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Florida Industrial Power Users Group v. Brown

Supreme Court of Florida

June 13, 2019

FLORIDA INDUSTRIAL POWER USERS GROUP, Appellant,
v.
JULIE IMANUEL BROWN, etc., et al., Appellees.

         NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED.

          An Appeal from the Florida Public Service Commission

          Jon C. Moyle, Jr. and Karen Putnal of Moyle Law Firm, P.A., Tallahassee, Florida, for Appellant

          Keith C. Hetrick, General Counsel, Samantha M. Cibula, Attorney Supervisor, and Adria E. Harper, Senior Attorney, Florida Public Service Commission, Tallahassee, Florida, for Appellee Florida Public Service Commission

          María José Moncada and William P. Cox, Florida Power & Light Company, Juno Beach, Florida; and Alvin B. Davis of Squire Patton Boggs (US) LLP, Miami, Florida, for Appellee Florida Power & Light Company

          CANADY, C.J.

         This case is before the Court on appeal from a decision of the Florida Public Service Commission relating to the rates or service of a public utility providing electric service. We have jurisdiction. See art. V, § 3(b)(2), Fla. Const. The Commission approved a request made by Florida Power and Light (FPL) for the recovery of costs through base rates for four solar energy centers expected to be in service by December 31, 2017, and for four solar energy centers expected to be in service by March 1, 2018. These solar energy projects (So) for which a base rate adjustment (BRA) was approved are collectively referred to as the SoBRA projects. In granting FPL's request, the Commission concluded that the SoBRA projects comported with the terms of a 2016 settlement agreement providing for recovery of these costs and that the projects were cost effective. Because we agree that the SoBRA projects met the terms set forth in the settlement agreement for cost recovery, we affirm the Commission's order.

         I. BACKGROUND

         The starting point of this case is in 2016, when FPL filed a petition with the Commission for an increase in base rates. Florida Industrial Power Users Group (FIPUG) and eight other parties intervened in the rate case. Prior to the Commission rendering its decision on FPL's petition, a settlement was reached between FPL and three of the nine intervening parties-not including FIPUG. The settling parties then filed a motion for approval of the settlement agreement, which they asserted resolved all of the issues in the rate case. In addition to resolving all of the underlying issues in the pending rate case, section 10 of the settlement agreement included provisions allowing FPL to recover costs for certain solar projects if the projects met certain capacity requirements and in-service dates and were demonstrated to the Commission to be cost effective. The Commission summarized the requirements provided in the settlement agreement for recovery of the costs of the SoBRA projects as follows:

There are several conditions that must be met for recovery in this case. First, FPL must request recovery for these projects during the term of the 2016 Agreement, or prior to December 31, 2020. Second, the cost of the components, engineering, and construction for any solar project is capped at $1, 750 per kilowatt alternating current (kWac). Third, for projects less than 75 MW (as are all of the projects proposed in this case): 1) the request for base rate recovery must be filed in the Fuel Clause docket as part of its final true-up filing; and 2) the issues are "limited to the cost effectiveness of each such project (i.e., will the project lower the projected system CPVRR [(cumulative present value revenue requirement)] as compared to each CPVRR without the solar project) and the amount of revenue requirements and appropriate percentage in base rates needed to collect the estimated revenue requirements." If the project meets these requirements, the terms of the 2016 Agreement have been met.

         In re Fuel & Purchased Power Cost Recovery Clause with Generating Performance Incentive Factor, Order No. PSC-2018-0028-FOF-EI at 8, 2018 WL 367863 (Fla. Pub. Serv. Comm'n Jan. 8, 2018) (footnote omitted) ("final order"); see also In re Petition for Rate Increase by Florida Power & Light Co., Order No. PSC-16-0560-AS-EI at 2-3, 2016 WL 7335779, at *2 (Fla. Pub. Serv. Comm'n Dec. 15, 2016) ("settlement order").

         Although FIPUG was not a signatory to the settlement agreement, it was given the opportunity to participate in the evidentiary hearing on the settlement agreement but chose to take no position on it and did not present any testimony or other evidence opposing it. The Commission ultimately approved the settlement agreement on December 15, 2016, concluding "that the Settlement Agreement establishes rates that are fair, just, and reasonable and is in the public interest." In re Petition for Rate Increase by Florida Power & Light Co., Order No. PSC-16-0560-AS-EI at 5, 2016 WL 7335779, at *3.

         FIPUG did not appeal the settlement order, but Sierra Club, another party to the rate case who was also not a signatory to the settlement agreement, did oppose certain provisions of the agreement and appealed the settlement order. See Sierra Club v. Brown, 243 So.3d 903 (Fla. 2018). We affirmed the settlement order in Sierra Club, concluding that the Commission applied the appropriate public interest standard in its consideration of the settlement agreement and that the Commission's decision to approve the settlement agreement was supported by competent, substantial evidence. Id. at 913, 916. We also noted in Sierra Club that "an independent express prudence finding was not a prerequisite to a public interest finding . . . and there was no need for the Commission to make an express individual prudence determination." Id. at 913.

         In March 2017, in accordance with the settlement order, FPL filed its Petition for Approval of Solar Base Rate Adjustments (solar petition) in the Fuel and Purchased Power Cost Recovery Clause docket (fuel docket), in which it requested an increase in base rates to recover costs for the SoBRA projects. FPL asserted that the 2017 and 2018 SoBRA projects were cost effective under the settlement agreement because they lowered the system CPVRR in 2017 and 2018 and the cost for each center fell below the $1, 750 per kWac cap. FPL asked the ...


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