Order No. PSC-2024-0172-PCO-EI•Florida Public Service Commission native order document 04114-2024
Florida Public Service Commission native order document 04114-2024
Order No. PSC-2024-0172-PCO-EIFlapubserv
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FILED 5/24/2024 DOCUMENT NO. 04114-2024 FPSC - COMMISSION CLERK BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION In re: Fuel and purchased power cost recovery DOCKET NO . 2024000 I-EI clause with generating performance incentive ORDER NO. PSC-2024-0172-PCO-EI _f:_a_ct_o_r._______________JJ ISSUED: May 24, 2024 The following Commissioners participated in the disposition of this matter: MIKE LA ROSA, Chairman ART GRAHAM GARY F. CLARK ANDREW GILES FAY GABRIELLA PASSIDOMO ORDER APPROVING TAMPA ELECTRIC COMPANY'S MID-COURSE CORRECTION BY THE COMMISSION: BACKGROUND On April 2, 2024, Tampa Electric Company (TECO or Company), filed for revision of its currently effective 2024 fuel cost recovery factors (MCC Petition).' TECO's currently effective fuel factors were approved last year at the November 1, 2023 final hearing. 2 Underlying the approval of TECO's 2024 fuel factors was the Florida Public Service Commission's (Commission) review of the Company's projected 2024 fuel- and capacity-related costs. These costs are recovered through fuel and capacity cost recovery factors that are set/reset annually in this docket. Mid-Course Correc ti ons 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.), 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 IO 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 1Oocument No. 01529-2024. 2 Order No. PSC-2023-0343-FOF-El, issued November 16, 2023, in Dock et No. 2023000 I-El , In re: Fuel and purchased power cost recovery clause with generating performance incentive/actor.
ORDER NO. PSC-2024-0172-PCO-EI DOCKET NO. 20240001-EI PAGE2 practical. The mid-course correction rule and its codified procedures are further discussed throughout this order. TECO's Petition In its MCC Petition, the Company currently estimates a net $137,918,831 million reduction in fuel-related costs for the 2024 period relative to its previous estimate. T EC O is proposing to use June 2024 through May 2025 forecasted sa les in determining its proposed mid- course fuel factors. If approved, this proposal will have the effect of reducing fuel cost recovery factors for the remainder of this year, as well as 2025. The Company is requesting that its revised fuel cost recovery factors and associated tariff become effective beginning with the fir st billing cycle of June 2024. The mid-course correction amount, rate methodology, and proposed effective date are further discussed herein. 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 TECO participated in our most-recent fuel hearing which took place on November 1, 2023. The fuel order stemming from this proceeding set forth the Company's fuel and capacity cost recovery factors effective with the first billing cycle of January 2024.3 Following the issuance of the fuel order, the Company has subsequently updated its 2024 fuel cost projection. TECO now projects its 2024 fuel-related costs to be approximately $138 million (net) lower than estimated in August 2023. 4 This reduction is primarily due to lower assumed prices for natural gas. The main factors influencing the decline in actual and projected natural gas prices in 2024 are elevated quantities of natural gas in storage and milder weather compared to previous years. 5 TECO Fuel and Purchased Power Mid-Course Correction TECO filed for a mid-course correction of its fuel charges on April 2, 2024. 6 The Company's MCC Petition and suppo11ing documentation satisfies the filing requirements of Rule 25-6.0424(1 )(b), F.A.C. The Company developed its proposed mid-course correction factors using twelve months of forecasted sales data, or June 2024 through May 2025. The factors proposed in this proceeding are currently contemplated to be charged for seven months in 2024. As is typical 3 / d. 4 Oocument No. 04814-2023. 5https://www.eia.gov/outlooks/steo/archi ves/apr24 .pd f 6 Document No. 01529-2024.
ORDER NO. PSC-2024-0172-PCO-EI DOCKET NO. 2024000 I-EI PAGE3 procedure, later this year newly developed 12-month-applicable factors will be proposed for authorization to begin with the first billing cycle of January 2025. Actual Period-Ending 2023 Fuel Cost Recovery Position Through its February 8, 2023, amended mid-course correction filing, TECO initially projected a period-specific 2023 over-recovery of fuel costs in the amount of $157,006,362. 7 By its actual/estimated filing and in compliance with Order No. PSC-2023-0107-PCO-EI, the projected period-specific 2023 over-recovery of fuel costs was amended by $183,160,125. This resulted in a projected period-specific 2023 over-recovery of $340,166,487 and a total true-up under-recovery of ($ 112,834,024). 8 However, the Company over-recovered this amount by $30,397,837 as its actual fuel cost recovery position at the end of 2023 is an under-recovery of ($82,436, I 87). 9 This approximate $30.4 million difference is proposed for inclusion in rates through the instant proceeding. Decreased pricing for natural gas is the primary driver of the approximate $340 million over-recovery of 2023 fuel costs discussed above. More specifically, the Company estimated an annual delivered natural gas cost of $7.49 per million British thermal unit (MMBtu) in its first fuel cost projection of 2023. 10 However, as indicated in the Company's December 2023 A- Schedule, TECO's average 2023 cost of natural gas was $3.94 per MMBtu, representing a difference of 47.4percent. 11 Natural gas-fired generation comprised approximately 87.7 percent ofTECO's generation mix in 2023.12 Projected 2024 Fuel Cost Recovery Position TECO's 2024 fuel-related revenue requirement has decreased substantiaJly since the filing of its last cost projection in August 2023. 13 More specifically, the results of this updated estimate are a reduction in TECO's estimated 2024 fuel-related costs in the amount of $107,520,994. As mentioned above, the remaining amount of the 2023 over-recovery proposed for refund through new 2024 rates is $30,397,837. Thus, the proposed net or decremental amount for inclusion into 2024 rates is $ 137,918,83 I. 14 7Oocument No. 01008-2023. 8Document No. 04317-2023. Further, we note the Company' s estimated end-of-period 2023 total under-recovery in Lhe amount of ($112,834,024) is embedded in current rates per Order No. PSC-2023-0343-FOF-EI. This amount constitutes the remainder of the approximate ($518 million) net under-recovery of 20 22 fuel costs ordered to be collected in 2023 and 2024 and is net of TECO 's 2023 mid-course true-up amount of ($64,989,253). See Order No. PSC-2023-0107-PCO-El, issued March 23 , 2023, in Docket No. 20230001-El, In re: Fu el and purchased power cost recove,y clause with generating performance incentive /a ctor. 9Document No. 01582-2024. 10oocument No. 05966-2023. 11Document No. 00322-2024. 12/d. 13 Document No. 04814-2023. 14Document No. 01529-2024.
ORDER NO. PSC-2024-0172-PCO-EI DOCKET NO. 20240001-EI PAGE4 The primary factor driving the change in projected 2024 fuel costs is lower assumed pricing for natural gas. More specifically, the underlying market-based natural gas price data used for the 2024 fuel cost projection was sourced on June 23, 2023. 15 This underlying data was used to produce an estimated average 2024 delivered natural gas cost of approximately $4.94 per MMBtu. 16 However, as indicated in its MCC Petition, TECO now estimates its average cost of natural gas in 2024 will be $3.97 per MMBtu, representing a decrease of 19.6 percent. 17 The updated cost estimate was based on the average natural gas futures/price over a five-day period ending March 7, 2024, or roughly eight months later than the previous estimate used to set current rates. 18 Natural gas-fired generation is projected to comprise approximately 87.0 percent ofTECO's generation mix in 2024. 19 Recovery Period and Interest Premium As proposed, the accounting period for 2024-applicable portion of the over-recovery is seven months, or beginning June 2024 and ending December 2024. 20 Jurisdictional sales from June 2024 through May 2025 in the amount of 20,292,165 (meter) megawatt-hours were used to develop the mid-course correction factors proposed for approval in this proceeding.21 TECO utilized the 30-day AA Financial Commercial Paper Rate published by the U.S. Federal Reserve to determine its actual 2023 and 2024 (January and February) interest amolmts. 22 The projected 2024 interest rate was developed via in-house modeling that produced a rate of 0.391 percent (2024 monthly average). 23 Mid-Course Correction Percentage Following the methodology prescribed in Rule 25-6.0424( l)(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 $137,918,831 / $648,701,011. 24 This calculation results in a mid-course correction level of approximately 21.3 percent at December 31, 2024. 15 Hearing Exhibit No. 70, entered in Docket No. 2023000 I-El. 16Document No. 04814-2023. 17 Document No. 01529-2024. 18Document No. 01648-2024. 19Oocument No. 01529-2024. 20/d. 21 /d. 22 Docurnent No. 01687-2024, and The Federal Reserve System (U .S. Federal Re serve) published Commercial Paper Rates which can be located via the following link: https: // www.federalreserve.gov/releases/cp/ 23 Document Nos.01529-2024 and 0 1687-2024. 24 Oocument No. 01529-2024, Schedule E2.
ORDER NO. PSC-2024-0172-PCO-EI DOCKET NO. 20240001-El PAGES Fuel Factor TECO ' s currently approved annual levelized fuel factor beginning with the first January 2024 billing cycle is 3.837 cents per kilowatt-hour (kWh). 25 The Company is requesting to decrease its currently-approved 2024 annual levelized fuel factor beginning June 2024 to 3.157 cents per kWh, a decrease of approximately 17.7 percent. 26 Bill Impacts In Table 1 below, the bjll impact of the mid-course correction on a residential customer using 1,000 kWh of electricity a month is shown. Following Table I, we address the impacts of the mid-course correction on non-residential customers. Table 1 Tampa Electric Company Monthly Residential Billing Detail for the First 1,000 kWh Currently Appr oved Approved Cha rges D ifference Difference In vo ice Co mponent Charges Beginning ($) (%) M ay 2024 June 2024 ($) ($) Base Charge $87.80 $87.80 $0.00 0.0% Fuel Charge 35.36 28.50 (6.86) ( 19.4%) Conservation Charge 2.15 2.1 5 0.00 0.0% Capacity Charge 0.62 0.62 0.00 0.0% Environmental Charge 0.89 0.89 0.00 0.0% Storm Protection Plan Charge 6.58 6.58 0.00 0.0% Clean Energy Transition Mechanism 4.30 4.30 0.00 0.0% Storm Restoration Charn.e 2.19 2. 19 0.00 0.0% Gross Receipts Tax 3.59 3.41 ffi.lfil (5.0%) Total $lill8 $1 36.44 ($704\ (4.9%) Source: Document No. 0 l 529-2024. TECO ' s currently approved total residential charge for the first 1,000 kWh of usage for May 2024 is $ 143.48. 27 Under the approved mid-course correction calculations, the current total residential charge for the first 1,000 kWh of usage beginning in June will be $136.44, a decrease of 4.9 percent. For non-residential rate classes, TECO reported that bill decreases based on average levels of usage for General Service customers would range from approximately 4.4 to 4.9 percent, and for General Service Demand customers, decreases would range from 25 Order No. PS C-2023-0343-FOF-E l. 26 Document No. 01529-2024. 27Order No. PSC -2023-0343-FOF-EI.
ORDER NO. PSC-2024-0172-PCO-EJ DOCKET NO. 20240001-EI PAGE6 approximately 8.1 to 11.4 percent. 28 TECO's proposed tariff sheet is shown on Appendix A to this Order. TECO's MCC Petition indicates a need for its fuel cost recovery factors to be revised. More specifically, the Company's underlying 2024 projected fuel-related revenue requirement has been reduced by $107,520,994. Additionally, the Company proposes to incorporate its 2023 period-specific final over-recovery of $30,397,837 into the current period. Thus, TECO 's current fuel cost recovery factors shall be reduced by $137,918,831. Sales from June 2024 through May 2025 shall be used to develop the revised/mid-course correction fuel factors. The revised fuel cost recovery factors associated with our decision are shown on Appendix A. We therefore authorize adjustments to TECO 's fuel cost recovery factors for the purpose of incorporating the Company's currently projected net 2024 fuel cost reduction. Accordingly, TECO's currently authorized 2024 fuel cost recovery factors shall be reduced by $137,918,831. 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 factors on a case-by-case basis. We have approved rate decreases to be effective less than 30 days after the date of our vote because the rate decrease was in the customers' best interest to be implemented as soon as possible.29 ln its MCC Petition, TECO proposes to decrease its 2024 fuel factors beginning with the first billing cycle of June 2024. In response to our Staffs First Data Request, TECO stated that it would - contingent on our approval - include a message on May customer bills explaining that the Company's proposed rate decrease is set to begin in June billing cycle. 3°Following our determination on this matter, TECO will update its bill notices informing customers of the fo1thcoming rate changes. The Company has also engaged in several other outreach efforts regarding the potential bill impacts of the proceeding. Specifically, TECO issued a press release on April 2, 2024, informing its customers of the potential adjustments related to the mid-course co1Tection through the Company's online media ce nter. The Company also separately contacted numerous large account customers via telephone, voicemail, and email to inform them of the proposal and the potential impact.31 Based on the foregoing, the fuel cost recovery factors, as shown on Appendix A, shall become effective with the first billing cycle of June 2024. 28Document No. 01648-2024. 29Order No. PS C-2024-0091-PCO-El, issued April I0, 2024, in Docket No. 2024000 I -E I, In re: Fuel and purchased power cost recovery clause with generating petformance incentive factor. 30 Document No. 01648-2024. 31/d.
ORDER NO. PSC-2024-01 72-PCO-EI DOCKET NO. 20240001-Ef PAGE7 Based on the fo regoing, it is ORDERED by the Florida Publ ic Service Commission that adjustments shall be made to TECO's fuel cost recovery facto rs for the purpose of incorporating the Company's currently projected net 2024 fue l cost reduction. Accordingly, TECO's currently authorized 2024 fuel cost recovery factors sha ll be reduced by $137,9 18 ,831. 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 June 2024. It is further ORDERED that the fuel and purchased power cost recovery clause docket is an ongo in g proceeding and sha ll remain ope n. RPS By ORDER of the Florida Public Service Commission this 24th day of May. 2024. Florida Public Service Commission 2540 Shumard Oak B ou levard Tallahassee, Florida 32399 (850) 413-6770 www.floridapsc.com Copies furnished: A copy of tnis document is provided to the parties of record at the time of issuance and, if applicable, interested persons.
ORDER NO. PSC-2024-0172-PCO-EI DOCKET NO. 2024000 I-EI PAGE8 NOTI CE 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. Th is 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: (l) 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-2024-0172-PCO-EI DOCKET NO. 2024000 1- EI Ap pendix A PAGE9 ~TECO ,-. TAMPA ELECTRIC • A N IC M C R A C O MPAN Y EIGHTY-EIGHTHSEVEN+H REVISED SHEET NO. 6.020 CA NCELS EIGHTY -SEVENTH~ REVISED SHEET NO. 6.020 ADDITIONAL BILLING CHARGES TOTAL FUEL AND PURCHASED POWER COST RECOVERY CLAUSE: The total fuel and purchased power cost recovery factor shall be applied to each kilowatt-hour delivered, and shall be computed in accordance with the formula prescribed by the Florida Public Service Commission. The following fuel recovery factors by rate schedule have been approved by the Commission: RECOVERY PERIOD (.J aA1:1ary June 2024 through December 2024 ) ¢/kWh ¢/kWn ¢/kWh Fuel Caeac il:t'. Environmental Rate Schedules Standard Peak Off- Peak RS (up to 1,000 kWh) 2.8503-536 0.062 0.089 RS (over 1,000 kV.Jh) ~ 0.062 0.089 RSVP-1 (P1) 3.1573.343 0.062 0.089 (P2) 3. 157~ 0.062 0.089 (P3) ~ 3M3 0.062 0.089 (P, ) 3.157~ 0.062 0.089 GS , GST 3.157U4 ~~ M[l~ 0.054 0.084 cs 3.157~ 0.054 0.084 LS-1 , LS -2 3 1273-006 0.012 0.060 GSO Optional Secondary 3.1573-343 0.048 0.081 Primary ;LIZ_53.80$ 0.048 0.080 Subtransm is sion 309~ 0.047 0.080 ¢1kWn $!kW ¢/kWh Fuel Caeac it:t'. Environmenta l Rate Schedules Standard Peak Off-Peak GSO , GSOT. SBO , SBOT Secondary ll§Z3.343 3 3234--045 3.0873,-7.5+ 0.20 0.081 Primary 3 1253-,005 3 2904..005 3.05~ 020 0.080 Subtransm is si on 3 0943.+66 3.2573-964 3.0253,68i 0.20 0.080 GSLOPR . GSLOTPR 3.1253.805 3.2904,005 30563.+-~ 0.17 0.071 SBLOPR , SBLDTPR 3 1253.805 3 2904.005 30563 "'149 0.17 0.071 GSLOSU , GSLOTSU ~ llfil;},Q64 ~ 019 0074 SBLOSU , SBLOTSU ~ ~~ ~ 0.19 0.074 Continued to Sheet No. 6. 021 ISSUED BY: AD . Collins, President DATE EFFECTIVE: .J a nl:l ary 1, 202 4 57
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