Florida Public Service Commission native order document 03816-2023

OCR transcription for search; preserved printed pages are authoritative

FILED 6/27/2023
DOCUMENT NO. 03816-2023
FPSC - COMMISSION CLERK

BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION

In re: Fuel and purchased power cost recovery || DOCKET NO. 20230001-EI
clause with generating performance incentive || ORDER NO. PSC-2023-0185-PCO-EI
factor. ISSUED: June 27, 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 FLORIDA POWER & LIGHT
COMPANY?’S MID-COURSE CORRECTION

BY THE COMMISSION:

BACKGROUND

On May 19, 2023, Florida Power & Light Company (FPL or Company), filed for a mid-
course correction of its 2023 fuel cost recovery charges (MCC Petition).' The Company last
filed for a mid-course correction of its fuel charges in March 2023. The Company’s March 2023
mid-course correction was approved at the April 4, 2023 Commission Conference.” Following
the March 2023 mid-course correction, the Company’s projected fuel-related revenue
requirement continued to shift downward. This projected cost shift prompted the Company to
file for a subsequent mid-course correction (instant petition) to incorporate the reduction into
customer rates.

Mid-Course Corrections

Mid-course corrections are used by this Commission between annual clause hearings
whenever costs deviate from revenue by a significant margin. Under Rule 25-6.0424, Florida
Administrative Code (F.A.C.), commonly referred to as the “mid-course correction rule,” a
utility must notify us whenever it expects to experience an under- or over-recovery of certain
service costs greater than 10 percent. The notification of a 10 percent cost-to-revenue variance
shall include a petition for mid-course correction to the fuel cost recovery or capacity cost
recovery factors, or shall include an explanation of why a mid-course correction is not practical.

'Document No. 03296-2023.
Order No. PSC-2023-0122-PCO-EI, issued April 11, 2023, Docket No. 20230001-EI, in re: Fuel and purchased
power cost recovery clause with generating performance incentive factor.

ORDER NO. PSC-2023-0185-PCO-EI
DOCKET NO. 20230001-EI
PAGE 2
FPL’s Petition
In its MCC Petition, the Company currently estimates an additional $359 million
reduction of fuel-related costs for the 2023 period relative to its previous estimate. 	FPL is
proposing to apply approximately $256 million of this cost reduction to the time period July
2023 through December 2023, and the remaining approximately $103 million is proposed to be
included in its 2024 fuel cost recovery factors. The Company is requesting that its revised fuel
cost recovery factors and associated tariff become effective beginning with the July 2023 billing
cycle.
We are vested with jurisdiction over the subject matter of this proceeding by the
provisions of Chapter 366, Florida Statutes (F.S.), including Sections 366.04, 366.05, and
366.06, F.S.
DECISION
FPL submitted its last mid-course correction petition on March 1, 2023, to address a
predicted over-recovery of 2023 fuel costs. At that time, the Company’s 2023 net over-recovery
of fuel costs was approximately $494 million. FPL proposed to account for approximately $379
million of the 2023 over-recovery during 2023 (specifically May 2023 through December 2023),
and defer the remaining approximate $115 million to be included in 2024.3 	FPL states the
purpose of implementing the cost reduction over this period is to partially offset the bill impact
associated with the storm restoration costs approved for collection from April 2023 through
March 2024 in Docket No. 20230017-EI.4 	Due to the corresponding change in 2023 interest
expense by applying the fuel cost recovery factors approved in Order No. PSC-2023-0122-PCO-
EI, that balance now amounts to approximately $109 million.5
Following its last mid-course correction, the Company has subsequently updated its 2023
fuel cost projection. 	FPL now projects its 2023 fuel-related costs are approximately $359
million lower than estimated in February 2023. This reduction is primarily due to lower assumed
prices for natural gas. The main factors influencing the decline in natural gas prices in 2023 are
elevated quantities of natural gas in storage and increased natural gas production compared to
previous years.6
The Company developed the instant proposed mid-course correction factors using nine
months of forecasted sales data (July 2023 through March 2024). 	The factors proposed in this
proceeding are currently contemplated to be charged for six months in 2023. 	As is typical
3Document No. 01638-2023.
4Order No. PSC-2023-0110-PCO-EI, issued March 23, 2023, in Docket No. 20230017-EI, In re: Petition for limited
proceeding for recovery of incremental storm restoration costs related to Hurricanes Ian and Nicole, by Florida
Power & Light Company.
5Document No. 03382-2023.
6May 	2023 	U.S. 	Energy 	Information 	Administration 	Short-Term 	Energy 	Outlook,
https://www.eia.gov/outlooks/steo/pdf/steo_full.pdf

ORDER NO. PSC-2023-0185-PCO-EI
DOCKET NO. 20230001-EI
PAGE 3
procedure, later this year newly developed 12-month-applicable factors will be proposed for
authorization to begin with the first billing cycle of January 2024.
Projected 2023 Fuel Cost Recovery Position
FPL’s estimated 2023 fuel-related costs have decreased since the filing of its previous
mid-course correction in March 2023.7 The Company now estimates a reduction to its 2023 fuel-
related costs in the amount of $358,764,356. The Company proposes to apply $256,094,786 of
this amount to rates in 2023, and $102,669,570 to rates in 2024. 8
The primary factor driving the change in projected 2023 fuel costs is lower than
previously assumed pricing for natural gas. The underlying market-based natural gas price data
used for the 2023 fuel cost projection was sourced on February 1, 2023.9 	This underlying data
was used to produce an estimated average 2023 delivered natural gas cost of $4.95 per million
British thermal unit (MMBtu).10 	However, FPL now estimates its average cost of delivered
natural gas in 2023 will be $4.38 per MMBtu, representing a decrease of (11.5) percent.11 	The
updated cost estimate was based on natural gas futures/prices sourced on May 1, 2023, or
roughly three months later than the previous estimate used to set current rates.12
We have compared the June through December 2023 commodity-only, i.e., excluding
delivery cost, price projection for natural gas underlying the Company’s mid-course correction
filing with current market prices.13 The arithmetic average of FPL’s commodity-only natural gas
price projection for the seven-month period June through December 2023 is $2.75 per MMBtu.14
FPL’s pricing information was sourced on May 1, 2023. Using information sourced on May 26,
2023, we calculate an average natural gas (commodity-only) price of $2.71 per MMBtu for the
same seven-month period. 	The results of this comparison indicate that natural gas prices over
the relevant timeframe have decreased since the development of the MCC Petition. 	However,
natural gas prices are continuously subject to market-influencing forces and therefore can be
volatile.
Mid-Course Percentage
Using the values shown on Schedule E1-B of the MCC Petition and following the
methodology prescribed in Rule 25-6.0424(1)(a), F.A.C., the mid-course percentage is equal to
the estimated end-of-period total net true-up, including interest, divided by the current period’s
total actual and estimated jurisdictional fuel revenue applicable to period, or ($733,450,360) /
7Document No. 01638-2023.
8Document No. 03296-2023.
9Document No. 01638-2023.
10Id.
11 Document No. 03296-2023.
12Id.
13 We obtained its natural gas pricing information from the CME Group Inc. CME Group pricing information with
respect 	to 	natural 	gas 	can 	be 	located 	through 	the 	following 	web 	address:
https://www.cmegroup.com/markets/energy/natural-gas/natural-gas.quotes.html
14 Document No. 03382-2023.

ORDER NO. PSC-2023-0185-PCO-EI
DOCKET NO. 20230001-EI
PAGE 4
$3,502,348,466.15 	This calculation results in a mid-course correction level of (20.9) percent at
December 31, 2023.16
Fuel Factor
FPL’s currently-authorized annual levelized fuel factor is 3.526 cents per kilowatt-hour
(kWh). 17 	The Company is requesting to decrease its currently-approved 2023 annual levelized
fuel factor beginning July 2023 to 3.142 cents per kWh, or by (10.9) percent.
Bill Impacts
In Tables 1 and 2 below, the bill impacts of the mid-course correction proposal on typical
residential customers using 1,000 kWh of electricity a month in FPL’s Peninsular and Northwest
(former Gulf Power Company) service territories are shown.
Table 1
FPL Peninsular Service Territory
Monthly Residential Billing Detail for the First 1,000 kWh
Invoice Component
Currently-
Authorized
Charges
June 2023
($)
Proposed
Charges
Beginning
July
2023
($)
Difference
($)
Difference
(%)
Base Charge 	$80.11 	$80.11 	$0.00 	0.0%
Fuel Charge 	32.24 	28.39 	(3.85) 	(11.9%)
Conservation Charge 	1.22 	1.22 	0.00 	0.0%
Capacity Charge 	2.12 	2.12 	0.00 	0.0%
Environmental Charge 	3.12 	3.12 	0.00 	0.0%
Storm Protection Plan Charge 	3.82 	3.82 	0.00 	0.0%
Storm Restoration Surcharge 	15.30 	15.30 	0.00 	0.0%
Transition Rider 	(1.58) 	(1.58) 	0.00 	0.0%
Gross Receipts Tax and Regulatory
Assessment Fee 	3.60 	3.50 	(0.10) 	(2.8%)
Total 	$139.95 	$136.00 	($3.95) 	(2.8%)
Source: Document No. 03296-2023.
15 Document No. 03296-2023, Schedule E1-B.
16 By Order No. PSC-2023-0108-PCO-EI, FPL received authorization to defer ($1,201,340,636) of its 2022 fuel cost
under-recovery to 2024. Additionally, through Order No. PSC-2023-0122-PCO-EI, FPL received authorization to
defer $115,279,411 of its 2023 fuel cost over-recovery to 2024. Accounting for these deferrals, the mid-course
percentage is equal to $352,610,865/$3,502,348,466, or 10.1 percent.
17 Document No. 03296-2023.

ORDER NO. PSC-2023-0185-PCO-EI
DOCKET NO. 20230001-EI
PAGE 5
FPL’s currently-authorized total residential charge for the first 1,000 kWh of usage for
June 2023 is $139.95.18 If the Company’s mid-course correction proposal is approved, then the
current total residential charge for the first 1,000 kWh of usage beginning in July will be
$136.00, a decrease of approximately (2.8) percent. Concerning non-residential customers, FPL
reported that bill decreases based on average levels of usage for small-sized commercial
customers would range from approximately (2.8) to (3.6) percent, (3.6) percent for medium-sized
commercial customers, (3.9) percent for large-sized commercial customers, and (6.4) percent for
industrial customers.19
Table 2
FPL Northwest Service Territory
Monthly Residential Billing Detail for the First 1,000 kWh
Invoice Component
Currently-
Authorized
Charges
June
2023
($)
Proposed
Charges
Beginning
July
2023
($)
Difference
($)
Difference
(%)
Base Charge 	$80.11 	$80.11 	$0.00 	0.0%
Fuel Charge 	32.24 	28.39 	(3.85) 	(11.9%)
Conservation Charge 	1.22 	1.22 	0.00 	0.0%
Capacity Charge 	2.12 	2.12 	0.00 	0.0%
Environmental Charge 	3.12 	3.12 	0.00 	0.0%
Storm Protection Plan Charge 	3.82 	3.82 	0.00 	0.0%
Storm Restoration Surcharge 	15.30 	15.30 	0.00 	0.0%
Transition Rider 	16.85 	16.85 	0.00 	0.0%
Gross Receipts Tax and Regulatory
Assessment Fee 	4.08 	3.98 	(0.10) 	(2.5%)
Total 	$158.86 	$154.91 	($3.95) 	(2.5%)
Source: Document No. 03296-2023.
FPL’s currently-authorized Northwest total residential charge for the first 1,000 kWh of
usage for June 2023 is $158.86.20 If the Company’s mid-course correction proposal is approved,
the current total Northwest residential charge for the first 1,000 kWh of usage beginning in July
will 	be 	$154.91, 	a 	decrease 	of 	approximately 	(2.5) 	percent. 	Concerning 	non-residential
customers, FPL reported that bill decreases based on average levels of usage for small-sized
commercial customers would range from approximately (2.4) to (3.2) percent, and (3.2) percent
for medium-size commercial customers, and (3.4) percent for large-size commercial customers.
18 Order No. PSC-2023-0122-PCO-EI.
19 Document No. 03382-2023.
20 Order No. PSC-2023-0122-PCO-EI.

ORDER NO. PSC-2023-0185-PCO-EI
DOCKET NO. 20230001-EI
PAGE 6
A figure associated with an industrial class for the Northwest service territory was not
identified.21
Based upon the above analysis, we find that FPL’s MCC Petition indicates a need for its
fuel recovery factors to be revised. The Company’s currently projected 2023 fuel-related costs
have been reduced by $358,764,356. 	The Company proposes to account for $256,094,786 of
this fuel cost reduction in the current period and defer $102,669,570 to 2024.
Therefore, we approve adjustments to FPL’s 2023 fuel cost recovery factors decreasing
the 2023 factor by $256,094,786 and deferring a further reduction of $102,669,570 until 2024.
Effective Date
Over the last 20 years in the Fuel Clause docket, we have considered the effective date of
rates and charges of revised fuel cost recovery factors on a case-by-case basis. 	We have
approved fuel cost recovery factor rate decreases effective sooner than the next full billing cycle
after the date of our vote with the range between the vote and the effective date being from 25 to
2 days. The rationale for that action is that it was in the customers’ best interest to implement the
lower rate as soon as possible.22
In its MCC Petition, FPL proposes to lower its 2023 fuel factors, beginning with the July
2023 billing cycle. In the instant case, there are 20 days between our vote on June 13, 2023, and
the beginning of FPL’s July 2023 billing cycle (July 3, 2023).23
Concerning advisement of the instant request, the Company has engaged in numerous
outreach efforts regarding the potential bill impacts of this proceeding. Specifically, FPL issued
a press release on May 19, 2023, informing its customers of the MCC proposal. 	Also on May
19, the Company informed its customers of the potential adjustments related to the mid-course
correction through a web-based billing information portal titled “2023 Bills.” The Company also
notified major business and governmental accounts/customers on May 22, 2023. 	General
notification, or “billing inserts,” began to be added to customer bills on May 22 nd as well.24
Given that adequate notice has been given to its customers and that this request is for a
rate reduction, we find that the fuel cost recovery factors, as shown on Appendix A, shall
become effective with the first billing cycle of July 2023.
Therefore, it is
ORDERED by the Florida Public Service Commission that adjustments to Florida Power
& Light Company’s fuel cost recovery factors shall be made to reduce its currently-approved
21 Document No. 03382-2023.
22 Order No. PSC-2023-0122-PCO-EI.
23 Document No. 03382-2023.
24Id.

ORDER NO. PSC-2023-0185-PCO-EI
DOCKET NO. 20230001-EI
PAGE7
2023 	fuel 	cost 	recovery 	factors 	by 	$256,094,786 	and 	deferring 	a 	further 	reduction
	of
$102,669,570 until 2024.
It
is further
ORDERED that the fuel cost recovery factors, as shown on Appendix A to this order,
shall become effective with the first billing cycle
of
July 2023.
It
is further
ORDERED that the fuel and purchased power cost recovery clause docket is an on-going
proceeding and shall remain open.
SBr
By ORDER
of
the Florida Public Service Commission this 27th day
of
June, 2023.
ADAMJ. TEITZMAN
Commission Clerk
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.

ORDER NO. PSC-2023-0185-PCO-EI
DOCKET NO. 20230001-EI
PAGE 8
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-2023-0185-PCO-EI
DOCKET NO. 20230001-EI Appendix A
PAGE 9

Siee—DiedSisty-Fourth Revised Sheet No.8.030
FLORIDA POWER & LIGHT COMPANY Cancels Sixty SecondSixty-Third Revised Sheet No. 8.030

BILLING ADJUSTMENTS
aa epee oe Monthly Rate of each rate schedule as indicated and are calculated in accordance with the

CONSERVATION
ekWh | S&W

KS-LES-I wR]
1° 1,000 kWh 0.122
RS-1, RS-] w/RIR-1
all addn kWh

RS-1l wRIR-1
AlkWh

GS-1

GST-1

GSD-1.GSD1-EV.
GSD-l w/SDTR

(Jan - May)(Oct - Dec)
GSD-1 w/SDTR
(Qun-Sept)

GSDT-1. HLFT-1
GSDT-lw’SDTR

Gan ~ May)(Oct - -Dec)

(Jun-Sept)

GSLD-1, CS-1.GSLD1-EV
GSLD-lwSDTR

Gan - May)(Oct -Dec)
GSLD-1 w/SDTR
Gan-Sepr)

GSLDT-1. CST-1.
HLFT-2, GSLDT-1
w/SDTR (Jan-May &
Oct-Dec)

GSLDT-1 w'SDTR

(an - May)(Oct -De) 3.123 0.49
GSLD-2 wiSDTR
(Jun-Sept) 0
GSLDT-2, CST-2,

0.49

ve tad 0.49

0.45
GSLDT-3, CST-3 382 | 4.282.916 0.45

(Connnued on Sheet No. §.030.1)

Issued by: Tiffany Cohen, Executive Director, Rate Development & Strategy
Effective: May12622-

ORDER NO. PSC-2023-0185-PCO-EI DOCKET NO. 20230001-EI PAGE 10
Appendix A
FLORIDA POWER & LIGHT COMPANY
Thirty Ninth Fortieth Revised Sheet No.8.030.1 Cancels Thirty Eighth-Thirty-Ninth_Revised Sheet No. 8.030.1
RATE
FUEL
CONSERVATION
CAPACITY
ENVIRON- MENTAL
STORM PROTECTION
SCHEDULE
c/kWh
c/kWh
c/kWh
c/kWh
S/KW
S/KW
/kWh
S/KW
S/KW
c/kWh
c/kWh
SkW
S/KW
Levelized
On-Peak
Off-Peak
OS-2
3.5053.123
0.085
0.127
0.211
0.815
MET
2-5053.123
0.42
0.69
0.258
0.74
CILC-1(G)
3.9153.488
3.3753.007
0.51
0.81
0.234
0.68
CILC-1(D)
3.8823 450
3-3472.983
0.51
0.81
0.234
0.68
CILC-1(T)
3.7963 382
3-2732.916
0.51
0.79
0.208
0.11
SL-1.OL-1. RL-1. PL- 1/SL-IM. LT-1.OS I/II
3.4623.085
0.038
0.016
0.044
0.288
SL-2. GSCU- 1/SL-2M
2-5363.151
0.090
0.137
0.207
0.316
RDC
DDC
RDC
DDC
RDC
DDC
SST-1(T)
3.2053 382
0.05
0.03
0.09
0.04
0.292
0.01
0.01
SST-1(D1)
3.9153.488
3.3753.007
0.05
0.03
0.09
0.04
0.565
0.12
0.05
SST-1(D2)
3.9103.484
3.3713.004
0.05
0.03
0.09
0.04
0.565
0.12
0.05
SST-1(D3)
3.8813.458
3.3462.982
0.05
0.03
0.09
0.04
0.565
0.12
0.05
ISST-1(D)
3.8823 450
2-3472.083
0.05
0.03
0.09
0.04
0.565
0.12
0.05
ISST-1(T)
3.7963 382
3-3732.016
0.05
0.03
0.09
0.04
0.292
0.01
0.01
(Continued on Sheet No. 8.030.2)
Issued by: Tiffany Cohen, Executive Director, Rate Development & Strategy Effective: May 1, 3022