Florida Public Service Commission native order document 02375-2023

OCR transcription for search; preserved printed pages are authoritative

FILED 3/23/2023 DOCUMENT NO. 02375-2023 FPSC - COMMISSION CLERK
BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION
In re: Petition for limited proceeding for recovery of incremental storm restoration costs related to Hurricanes Elsa, Eta, Isaias, Ian, Nicole, and Tropical Storm Fred, by Duke Energy Florida, LLC.
DOCKET NO. 20230020-EI ORDER NO. PSC-2023-0111-PCO-EI ISSUED: March 23, 2023
The following Commissioners participated in the disposition of this matter:
ANDREW GILES FAY, Chairman ART GRAHAM GARY F. CLARK MIKE LA ROSA GABRIELLA PASSIDOMO
ORDER APPROVING DUKE ENERGY FLORIDA, LLC'S INTERIM STORM COST RECOVERY CHARGE
BY THE COMMISSION:
BACKGROUND
On January 23, 2023, Duke Energy Florida, LLC (DEF or Company) filed a petition for a limited proceeding seeking authority to implement an interim storm restoration recovery charge to recover $442.1 million for the incremental restoration costs related to Hurricanes Elsa, Eta, Ian, Isaias, and Nicole and Tropical Storm Fred, as well as to replenish its storm reserve. This amount includes approximately $4.5 million in interest.
DEF filed its petition pursuant to the provisions of the 2017 Second Revised and Restated Settlement Agreement (2017 Settlement) approved by Order No. PSC-2017-0451-AS-EU and the 2021 Settlement Agreement (2021 Settlement) approved by Order No. PSC-2021-0202-AS- EI.1 Pursuant to Order No. PSC-2021-0425-FOF-EI (2021 Rate Mitigation Agreement), DEF charged the remaining uncollected storm restoration costs resulting from Hurricanes Eta and Isaias, estimated at $9.2 million, to the storm reserve, while reserving the right to collect the remainder of the unrecovered storm cost balance at a later time.2 DEF also voluntarily agreed to forego recovering costs related to Hurricane Elsa through a storm surcharge and instead reserved the right to collect an estimated $15 to $18 million of storm restoration costs at a later date. As a result of the 2021 Rate Mitigation Agreement, DEF deferred collection of approximately $24.4 million in storm-related costs. DEF is now seeking to recover those costs as part of its petition. Pursuant to the 2017 Settlement and 2021 Settlement, the Company can recover storm costs,
1Order No. PSC-2017-0451-AS-EU, issued November 20, 2017, in Docket No. 20170183-EI, In re: Application for limited proceeding to approve 2017 second revised and restated settlement agreement, including certain rate adjustments, by Duke Energy Florida, LLC. and Order No. PSC-2021-0202-AS-EI, issued June 4, 2021, in Docket No. 20210016-EI, In re: Petition for limited proceeding to approve 2021 settlement agreement, including general base rate increases, by Duke Energy Florida, LLC.
2Order No. PSC-2021-0425-FOF-EI, issued November 16, 2021, in Docket No. 20210158-EI, In re: Limited proceeding to consider Duke Energy Florida, LLC's unopposed motion to approve rate mitigation agreement.

ORDER NO. PSC-2023-0111-PCO-EI
DOCKET NO. 20230020-EI
PAGE 2
without a cap on the level of charges on customer bills, on an interim basis beginning 60 days
following the filing of a petition for recovery. 	DEF has proposed interim storm restoration
charges applicable to all rate classes over a 12-month recovery period, effective with the first
billing cycle of April 2023.
We have jurisdiction over this matter pursuant to Sections 366.04, 366.05, 366.06, and
366.076, Florida Statutes.
DECISION
DEF filed a petition for a limited proceeding seeking authority to implement an interim
storm restoration recovery charge to recover $442.1 million for the incremental restoration costs
related to Hurricanes Elsa, Eta, Ian, Isaias, Nicole and Tropical Storm Fred, and to replenish its
storm reserve. In its petition, DEF requested to replenish the storm reserve to $131.9 million.
The petition was filed pursuant to the provisions of the 2017 Settlement approved by
Order No. PSC-2017-0451-AS-EU and 2021 Settlement approved by Order No. PSC-2021-
0202-AS-EI.3 	Storm restoration costs for Eta, Elsa, Isaias, and Fred were incurred while the
2017 Settlement Agreement was in effect. 	Storm restoration costs for Ian and Nicole were
incurred during the term of the 2021 Settlement Agreement. The Storm Cost Recovery
provisions of the respective Settlement Agreements are identical. 	Pursuant to Paragraph 38 of
the 2017 Settlement and Paragraph 30c of the 2021 Settlement, DEF can begin recovery of storm
costs, without a cap, 60 days following the filing of a petition for recovery. DEF has proposed
an interim storm recovery charge of $13.14 per 1,000 kilowatt-hours (kWh) on a residential
customer bill over a 12-month recovery period effective the first billing cycle of April 2023.
In its petition, DEF stated that it incurred total retail recoverable costs of approximately
$442.1 million as a result of Hurricanes Elsa, Eta, Ian, Isaias, and Nicole and Tropical Storm
Fred, as well as to replenish its storm reserve. The Company further stated that this amount was
calculated in accordance with the Incremental Cost and Capitalization Approach methodology
prescribed in Rule 25-6.0143, Florida Administrative Code.
The approval of an interim storm restoration recovery charge is preliminary in nature and
is subject to refund pending further review once the total actual storm restoration costs are
known. After the actual costs are reviewed for prudence and reasonableness, and are compared
to the actual amount recovered through the interim storm restoration recovery charge, a
determination will be made whether any over/under recovery has occurred. 	The disposition of
any over/under recovery, and associated interest, will be considered by this Commission at a
later date.
Based on a review of the information provided by DEF in its petition, we hereby
authorize the Company to implement an interim storm restoration recovery charge subject to
3Order No. PSC-2017-0451-AS-EU, issued November 20, 2017, in Docket No. 20170183, In re: Application for
limited proceeding to approve 2017 second revised and restated settlement agreement, including certain rate
adjustments, by Duke Energy Florida, LLC. and Order No. PSC-2021-0202-AS-EI, issued June 4, 2021, in Docket
No. 20210016-EI, In re: Petition for limited proceeding to approve 2021 settlement agreement, including general
base rate increases, by Duke Energy Florida, LLC.

ORDER NO. PSC-2023-0111-PCO-EI
DOCKET NO. 20230020-EI
PAGE 3
refund. Once the total actual storm costs are known, DEF shall be required to file documentation
of the storm costs for our review and true-up of any excess or shortfall.
All funds collected subject to refund shall be secured by a corporate undertaking. The
criteria for a corporate undertaking include sufficient liquidity, ownership equity, profitability,
and interest coverage to guarantee any potential refund. DEF requested a 12-month collection
period 	from 	April 	2023 	to 	March 	2024 	for 	Interim 	Storm 	Cost 	Recovery 	Charges 	of
$442,074,721 related to Hurricanes Elsa, Eta, Ian, Isaias, Nicole and Tropical Storm Fred. 	We
have reviewed DEF’s three most recent annual reports filed with us (2021, 2020, and 2019) to
determine if the Company can support a corporate undertaking to guarantee the funds collected
for recovery of incremental storm restoration costs related to all the weather events. 	DEF’s
financial information indicates the Company’s liquidity is deficient, that is, that current assets are
less than current liabilities. 	However, the Company participates in Duke Energy Corporation’s
(DEF’s parent company) money pool and has access to additional funds if needed. In addition,
DEF’s ownership equity, profitability, and interest coverage are sufficient to support a potential
refund of $442 million. 	Moreover, it is improbable DEF will be required to refund the entire
requested amount.
For these reasons we find that DEF has adequate resources to support a corporate
undertaking in the amount requested and that a corporate undertaking of $442 million is
appropriate. 	This brief financial analysis is only appropriate for deciding if the Company can
support a corporate undertaking in the amount proposed and was not considered in our
evaluation of other issues in this proceeding.
DEF is seeking approval of interim storm cost recovery surcharges associated with
Hurricanes Elsa, Eta, Isaias, Ian, Nicole, and Tropical Storm Fred as shown in proposed Tariff
Sheet Nos. 6.105 and 6.106, found in Attachment A to this order. 	The surcharges would be
applicable to all rate classes. 	Tariff Sheet No 6.105 indicates the proposed interim storm cost
recovery surcharges and Tariff Sheet No. 6.106 defines the storm cost recovery surcharge.
DEF explained that it has allocated the storm cost recovery amount to the rate classes
consistent with the rate design approved in the 2021 Settlement. 4 	We have reviewed the storm
cost recovery allocation and calculation of rates and it appears that DEF has calculated rates in
accordance with the 2021 Settlement, using the most recent load research study and projected
billing determinants for the recovery period.
The interim storm restoration recovery charge calculations are shown on pages 9 and 10
in Appendix A to DEF’s petition. For residential customers, the surcharge would be 1.314 cents
per kWh, which would equate to $13.14 on a 1,000 kWh residential bill. If approved by this
Commission, the storm cost recovery surcharge would be included in the non-fuel energy charge
on customer bills.
Based on our review, we hereby approve DEF’s proposed interim storm restoration
recovery charge tariff, as shown on Attachment A to this order, effective with the first billing
4 Order No. PSC-2021-0202-AS-EI, issued June 4, 2021, in Docket No. 20210016-EI, In re: Petition for limited
proceeding to approve 2021 settlement agreement, including general base rate increases, by Duke Energy Florida,
LLC.

ORDER NO. PSC-2023-0111-PCO-EI
DOCKET NO. 20230020-EI
PAG E 4
cycle of Apri l 2023 and end in g the ea rl ier of fu ll recovery or with the las t billing cyc le of March
2024, whichever occurs first. 	Furthermore, we find that th e int er im storm re storation recovery
charge sha ll be s ubj ect to a fina l true- up .
Based on th e forego in g, it is
ORDERED by th e Florida Publ ic Se rvi ce Com mi ssion that Duke Energy Flor id a, LLC' s
limited peti ti on fo r recovery of in cremental sto rm restora ti on costs related to Hurricanes Elsa,
Eta, Isaias, Nicole, a nd Tropical Storm Fred through the implementation of an inte rim storm
re stora ti on recovery charge s ubj ect to refund is hereby gra nted. Once th e total ac tu al storm costs
are known, DEF sha ll fil e doc um enta ti on of the tota l sto rm costs for our review a nd tru e- up of
any excess or shortfa ll. It is further
ORDERED 	th at Duke 	Energy 	Flo rid a, 	LLC ' s proposed 	inte rim 	storm restoration
re covery charge tariff, as shown on Attac hm ent A of this order, is hereby approved effective
with the first bil li ng cycle of Apri l 2023 and ending th e earlier of fu ll re covery or w ith th e last
bi lling cycle of March 2024, whichever occ ur s fir s t. 	T hi s int e rim sto rm re stora ti on recovery
charge sh al l be s ubj ect to fin al true -u p. It is furth er
ORDERED th at th e app ro pri ate sec uri ty to guarantee the fund s co ll ec ted subject to
refund is a corporate undertaki ng in th e amo un t of $442 milli on. It is further
ORDERED th at this docket sha ll re ma in open pending fina l reconci li ation of ac tu al
recoverab le sto rm costs wi th the amount co ll ec ted pursua nt to the inter im storm res tora ti on
recovery charge a nd the calc ul ation of a refund or ad ditional charge if wa r ra nt ed.
SB r
By ORDER of t he Flor id a Public Service Co mmi ssion thi s 23 rd day of March, 2023.
JJ ,
Co mmi ss io
Florida Pub li c Service Co mmi ss ion
2540 Shumard Oak Boulevard
Ta llahassee, Fl orida 32399
(850) 4 13-6770
www .fl oridapsc.com
Copies furnishe d: 	A copy of thi s docume nt is
p rov id ed to th e pattie s of record at th e tim e of
iss uance and, if app lic able, interested persons.

ORDER NO. PSC-2023-0111-PCO-EI
DOCKET NO. 20230020-EI
PAGE 5
NOTICE OF FURTHER PROCEEDINGS OR JUDICIAL REVIEW
The Florida Public Service Commission is required by Section 120.569(1), Florida
Statutes, to notify parties of any administrative hearing or judicial review of Commission orders
that is available under Sections 120.57 or 120.68, Florida Statutes, as well as the procedures and
time limits that apply. 	This notice should not be construed to mean all requests for an
administrative hearing or judicial review will be granted or result in the relief sought.
Mediation may be available on a case-by-case basis. 	If mediation is conducted, it does
not affect a substantially interested person's right to a hearing.
Any 	party 	adversely 	affected 	by 	this 	order, 	which 	is 	preliminary, 	procedural 	or
intermediate in nature, may request: (1) reconsideration within 10 days pursuant to Rule 25-
22.0376, Florida Administrative Code; or (2) judicial review by the Florida Supreme Court, in
the case of an electric, gas or telephone utility, or the First District Court of Appeal, in the case
of a water or wastewater utility. 	A motion for reconsideration shall be filed with the Office of
Commission Clerk, in the form prescribed by Rule 25-22.0376, Florida Administrative Code.
Judicial review of a preliminary, procedural or intermediate ruling or order is available if review
of the final action will not provide an adequate remedy. Such review may be requested from the
appropriate court, as described above, pursuant to Rule 9.100, Florida Rules of Appellate
Procedure.

ORDER NO. PSC-2023-0111-PCO-EI DOCKET NO. 20230020-EI
PAGE 6
ATTACHMENT A
I
DUKE ENERGY.
SECTION NO. VI ONE HUNDRED AND FIRSTTH REVISED SHEET NO. 6.105 CANCELS NINETY-NINONE HUNDREDTH REVISED SHEET NO. 6.105
Page 1 of 3
Applicable:
To the Rate Per Month provision in each of the Company's filed rate schedules which reference the billing adjustments set forth below.
COST RECOVERY FACTORS
Rate Schedule/Metering Level
ECCR(2)
CCR(3)
ECRC(4)
ASC(5)
SPPCRC(6)
SCRS()
¢/ kWh
$/ kW
¢/ kWh
$/ kW
¢/ kWh
¢/ kWh
¢/ kWh
$/ kW
d/ kWh
RS-1, RST-1, RSL-1, RSL-2 (Sec.)
0.320
1.3281.2 85
0.022
0.199
0.414
1
-1.314
< 1000
> 1000
GS-1, GST-1
Secondary
0.288
-
-
-1.312
Primary
0.285
-
1.1731.1 38 1.1611.1 27 1.1501.1 15
0.021
0.173
0.397
-1.299
Transmission
0.282
0.021
0.172
0.393
-1.286
GS-2 (Sec.)
0.217
0.8220.7 95
0.018
0.124
0.188
-0.582
GSD-1, GSDT-1, SS-1* Secondary
0.85
1.05
-0.941
Primary
0.84 0.83
3.373.26 3.343.23 3.303.19
0.020 0.020 0.020
0.149
1.01
-0.932
Transmission
0.148
0.19
-0.922
CS-2, CST-2, CS-3, CST- 3, SS-3*
Secondary
0.46
-1.611
Primary
0.46 0.45
1.671.61 1.651.59 1.641.58
0.016 0.016 0.016
0.097 0.096 0.095
0.98 0.97 0.96
-1.595
Transmission
-1.579
IS-2, IST-2, SS-2* Secondary
0.70
0.124
0.80
-0.421
Primary
0.69
0.123
0.59
-0.417
Transmission
0.69
0.122
0.14
-0.413
LS-1 (Sec.)
0.116
-
I
0.014
0.050
0.306
-
-1.166
*SS-1, SS-2, SS-3 Monthly
Secondary
0.082
0.094
Primary
0.081
-
0.3250.3 14 0.3220.3 11 0.3190.3 08
0.092
Daily
Secondary
0.039
50
Primary
0.039
48
Transmission
0.038
0.1520.1 47
0.044
GSLM-1, GSLM-2
See appropriate General Service rate schedule
Fuel Cost Recovery(1)
Rate Schedule/Metering Level
Levelized
On-Peak
Off-Peak
Super-Off-Peak
RS-1 Only
< 1,000
5.9617.953
N/A
N/A
N/A
RS-1 Only
> 1,000
7.0319.023
N/A
N/A
N/A
LS-1 Only
Secondary
5.8657.751
N/A
N/A
N/A
All Other Rate Schedules
Secondary
6.2668.281
7.69510.169
6.3048.331
4.6746.178
-
0.093
Transmission
0.080
0.1550.1
0.045
-
0.1530.1
0.045
-
¢/ kWh
¢/ kWh
¢/ kWh
¢/ kWh
ISSUED BY: Thomas G. Foster, Vice President, Rates & Regulatory Strategy - FL
- EFFECTIVE: March 1, 2023April 1, 2023
0.3410.3
30
2.692.60 2.662.57 2.642.55
0.018 0.018 0.018
0.175
0.401
0.021
0.151
I
RATE SCHEDULE BA-1 BILLING ADJUSTMENTS

ORDER NO. PSC-2023-0111-PCO-EI
DOCKET NO. 20230020-EI
PAGE 7

im DUKE SECTION NO. VI
|

ONE HUNDRED AND FIRSTTH REVISED SHEET NO. 6.105
ENERGY. CANCELS NINETY-NINONE HUNDREDTH REVISED SHEET NO. 6.105

Page 2 of 3
All Other Rate Schedules Primary $2038. 198 FHHIL.OGT | $2405.247 48276.116
All Other Rate Schedules Transmission 64445 115 7SH49. 965 64785 164 45815 .054

(Continued on Page No. 2)

ISSUED BY: Thomas G. Foster, Vice President, Rates & Regulatory Strategy — FL
EFFECTIVE: March+4,2023April 1, 2023

ORDER NO. PSC-2023-0111-PCO-EI DOCKET NO. 20230020-EI
PAGE 8
DUKE ENERGY®
SECTION NO. VI THIRTY-THIRD-FOURTH REVISED SHEET NO. 6.106 CANCELS THIRTY-SECOND-THIRD_REVISED SHEET NO. 6.106
Page 2 of 3
RATE SCHEDULE BA-1 BILLING ADJUSTMENTS (Continued from Page 1)
(1) Fuel Cost Recovery Factor:
The Fuel Cost Recovery Factors applicable to the Fuel Charge under the Company's various rate schedules are normally determined annually by the Florida Public Service Commission for the billing months of January through December. These factors are designed to recover the costs of fuel and purchased power (other than capacity payments) incurred by the Company to provide electric service to its customers and are adjusted to reflect changes in these costs from one period to the next. Revisions to the Fuel Cost Recovery Factors within the described period may be determined in the event of a significant change in costs.
(2) Energy Conservation Cost Recovery Factor:
The Energy Conservation Cost Recovery (ECCR) Factor applicable to the Energy Charge under the Company's various rate schedules is normally determined annually by the Florida Public Service Commission for twelve-month periods beginning with the billing month of January. This factor is designed to recover the costs incurred by the Company under its approved Energy Conservation Programs and is adjusted to reflect changes in these costs from one period to the next. For time of use demand rates the ECCR charge will be included in the monthly max demand only.
(3) Capacity Cost Recovery Factor:
The Capacity Cost Recovery (CCR) Factors applicable to the Energy Charge under the Company's various rate schedules are normally determined annually by the Florida Public Service Commission for the billing months of January through December. This factor is designed to recover the cost of capacity payments made by the Company for off-system capacity and is adjusted to reflect changes in these costs from one period to the next. For time of use demand rates the CCR charge will be included in the monthly max demand only.
(4) Environmental Cost Recovery Clause Factor:
The Environmental Cost Recovery Clause (ECRC) Factors applicable to the Energy Charge under the Company's various rate schedules are normally determined annually by the Florida Public Service Commission for the billing months of January through December. This factor is designed to recover environmental compliance costs incurred by the Company and is adjusted to reflect changes in these costs from one period to the next.
(5) Asset Securitization Charge Factor:
The Asset Securitization Charge (ASC) Factors applicable to the Energy Charge under the Company's various rate schedules represent a Nuclear Asset-Recovery Charge approved in a financing order issued to the Company by the Florida Public Service Commission and are adjusted at least semi-annually to ensure timely payment of principal, interest and financing costs of nuclear asset-recovery bonds from the effective date of the ASC until the nuclear asset-recovery bonds have been paid in full or legally discharged and the financing costs have been fully recovered. As approved by the Commission, a Special Purpose Entity (SPE) has been created and is the owner of all rights to the Nuclear Asset-Recovery Charge. The Company shall act as the SPE's collection agent or servicer for the Nuclear Asset-Recovery Charge. The Nuclear Asset-Recovery Charge shall be paid by all existing or future customers receiving transmission or distribution service from the Company or its successors or assignees under Commission-approved rate schedules or under special contracts, even if the customer elects to purchase electricity from alternative electric suppliers following a fundamental change in regulation of public utilities in this state.
(6) Storm Protection Plan Cost Recovery Clause Factor:
The Storm Protection Plan Cost Recovery Clause (SPPCRC) Factors applicable to the Energy Charge under the Company's various rate schedules are normally determined annually by the Florida Public Service Commission for the billing months of January through December. This factor is designed to recover storm protection plan costs incurred by the Company and is adjusted to reflect changes in these costs from one period to the next. For time of use demand rates the SPPCRC charge will be included in the monthly max demand only.
(7) Storm Cost Recovery Surcharge Factor:
In accordance with a Florida Public Service Commission ruling, the Storm Cost Recovery Surcharge (SCRS) factor is applicable to the Energy Charge under the Company's various rate schedules for the billing months of August 2021 through July 2022April 2023 through March 2024. This surcharge is designed to recover storm-related restoration costs, replenishment of the storm reserve, and interest incurred by the Company related to Hurricanes Eta and Isaias in 2020Elsa, Eta, lan, Isaias, Nicole, and Tropical Storm Fred.
Gross Receipts Tax Factor:
In accordance with Section 203.01(1)(a)1 of the Florida Statutes, a factor of 2.5641% is applicable to electric sales charges for collection of the state Gross Receipts Tax.
Regulatory Assessment Fee Factor:
In accordance with Section 350.113 of the Florida Statutes and Rule 25-6.0131, F.A.C., a factor of 0.072% is applicable to gross operating sales charges for collection of the Regulatory Assessment Fee.
(Continued on Page No. 3)
ISSUED BY: Thomas G. Foster, Vice President, Rates & Regulatory Strategy - FL
EFFECTIVE: January 1, 2023April 1, 2023
-