Florida Public Service Commission native order document 02603-2023

OCR transcription for search; preserved printed pages are authoritative

FILED 4/11/2023
DOCUMENT NO. 02603-2023
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-2023-0122-PCO-EI
factor. ISSUED: April 11, 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 March 1, 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 January 2023. The January 2023 mid-
course correction was approved by Order No. PSC-2023-0108-PCO-EI. Following the January
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

We use mid-course corrections between annual clause hearings whenever costs deviate
from revenue by a significant margin. Under Rule 25-6.0424, Florida Administrative Code
(F.A.C.), which is 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.

FPL’s Petition
In its MCC Petition, the Company estimates an approximate $494 million reduction of

fuel-related costs for the 2023 period relative to its previous estimate. FPL is proposing to apply
approximately $379 million of this amount to the period May 2023 through December 2023, and

‘Document No. 01638-2023.

ORDER NO. PSC-2023-0122-PCO-EI
DOCKET NO. 20230001-EI
PAGE 2
the remaining approximate $115 million to be included in its 2024 fuel cost recovery factors.
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.2 	The Company is requesting that its
revised fuel cost recovery factors and associated tariff become effective beginning with the May
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 prior 2023 mid-course correction petition on January 23, 2023, for the
purposes of addressing its under-recovery of 2022 fuel costs. 	The Company’s 2022 net under-
recovery of fuel costs was approximately $2.1 billion. 	Through the January mid-course
correction, FPL proposed to account for approximately $937 million of its 2022 under-recovery
in the current, or 2023 period, and defer approximately $1.2 billion for collection in 2024. The
request also included incorporating a reduction to FPL’s then-estimated 2023 fuel-related costs
in the amount of approximately $1.0 billion. 	The January mid-course correction request was
approved by Order No. PSC-2023-0108-PCO-EI. The Company subsequently updated its 2023
fuel cost projection. 	The results of this update indicate FPL’s projected 2023 fuel-related costs
are approximately $494 million lower than estimated in January 2023. 	This reduction is
primarily due to lower assumed prices for natural gas. The main factor influencing the decline in
natural gas prices in 2023 is mild winter weather across large parts of the country resulting in
lower natural gas consumption.3
The Company developed its proposed mid-course correction amount using 11 months of
forecasted sales data (May 2023 through March 2024). The factors proposed in this proceeding
are currently contemplated to be charged for eight months in 2023. As is typical 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 substantially since the filing of its
previous mid-course correction in January 2023.4 	More specifically, the Company now
estimates a reduction to its 2023 fuel-related costs in the amount of $493,878,360. 	The
Company proposes to apply $378,598,949 of this amount to rates in 2023, and $115,279,411 to
rates in 2024.5
2Order No. PSC-2023-0108-PCO-EI, issued March 23, 2023, in Docket No. 20230001-EI, In re: Fuel and
purchased power cost recovery clause with generating performance incentive factor..
3March 2023 EIA Short-Term Energy Outlook, https://www.eia.gov/outlooks/steo/pdf/steo_full.pdf
4Document No. 00354-2023.
5Document No. 01638-2023.

ORDER NO. PSC-2023-0122-PCO-EI
DOCKET NO. 20230001-EI
PAGE 3
The primary factor driving the change in projected 2023 fuel costs is lower assumed
pricing for natural gas. 	More specifically, the underlying market-based natural gas price data
used for the previous or January mid-course correction was sourced on January 3, 2023. 6 	This
underlying data was used to produce an estimated average 2023 delivered natural gas cost of
$5.70 per million British thermal unit (MMBtu).7 	However, as indicated in its MCC Petition,
FPL now estimates its average cost of delivered natural gas in 2023 will be $4.95 per MMBtu,
representing a decrease of (13.2) percent.8 	The updated cost estimate was based on natural gas
futures/prices sourced on February 1, 2023, or roughly one month later than the previous
estimate used to set current rates.9
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 ($707,462,276) /
$3,829,271,573.10 	This calculation results in a mid-course correction level of (18.5) percent at
December 31, 2023.11
Fuel Factor
FPL’s currently-approved annual levelized fuel factor beginning with the first April 2023
billing cycle is 3.957 cents per kilowatt-hour (kWh).12 	The Company is requesting to decrease
its currently-approved 2023 annual levelized fuel factor beginning May 2023 to 3.526 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 to typical
residential customers using 1,000 kWh of electricity a month in FPL’s Peninsular and Northwest
(former Gulf Power Company) service territories are stated. 	Following Tables 1 and 2, the
impact of the proposed MCC on non-residential customers is addressed:
6Document No. 00354-2023.
7Id.
8Document No. 01638-2023.
9Id.
10 Document No. 01638-2023, Schedule E1-B.
11 Through its prior mid-course correction, FPL received authorization by Order No. PSC-2023-0108-PCO-EI to
defer ($1,201,340,636) of its 2022 fuel cost under-recovery to 2024. Accounting for this deferral, the mid-course
percentage is equal to $493,878,360 / $3,829,271,573, or 12.9 percent.
12 Approved by Order No. PSC-2023-0108-PCO-EI.

ORDER NO. PSC-2023-0122-PCO-EI
DOCKET NO. 20230001-EI
PAGE 4
Table 1
FPL Peninsular Service Territory
Monthly Residential Billing Detail for the First 1,000 kWh
Invoice Component
Currently-
Approved
Charges
April 2023
($)
Proposed
Charges
Beginning
May
2023
($)
Difference
($)
Difference
(%)
Base Charge 	$80.11 	$80.11 	$0.00 	0.0%
Fuel Charge 	36.56 	32.24 	(4.32) 	(11.8%)
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 	3.71 	3.60 	(0.11) 	(3.0%)
Total 	$144.38 	$139.95 	($4.43) 	(3.1%)
Source: Document No. 01638-2023.
FPL’s currently-approved total residential charge for the first 1,000 kWh of usage for
April 2023 is $144.38.13 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 May will be
$139.95, a decrease of approximately (3.1) 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 (3.0) to (3.9) percent, (3.9) percent for medium-sized
commercial customers, (4.2) percent for large-sized commercial customers, and (6.8) percent for
industrial customers.14
13 Document No. 01638-2023.
14 Document No. 02167-2023.

ORDER NO. PSC-2023-0122-PCO-EI
DOCKET NO. 20230001-EI
PAGE 5
Table 2
FPL Northwest Service Territory
Monthly Residential Billing Detail for the First 1,000 kWh
Invoice Component
Currently-
Approved
Charges
April
2023
($)
Proposed
Charges
Beginning
May
2023
($)
Difference
($)
Difference
(%)
Base Charge 	$80.11 	$80.11 	$0.00 	0.0%
Fuel Charge 	36.56 	32.24 	(4.32) 	(11.8%)
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 	4.20 	4.08 	(0.12) 	(2.9%)
Total 	$163.30 	$158.86 	($4.44) 	(2.7%)
Source: Document No. 01638-2023.
FPL’s currently-approved Northwest total residential charge for the first 1,000 kWh of
usage for April 2023 is $163.30.15 	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 May will be $158.86, a decrease of approximately (2.7) 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 (2.6) to (3.4) percent, (3.5)
percent for medium-size commercial customers, and (3.7) percent for large-size commercial
customers. 	A figure associated with an industrial class for the Northwest service territory was
not identified.16
Based on the information stated above, we find that FPL’s projected 2023 fuel-related
costs have been reduced by $493,878,360 and that $378,598,949 of this fuel cost reduction shall
be accounted for in the current period and $115,279,411 shall be deferred to 2024. The revised
fuel cost recovery factors associated with our decision are shown on Appendix A.
15 Document No. 01638-2023.
16 Document No. 02167-2023.

ORDER NO. PSC-2023-0122-PCO-EI
DOCKET NO. 20230001-EI
PAGE 6
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 the our vote with the range between the vote and the effective date being from
25 to 2 days. 	The rationale for that action was that it was in the customers’ best interests to
implement the lower rate as soon as possible.17
In its MCC Petition, FPL proposes to lower its 2023 fuel factors beginning with the first
billing cycle of May 2023. 	In the instant case, there are 27 days between our vote on April 4th
and the beginning of FPL’s May 2023 billing cycle (May 1st ).18
Concerning advisement of the instant request, the Company has engaged in numerous
outreach efforts regarding the potential bill impacts of its proposal. 	Specifically, FPL issued a
press release on March 1, 2023, informing its customers of the mid-course correction proposal.
Further, on March 1, 2023, and subsequently on March 7, 2023, the Company informed its
customers of the future potential adjustments related to the mid-course correction through a web-
based billing information portal titled “2023 Bills”. The Company also sent emails to residential
and small business customers on March 9, 2023, that included a description of the mid-course
correction proposal. FPL also plans to separately contact numerous commercial, industrial, and
governmental customers to inform them of its proposal and the potential impact on their bills.19
For these reasons, we find that the fuel cost recovery factors, as shown on Appendix A,
shall become effective with the first billing cycle of May 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
2023 fuel cost recovery factors by $378,598,949. It is further
17 Order No. PSC-08-0825-PCO-EI, issued December 22, 2008, in Docket No. 080001-EI, In re: Fuel and purchased
power cost recovery clause with generating performance incentive factor; Order No. PSC-09-0254-PCO-EI, issued
April 27, 2009, in Docket No. 090001-EI, In re: Fuel and purchased power cost recovery clause with generating
performance incentive factor; Order No. PSC-11-0581-PCO-EI, issued on December 19, 2011, in Docket No.
110001-EI, In re: Fuel and purchased power cost recovery clause with generating performance incentive factor;
Order No. PSC-12-0342-PCO-EI, issued July 2, 2012, in Docket No. 120001-EI, In re: Fuel and purchased power
cost recovery clause with generating performance incentive factor; Order No. PSC-2012-0082-PCO-EI, issued
February 24, 2012, in Docket No. 120001-EI, In re: Fuel and purchased power cost recovery clause with generating
performance incentive factor; Order No. PSC-15-0161-PCO-EI, issued April 30, 2015, in Docket No. 150001-EI, In
re: Fuel and purchased power cost recovery clause with generating performance incentive factor; Order No. PSC-
2018-0313-PCO-EI, issued June 18, 2018, in Docket No. 20180001-EI, In re: Fuel and purchased power cost
recovery clause with generating performance incentive factor; Order PSC-2020-0154-PCO-EI, issued May 14,
2020, in Docket No. 20200001-EI, In re: Fuel and purchased power cost recovery clause with generating
performance incentive factor.
18 Document No. 02167-2023.
19Id.

ORDER N O. PS C-2023-0 122-PCO-EI
DO CKET N O. 2023000 I -E l
PAGE 7
ORDERED that the fue l cost recovery factors, as shown on Appendix A to this order,
s ha ll become effective with t he first billi ng cycle of May 2023. It is furt he r
ORDERED that the fu el and pu rchased power cost recove ry clause docket is an on-go in g
proceed ing and s ha ll rema in ope n.
SB r
By ORDER of th e Florida Pub lic Service Co mmi ssion this .lJJb. day of A pri l, 2023.
)J ,
Florida Publ ic Service Commiss ion
2540 Shumard Oak Boulevard
Ta ll ahassee, Florida 32399
(85 0) 4 13-6770
'vVWW. noridapsc.com
Cop ies furnished: 	A copy of t hi s doc um ent is
provided to the pa11 ies of record at th e time of
is suance and, if applicable, inte re sted perso ns.
NOTICE OF FURTHER PROCEE DI NGS OR JUDI C IA L REV IEW
The Florida Public Se rvice Commission is required by Section 	12 0.569( 1), 	Florida
Statutes, to notify parties of any administrative hearing or judicial rev ie w of Comm iss ion orders
th at is availab le under Sections 120.57 or 120.68, Florida Statutes, as wel l as th e procedures a nd
time limits that app ly. 	This notice shou ld not be construed to mean all requests for an
adm ini strative hearing or j udicial review will be granted or re sult in the re li ef soug ht.
Mediation may be ava il able on a case- by -ca se ba sis. 	If mediation is conducted, it does
not affect a substantia l ly interes ted person's rig ht to a hea ring.
Any 	party 	ad ver se ly 	affected 	by 	thi s order, 	which 	is preliminary, 	procedura l or
intermediate in nature, ma y req ues t: ( I ) reconsideration within IO days pursuant to Rule 25 -
22.0376, Florida Administrative Code; or (2) judicial rev iew by the Florida Supreme Cou11, in
th e case of an electric, gas or tele ph one util ity, or the First District Court of A pp ea l, in the case
of a wa ter or waste wa ter uti l it y. 	A motion for recons id eration shal l be filed with the Office of
Comm iss ion Cle rk , in th e fo rm pre sc ribed by Ru le 25-22.0376, Fl orida Administrative Code.
Judicial review of a preliminary, procedural or intermediate ru lin g or order is ava il ab le if review
of the fina l action wi ll not provide an adequate remedy. Such review ma y be req uested from the

ORDER NO. PSC-2023-0122-PCO-EI
DOCKET NO. 20230001-EI
PAGE 8
appropriate court, as described above, pursuant to Rule 9.100, Florida Rules of Appellate
Procedure.

ORDER NO. PSC-2023-0122-PCO-EI
DOCKET NO. 20230001-EI

PAGE 9

FLORIDA POWER

APPENDIX A

SixtySecondSixty-Third Revised Sheet No.3.030

& LIGHT COMPANY

Cancels Sixty-Second Six-Fiest Revised Sheet No. 8.030

BILLING ADJUSTMENTS

The following charges are applied to the Monthly Rate of each rate schedule as indicated and are calculated im accordance with the

formula 5
RATE

the Flonda Public Service Commission.

CONSERVATION

STORM
PROTECTION

SCHEDULE

ckWa $kWw

ekWh SEW

RS-1, R5-l w/RIR-1
1° 1,000 kWh

RS-1, RS-1 w/ RTR-1
all addon kWh

RS-1 w/RIR-1
AlkWh

GS-1

GST-1

GSD-1, GSD1-EV,
GSD-1 w/SDTR
(an — May)(Oct —Dec)

GSD-1 w/SDTR
(Jun-Sept)

GSDT-1, HLFT-1
GSDT-lw/SDTR
(an — May)(Oct —Dec)

GSDT-1 w/SDTR
(un-Sept)

GSLD-1, CS-1, GSLD1-EV
GSLD-lw/SDTR
(Jan - May)(Oct -Dec)

GSLD-1 w/SDTR
Gun-Sept)

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

GSLDT-1 w/SDTR
(un-Sept)

GSLD-2, CS-2,
GSLD-2 w/SDTR
(Jan - May)(Oct —Dec)

GSLD-2 w/SDTR
(@un-Sept)

GSLDT-2, CST-2,
HLFT-3,

GSLDT-2 w/SDTR
(Jan - May)(Oct -Dec)

0.49

GSLDT-2 w/SDTR
(Qun-Sept)

0.49

GSLD-3, CS-3

0.45

GSLDT-3, CST-3

0.45

(Continued on Sheet No. 8.030.1)

Issued by: Tiffamy Cohen, Executive Director, Rate Development & Strategy
| Effective: -*Aprt-hoti

ORDER NO. PSC-2023-0122-PCO-EI DOCKET NO. 20230001-EI
PAGE 10
FLORIDA POWER & LIGHT COMPANY
Thirty-Ninth Thirty Eighth Revised Sheet No.8.030.1 Cancels Thirty-Eighth Thisty Seventh-Revised Sheet No. 8.030.1
(Continued from Sheet No. 8.030) BILLING ADJUSTMENTS (Continued)
RATE
FUEL
CONSERVATION
CAPACITY
ENVIRON- MENTAL
STORM PROTECTION
SCHEDULE
e/kWh
c/kWh
c/kWh
ckWh
S/KW
S/KW
c/kWh
S/KW
$/KW
c/kWh
ekW
S/KW
$/KW
Levelized
On-Peak
Off-Peak
OS-2
3-0333.505
0.085
0.127
0.211
0.815
MET
3.0323.505
0.42
0.69
0.258
0.74
CILC-1(G)
4-2543.915
3.8453. 375
0.51
0.81
0.234
0.68
CILC-1(D)
4-2193.882
3.8133.347
0.51
0.81
0.234
0.68
CILC-1(T)
4.1353.796
3.3383 273
0.51
0.79
0.208
0.11
SL-1,OL-1, RL-1. PL- 1/SL-1M, LT-1,OS I/II
3.0113.462
0.038
0.016
0.044
0.288
SL-2, GSCU- 1/SL-2M
2.9683.536
0.090
0.137
0.207
0.316
RDC
DDC
RDC
DDC
RDC
DDC
SST-1(T)
4.1353.796
3.7383 273
0.05
0.03
0.09
0.04
0.292
0.01
0.01
SST-1(D1)
4.3543.915
3.8453 375
0.05
0.03
0.09
0.04
0.565
0.12
0.05
SST-1(D2)
4-2493.910
3.8403 371
0.05
0.03
0.09
0.04
0.565
0.12
0.05
SST-1(D3)
4-5173.881
3.0123 346
0.05
0.03
0.09
0.04
0.565
0.12
0.05
ISST-1(D)
4-3193.882
3-0133 347
0.05
0.03
0.09
0.04
0.565
0.12
0.05
ISST-1(T)
4.1253.796
3.7283 273
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: April 1, 2012