243 So. 3d 903
Fla.
2018
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Background

  • Florida Power & Light (FPL) filed consolidated rate dockets in 2016 seeking large base-rate increases and cost recovery for capital projects, including a $725.6 million Peaker Replacement Project that replaced 44 aging gas-turbine peaking units with seven newer combustion turbines.
  • The Peaker Project accounted for about $92 million of FPL’s 2017 revenue request but was estimated to produce net customer savings over time and improve reliability; peaker units provide fast-start, emergency, and peak-hour capacity that solar cannot reliably supply.
  • FPL and three intervenors (Office of Public Counsel, South Florida Hospital & Healthcare Assn., Florida Retail Federation) executed a nonunanimous “black box” settlement resolving all 167 issues in the consolidated dockets; Sierra Club, AARP, and two individual intervenors opposed.
  • The Florida Public Service Commission reopened the record, held a hearing on whether the settlement was in the public interest, and unanimously approved the settlement, adopting findings about rate reductions, service quality, rate stability, and participation by broad customer representatives.
  • Sierra Club appealed, arguing the Commission should have applied the statutory prudence standard to the Peaker Project individually rather than approving the settlement under the Commission’s public interest standard.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether the PSC was required to perform an independent prudence determination of FPL’s Peaker Project before approving a nonunanimous settlement that included cost recovery for that project Sierra Club: statute §366.06(1) requires prudence review of utility investments; Commission must decide prudence of the Peaker Project separately rather than rely only on a holistic public-interest settlement review Commission/FPL: when presented with a settlement, the Commission properly applies a case-specific public-interest standard to the settlement as a whole and need not make discrete prudence findings on every resolved issue The Court affirmed that the Commission may review settlements under the public-interest standard and is not required to make independent prudence findings for the Peaker Project when approving a settlement
Whether the Commission’s Final Order provided sufficient findings and was supported by competent, substantial evidence Sierra Club: Final Order failed to adequately explain the basis for approving cost recovery relating to the Peaker Project Commission/FPL: the Final Order described major settlement terms, procedural history, participant support, rate impacts, reliability and service findings, and factual record; competent, substantial evidence supports the public-interest determination The Court held the Final Order was sufficient and that competent, substantial evidence supported the Commission’s finding that the settlement was in the public interest

Key Cases Cited

  • Citizens of State v. Fla. Pub. Serv. Comm’n, 146 So. 3d 1143 (Fla. 2014) (approving Commission’s use of public-interest standard to review settlement agreements)
  • Citizens of State v. Fla. Pub. Serv. Comm’n, 191 So. 3d 897 (Fla. 2016) (de novo review of Commission authority; interpretations of statute reviewed for clear error)
  • Citizens of State v. Fla. Pub. Serv. Comm’n (FPUC), 213 So. 3d 703 (Fla. 2017) (Commission must explain reasoning when allowing cost recovery precluded by prior settlement)
  • S. All. for Clean Energy v. Graham, 113 So. 3d 742 (Fla. 2013) (prudence standard arises under §366.06 and governs cost recovery for investments)
  • Crist v. Jaber, 908 So. 2d 426 (Fla. 2005) (appellant bears burden to show departure from essential requirements of law or lack of competent, substantial evidence)
  • Gulf Power Co. v. Fla. Pub. Serv. Comm’n, 453 So. 2d 799 (Fla. 1984) (appellate court will not reweigh evidence or substitute its judgment for Commission)
  • W. Fla. Elec. Coop. Ass’n v. Jacobs, 887 So. 2d 1200 (Fla. 2004) (Commission orders presumed reasonable and just)
  • United Tel. Co. of Fla. v. Fla. Pub. Serv. Comm’n, 496 So. 2d 116 (Fla. 1986) (Commission derives authority solely from Legislature; authority-to-act questions reviewed de novo)
  • AmeriSteel Corp. v. Clark, 691 So. 2d 473 (Fla. 1997) (public-interest inquiry guides Commission review of settlement/territorial agreements)
  • Fla. Power & Light v. Beard, 626 So. 2d 660 (Fla. 1993) (prudence standard applied to individual investment projects in rate cases)
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