new
electro-technologies.
Research and Development Programs
Conservation Demonstration and Development. This package of conservation programs
explores and pursues research, development, and demonstration projects to promote energy
efficiency and conservation. The program serves as an umbrella program for the identification,
development, demonstration, and evaluation of new or emerging end-use technologies.
Renewable Energy. This program encompasses a variety of voluntary renewable and green
energy programs under development by Gulf Power. The voluntary pricing options for
customers include, but are not limited to, EarthCents Solar (Photovoltaic Rate Rider) and the
Solar for Schools program. In addition, the renewable energy program includes expenses
necessary to prepare and implement a green energy pilot program using landfill gas, wind, solar,
or other renewable energy sources.
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DRAFT FEECA REPORT 1-14-2014
D. Tampa Electric Company (TECO)
Residential Programs
Residential Energy Audits. On-site audits of premises, online audits, and telephone surveys
instruct customers how to use conservation measures and practices to reduce their energy usage.
Duct Repair. This program reduces weather-sensitive peaks by offering incentives to encourage
the repair of the air distribution system in a residence.
Heating and Cooling Program. This program reduces weather-sensitive peaks of residential
customers by providing incentives for the installation of high efficiency heating and air
conditioning equipment at existing residences.
Residential Building Envelope Improvement. This program reduces demand and saves energy by
decreasing the load on residential air conditioning and heating (HVAC) equipment. Eligible
customers can receive incentives to add ceiling insulation exterior walls, window replacements
and window film.
Prime Time Program. This load management program directly controls the larger loads in
residential customers’ homes such as air conditioning, water heating, electric space heating, and
pool pumps. Participating customers receive monthly credits on their electric bills. The program
is currently closed to new participants.
Renewable Energy Initiative. This program assists in the delivery of renewable energy for
TECO’s Renewable Energy Program by providing funding for program administration,
evaluation, and market research.
Price Responsive Load Management. This program reduces weather sensitive peak loads by
offering a multi-tiered rate structure as an incentive for participating customers to reduce their
electric demand during high cost or critical periods of generation.
Residential Low-Income Weatherization. This program saves demand and energy by decreasing
the energy consumption at a residence. The program is aimed at low-income customers and
provides, at no cost to qualified customers, the following: eight compact fluorescent lamps, one
water heater wrap, three low-flow faucet aerators, two showerheads, a window (HVAC)
weather-stripping kit, wall plate thermometers, HVAC filters, weather-stripping, caulking, and
ceiling insulation (up to R-19).
Educational Energy Awareness – Pilot. This program saves demand and energy by increasing
customer awareness of available conservation measures and practices that can reduce the
individual’s energy use. TECO partners with schools within its service area at the eighth grade
level to teach students the benefits of energy efficiency.
Energy Plus Homes. This program encourages new home construction to be above the minimum
energy efficiency levels required by the State of Florida Energy Efficiency Code for New
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DRAFT FEECA REPORT 1-14-2014
Construction through the installation of high efficiency equipment and building envelope
options.
Commercial Programs
Cogeneration. This program encourages the development of cost-effective commercial and
industrial cogeneration facilities through the evaluation and administration of standard offers and
the negotiation of contracts for the purchase of firm capacity and energy.
Commercial Cooling. The purpose of this program is to encourage the installation of high
efficiency direct expansion (DX) commercial air conditioning equipment.
Commercial Lighting. This program reduces weather-sensitive peaks by encouraging investment
in more efficient lighting technology in commercial facilities.
Commercial Load Management. This load management program’s purpose is to achieve
weather-sensitive demand reductions through load control of equipment at the facilities of firm
commercial customers.
Standby Generator. This program uses the emergency generation capacity at firm commercial
and industrial facilities to reduce weather-sensitive peak demand.
Conservation Value. This incentive program for firm commercial and industrial customers
encourages additional investments in substantial demand shifting or demand reduction measures.
Industrial Load Management. This program is for large industrial customers with interruptible
loads of 500 kW or greater.
Commercial Duct Repair. This program reduces weather-sensitive peaks by offering incentives
to encourage the repair of the air distribution system in a facility.
Commercial Building Envelope Improvement. This program saves demand and energy by
decreasing the load on air conditioning and heating (HVAC) equipment. Eligible customers can
receive incentives to add ceiling insulation, exterior wall insulation, and window film.
Commercial Efficient Motors. This program encourages commercial/industrial customers to
install premium-efficiency motors in new or existing facilities through incentives. The program
aims to reduce the growth of peak demand and energy by encouraging customers to replace worn
out, inefficient equipment with high efficiency equipment that exceeds minimum product
manufacturing standards.
Research and Development
A five-year Research and Development program is directed at end-use technologies (both
residential and commercial) not yet commercially available, where insufficient data exists for
measure evaluations specific to Central Florida climate.
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DRAFT FEECA REPORT 1-14-2014
E. Florida Public Utilities Company
Residential Programs
Geothermal Heat Pump Program. This program reduces the demand and energy requirements of
new and existing residential customers through the promotion and installation of advanced and
emerging geothermal systems.
Residential Heating and Cooling Efficiency Upgrade. The purpose of this program is to reduce
the rate of growth in peak demand and energy throughout the company’s service territories by
increasing the number of high-efficiency heat pumps.
GoodCents Home/Energy Star Program. This program provides guidance concerning energy
efficiency in new construction by promoting energy efficient home construction techniques and
by evaluating the energy efficient components of design and construction.
GoodCents Energy Survey Program. The program promotes the installation of cost-effective
conservation measures by giving the customer specific whole-house recommendations regarding
energy efficiency. The survey process also checks for possible duct leakage.
Residential Ceiling Insulation Upgrade Program. This program reduces peak demand and
energy consumption by decreasing the load presented by the residential air-conditioning and
heating equipment. Customers are required to add at least R-11 of ceiling insulation to qualify
for a $100 incentive in the form of an Insulation Certificate that may be applied to the total cost
of installing the added ceiling insulation.
Commercial Programs
GoodCents Commercial Building Program. This program addresses the most common critical
areas in commercial buildings affecting summer peak kW demand: thermal efficiency of the
building and HVAC equipment efficiency. In addition, the program is designed to ensure that
buildings are constructed with energy efficiency levels above the Florida Model Energy code
standards.
GoodCents Commercial Technical Assistance Audit. This program is an interactive program that
assists commercial customers in identifying advanced energy conservation opportunities.
Customers receive an on-site review of the facility operation, equipment, and energy usage
pattern by a Florida Public Utilities Company Conservation Specialist. In addition, a technical
evaluation is performed to determine the economic payback or life cycle cost for various
improvements to the facility.
Commercial Indoor Efficient Lighting Rebate Program. This program reduces peak demand and
energy consumption by decreasing the load presented by commercial lighting equipment. The
program requires that commercial customers achieve at least 1,000 watts of lighting reduction
from any lighting source that has been retrofitted with a more efficient fluorescent lighting
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DRAFT FEECA REPORT 1-14-2014
system (ballasts and lamps). By doing so, customers qualify for an incentive of $0.10 per watt
reduced.
Educational and Research Programs
Low Income. This program provides low-income customers with basic energy education and
informs the customers of specific services offered by the utility.
Affordable Housing Builders and Providers. This program encourages affordable housing
builders to attend educational seminars and workshops related to energy efficient construction,
retrofit programs, financing programs, and the GoodCents Home program. The company works
with the Florida Energy Extension Service and other seminar sponsors to offer a minimum of
two seminars and/or workshops per year.
Conservation Demonstration and Development (CDD). The program pursues research,
development, and demonstration projects that are designed to promote energy efficiency and
conservation.
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DRAFT FEECA REPORT 1-14-2014
F. Orlando Utilities Commission
Residential Programs
Residential Energy Survey Program. This program provides residential customers with
recommended energy efficiency measures and practices. The program consists of three
measures: the Residential Energy Walk-Through Survey, the Residential Energy Survey Video
and DVD, and an interactive Online Home Energy Audit.
Duct Repair Rebate Program. The purpose of this program is to encourage customers to repair
leaking ducts on existing systems. Customers will receive up to a $150 rebate for duct repairs on
their homes.
Ceiling Insulation Rebate Program. This program is offered to residential customers to
encourage them to upgrade their attic insulation. Customers will receive a $100 rebate for
upgrading their attic insulation to R-19 or higher.
Window Film/Solar Screen Rebate Program. This program is designed to encourage customers
to install solar shading on their windows. Customers will receive up to a $100 rebate for
installation of solar shading film with a shading coefficient of 0.5 or less.
High Performance Windows Rebate Program. This program is designed to help minimize
heating, cooling, and lighting costs. The high performance windows rebate program is designed
to encourage customers to install windows that will improve energy efficiency in their homes.
Customers will receive a $1 rebate per square foot (up to $250) for the purchase of ENERGY
STAR® rated energy efficient windows.
Caulking and Weather Stripping Rebate Program. This program is designed to encourage
customers to caulk and weather-strip their homes. Customers will receive a rebate of 50 percent
of the cost (up to $50) for the caulking and weather-stripping of their homes.
Wall Insulation Rebate Program. This program is designed to encourage customers to insulate
the walls of their homes. Customers will receive a rebate of $300 for wall insulation.
Cool/Reflective Roof Rebate Program. This program is designed to encourage customers to
install new roofing to help insulate their homes. Customers will receive a rebate of $150 for
ENERGY STAR® cool/reflective roofing that has an initial solar reflectance greater than or
equal to 0.70.
Home Energy Fix-Up Program. This program is available to customers with a total annual
family income of $35,000 or less. Each customer must request and complete a free Residential
Energy Survey. OUC will arrange for a licensed, approved contractor to perform the necessary
repairs and will pay 85 percent of the total cost, not to exceed $2,000. The remaining 15 percent
can be paid directly or over an interest-free 12-month period on the participant’s monthly electric
bill.
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DRAFT FEECA REPORT 1-14-2014
Efficient Electric Heat Pump Rebate Program. This program provides rebates to qualifying
customers in existing homes who install heat pumps having a seasonal energy efficiency ratio
(SEER) of 14.0 or higher.
Commercial Programs
Commercial Energy Survey Program. The purpose of this program is to focus on increasing
energy efficiency and energy conservation in commercial buildings. A free survey comprised of
a physical walk-through inspection of the commercial facility performed by experienced energy
experts is included.
Commercial Indoor Lighting Retrofit Program. The program reduces energy consumption for
the commercial customer through the replacement of older fluorescent and incandescent lighting
with newer, more efficient lighting technologies.
Commercial OUConsumption Online Program. This program enables businesses to check their
energy use and demand from a desktop computer, allowing business owners to manage their
energy load. Participants must cover a one-time program set-up fee of $45, a $45 monthly fee
per meter for the service, and the cost of additional infrastructure (ranging between $0 and $500)
at the meters, which may be required.
Commercial OUConvenient Lighting Program. This program provides complete outdoor
lighting services for commercial applications, including industrial parks, sports complexes, and
residential developments. Each lighting package is customized for each participant, allowing the
participant to choose among light fixtures. Upfront financial costs and maintenance are
controlled by Orlando Utilities. The participant then pays a low monthly fee for each fixture.
Orlando Utilities also retrofits existing fixtures to new light sources or higher output units. New
agreements have allowed this program to expand into neighboring communities like Clermont,
Oviedo, and Brevard County.
Commercial Power Quality Analysis Program. This program gives Orlando Utilities the ability
to ensure the highest possible power quality to commercial customers. The program’s goals
include making the maximum effort to solve power quality problems through monitoring and
interpretive analysis, identifying solutions that will lead to corrective action, and providing
ongoing follow-up services to monitor results.
Commercial Infrared Inspections Program. The purpose of this program is to help customers
uncover potential reliability and power quality problems. The infrared inspection detects thermal
energy and measures the temperature of wires, breakers, and other electrical equipment
components. The information is transferred into actual images and those images reveal potential
problem areas and hot spots that are invisible to the naked eye.
OUCooling. Funded originally in 1997, this program allows Orlando Utilities to fund, install
and maintain a central chiller plant for each business district participating under the program.
Benefits to the businesses are lower energy consumption, increased reliability, no environmental
risks associated with the handling of chemicals, avoided initial capital cost, lower maintenance
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DRAFT FEECA REPORT 1-14-2014
costs, a smaller mechanical room, no insurance requirements, improved property resale value,
and availability of maintenance personnel for other duties.
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DRAFT FEECA REPORT 1-14-2014
G. JEA
Residential Programs
Residential Energy Audit Program. Uses auditors to examine homes, educate customers and
make recommendations on low-cost or no-cost energy-saving practices and measures.
Residential Energy Efficient Products. This program promotes the use of energy efficient
lighting and other energy efficient products in homes by offering a financial incentive. JEA
includes messaging concerning the proper disposal of bulbs containing mercury.
Green Built Homes of Florida. This program encourages the application of energy efficient
construction and products in new homes by offering a financial incentive to builders and
developers.
Residential Solar Water Heating. This program offers a financial incentive to customers to
encourage the use of solar water heating technology.
Residential Solar Net Metering. This program promotes the use of solar photovoltaic systems by
purchasing excess power from residential customers implementing these systems.
Neighborhood Efficiency Program. This program offers education concerning the efficient use
of energy and water as well as the direct installation of an array of energy and water efficient
measures at no cost to income qualified customers.
Commercial Programs
Commercial Energy Audit Program. This program uses auditors to examine the businesses,
educate customers, and make recommendations on low-cost or no-cost energy-saving practices
and measures.
Commercial Energy Efficient Products. This program promotes the use of energy efficient
lighting and other energy efficient products in businesses by offering a financial incentive. JEA
includes messaging concerning the proper disposal of bulbs containing mercury.
District Chilled Water Program. This program utilizes district chilled water to reduce energy
costs, other operating costs as well as capital costs.
Commercial Solar Net Metering. This program promotes the use of solar photovoltaic systems
by purchasing excess power from commercial customers implementing these systems.
45
II. Outside Persons
Who Wish to
Address the
Commission at
Internal Affairs
OUTSIDE PERSONS WHO WISH
TO ADDRESS THE COMMISSION AT
INTERNAL AFFAIRS
January 23, 2014
Speaker
Matt McCaffree
Representing
Item #
National Association of Water Companies
1
III. Supplemental
Materials Provided
During Internal
Affairs
The records reflect that there were no
supplemental materials provided to the
Commission during this Internal Affairs
meeting.
IV. Transcript
000001
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BEFORE THE
FLORIDA PUBLIC SERVICE COMMISSION
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PROCEEDINGS:
COMMISSIONERS
PARTICIPATING:
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CHAIRMAN ART
COMMISSIONER
COMMISSIONER
COMMISSIONER
COMMISSIONER
GRAHAM
LISA POLAK EDGAR
RONALD A. BRISÉ
EDUARDO E. BALBIS
JULIE I. BROWN
DATE:
Thursday, January 23, 2014
TIME:
Commenced at 9:30 a.m.
Concluded at 11:01 a.m.
PLACE:
Gerald L. Gunter Building
Room 105
2540 Shumard Oak Boulevard
Tallahassee, Florida
REPORTED BY:
JANE FAUROT, RPR
Official FPSC Reporter
(850) 413-6732
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INTERNAL AFFAIRS
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FLORIDA PUBLIC SERVICE COMMISSION
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P R O C E E D I N G S
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CHAIRMAN GRAHAM:
Let the record show it is
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Thursday, January the 23rd, and this is the Internal
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Affairs meeting.
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Welcome, everybody.
I'm glad you got here
safely.
Let's start with the agenda.
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is we have a presentation by NAWC.
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Come on down.
The first thing
Who's doing that?
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MR. McCAFFREE:
All right.
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COMMISSIONER EDGAR:
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MR. McCAFFREE:
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COMMISSIONER EDGAR:
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MR. McCAFFREE:
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Mr. Chairman, Commissioners, thank you very
You made it.
I made it.
Good.
It's great to be here.
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much for having me here.
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members, I appreciate the opportunity to talk about some
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of these important issues that we're facing and some of
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the challenges, and really some of the policy items that
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have happened in the last, you know, 18 to 24 months.
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On a personal note, I know that everyone down
here thinks that it's cold --
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(Laughter.)
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MR. McCAFFREE:
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And on behalf of NAWC and the
-- but thank you for rescuing
me from 8 degrees in Washington, D.C.
We might consider
FLORIDA PUBLIC SERVICE COMMISSION
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doing this on an annual basis.
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(Laughter.)
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MR. McCAFFREE:
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But we can talk about that
afterwards.
You know, I really, you know, wanted to talk
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about some of the challenges that, you know, I'm sure
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that you all are familiar with, but I'd offer that as a
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prelude to some of the developments that have happened
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at a state level and at the national level at the NARUC
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Water Committee and some of the resolutions that have
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recently been adopted.
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2013 was really an important year in some of
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these, some of the progress that has been made on the
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policy front.
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to talk about that and field any questions that you
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might have.
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questions throughout the presentation, please stop me
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and I'll be happy to address those then.
19
So I just wanted to have the opportunity
Of course, you know, if you have any
Just looking at the agenda really quickly.
20
I'll talk about NAWC, give a brief introduction, give a
21
quick overview of the water sector and water itself and
22
the water service itself, and then go into the industry
23
challenges, primarily the perennial challenges that we
24
are facing.
25
moving and the direction that we seek.
But, you know, how things are kind of
Then the
FLORIDA PUBLIC SERVICE COMMISSION
1
regulatory responses to those challenges and, like I
2
said, some of the developments that have happened in
3
2013 and 2012.
4
000004
And, finally, you know, I'd like to end on the
5
importance of the regulatory environment, because I
6
think that that really underpins everything that is
7
happening and the discussions that have happened at the
8
state level and at the national level.
9
First of all, the National Association of
10
Water Companies.
11
represents all aspects of the private water services
12
industry.
13
companies, but those companies that participate in
14
public/private partnerships or that operate and contract
15
with municipal utilities to operate and, in some cases,
16
build their water system.
17
We are a trade association that
So it's not just the regulated water
About one in four Americans receive water
18
service from one of these companies, 73 million
19
Americans.
20
about 17 percent of the nation's community water
21
systems.
22
approximately inverse of what you have for electric
23
service, where you have the majority of the citizens in
24
the U.S. served by private electric companies.
25
And private water companies own and operate
So the structure, industry structure is
The majority of the U.S. is served by
FLORIDA PUBLIC SERVICE COMMISSION
1
municipal systems, and about 17 percent by private
2
companies.
3
13 or 14 percent of the population.
4
000005
And then there is well service, that's about
We have different member services.
I'm Matt
5
McCaffree, Director of State Regulatory Relations, and I
6
head up our regulatory efforts.
7
affairs, member services, communications, et cetera.
8
9
We also have government
So let's talk about water.
I think everyone
in this room understands the importance of water.
It's
10
the lifeblood to our economy.
11
without water service.
12
church, a business, a home, for all intents and
13
purposes, without receiving some sort of water service.
14
You can't have anything
You can't have a school, a
And it obviously plays this key role in
15
society; not just public health, and it's something that
16
you ingest.
17
ingested.
18
portion of the infrastructure investment and
19
infrastructure concerns of a water service company.
20
It's the only utility service that's
But public safety, fire protection is a big
It's environmentally regulated with the
21
baseline set by the EPA and then enforcement happens by
22
the state DEPs, and it has to be safe regardless of
23
cost.
24
providing service.
25
Safety and reliability are primary concerns in
There isn't a federal agency that oversees
FLORIDA PUBLIC SERVICE COMMISSION
000006
1
kind of trade and economic regulation of water like you
2
have for electricity, for example, or communications.
3
So it really comes down to federalism practice and how
4
the states are engaging on this infrastructure and
5
service issues for water service companies.
6
utilities are subject to the same environmental
7
compliance set by the EPA.
8
9
And all
Now, the different states can decide to have
stricter requirements for larger utilities versus
10
smaller utilities, but that baseline is set by the EPA.
11
And these EPA standards are increasing over time, and
12
that's a good thing.
13
had 20 years ago versus 30 years ago.
14
safer water, that comes at a cost.
15
this increasing capital requirement year over year for
16
utilities.
17
You have safer water today than we
And while we have
And that comes at
Water itself is costly to transport, it can't
18
be compressed, and there are no substitutes.
So that
19
means that the water services and the water issues are
20
local.
21
affordable service, it makes more sense for utilities to
22
look to their local water sources.
23
in Florida the majority of systems are groundwater,
24
90-plus percent, and that means that you can have --
25
because they are drawing on local sources, you can have
At the price point right now, because it's an
And, you know, here
FLORIDA PUBLIC SERVICE COMMISSION
000007
1
highly divergent costs from one service territory to the
2
next.
3
different cost drivers for their business and for the
4
service they are providing to their customers.
5
They can be directly adjacent, but they can have
Right now it's the least expensive to
6
consumers.
7
might be changing, because costs continue to rise for a
8
variety of reasons.
9
In the next slide I'll show you how that
It's highly fragmented.
10
water systems in the U.S.
11
there are about 3,000.
12
1,700.
13
There are 50,000
If you look at electrics,
For natural gas you have about
So this is a fragmented industry.
There are probably opportunities for scale;
14
probably opportunities for consolidation.
15
to say -- it's much easier said than done, shall we say.
16
And, you know, with this last point, I said highly
17
variable costs.
18
vary widely between systems because this is a high fixed
19
cost industry, and I'll get to that in a second, as
20
well.
21
But it's easy
What I meant to say was that the costs
So this is a chart from the Institute of
22
Public Utilities out of Michigan State, and they do a
23
great job of surveying different rates across the
24
country and they look at the demographics of commissions
25
and commissioners, and, you know, have a great database
FLORIDA PUBLIC SERVICE COMMISSION
1
of tracking this over time.
2
average utility bill cost for the average household, a
3
household of four in the U.S., you'll see that water --
4
I think that it's fair to combine fuel oil and natural
5
gas because these are heating expenses.
6
combine fuel oil and natural gas, water is, on average,
7
the cheapest utility or the least utility expenditure
8
for the average household.
9
And if you look at the
000008
If you were to
Now, that's going to change a lot depending on
10
the cost drivers for an individual system, but it's
11
still very affordable.
12
those costs have gone up over time.
13
ten years, if I were to predict where that's headed, I
14
would think that water will no longer be able to claim
15
that it's the most affordable service of the utility
16
services.
17
capita consumption, increasing EPA mandates, and aging
18
infrastructure.
19
away anytime soon.
20
What this also shows is that
And, you know, in
And that's being driven by decreasing per
And, you know, I don't see those going
So there are significant capital requirements
21
for water infrastructure.
Looking at the EPA estimates
22
and the EPA forecasts, in 2013 -- they have a drinking
23
water needs assessment that comes out every so often;
24
2013 was their most recent one.
25
about 384 billion will be needed by 2030 for drinking
And they estimate that
FLORIDA PUBLIC SERVICE COMMISSION
000009
1
water infrastructure.
2
355 billion, and in 2008 it was 298 billion.
3
shows is that, you know, as accurate or inaccurate as
4
that number might be, it shows that that infrastructure
5
gap is not being addressed.
6
In 2009 that figure was
What that
The American Society of Civil Engineers
7
estimates that a trillion will be needed for water and
8
wastewater infrastructure over the next 25 years.
9
Again, it's a forecast, so it's probably wrong, but I
10
think the lesson there is that it is a big number, and
11
we're not doing enough to address that infrastructure
12
gap right now.
13
The private regulated -- by my estimate, the
14
private regulated water companies are investing about
15
4 billion a year in drinking water infrastructure.
16
if you take that out, extrapolate that out to 2030, that
17
comes out to about 68 billion.
18
enough, that's about 17 percent of 384 billion, and
19
that's about the market penetration for private
20
regulated systems in the U.S.
21
need to do more as people that are invested in continued
22
safe and reliable delivery of service to make sure that
23
we are addressing that infrastructure gap.
24
25
Now
And interestingly
Still, I think that we
This infrastructure gap is significant,
because it's the most capital intensive of utilities.
FLORIDA PUBLIC SERVICE COMMISSION
000010
1
It's about twice as capital intensive as electric; about
2
three times that of natural gas.
3
these are underground assets, and they are very
4
expensive and expensive to maintain.
5
are underground these are long lived assets, and that
6
means that they have the lowest depreciation.
7
have this high capital requirement; you have low
8
depreciation rates.
9
a lower depreciation rate means that utilities have to
And that's because
Also, because they
So you
So they need the money, and having
10
make a pretty solid case to the capital markets in order
11
to get those funds.
12
And, you know, let's remember that this is a
13
competitive market for funds.
14
focus on water.
15
electric and natural gas, you know, bridges, buildings,
16
you know, these large capital planning projects.
17
so, I think -- when I talk about the financial health of
18
companies and the financial viability of companies, it's
19
with a long-term concern about continuing to provide
20
that service that we are accustomed to, the safe and
21
reliable service that we, as customers, and that our
22
neighbors are accustomed to.
23
question ties directly into that, being able to access
24
the funds to continue to make those investments.
25
There are banks that just
The money, the pool of money goes to
And
So I think the financial
So on the next slide, you know, I wanted to
FLORIDA PUBLIC SERVICE COMMISSION
000011
1
talk about kind of this perfect storm that we're in as
2
an industry.
3
just said.
4
mandates, tight credit markets, although it's getting a
5
little bit better.
6
has been, you know, slow.
It's a capital incentive industry, as I
We have aging infrastructure, growing EPA
But, still, the economic recovery
7
A scarce supply in some areas.
And I'm not
8
just talking about the desert southwest.
9
scarce supply in the southeast and some places in the
We are seeing
10
midwest.
The 2012 drought is still, you know, on
11
everyone's minds.
12
in the U.S.
13
worst that is has ever been in recorded history.
14
But then with these last three points,
It affected over half of the counties
The drought in California right now is the
15
declining consumption, increasing expenses, and limited
16
growth.
17
looking back historically, the water utilities used to
18
be able to kind of hide behind continued growth,
19
increasing consumption, and not having these increasing
20
expenses that are largely driven by EPA mandates and
21
having to control for contaminants in the water at an
22
increasing level of strickness.
23
You know, I circled these because, you know,
So this is something that water utilities have
24
been dealing with over the last 10 to 15 years.
25
we're seeing, you know, it's -- with these three issues,
FLORIDA PUBLIC SERVICE COMMISSION
And
1
it's kind of like the tide going out and exposing the
2
rocks beneath, and exposing, you know, some of the
3
problems that we have to deal with.
4
000012
Now, of course, the companies, what this means
5
is the companies have to operate as efficiently as
6
possible, and they have that incentive to do so.
7
also means that the regulatory process, you know, we
8
need to look at how the regulatory process can operate
9
as efficiently as possible, as well.
10
But it
So what does this look like, you know, with
11
this kind of exposure?
12
is a significant gap in the authorized versus the actual
13
ROEs in water versus their other regulated counterparts
14
in electricity.
15
What we're seeing is that there
This is from R.W. Baird, 2012.
And we have
16
actually done an internal survey, as well, and we have
17
seen a gap, an average gap in authorized versus actual
18
of 400 to 500 basis points across our members.
19
know, it was a small survey and we could probably
20
tighten up the data, but what it shows is that for the
21
most part a lot of these companies were exposed to this
22
kind of -- this continued financial minimum risk.
23
And, you
And these are companies that are operating
24
very efficiently.
And, you know, looking at it from
25
state to state, there were some states that didn't have
FLORIDA PUBLIC SERVICE COMMISSION
1
as much of an issue.
2
of, you know, 50 basis points or 100 basis points.
3
think that that's -- I don't want to use the term
4
acceptable, but it's explainable.
5
6
You know, where there was a gap
COMMISSIONER BROWN:
000013
I
Do you have that broken
down by state?
7
MR. McCAFFREE:
8
And in states that have a positive regulatory
9
Yes, we do.
environment that gap narrows.
We do.
And where there's an
10
adversarial regulatory environment or where it's
11
difficult for them to do business it's significantly
12
higher.
13
And, you know, we are looking across the same
14
company in many cases.
15
that has the same management practices, and, you know,
16
the same opportunities for efficiency and so on.
17
that really got us thinking about the regulatory
18
environment and maybe some of the alternative regulatory
19
mechanisms that could be employed to make that as
20
efficient as possible with the ultimate benefit going to
21
the consumers, decreasing rate case expense, et cetera.
22
And this is the same company
So
So I just kind of covered this, but the
23
growing challenge for investment is that the utilities
24
are underperforming due to regulatory lag or an
25
inefficient regulatory process.
And so what happens to
FLORIDA PUBLIC SERVICE COMMISSION
000014
1
utilities when they don't earn their authorized ROE?
2
the short-term it could be nothing.
3
seeing companies survive by having, you know, a
4
significant ROE gap over one or two years.
5
something that -- it's not completely unsurmountable,
6
but what we are also seeing is that for a
7
multi-jurisdictional utility, there will be subsidies
8
from other jurisdictions and reductions in O&M expenses
9
in the short-term.
10
You know, we're
That's
In the long-term if you have these reductions
11
in O&M expenses and subsidizations from other
12
jurisdictions, you see utilities deploying capital
13
resources to other jurisdictions.
14
of examples at the end, but you will see that capital
15
spending go below current depreciation, so the aging
16
infrastructure problem is exacerbated and they won't
17
fill vacant positions.
18
local job pool and on the local economies.
19
In
I'll get to a couple
So that has an effect on the
So just to quickly talk about, you know, how
20
regulatory lag -- and just to clarify, regulatory lag is
21
the time between when a cost is incurred by the utility
22
or needed by the utility and when that revenue actually
23
increases through the rate case process and the rate
24
application process.
25
So just, you know, thinking about this general
FLORIDA PUBLIC SERVICE COMMISSION
000015
1
example, let's say you've got a test year allowed ROE of
2
10 percent.
3
you know, I've heard from some utilities that just
4
because of EPA mandates they count on a 10 percent
5
increase in O&M every year.
6
You add in a 5 percent increase in O&M --
A 10 percent decrease in consumption, that is
7
above average.
We have seen about a 2 percent decrease
8
in per capita consumption, but we have seen in some
9
cases where it has been as high as 20 percent.
A
10
one-year capital expenditure of three times depreciation
11
because of the long-lived assets that go in the ground.
12
You add in, you know, maybe a historical test
13
year and just with the rate case process it's probably,
14
you know, more of the case, and you could have a
15
combined effect of, say, 5.8 percent.
16
420 basis-point deduction right off the bat coming
17
directly out of the rate case.
18
the allowed ROE is gone.
19
committee there has been some discussion about whether
20
regulatory lag is the right term.
21
So you have a
So the ability to earn
And, you know, at the water
It's really a loss.
And, you know, a lag implies that they have --
22
that the company has an opportunity to make that back
23
up, but they don't.
24
that ability to earn the 10 percent ROE is gone.
25
that's, in my view, in direct violation of the
Once regulatory lag has its effect,
FLORIDA PUBLIC SERVICE COMMISSION
And
000016
1
regulatory compact.
2
operating in good faith and that they are providing
3
safe, reliable service, then the regulatory compact
4
states that they should have an opportunity to earn a
5
fair return on their investment.
6
rate case process is all about.
That's what cost of
7
service regulation is all about.
That's why we are
8
here.
9
If a utility can show that they are
And that's what the
So if the Commission determines that they can
10
earn a certain return, but in practice and in effect
11
they never have that opportunity to earn that return,
12
then I think it's worth going back and looking at what
13
can be done throughout the regulatory process to fix
14
that.
15
is operating as efficiently as possible.
And this, of course, is assuming that the company
16
So, you know, I don't want to put all the
17
responsibility on the regulatory portion, because I
18
think the company carries the majority of the burden and
19
the majority of the responsibility.
20
21
So addressing regulatory lag, or thinking
about these different mechanisms.
22
CHAIRMAN GRAHAM:
23
MR. McCAFFREE:
24
CHAIRMAN GRAHAM:
25
And last year --
Matt?
Yes.
I just want to say, we have
been going at this for about 20 minutes; are you going
FLORIDA PUBLIC SERVICE COMMISSION
1
to walk us through every slide?
2
ask, I guess?
000017
Can you just get to the
3
MR. McCAFFREE:
Sure.
Sure, I can do that.
4
Just as a little bit of background, let me,
5
Mr. Chairman, let me get through this, and then I'll get
6
to really the recent policy developments.
7
talk about alternative regulation and the challenge for
8
small utilities and things that we really are focused
9
on.
10
11
CHAIRMAN GRAHAM:
I wanted to
And that's something that is
very important to us is the small water utilities.
12
MR. McCAFFREE:
Great.
Great.
13
So we looked at the alternative mechanisms and
14
did a survey across water, electric, and natural gas.
15
And the bottom line is -- and I'll move through this
16
quickly -- is that the alternative mechanisms, when you
17
are really comparing apples-to-apples, are much more
18
prevalent for electric and natural gas.
19
opportunity there to look at these alternative
20
mechanisms and apply them to water utilities.
And there's an
21
And so, Mr. Chairman, you're asking about, you
22
know, what requests we are coming with -- the message is
23
that these are worth looking at.
24
bullet for every single state.
25
the preferences and on the current environment and the
There is no silver
It's going to depend on
FLORIDA PUBLIC SERVICE COMMISSION
1
current constraints that the different companies are
2
facing.
3
disproportionate treatment when the regulatory
4
principles across the three sectors are the same.
5
000018
But it shows that there is kind of this
So you have the data there, and I'll, you
6
know, let you look at that afterwards, and I'll talk
7
about what NARUC has discussed in a second.
8
second challenge we've had coming out of the last couple
9
of years is small systems, and engaging small systems in
But the
10
the regulatory process.
Making sure that they are aware
11
of the different tools that are available, and then in
12
states that don't have these tools in place or that
13
don't have them in effective practice, helping promote
14
those as much as possible through the NARUC Water
15
Committee and, you know, with individual state outreach.
16
So I think that everyone can agree that --
17
well, I hope that everyone can agree that it's worth
18
matching the regulatory effort to the scope of that
19
utility.
20
overlooking any sort of diligence, but making sure that
21
the rate application process doesn't lead to this
22
disproportionate cost on a per customer basis for a
23
small utility versus a large utility that has lawyers
24
and accountants and can hire consultants and spread it
25
out across a large rate base or a large customer base.
And I'm not talking about, you know,
FLORIDA PUBLIC SERVICE COMMISSION
1
So, you know, it's all about breaking the
000019
2
cycle of underinvestment.
3
want to continue serving their customers as well as
4
possible and are committed to that aren't left behind in
5
terms of investment because of the regulatory process,
6
because the regulatory process is too onerous.
7
difficult to happen.
8
9
And so small companies that
It's
So those two questions and those two
discussions have led to these recent policy
10
developments.
So, you know, I think that we have seen
11
some of these regulatory mechanisms adopted in states
12
that were kind of unexpected, quite frankly.
13
Carolina, Arizona, and Nevada have adopted some of these
14
alternative mechanisms in the last, you know, 18 months.
15
And then in 2013, three NARUC resolutions were
North
16
passed.
17
order here, but the resolution recognizing the role of
18
alternative regulation stating that the cost-of-service
19
ratemaking, which has worked reasonably well, no longer
20
adequately addresses the challenges of the water
21
utilities.
22
The first -- and I'm sort of going in reverse
And then looking at some of the other kind of
23
market realities of the sector today, and endorses
24
states investigating these mechanisms as potential ways
25
to make sure that investment continues and that the
FLORIDA PUBLIC SERVICE COMMISSION
1
regulatory process works as well as possible reducing
2
rate case cost, reducing the frequency of rate cases,
3
reducing the length of the rate application with the
4
ultimate benefit to consumers.
5
000020
The second, which kind of ties in with
6
alternative regulation, is just recognizing that there
7
is this ROE gap.
8
have seen that it indicates that there is a structural
9
issue with the regulatory process for water versus
They have looked at the evidence, they
10
electric and natural gas, and that the ability for a
11
utility to earn a return is a critical component in
12
regulated water service.
13
And then, finally, identifying best practices
14
for small systems.
15
regulatory practices for small systems across the
16
country, but none of the best practices that are
17
included in the resolution are new.
18
terribly revolutionary in that.
19
So we looked at all the different
There's nothing
They are all in place in at least one state,
20
and in some cases, like the simplified rate application
21
for small systems, that's in place in over half of the
22
states.
23
In talking to small company owners, in talking to
24
regulatory staff, in talking to commissioners and
25
stakeholders, there was a pretty wide variation in --
But it comes down to implementation, as well.
FLORIDA PUBLIC SERVICE COMMISSION
000021
1
for those states that have these practices in place, a
2
wide variation in practice.
3
So, you know, you could have a simplified rate
4
application.
5
you know, it is easier for us to go through the
6
traditional rate application, because the simplified
7
rate application takes longer, it ends up costing more,
8
and we have, you know, less ability to argue our point.
9
But I talked to some companies that said,
So I think that, you know, the devil is in the
10
details there and making sure that all the stakeholders
11
are working as well as possible with the interest of
12
these small companies in mind.
13
And, you know, I'm not talking about the small
14
companies that aren't very good at their jobs, quite
15
frankly, and don't really care as much about their
16
quality of service and what they're doing.
17
know, the companies that are really out there and making
18
sure that the community that they are serving and that
19
they live in is getting the best service possible and
20
the best rates possible.
21
But, you
And, you know, I think that -- well, here's a
22
slide that goes over some of the mechanisms.
I won't go
23
into too much detail to respect our time here.
24
would be happy to send around the resolution afterwards
25
so that everyone has them.
And I
But, you know, regulation
FLORIDA PUBLIC SERVICE COMMISSION
000022
1
really is -- the key here is that regulation is
2
essential to investment.
3
small company or whether you're talking about a large,
4
you know, multi-jurisdictional utility that is in 14
5
states.
6
Whether you're talking about a
We're facing a challenge here.
And in order
7
to continue to provide this critical service that we
8
have all grown accustomed to being highly reliable and
9
very safe with these increasing -- with water that will
10
ultimately end up being safer, you know, ten years down
11
the road versus now, just as the water now is safer than
12
it was ten years ago by and large.
13
We have to make sure that we're investing in
14
the system, which means that the regulatory -- we need
15
to continue to look at innovations on the regulatory
16
side that can allow for this investment, and that comes
17
down to a productive regulatory environment.
18
So looking at the states that have this
19
environment, it's a cooperative process.
20
not mean that there is a lack of diligence.
21
a strong consumer advocate.
22
and engaged staff, an independent staff, and very
23
educated, engaged, and independent commissioners.
24
25
And this does
This means
This means very educated
With the utilities and all the parties that
understand that there has to be an ability to compromise
FLORIDA PUBLIC SERVICE COMMISSION
1
and to look at streamlining this so it benefits
2
consumers.
3
good communication practices, but also having these
4
mechanisms in place.
5
small companies or alternative mechanisms for larger
6
investments, larger long-term investments.
7
decoupling and what have you.
8
are many different tools in the tool box that can be
9
employed here.
10
11
000023
And that happens, quite frankly, through
Whether they are mechanisms for
It's
And like I said, there
There is not one in particular that, you
know, is better than all others.
And it's really -- you know, you can measure
12
the output by how frequently the rate cases are, how
13
long they last, what the rate case expenses are, and how
14
happy the customers are.
15
critical, as well, looking at customer satisfaction,
16
looking at customer engagement.
17
pretty idiosyncratic world.
18
understands cost-of-service regulation, which is why I
19
have a job.
20
I think that that is very
Because this is a
You know, not everybody
(Laughter.)
And, you know, while water is a very emotional
21
issue, you know, we ingest it, you know, we bathe our
22
kids in it, and do all of those other things, there is a
23
lack of understanding of what it takes to provide this
24
service to every single one of us.
25
expertise that is behind it and why the investment that
And why the
FLORIDA PUBLIC SERVICE COMMISSION
000024
1
goes into it is so critically important and why we need
2
to continue to invest in those.
3
So, you know, they're significant requirements
4
of the utility.
Like I said before, I think that most
5
of the responsibilities fall on the utility's shoulders.
6
They need to have access to capital and make sure that
7
they are financially healthy and viable and competitive
8
in a competitive market; that they're operating
9
efficiently; that they have the experts on hand to
10
continue to provide this service; that they have solid
11
management, and that they approach these issues that
12
come down the pike creatively and are proactive at
13
dealing with challenges like we have recently seen in
14
West Virginia, for example.
15
So, you know, I'll stop there.
16
Well, actually, ending on a point that I think is
17
important to make, we're seeing investment flowing to
18
best practice states and states with a productive
19
regulatory environment.
20
between certain practices and investment.
21
Let's see.
So we have seen a correlation
There are examples of companies,
22
multi-jurisdictional companies deploying certain
23
technologies in states that allow for quicker recovery
24
and a faster rate case process.
25
And, you know, this means jobs; this means
FLORIDA PUBLIC SERVICE COMMISSION
000025
1
money to the local economy; this means better service to
2
the customers, and that's something that's important to
3
remember.
4
are looking at the constraints and needs within their
5
state borders, it's important to remember that money
6
doesn't respect state borders.
7
necessarily respect state borders.
8
9
Even though, you know, the individual states
Investment doesn't
And I'd like to see more money going to the
local economies, more money going through this
10
regulatory process and into the systems for this
11
long-term investment and long-term service.
12
So that's where we are.
13
CHAIRMAN GRAHAM:
14
COMMISSIONER BROWN:
15
Thank you for your presentation, Matt, and I
Any questions for Matt?
A couple.
16
appreciate it.
17
us, especially with regard to the smaller utility
18
systems.
19
This is an area of interest to all of
And we have seen some interesting legislation
20
come through Florida, and you raised some points about
21
alternative regulatory mechanisms.
22
that we have a duty to help avoid any type of regulatory
23
lag on our part as the Commission.
24
the resolution in July, you talked about facilitating
25
emergency infrastructure funds.
And I do believe
But you talk about
FLORIDA PUBLIC SERVICE COMMISSION
1
MR. McCAFFREE:
2
COMMISSIONER BROWN:
000026
Uh-huh.
Was it discussed or
3
contemplated by the industry of how to do that?
4
by some type of reserve fund?
5
contemplated?
6
MR. McCAFFREE:
How was that
The mechanisms that we saw
7
were reserve funds that were set up and could be
8
accessed only, you know, when determined by the
9
Commission.
10
Was it
COMMISSIONER BROWN:
Who monitored or who kind
11
of regulated that reserve fund?
12
that would control that?
13
MR. McCAFFREE:
Was it the utilities
You know, I'd have to go
14
check, actually.
15
offhand, you know, it would go into an escrow, and the
16
regulations restricted their access to it until the
17
Commission said, well, this is an emergency.
18
In the examples that I can think of
COMMISSIONER BROWN:
That's an area of
19
interest, at least our state legislature, and they are
20
looking at that this session, too.
21
curious about that.
22
MR. McCAFFREE:
23
COMMISSIONER BROWN:
24
25
So that's why I'm
Okay.
The other thing you talk
about, the perfect storm -MR. McCAFFREE:
Right.
FLORIDA PUBLIC SERVICE COMMISSION
000027
1
COMMISSIONER BROWN:
-- and how you have all
2
of these compounding factors that's only going to
3
increase rates to customers.
4
avoiding rate shock over the next ten years with all of
5
these increased EPA regulations and, you know, capital
6
intensive projects that are going to be in place?
7
they looked at somehow a mechanism to avoid the rate
8
shock?
9
MR. McCAFFREE:
Has the industry looked at
Have
Well, you know, the utilities,
10
the ones that operate well, and the large utilities
11
certainly do, they are looking at these costs that are
12
coming down the pike.
13
and they are certainly planning for these.
14
know, it's not always a perfect science.
15
They have long-term investments,
But, you
There can be a delay in EPA regulation.
You
16
could have something that happens, like the spill in
17
West Virginia, that drives the discussion and
18
accelerates the timeline for certain parameters.
19
mean, under EPA regulations there are 91 different
20
parameters that a utility has to control for, and that's
21
going to expand.
22
know, 93 by the end of the week because of these two
23
chemical spills in West Virginia, but I guarantee you
24
they are talking about it right not.
25
I
I don't think that's going to be, you
And, you know, the utility can just assume
FLORIDA PUBLIC SERVICE COMMISSION
1
that there is going to be this increase in O&M.
2
talked about this one utility assuming a 10 percent O&M
3
increase every year because of EPA regulations, and they
4
build that into their investment.
5
that that can be -- that can be controlled for on the
6
utility side somewhat.
7
shock, I think another component is to make sure that
8
there is kind of a predictable regulatory environment
9
and regulatory process.
10
I
000028
You know, I think
But in order to avoid rate
The alternative mechanisms get toward this
11
rate shock issue, and that's really what this has been
12
about.
13
to take place and their distribution in the
14
infrastructure.
15
adding new treatment plant, and not building their rate
16
base, but replacing infrastructure that really needs to
17
be replaced, but not waiting until the next rate case to
18
bump up those rates.
19
controlled, it's capped, it's communicated to the
20
commission and the commission staff, and then verified
21
afterwards.
22
safeguards in place.
23
let's avoid rate shock.
24
25
So it is nonrevenue-based investments that need
So it's not expanding service, it's not
It's a gradual increase.
It's
So, you know, there are plenty of
But the whole point was, you know,
COMMISSIONER BROWN:
And additional rate case
expense, and -FLORIDA PUBLIC SERVICE COMMISSION
000029
1
MR. McCAFFREE:
Exactly, exactly.
2
And so, you know, we know that this investment
3
needs to take place.
We know that lines need to be
4
replaced, so let's do it in a more intelligent manner so
5
it can become more gradual.
6
COMMISSIONER BROWN:
7
COMMISSIONER BALBIS:
8
appreciate your presentation.
9
information.
10
One clarification.
Excellent.
Mr. McCaffree, I
A lot of good
You mentioned, I know you
11
said contributions in aid of construction.
12
some examples of that in other states?
13
MR. McCAFFREE:
Thank you.
What are
Well, it's really about --
14
and, you know, this has to happen on an ad hoc basis so
15
that when CIAC is used, you know, by a developer, for
16
example, it doesn't result in unsustainable rates down
17
the road when, you know, more investments need to take
18
place for that system.
19
And say a developer, you know, works on a
20
subdivision.
All of a sudden it becomes sort of a
21
de facto water utility, and they end up selling it to
22
another owner.
23
that need to be made, and they don't have the
24
calculations for rate base to continue.
25
increase rates for the investments that they need to
And the owner looks at the replacements
They need to
FLORIDA PUBLIC SERVICE COMMISSION
1
000030
make.
2
So the examples that we have seen have been
3
kind of on an ad hoc basis.
4
not a new utility, a new system is using CIAC that won't
5
work out, you know, in a way that won't work out in the
6
long run.
7
They'll evaluate whether or
COMMISSIONER BALBIS:
Okay.
And then on your
8
point on the different alternative ratemaking
9
mechanisms, I guess this state has quite a few.
You
10
mentioned, you know, an emergency fund where utilities
11
coming in for interim rate relief, which we have granted
12
in the past, if it was justified, and they can implement
13
those rates immediately, which I think has been
14
successful.
15
We also have the indexing process every year
16
where we look at the cost-of-living increases,
17
et cetera, and also the staff-assisted rate case
18
process.
19
has a number of alternative programs?
20
pretty have almost each one you mentioned here.
21
Do you feel this state, as compared to others,
MR. McCAFFREE:
I mean, you
I think that Florida has some
22
great mechanisms in place for small companies, and rate
23
indexing is certainly best practice that we track and
24
that we recognize.
25
to making sure that those mechanisms, in practice, are
But I think, you know, it comes down
FLORIDA PUBLIC SERVICE COMMISSION
1
hitting the initial goals of, you know, putting those
2
mechanisms in place.
3
COMMISSIONER BALBIS:
Okay.
000031
And one other
4
thing that you mentioned, you know, I have made comments
5
several times about capital expenditures, you know, the
6
limitations that we have on the test year and not
7
looking at five years, or maybe even longer, capital
8
improvement plans which most municipal utilities do.
9
Are there some states that have an expanded
10
test year or some sort of capital improvement program
11
analysis?
12
MR. McCAFFREE:
New York has multi-year rates,
13
so that's -- let's see, there's New York and then one
14
other state that has it.
15
looking at it, but it's not -- that's one of the issues.
16
It's not as wide spread in water as it is in electric
17
and natural gas.
18
I know that California is
COMMISSIONER BALBIS:
Okay.
And then you
19
mentioned an increase in O&M expenses.
We have gone
20
through several -- I probably shouldn't say they were
21
contentious, but as you mentioned that water is very
22
personal to customers.
23
expenses and scrutinized those as we do all costs.
24
in looking at what I feel an operating utility, the main
25
factors, people, power and chemicals from the O&M side,
And we have looked at O&M
FLORIDA PUBLIC SERVICE COMMISSION
And
000032
1
we have seen a little bit of upticks in the power costs.
2
Of course, chemical costs have been relatively stable,
3
maybe a little bit of an increase, and we have even seen
4
examples of large companies that have multiple utility
5
systems within the state not even having aggregate
6
contracts for chemicals, like, each individual utility
7
has different chemical costs, and I found that
8
surprising.
9
And on the people side, this Commission has
10
been consistent in not -- you know, if raises aren't
11
appropriate, et cetera, so the people costs have
12
relatively stabilized.
13
there is a perception out there and perhaps the reality
14
is a significant increase in affiliate charges for the
15
large companies.
16
affiliated charges and how to manage that, how to make
17
sure that those are operating and being passed on to the
18
individual utilities officially?
19
an increase in those.
20
But one thing we have seen, and
Has the industry as a whole focused on
MR. McCAFFREE:
Because we have seen
We haven't.
Actually, that's
21
something that I'll look into and talk to our crews
22
about.
23
But, yes, I'll take a closer look at that.
COMMISSIONER BALBIS:
Okay.
And then the last
24
question, Mr. Chairman, you mentioned the EPA mandates.
25
And I know probably the recent large -- the one with the
FLORIDA PUBLIC SERVICE COMMISSION
1
000033
largest impact was probably the THM rule.
2
Do you see anything coming up, whether
3
additional nutrient criteria that may require some
4
wastewater modifications, or what's coming down the
5
pike, do you think?
6
MR. McCAFFREE:
Actually, I don't have that on
7
my radar, you know, exactly what's coming down from the
8
environment regulatory side.
9
often with the EPA, and with Phil Oshida specifically.
You know, we communicate
10
You know, he gives us an overview once a year.
11
that's actually -- you know, I'd be happy to put you in
12
touch with some folks at the EPA to give you a quick
13
summary.
14
15
16
COMMISSIONER BALBIS:
you.
Okay.
But
All right.
Thank
That's all I have.
CHAIRMAN GRAHAM:
I'm glad you asked that
17
question, because that's the question I was going to ask
18
about the EPA mandates.
19
Any other questions?
20
Well, Matt, I do appreciate you coming down,
21
22
23
24
25
and enjoy the warmth.
MR. McCAFFREE:
Thanks.
I haven't even put on
a coat jacket yet.
Thank you, Mr. Chairman.
Commissioners.
Thank you,
I appreciate it.
FLORIDA PUBLIC SERVICE COMMISSION
1
COMMISSIONER EDGAR:
2
CHAIRMAN GRAHAM:
3
Thank you.
All right.
Commissioners,
Number 2 on the agenda.
4
5
000034
MS. MARR:
Good morning, Commissioners.
I'm
Diana Marr with Commission staff.
6
In 2009, the American Recovery and
7
Reinvestment Act, also known as ARRA, provided a grant
8
to state utility commissions to help them manage the
9
anticipated increased workload resulting from the
10
electricity-related initiatives funded by ARRA.
11
these are renewable energy, smart grid, and electric
12
vehicles.
13
Some of
The Commission directed staff to pursue the
14
grant and to use it for staff training.
15
2009, a grant was awarded in the amount of $1,217,160.
16
Its term was January 1, 2010, through November 30th,
17
2013.
18
or to supplement, not supplant, the PSC's training
19
expenditures.
20
In December of
And the purpose of the grant was to supplant --
The primary components of the training plan
21
developed by staff include educational seminars and
22
conferences, on-site training, and site visits.
23
because of the grant we were able to provide advanced
24
training and cross-training for technical staff in the
25
regulation of electric utilities.
FLORIDA PUBLIC SERVICE COMMISSION
And
000035
1
2
I'm available to answer any questions you may
have.
3
4
CHAIRMAN GRAHAM:
I think there's probably a
couple.
5
COMMISSIONER BROWN:
Just a question about the
6
grant.
I don't have a copy of it, but was the grant
7
specifically earmarked for training only?
8
9
10
11
MS. MARR:
No, the grant was directed towards
state commissions to help them manage the increased
workload.
The Commission decided on the training grant.
COMMISSIONER BROWN:
And there was a matching
12
requirement, as well, correct, so that the Commission
13
had to expend --
14
MS. MARR:
Well, it wasn't exactly a matching
15
requirement, but it supplements the existing
16
expenditures.
17
money in lieu of monies that they were already using.
So the Commission could use the federal
18
COMMISSIONER BROWN:
19
COMMISSIONER BALBIS:
Okay.
One thing that jumped
20
out on Page 3 of the summary was that basically $450,000
21
of the grant has converted back to the Department of
22
Energy; is that correct?
23
MS. MARR:
Yes, sir.
24
COMMISSIONER BALBIS:
25
all of the funds in the grant?
Why didn't we utilize
FLORIDA PUBLIC SERVICE COMMISSION
1
2
MR. BAEZ:
Commissioner, I can take that
000036
question.
3
First, a clarification.
I think that the
4
number that you see there of $450,000, the way that the
5
grant was structured wasn't an award of 1.2 million to
6
the Commission.
7
money.
8
resides at DOE.
9
So technically we are not returning
That really is the balance of the grant that
We were merely drawing down.
One of the things that probably isn't in the
10
memorandum was how the grant came to be, or how that
11
number came to be.
12
it this way.
13
rather than a number that was developed by the
14
Commission in pursuit of the grant.
15
$1.2 million is the product of a mathematical formula
16
that included a baseline number of about -- I may get
17
the number wrong, but it was either 350 or $450,000 that
18
was available to every jurisdiction, to every utility
19
commission.
20
the states, you got the difference.
21
And the way DOE -- well, let me say
It was a number that was assigned to us
So that
And then based on relative population among
And Florida being the size it is, accounts for
22
the rest of the -- up to the 1.2 million.
So for
23
starters, I'd say we didn't ask -- that was not a number
24
that was internally driven.
25
act of not having spent the money shouldn't be
So having said that, the
FLORIDA PUBLIC SERVICE COMMISSION
000037
1
interpreted as us not, certainly not meeting goals that
2
we may have set initially, the reason being we were
3
trying to spend up to that goal.
4
So two things that I would clarify.
It's not
5
a return of money, it's just money that wasn't accessed
6
in the end.
7
think that given the circumstances that we were working
8
under, and the opportunities available to us during that
9
time period, we haven't lacked for funding, and we have
10
gotten every benefit that we had been able to identify
11
from the availability of the funds.
12
we could to get value as we determined.
13
COMMISSIONER BALBIS:
14
MR. BAEZ:
15
COMMISSIONER BALBIS:
And with the additional statement that I
We spent as much as
Okay.
As much as we needed.
Thanks for the
16
clarification of the drawdown versus reverting.
17
was a little misleading.
18
That
I was just looking at the grant application
19
itself, and it's my understanding that the Commission in
20
2009 directed staff to seek this grant, correct?
21
MR. BAEZ:
Yes.
22
MS. MARR:
Correct.
23
COMMISSIONER BALBIS:
Yes, yes.
And then reading through
24
the grant, the application that Mr. Futrell put
25
together, there seems to be a very detailed list of
FLORIDA PUBLIC SERVICE COMMISSION
1
activities that are going to be performed and costs
2
associated with that, and a spending plan that was
3
developed by staff to equal the 1.2 million.
4
000038
Just having that disparity of what we
5
anticipated to spend and what we did spend, are there
6
activities that we didn't do, training that we didn't
7
seek; I mean, why the difference?
8
MR. BAEZ:
I think part of the difference --
9
well, let me start off by saying that whatever work plan
10
the staff developed at the beginning was aspirational in
11
a way.
12
mentioned before, we were trying to match the monies
13
that were available and draw a plan accordingly in order
14
to provide the necessary documentation to DOE in order
15
to actually, you know, make everything kosher for the
16
grant itself.
17
I mean, we were going at it -- again, as I had
You asked if there were things that we did not
18
get to do.
I think the easy answer is probably yes.
19
Remember that this was a four-year period that we had.
20
Because we chose training, or because the Commission
21
actually directed us to pursue the grant in the form of
22
training supplement, that the very nature of training
23
involves human participation.
24
necessarily involves time and availability and, you
25
know, the jibing of scheduling and so forth.
I think that that
FLORIDA PUBLIC SERVICE COMMISSION
1
You will remember -- we'll pick a year.
000039
2012
2
was rather busy, for instance, with rate cases.
3
rate cases would naturally take precedence over any
4
opportunity for training, and that has -- I think those
5
timing issues and availability issues have an effect on
6
the way that we -- on the opportunities that we have to
7
spend grant money that we would have otherwise -- on
8
training that we would have otherwise had during any
9
given year.
10
I mean,
In addition to that, I think Commissioner
11
Brown alluded to a matching of funds.
While that is not
12
technically true, I think the proper answer is since it
13
was used to supplement, that implies that we have to
14
have money available to spend.
15
couple of years there where for budgetary reasons money
16
wasn't available from our end, and, therefore, denied us
17
access under the terms of the grant.
And there have been a
18
So I think all of those factors thrown into
19
the pot is why you probably see a balance at the end,
20
because we didn't have the proper conditions to take
21
advantage of the opportunities during any given period.
22
You can see in the last year when things started to look
23
a little better, we did try to make the most of our
24
opportunities in the end.
25
COMMISSIONER BALBIS:
Okay.
And I guess --
FLORIDA PUBLIC SERVICE COMMISSION
000040
1
and this is to my colleagues, my main concern is that,
2
one, and it might be my fault, this is the first I have
3
heard that we had this.
4
$450,000 in additional funds, I personally feel I would
5
have liked to have known that so maybe we can
6
collectively discuss if the right decision as to seek
7
those additional funds, or maybe look and see what
8
additional training we can do to use those funds.
9
And the fact we had access to
Because as you have said to us on several
10
occasions, you know, we are trying to build up our
11
staff, educate our staff.
12
turnover with senior folks retiring, and I just see it
13
as a lost opportunity.
14
and it makes sense, but just hearing about it for the
15
first time and after the funds have already -- are no
16
longer able to be accessed is something that I have
17
concerns with.
18
We are having a lot of
And I understand the rationale
And looking at some of the activities in
19
calendar year 2013, these were events where we had sent
20
additional staff, and it looks as if we had the
21
opportunity to have the DOE grant fund some of the
22
additional staff that attended those, which is a
23
concern.
24
25
MR. BAEZ:
Well, I think they did.
I mean, if
what you're saying is we didn't -- if what you're
FLORIDA PUBLIC SERVICE COMMISSION
1
000041
suggesting is we didn't send enough --
2
COMMISSIONER BALBIS:
No, I'm suggesting that
3
we sent additional folks to do the training, and
4
according to your spreadsheet that less than the number
5
that was sent were reimbursed through the grant.
6
7
8
9
MR. BAEZ:
Less than the number that were
MS. MARR:
And, Commissioner, that would be
sent?
because the Commission paid for the difference of, I
10
think, what you're looking at.
11
attended an event, the grant may have paid for six and
12
the Commission paid for four.
13
COMMISSIONER BALBIS:
14
what this reflects.
15
whatever the number is --
So if ten people
Right.
Yes, and that's
It may not be six or four or
16
MS. MARR:
Right.
17
COMMISSIONER BALBIS:
-- but if we had
18
$450,000 still left to be accessed, was there an
19
opportunity to have the DOE pay for nine and have the
20
Commission pay for one.
21
application, there doesn't appear to be any mention of
22
matching fund requirements.
23
did we miss any opportunities --
Because looking at the grant
That's my concern is that
24
(Inaudible; simultaneous conversation.)
25
MR. BAEZ:
When the opportunity presented
FLORIDA PUBLIC SERVICE COMMISSION
000042
1
itself, and in this -- an example that you're using, one
2
of the things that we considered was what -- I mean, the
3
starting point for the conversation or for the
4
consideration is how many folks do we usually -- how
5
many staffers do we usually send to a conference, for
6
example.
7
addition with ARRA funding would be prudent?
8
think that's more art than science, I will admit to you,
9
because we have -- you know, again, I go back to not
10
And using that as a basis, then how many in
And I
just issues of availability, but also optics.
11
I mean, there is no other way to talk around
12
it.
13
scrutinized and also subject to audit at any point in
14
time.
15
be on the conservative side with how far we leverage the
16
federal funding.
17
judgment call.
18
These federal fund expenditures are heavily
And rather than risk an audit, we tend to always
It's really a question of -- it was a
I don't know any other way to put it.
COMMISSIONER BALBIS:
Okay.
And,
19
Mr. Chairman, and not to -- my main point is that, you
20
know, it's almost too late now, but for the next time,
21
you know, I personally would like to know --
22
MR. BAEZ:
It's officially too late, yes.
23
COMMISSIONER BALBIS:
-- and I would assume
24
that my colleagues would like to know that before the
25
deadline passes on utilizing a grant, especially a grant
FLORIDA PUBLIC SERVICE COMMISSION
1
was authorized, staff was authorized to pursue by the
2
Commission, to bring to our attention.
3
MR. BAEZ:
000043
I regret that this is the first
4
time you hear that ARRA funding was available.
5
that's, in fact, the case, then you have my apologies,
6
Commissioner.
7
floating around and funding our training activities for
8
four years.
9
If
This is, in fact, a grant that has been
COMMISSIONER BALBIS:
Well, that's why I said
10
it might be my fault, but --
11
MR. BAEZ:
12
Apryl was kind enough to remind me, you know,
I'm sorry?
(Pause.)
13
the ARRA funding also needs budgetary approval.
14
part of the yearly request for appropriation
15
authorization by the Legislature, as well.
16
So it's
If it was not brought to the floor
17
sufficiently, then I take responsibility for that.
We
18
tried, as best we could, to highlight activities that
19
were funded by ARRA.
20
training opportunity and every conference opportunity
21
that came up during the span of those four years
22
actually included an ARRA portion of it, because that's
23
how we were able to leverage greater participation,
24
given whatever the existing circumstances were on it,
25
Commissioner.
As a matter of fact, I think every
So if this is the first time that you are
FLORIDA PUBLIC SERVICE COMMISSION
1
2
3
hearing about it, you have my apologies.
CHAIRMAN GRAHAM:
MR. BAEZ:
5
CHAIRMAN GRAHAM:
6
MR. BROWN:
8
9
Anyone else?
Well, thank
you for your report.
4
7
000044
Commissioners.
Thank you, Commissioners.
Number 3.
Good morning, Chairman Graham,
How are you?
My name is Shevie Brown.
the Division of Economics.
I'm an analyst in
The item before you is the
10
draft annual report of the Florida Energy Efficiency and
11
Conservation Act, the FEECA report.
12
Commissioners, this report is a summary report
13
or factual report that we attempt to fulfill the
14
Commission's statutory obligations related to providing
15
the report to the Governor and the Legislature.
16
report discusses topics such as the utilities' progress
17
towards meeting the adopted goals which were set by you
18
guys, information on electric and natural gas programs,
19
information pertaining to energy standards on
20
conservation.
21
The
Other highlights of this report includes a
22
summary of the Commission's collaborative with the
23
Department of Agriculture and Consumer Services, along
24
with PURC, to evaluate whether or not FEECA is still in
25
the public interest.
FLORIDA PUBLIC SERVICE COMMISSION
1
A summary of the Commission's staff audit
000045
2
regarding a review of the administrative efficiency of
3
utility DSM programs, a summary of federal appliance
4
standards, a summary of natural gas activities, an
5
update on electric DSM goal-setting activities, and a
6
review of the Commission's outreach activities regarding
7
energy conservation.
8
We are seeking your approval to submit this
9
report to the Governor and the Legislature before our
10
March 1st statutory deadline.
11
Commissioners, we were made aware of a scrivener's error
12
in the report on Page 2 under the Executive Summary in
13
the second paragraph.
14
In addition,
The last line in that paragraph, I'll just
15
read it out just for completeness.
16
Florida Statutes, requires the Commission to submit a
17
biennial report to the Governor, President of the Senate
18
and President of the House regarding the effects of the
19
state energy standards on conservation."
20
aware, that should not be President of the House, it
21
should be Speaker of the House.
22
your permission to make those corrections and any others
23
that you may find in the report.
24
25
"Section 553.975,
And as you're
And we would request
Other than that, that concludes my
presentation this morning.
And we are available for any
FLORIDA PUBLIC SERVICE COMMISSION
1
000046
discussion.
2
CHAIRMAN GRAHAM:
Any questions?
3
COMMISSIONER BALBIS:
One comment.
Thank you
4
for this report.
5
I'm glad that we are continuing to point out that
6
building code and energy efficiency is an effective
7
mechanism, and pointing that out to those, I think, is
8
important.
9
about to start the goal-setting process, so I look
10
I think it was very comprehensive, and
And we are in an unusual position as we're
forward to that.
11
You mentioned the PURC report that was
12
requested by the Legislature.
13
were three recommendations and several other areas that
14
warranted further study.
15
were to be done prior to the goal-setting process.
16
Some of those recommendations
Has staff addressed that as far as it pertains
17
to the FEECA report?
18
deep.
19
In that PURC report there
MR. BROWN:
I know I don't want to dive in too
Right.
I'll have to ask for some
20
clarity on that.
21
Mr. Dean can assist me with that.
22
I'm not sure about that, but maybe
MR. DEAN:
I may have Mark back me up.
I
23
believe there were three recommendations, Commissioners.
24
One was that there would be more availability and access
25
to the data.
We have done that.
We have put more of
FLORIDA PUBLIC SERVICE COMMISSION
000047
1
the filings that will occur in the FEECA docket, which
2
are massive, on our website so that any intervenor or
3
party can directly access them.
4
There was also a recommendation -- Mark, what
5
were the other ones?
6
request --
7
I believe there was a data
MR. FUTRELL:
Commissioners, I think there was
8
also an identification that the criteria for judging
9
cost-effectiveness of conservation programs be made up
10
front.
11
out from PURC, we provided you with a memorandum
12
summarizing their findings and recommendations.
13
think we're in a position where the Commission's rule
14
requires, at a minimum, the three conservation tests;
15
the Participant, the Rate Impact Measure test, or RIM
16
test, and the Total Resource Cost test, the TRC test.
17
And certainly we have -- when that report came
And I
And that information will continue to be
18
filed, and the Commission goes through its processes, as
19
you mentioned, in the goal-setting process to judge
20
cost-effectiveness.
21
are, at a minimum, at the Commission's disposal.
22
that was one of the items that was identified, was more
23
clarity up front on which cost-effectiveness test should
24
be relied upon which might be helpful to the process.
25
And so those are three tools that
COMMISSIONER BALBIS:
Okay.
Thank you.
FLORIDA PUBLIC SERVICE COMMISSION
But
000048
1
CHAIRMAN GRAHAM:
Anybody else?
2
I think staff is seeking approval.
3
MR. BROWN:
Yes, sir.
Once you approve it,
4
we'll make those corrections that we talked about today
5
and any others that are found.
6
to your office the letters that will be sent out to the
7
Governor and the Legislature and other parties.
8
COMMISSIONER EDGAR:
9
COMMISSIONER BALBIS:
10
11
CHAIRMAN GRAHAM:
And then we will submit
Move approval.
Second.
It has been moved and
seconded, approval of the draft report.
12
Any further discussion?
13
Seeing none, all in favor?
14
(Vote taken.)
15
CHAIRMAN GRAHAM:
16
Legislative update.
17
18
19
20
Thank you very much.
It's that time of year
again.
MS. PENNINGTON:
Good morning.
I'll sit in
this chair that somebody lifted up a little bit for me.
I first wanted to talk to you about a couple
21
of bills that Representative Dudley filed that we are
22
just going to kind of watch.
23
proposals, amendment -- to put a constitutional
24
amendment on the ballot.
25
utility could recover any costs until the plant has been
Both of them are
The first one would be that no
FLORIDA PUBLIC SERVICE COMMISSION
000049
1
placed in commercial operation.
And then the second one
2
has to do with prohibiting -- no, that's not the one,
3
I'm so sorry -- the second one has to do with providing
4
that any person, corporation, any kind of entity that
5
exclusively produces renewable energy is not a public
6
utility.
7
ballot, I'm assuming for November.
8
introduced in the last week or so, so there has not been
9
any movement so far on those two bills.
And both of those he has filed to place on the
They were just
10
There has been no movement on the repealer
11
bill that repeals entirely the nuclear cost recovery
12
clause.
13
working on, we are working with the staff, are some of
14
the water and wastewater issues.
15
And then the other issues that we are kind of
Senator Hays has not yet filed his bill, but
16
to the best of our knowledge it closely resembles the
17
bill that Representative Santiago has filed that
18
incorporates several of the recommendations of the water
19
and wastewater study committee.
20
been agendaed for any committee yet.
21
And that bill has not
Senator Simpson's Bill 272, which one of
22
those -- there is one section of that bill that contains
23
one of the recommendations from the water and wastewater
24
study committee.
25
substitute and has -- the first part of the bill creates
That bill is now a committee
FLORIDA PUBLIC SERVICE COMMISSION
000050
1
a process, and as has been explained to us, the intent
2
is to give customers a better voice in the process.
3
it sets forth a process for customers filing a petition
4
for revocation based upon the water and/or wastewater
5
utility failing to meet the secondary standards or the
6
operational standards for wastewater.
7
And
Senate staff has reached out to us to assure
8
that any process created in that bill is a process that
9
would work seamlessly with our other processes that we
10
currently have and it is something that we foresee could
11
be implemented.
12
intent is that customers have a greater voice to bring
13
customers and the utility to the table so that customers
14
have a stake in the process, understand if I want this
15
level, this quality of drinking water, then it's going
16
to cost this much.
17
it, fine.
18
But they have made it clear that the
And if they are willing to pay for
And it also contains the part about the
19
ability of the Commission to deny all or part of a rate
20
increase if the water and wastewater utility fails to
21
meet the secondary water standards or the operational
22
standards for wastewater.
23
Committee meetings begin again the week of
24
February 3rd and they run for three weeks, and then
25
there's a week off and the session starts.
FLORIDA PUBLIC SERVICE COMMISSION
000051
1
Any questions?
2
CHAIRMAN GRAHAM:
3
COMMISSIONER BRISÉ:
Questions?
Commissioner.
This is the bill that has
4
that 65 percent of the consumers can file a petition
5
with the Commission?
6
MS. PENNINGTON:
Yes.
7
COMMISSIONER BRISÉ:
Is that for a particular
8
system or is that system-wide?
9
65 percent be calculated?
10
MS. PENNINGTON:
How would that
Well, and that's one thing
11
that senate staff has reached out to us to identify if
12
it's one-meter-one-vote kind of thing, or if it's the
13
customers in a utility system.
14
asking if a company owns several systems?
15
COMMISSIONER BRISÉ:
16
MS. PENNINGTON:
individual system, yes, sir.
18
interpret it.
MR. KISER:
Right.
No, I believe that it's each
17
19
And I think -- are you
That's how we would
Mr. Chairman, for those that have
20
really been following those water bills, and I know that
21
all of you have a certain amount of interest in them,
22
that bill started out to be the bill that you may have
23
seen before, which was going to limit how much a private
24
utility's cost to the customer could be to comparison to
25
the local city or county system.
And, of course, we all
FLORIDA PUBLIC SERVICE COMMISSION
1
had problems with the constitutionality of that.
2
has all been taken out, and the 65 percent thing is
3
basically the change that took place on that bill.
4
000052
That
So that has been struck, and now the bill
5
has -- the major portion of that bill is the 65 percent.
6
And the second half of the bill has to do with what
7
happens when it comes to the Commission and we find that
8
the 65 percent level has been met.
9
provision has to do with what the Commission can do with
10
Then the second
that once it's in our lap.
11
MS. PENNINGTON:
And right now the committee
12
substitute has three options that the Commission -- and
13
this is at the point that the staff has done all of the
14
background investigative work and the utility has had an
15
opportunity to respond, as well.
16
The Commission can dismiss the petition.
They
17
can -- the current language is suspend the license,
18
which is not the appropriate word, and they intend to
19
change, but to create somewhat of a probationary -- put
20
them on probation and give them a corrective plan up to
21
a maximum of three years to correct those issues that
22
have been identified and clearly -- clearly identified
23
in the petition and that there has been a foundation
24
for.
25
And the third one is the process for
FLORIDA PUBLIC SERVICE COMMISSION
1
revocation of the certificate and placing it in
2
receivership, pursuant to the current process of
3
abandonment procedures.
4
CHAIRMAN GRAHAM:
000053
Has there been -- I know
5
you're saying that the staff -- legislative staff has
6
been talking about it, but to me it seems like -- that
7
65 percent seems like a huge number.
8
got 65 percent of all the meters, then that's a huge
9
problem that's out there.
Because if you've
And I guess the question I
10
have, is this 65 percent of all the customers, or is
11
it one of those things where they will send out a
12
petition in the bill, and if 65 percent of the ones that
13
get returned say that?
14
completely different things.
15
always going to see about 35 percent apathy out there.
16
So how do you ever get --
17
MS. PENNINGTON:
I mean, those could be
Because I think you are
Well, you know, there is a
18
difference between the way the bill is currently written
19
and some issues that they have asked us to help them
20
define.
21
how that process would work.
22
currently says that it's 65 percent of customers, and we
23
are still struggling to define customer.
24
25
And one of those issues is that very issue and
But right now the bill
But the intent is one meter.
If you have five
people living at one address, it's one vote.
FLORIDA PUBLIC SERVICE COMMISSION
If you
000054
1
have -- maybe have two meters, or, you know, you own one
2
and you also own a rental, you would likely have two
3
votes.
4
would have that many votes.
5
thing.
6
think that's one of the things that we have looked at as
7
well.
8
Or if you owned five other rental units you
It's the one meter kind of
And we would exclude meters for irrigation, I
And then the other thing is it provides for,
9
if there's a master meter, 65 percent of the residents.
10
And that still needs to be defined a little better, as
11
well.
12
COMMISSIONER BRISÉ:
13
particular bill.
14
resolution passed in --
15
16
What's the threshold to get a joint
MS. PENNINGTON:
I believe it's two-thirds, a
two-thirds vote in both houses.
17
COMMISSIONER BRISÉ:
18
CHAIRMAN GRAHAM:
19
Nothing else on this
Okay.
Anything else?
Is that it
for --
20
MS. PENNINGTON:
Yes, sir.
21
CHAIRMAN GRAHAM:
22
MS. PENNINGTON:
23
CHAIRMAN GRAHAM:
24
MR. BAEZ:
25
Commissioners, I just wanted to put a couple
Okay.
Well, thank you.
Thank you.
Executive Director's report.
Thank you, Mr. Chairman.
FLORIDA PUBLIC SERVICE COMMISSION
000055
1
of things on your radar, going back to the grant funding
2
and so forth.
3
Actually, one of the things that we did try to
4
do, and you may have heard me mention it on a couple of
5
occasions, is to try and get the most bang for our buck
6
and try and leverage those funding, having leveraged
7
those funding dollars into projects or benefits that
8
would keep giving even after the period was gone.
9
we are well into that period now.
10
And
And I wanted to put something on your -- make
11
you aware of something.
12
we use the funding in part to provide leadership
13
training.
14
of occasions prior.
15
and 31 employees were able to participate in the two
16
separate classes.
17
had -- we had some staff-driven projects that were being
18
undertaken.
19
our first of those projects out of the gate.
20
One of the uses -- the funding,
You may have heard me mention it on a couple
We have two classes this go around,
And as a follow on, you may recall we
And I wanted to let you know that we have
One of our teams, one of our leadership teams
21
got busy putting together and aggregating a training
22
website to provide training resources for the entire
23
agency in the form of a website, the link of which is
24
located on your Internet web.
25
out, it's on the top left-hand corner, it's under PSC
If you want to check it
FLORIDA PUBLIC SERVICE COMMISSION
1
2
000056
Regulatory Training.
It's organized from large to small, and you
3
can access it in any number of ways, but I think the
4
purpose of it -- and I'm paraphrasing the team, so I
5
hope they won't judge me too harshly -- I think the
6
purpose was to give every employee at the agency the
7
ability to learn more about not just the agency and the
8
work that we do in all the different, across the
9
different industries, but also to understand and have a
10
better appreciation and understanding for our place as
11
part of state government.
12
So if you do visit the website, and I hope
13
that you will, you will see that it goes from the State
14
of Florida down to an industry.
15
managers can access it any number of ways in order to
16
fashion new employee training, existing employee
17
cross-training and the like.
18
And as I mentioned,
So I commend it to you and urge you to check
19
it out if you have a burning desire to learn more about
20
the regulatory compact, or CIAC, or anything else that
21
got mentioned here, I recommend it to you.
22
As a preview to something that will be shortly
23
added to it, one of the other teams is involved in
24
putting together a module that will be included for the
25
website that deals mainly with managerial training.
FLORIDA PUBLIC SERVICE COMMISSION
So
000057
1
when we have a new manager, there's a resource there
2
readily available for them to be able to access and help
3
them along with their professional development, as well.
4
So be on the lookout.
5
That's all for now.
6
CHAIRMAN GRAHAM:
7
COMMISSIONER BALBIS:
8
was going to say he was $450,000 short.
9
MR. BAEZ:
11
CHAIRMAN GRAHAM:
12
MR. BAEZ:
13
CHAIRMAN GRAHAM:
14
Seeing none.
I was just nervous he
No.
Thank you for the report.
Thank you, Chairman.
Other matters?
Okay.
15
think we are done.
16
everybody travel safely.
18
Questions?
(Laughter.)
10
17
Thank you.
Well, that means that I
So this meeting is adjourned, and
(The Internal Affairs meeting concluded at
11:01 a.m.)
19
20
21
22
23
24
25
FLORIDA PUBLIC SERVICE COMMISSION
000058
1
2
STATE OF FLORIDA
CERTIFICATE OF REPORTER
3
4
COUNTY OF LEON
5
6
7
8
9
10
I, JANE FAUROT, RPR, Chief, Hearing Reporter
Services Section, FPSC Division of Commission Clerk, do
hereby certify that the foregoing proceeding was heard
at the time and place herein stated.
IT IS FURTHER CERTIFIED that I
stenographically reported the said proceedings; that the
same has been transcribed under my direct supervision;
and that this transcript constitutes a true
transcription of my notes of said proceedings.
13
I FURTHER CERTIFY that I am not a relative,
employee, attorney or counsel of any of the parties, nor
am I a relative or employee of any of the parties'
attorney or counsel connected with the action, nor am I
financially interested in the action.
14
DATED THIS 30th day of January, 2014.
11
12
15
16
17
18
-~------
FAUROT, RPR
cial FPSC Hearings Reporter
(850)
413-6732
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20
21
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23
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25
FLORIDA PUBLIC SERVICE COMMISSION

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