Florida Public Service Commission native order document 05425-2026

FILED 8/24/2026
DOCUMENT NO. 05425-2026
FPSC 	- COMMISSION CLERK
BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION
DOCKET NO. 20250032-EI
ORDER NO. PSC-2026-0291-PCO-EI
ISSUED: August 24, 2026
The following Commissioners participated in the disposition of this matter:
GABRIELLA PASSIDOMO SMITH, Chairman
GARY F. CLARK
MIKE LA ROSA
BOBBY PAYNE
ANA ORTEGA
In re: Review of incentive mechanisms for the
electric investor-owned utilities.
ORDER CLOSING INCENTIVE MECHANISMS REVIEW DOCKET
BY THE COMMISSION:
Procedural Background
By Order No. PSC-2025-0038-FOF-EI (2025 TECO 	Order), 	as 	part of Tampa 	Electric
Company’s (TECO) 2024 base rate proceeding, we directed Commission 	staff to open a generic
docket 	to allow us 	to evaluate 	the various Asset Optimization Mechanisms (AOMs) 	for 	all 	the
electric investor-owned utilities (lOUs). 1AOMs are broadly defined as incentive mechanisms to
encourage 	utilities 	to 	produce 	gains 	from 	existing 	utility 	assets, 	such 	as 	through 	wholesale
energy 	transactions 	or 	fuel 	stockpile 	transactions 	that do 	not 	impact 	system 	reliability. We
directed Commission 	staff to 	conduct a workshop 	in 	the 	generic 	docket 	to 	allow 	the 	electric
lOUs and interested parties to provide input on the AOMs.
On February 	12, 2025, Docket No. 20250032-EI was 	established to review 	the various
incentive mechanisms associated with 	utility 	assets supported by ratepayer funds. On February
13, 	2025, 	the 	Office 	of 	Public 	Counsel 	(OPC) 	filed 	a 	Notice 	of 	Intervention, 	which was
acknowledged by Order No. PSC-2025-0055-PCO-EI. Commission 	staff propounded one round
of data requests 	to 	the 	electric lOUs, 	including 	Florida Power & Light Company (FPL), Duke
Energy 	Florida, LLC (DEF), TECO, and Florida 	Public 	Utilities Company (FPUC). A second
round of data requests was propounded to FPL, DEF, and TECO. FPUC was excluded from the
second round because 	it 	is not a generating IOU, and 	therefore 	does not engage 	in wholesale
energy transactions and does not have fuel or generation associated assets for asset optimization.
For purposes 	of 	this 	Order, any 	future 	reference made 	herein 	to 	the 	electric lOUs 	does 	not
include FPUC.
1See Order No. PSC-2025-0038-FOF-EI, issued February 3, 2025, in Docket No. 20240026-EI, In re: Petition for
rate increase by Tampa Electric Company, pp. 176-77.

ORDER NO. PSC-2026-0291-PCO-EI
DOCKET NO. 20250032-EI
PAGE 2
Commission staff conducted a workshop on February 5, 2026. The IOUs, OPC, and
Florida Rising, Inc. (FL Rising) participated in the workshop and submitted post-workshop
comments.2
We have jurisdiction over this matter pursuant to Sections 366.04, 366.041, and 366.05,
Florida Statutes (F.S.).
Decision
I. 	Brief History
We first approved an asset optimization mechanism as part of FPL’s 2013 base rate
proceeding.3 In 2023, the Florida Supreme Court expressly recognized our statutory authority to
approve asset optimization incentives.4 As of 2025, all the electric IOUs have a utility-specific,
Commission-approved AOM. However, as this Commission recognized in the 2025 TECO
Order, the approved AOMs are dissimilar in terms of allowable activities and revenue sharing
thresholds. This is in part due to all prior AOMs being approved as part of comprehensive
settlement agreements. Consequently, through the 2025 TECO Order, we determined that a
generic proceeding should be established and a workshop should be held.
Before this Commission approved the first AOM in 2013, we relied upon the Generating
Performance Incentive Factor (GPIF) program to optimize the efficiency and performance of the
IOUs’ base load generating units through the annual Fuel Clause proceeding. The GPIF was
established as a performance-based incentive to promote efficient plant operations while helping
control fuel costs for customers. When this Commission later adopted the first AOM for FPL in
2013, questions arose regarding the relationship between the AOM and the existing GPIF
program, as incentives for generator efficiency and availability may impact their performance for
wholesale energy sales or purchases. As such, as part of the 2013 Fuel Clause proceeding, we
directed FPL, the sole utility with an AOM at the time, to review the interrelationship between
the AOM and the GPIF program during 2015.5 However, this review was never completed due to
subsequent settlement agreements. Therefore, as part of the 2026 workshop, Commission staff
took the opportunity to also discuss and solicit comment on the GPIF because a similar
relationship between AOMs incentives and GPIF could be evaluated for all the electric IOUs.
2 FL Rising was added to this docket as an Interested Person on February 18, 2025. The Southern Alliance for Clean
Energy was added to this docket as an Interested Person on February 21, 2025, but did not file post-workshop
comments or otherwise participate in the workshop.
3 A detailed history of Commission actions regarding incentive mechanisms is provided in Order No. PSC-2025-
0038-FOF-TP, beginning at page 173.
4 See Floridians Against Increased Rates, Inc. v. Clark, 371 So. 2d 905, 907 fn. 2 (Fla. 2023).
5 See Order No. PSC-13-0665-FOF-EI, issued December 18, 2013, in Docket No. 20130001-EI, In re: Fuel and
purchased power cost recovery clause with generating performance incentive factor.

ORDER NO. PSC-2026-0291-PCO-EI
DOCKET NO. 20250032-EI
PAGE 3
II. 	Current Asset Optimization Mechanisms
As of 2026, gains attributed to AOMs include wholesales purchases, wholesales sales,
and asset optimization activities, which vary by utility. Table 1 identifies the allowable asset
optimization activities by electric IOU.
Table 1
Asset Optimization Activities by Utility
Asset Optimization Activities 	FPL 	TECO 	DEF
Asset Management Agreements 	 	 	
Renewable Energy Credit Sales 	 	
Electric Transmission Capacity Release 	
Gas Storage Utilization 	 	 	
Gas Transportation Capacity Release 	 	
Gas Delivered using Existing Transport 	 	 	
Gas Sales Production Area (Upstream) 	 	 	
Coal Transportation Savings 	
All Fuel Source Supply and Capacity 	
Source: Responses to Commission staff’s First Data Request.6
Similarly, as of 2026, the AOM revenue sharing for each electric IOU differs in the
number and level of sharing thresholds, with each having their own sharing percentage. The
current and former sharing thresholds for each of the electric IOUs are reflected in Table 2.
Table 2
Asset Optimization Mechanism Thresholds
Rate Case
Order
Threshold Determination
Methodology
Percent Shareholder Incentive
by Threshold
0% 	60% 	50% 	0%
FPL 2013 	1st: Projected Savings + $10M
2nd: Settlement Negotiations
$46M 	$100M 	>$100M 	$46M
FPL 2016 	Settlement Negotiations 	$40M 	$100M 	>$100M 	-
FPL 2021 	Settlement Negotiations 	$42.5M 	$100M 	>$100M 	-
FPL 2025 	Settlement Negotiations 	$42.2M 	100M 	$150M 	>$150M
DEF 2024 	1st: Historic 12 Year Average
2nd: Double First Threshold $4.9M 	$9.8M 	>$9.8M 	-
TECO 2016 	1st: Historic 4 Year Avg +$1M
2nd: Settlement Negotiations
$4.5M 	$8M 	>$8M 	-
TECO 2021 	Settlement Negotiations 	$4.5M 	$8M 	>$8M 	-
TECO 2025 	Historic Performance 	$4.5M 	$8M 	>$8M 	-
Source: Prior Commission orders.
6 See Document Nos. 01372-2025, 01386-2025, and 01387-2025, in Docket No. 20250032-EI.

ORDER NO. PSC-2026-0291-PCO-EI
DOCKET NO. 20250032-EI
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III. 	Commission Staff’s Workshop
On February 5, 2026, Commission staff conducted a workshop to discuss the incentive
mechanisms, 	including 	GPIF 	and 	AOM. 	To 	encourage 	discussion 	during 	the 	workshop,
Commission staff presented a brief history of the AOMs and the following general framework to
address the incentive mechanisms, including (1) allowable activities, (2) incremental costs, (3)
two revenue sharing proposals, and (4) GPIF.
A. 	Summary of Commission Staff’s Workshop Proposal
1. 	Allowable Activities: Wholesale energy sales, wholesale energy purchases, and any asset
optimization activities including existing utility assets that do not interfere with reliability,
for all fuel sources, with both fuel infrastructure and stockpiles eligible. Renewable energy
credits, emissions credits, or similar attributes would be eligible.
2. 	Incremental 	Costs: 	Incremental 	costs 	associated 	with 	AOM 	activities 	would 	be
recovered through base rates.
3. 	Revenue Sharing: Two options for revenue sharing of net gains:
o 	Option 1: 20 percent above a three-year rolling average threshold, and 40 percent
above twice the three-year rolling average.
o 	Option 2: 30 percent with no thresholds.
4. 	Generating Performance Incentive Factor: While not explicitly addressed in the 2025
TECO Order, Commission staff also proposed ending GPIF in its generic 2026 workshop
proposal to address the overlap with AOMs discussed in Order No. PSC-13-0665-FOF-EI.
The proposal to end GPIF was due to the GPIF rewards and penalties not influencing utility
behavior, as the efficiency and availability improvements represent best practices. Wholesale
sales and purchases are two major categories in the AOMs which are impacted by generator
availability 	and 	efficiency. 	Furthermore, 	due 	to 	the 	convergences 	of 	the 	incentives,
Commission staff proposed retaining reporting requirements of unit performance to allow
this Commission and parties to gather information for analysis and review during Fuel
Clause and base rate cases.
IV. 	Post-Workshop Comments
In addition to the workshop, Commission staff also sought comment from participants on
how changes, if any, should be implemented (i.e., a Commission Order similar to the current
wholesale 	sales 	incentive 	established 	in 	the 	2000 	Wholesale 	Sales 	Incentive 	Order 7 	or
rulemaking). After the workshop, each of the electric IOUs, OPC, and FL Rising submitted
7 See Order No. PSC-00-1744-PAA-EI, issued September 26, 2000, in Docket No. 19991779-IE, In re: Review of
the appropriate application of incentives to wholesale power sales by investor-owned electric utilities.

ORDER NO. PSC-2026-0291-PCO-EI
DOCKET NO. 20250032-EI
PAGE 5
comments, which are summarized below. Overall, the electric IOUs commented that no generic
incentive mechanism was needed at this time and proposed allowing AOMs to continue based on
each utility’s unique characteristics. All three electric IOUs also disagreed with the proposed
elimination of the GPIF. In addition, TECO and DEF provided suggestions for this Commission
in case we sought to move forward with any part of Commission staff’s workshop proposal.
TECO expressed its preference for Commission staff’s proposed list of eligible and revenue
sharing Option 2. DEF also expressed a preference for Option 2, but with an increased fixed
percentage of at least 35 percent.
OPC proposed freezing all AOM incentives pending the resolution of appeals associated
with Commission Orders addressing the AOMs 8 and the expiration of any applicable settlement
agreements. This would be followed by a comprehensive evaluation to determine if the AOMs
are resulting in net economic benefit for ratepayers through an evidentiary hearing. OPC further
proposed that we consider adopting the concept of joint economic dispatch used in many states.
OPC also adopted the comments of FL Rising on Commission staff’s workshop proposal and
advised against revenue sharing Option 1 and the usage of tiered incentives.
FL Rising commented that rulemaking is the appropriate venue for changes to end or
implement any further AOMs. FL Rising also provided comments regarding its analysis of the
possible correlation between higher utility bills and the incentive mechanism. Furthermore, FL
Rising asserted that AOMs should be subject to constraints to ensure that rate base is not being
inflated to support incentive mechanisms that increase utility profits. FL Rising proposed that
under any rulemaking the electric IOUs should provide what assets would be in their individual
AOMs every three years. During the proposed proceeding the IOUs would have the obligation to
show that utility assets utilized for AOMs would: (i) have been prudently added to rate base, (ii)
were used and useful for ratepayers, and (iii) their usage for AOM would be incidental to their
service to ratepayers. Further, FL Rising proposed assets that did not require significant activity
by the utility would not be eligible for AOMs, using the example of renewable energy credits.
V. 	Conclusion
Based on our review of the existing AOMs and comments received at the workshop,
there appears to be no need at this time to establish all-encompassing standards for AOMs. Both
FPL and DEF operate AOMs pursuant to Commission-approved settlement agreements with
allowable activities and revenue sharing thresholds based on the characteristics of each utility
and the circumstances presented in their respective rate cases. The points made in the electric
IOU’s post-workshop submissions regarding the downsides of a uniform approach as compared
to individual mechanisms are well-taken by us. Additionally, imposing new standards to
retroactively alter one term of a settlement agreement that has been approved as a whole by final
order may raise procedural and substantive legal issues.
The specifics of each current AOM approval underscore the difficulties of considering
and implementing revisions to the mechanisms at this time. The 2024 DEF Settlement
8 See fns. 11 and 13, infra.

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DOCKET NO. 20250032-EI
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Agreement that contains that utility’s AOM was approved without opposition by Order No. PSC-
2024-0472-AS-EI. OPC was a party to the 2024 DEF Settlement Agreement. Florida Rising did
not oppose the 2024 DEF Settlement Agreement or the Joint Motion for Approval.9 The term of
the 2024 DEF Settlement Agreement expires as early as December 2027. Because DEF is
operating under an unopposed AOM that is part of settlement with a limited term, we feel that
revisiting that particular AOM at this time would not be an efficient use of resources.
Turning to the remaining electric IOUs, FPL’s AOM as proposed in its settlement
agreement was contested by OPC and FL Rising.10 Both of those parties have filed appeals of
our final order approving the settlement agreement.11 Similarly, OPC and FL Rising contested
TECO’s AOM as proposed in its rate case.12 Both have appealed certain aspects of our final
order approving TECO’s base rate increase.13 These procedural hurdles caution us from taking
any further action regarding those AOMs while the two matters are on appeal and the
mechanisms remain in place.
In addition, we are aware that TECO and OPC have proposed a settlement agreement in a
separate docket that, while it does not directly impact AOM, includes a base rate freeze that
could have implications if costs were shifted from the AOM established in 2025 to base rates.14
Because the procedural requirements of the 2025 TECO Order have been completed, no
further action by Commission staff or the electric IOUs is needed. Therefore, this docket shall be
closed because we are taking no action at this time. Our decision here does not preclude us from
revisiting the matter later. This Commission, whether by petition or on its own motion, can
convene a future proceeding to review the various shareholder incentive mechanisms for the
electric IOUs when a need is demonstrated or when deemed appropriate by us.
Based on the foregoing, it is
ORDERED by the Florida Public Service Commission that no further action regarding
asset optimization activities and revenue-sharing thresholds appears needed at this time. It is
further
ORDERED that this docket shall be closed.
9 See Order No. PSC-2024-0472-AS-EI, p. 36.
10 See Document Nos. 08082-2025 (FL Rising Response in Opposition to Motion to Approve Settlement
Agreement) and 08105-2025 (OPC Letter Opposing FPL Rate Increase Settlement), in Docket No. 20240011-EI,
filed August 20 & 21, 2025, respectively.
11 Case Nos. SC2026-0259 (OPC) & SC2026-0281 (FL Rising).
12 See Document Nos. 09619-2024 (OPC Post-Hearing Brief) at p. 85 and 09626-2024 (FL Rising Post-Hearing
Brief) at pp. 25-26, in Docket No. 20240026-EI, filed October 21, 2024.
13 Case Nos. SC2025-0300 (OPC) & SC2025-0289 (FL Rising).
14 See Document No. 03550-2026, titled Motion to Approve 2026 Bayside Agreement, filed in Docket Nos.
20260001-EI, 20260053-EI, and 20260062-EI.

ORDER NO. PSC-2026-0291-PCO-EI
DOCKET NO. 20250032-EI
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By ORDER of the Florida Public Service Commission this 24th day of August , 2026 	.
ADAM THiTZMAN
Commission Cl£rk
Florida Public Service Commission
2540 Shumard Oak Boulevard
Tallahassee, Florida 32399
(850)413-6770
www.floridapsc.com
Copies 	furnished: A 	copy 	of 	this 	document 	is
provided 	to 	the 	parties 	of record 	at 	the 	time 	of
issuance and, 	if applicable, interested persons.
CMM
NOTICE OF FURTHER PROCEEDINGS OR JUDICIAL REVIEW
The Florida Public Service Commission (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. 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.