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State of Florida
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Public Service Commission
Capital Circle Office Center ● 2540 Shumard
Oak Boulevard
Tallahassee, Florida 32399-0850
-M-E-M-O-R-A-N-D-U-M-
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DATE:
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August 22, 2025
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TO:
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Office of Commission Clerk (Teitzman)
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FROM:
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Division of Accounting and Finance (Vogel, Gatlin,
Hinson) MC
Division of Economics
(Hampson) ED
Division of Engineering
(P. Buys, Ramos, Smith II) TB
Office of the General
Counsel (Brownless, Crawford) JSC
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RE:
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Docket No. 20240149-EI – Petition for
limited proceeding for recovery of incremental storm restoration costs
related to Hurricanes Debby, Helene, and Milton, by Florida Power & Light
Company.
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AGENDA:
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09/04/25 – Regular Agenda – Proposed Agency Action - Interested
Persons May Participate
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COMMISSIONERS ASSIGNED:
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All Commissioners
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PREHEARING OFFICER:
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Fay
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CRITICAL DATES:
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10/29/25 (date by which Petition
must be ruled on pursuant to Section 120.542, F.S.)
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SPECIAL INSTRUCTIONS:
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None
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Case Background
On October 29,
2024, Florida Power & Light Company (FPL or Company) filed a petition for a
limited preceding seeking authority to implement an interim storm restoration
recovery charge to recover $1.2 billion for the incremental restoration costs
related to Hurricanes Debby, Helene, and Milton, as well as the replenishment
of its retail storm reserve. The
Commission granted FPL’s petition by Order No. PSC-2024-0503-PCO-EI, issued
December 17, 2024, and approved an interim storm restoration recovery charge
subject to final true-up once the total actual storm costs were known. Intervention by the Office of Public Counsel
(OPC) was acknowledged by Order No. PSC-2024-0490-PCO-EI, issued December 6,
2024.
On July 31, 2025, FPL
filed a Petition for temporary variance from waiver of Rule 25-6.0143(1)(g),
Florida Administrative Code (F.A.C.)(Petition).
Rule 25-6.0143, F.A.C., addresses electric utilities’ use of accumulated
provision accounts 228.1, 228.2, and 228.4. Paragraph
1(g) of Rule 25-6.0143 requires that under the Incremental Cost and
Capitalization Approach methodology for determining the allowable costs to be
charged to cover storm-related damages, certain storm costs may be charged to
Account 228.1 only after review and approval by the Commission. Before the Commission makes this
determination, the utility may defer the costs if they were incurred prior to
June 1 of the year following the storm event.
Rule
25-6.0143(1)(g), F.A.C. further requires that:
By
September 30 a utility must file a petition for the disposition of any costs
deferred prior to June 1 of the year following the storm event giving rise to
the deferred costs.
Hurricanes Debby,
Helene, and Milton impacted FPL’s service area during the 2024 storm
season. Because FPL’s storm restoration
costs related to those storms were incurred prior to June 1, 2025, FPL is
required by Rule 25-6.0143(1)(g), F.A.C., to file its petition and
documentation concerning the disposition of deferred storm costs related to
Hurricanes Debby, Helene, and Milton no later than September 30, 2025.
FPL is asking for a temporary variance or waiver of the
September 30 filing requirement. FPL is
asking that it be allowed until December 31, 2025, to file its petition and supporting
documentation.
Notice of FPL’s Petition was published in the August 5, 2025,
edition of the Florida Administrative
Register, as required by Section 120.542(6), Florida Statutes (F.S.). No one commented on the Petition within the
14-day comment period provided by Rule 28-104.003, F.A.C. Under Section 120.542(8), F.S., the
Commission must approve or deny the Petition by October 29, 2025, or the
Petition would be deemed approved.
The purpose of this recommendation is to address only the
request for waiver and variance. The
Commission has jurisdiction under Sections 120.542, 350.115, 366.04, 366.05,
and 366.06, F.S.
Discussion
of Issues
Issue
1: Should the Commission grant Florida
Power & Light Company’s Petition for a temporary waiver or variance of Rule
25-6.0143(1)(g), F.A.C.
Recommendation: Yes. The Commission should grant FPL’s Petition
for a temporary variance or waiver of Rule 25-6.0143(1)(g), F.A.C., to allow
FPL to file its petition and documentation supporting the review and true-up of the total actual incremental storm restoration costs related to Hurricanes Debby, Helene, and Milton no
later than December 31, 2025.
(Brownless)
Staff Analysis: FPL is requesting that the
Commission grant it a temporary variance from or waiver of Rule
25-6.0143(1)(g), F.A.C. Pursuant to this rule provision, FPL is required to file
its petition for disposition of certain deferred costs by September 30, 2025.
Legal Standard for Rule Variances or
Waivers
Pursuant to Section 120.542(2),
F.S., the Commission is required to grant waivers and variances from its rules
“when the person subject to the rule demonstrates that the purpose of the
underlying statute will be or has been achieved by other means by the person
and when application of a rule would create a substantial hardship or would
violate principles of fairness.” A “substantial hardship” is defined by statute
as a “demonstrated economic, technological, legal, or other type of hardship.”
Rule 25-6.0143, F.A.C.,
implements Section 350.115, F.S., which allows the Commission to prescribe by
rule uniform systems and classifications of accounts for each type of regulated
company and approve or establish adequate, fair, and reasonable depreciation
rates and charges. The rule also implements Section 366.04(2)(a), F.S., which
gives the Commission power over electric utilities to prescribe uniform systems
and classifications of accounts.
FPL’s Petition
FPL stated that application of Rule 25-6.0143(1)(g),
F.A.C., to require the preparation and filing of the petition and documentation
supporting the review and true-up of the total actual incremental storm restoration costs related to Hurricanes Debby, Helene, and Milton no
later than September 30, 2025, will create a substantial hardship. In its October 29, 2024 petition, FPL
estimated that the total storm-related restoration costs for Hurricanes Debby, Helene,
and Milton to total $1.2 billion. Given
the volume of invoices to be reviewed and the fact that three separate storms
significantly impacted FPL’s system late in the 2024 hurricane season,
additional time has been required to process, review, and finalize storm
restoration invoices for payment. FPL
does not estimate that its review process can be completed until late August or
early September 2025.
FPL has also been engaged with the
other investor-owned electric utilities (IOUs) with open storm dockets, the
Office of Public Counsel, and Commission staff, to hire an outside auditor to
review Hurricane Milton costs and develop a scope of audit applicable to all
the IOUs. FPL is in the process of
hiring an outside auditor but does not anticipate that the auditor’s review of
Hurricane Milton costs will be complete until early December 2025. FPL argues that completing the outside audit
before filing the petition for cost recovery will reduce the scope and volume
of the discovery needed. Further, if
forced to file prior to September 30, there is a risk that the outside audit
results will conflict with the September 30 filing causing unnecessary
confusion and the need for additional discovery.
Finally, FPL has requested that
its petition for variance be considered at the Commission’s September 4th
Agenda Conference so that it can become effective, if granted, on or before the
September 30 filing deadline. FPL has
stated that no anticipated party to the proceeding, and no customer will be
adversely affected or prejudiced by granting its request. FPL has contacted OPC, the only current party
to this docket, and is authorized to represent that OPC has no objection.
Purpose of Underlying Statutes
Sections 350.115 and
366.04(2)(a), F.S., give the Commission power to prescribe by rule uniform
systems and classifications of accounts and to approve or establish adequate,
fair, and reasonable rates and charges for electric utilities. The purpose of
the September 30 filing date is to facilitate a timely review of storm
restoration costs and afford the Commission adequate oversight on the use of
Commission-approved storm reserves (Account 228.1). Often the initial filings
made pursuant to Rule 25-6.0143, F.A.C., reflect estimated costs used to
implement an interim cost recovery mechanism. As such, staff believes that the
purpose of Sections 350.115 and 366.04(2), F.S., will be unaffected by granting
the requested temporary variance or waiver.
For these reasons, the purpose
of the statutes will still be achieved as required by Section 120.542, F.S., if
FPL’s Petition for temporary variance or waiver is granted. Further, no anticipated party to any
proceedings and no customers will be prejudiced or adversely affected by
granting FPL’s Petition for temporary variance or waiver.
Substantial Hardship
The facts presented by FPL to
demonstrate a substantial hardship focus on the volume of work FPL needs to
complete before filing its petition and supporting documentation for final
storm restoration cost disposition. The cost estimates for restoration related
to Hurricane Milton are $924.0 million.
These costs are in addition to $134.8 million for Hurricane Debby and
$177.0 million for Hurricane Helene. FPL
needs to complete significant internal work on these hurricane costs before it
can then turn to the task of an independent audit for Hurricane Helene. The
audit, in turn, must be completed before FPL can then file for final
disposition.
The Commission considered and
granted a similar request for waiver or variance from FPL in 2021. In
that docket, the enhanced workload arose from a rate case hearing that was
proceeding on a contemporaneous track as storm recovery. As noted in the order
granting FPL’s petition in that docket, the Commission has in the past granted
petitions for variance or waiver on the basis that application of a rule’s
filing deadline created substantial hardship because of utility staffing
limitations caused by the specific circumstances alleged in those petitions.[3] This was
also the case in 2023, when FPL was granted a filing variance for costs
associated with Hurricanes Ian and Nicole. Under
the specific facts presented here, staff believes that FPL has demonstrated
substantial hardship under Section 120.542, F.S.
Conclusion
For the reasons
stated above, the Commission should grant FPL’s Petition for a temporary
variance or waiver of Rule 25-6.0143(1)(g), F.A.C., to allow FPL to file its
petition for certain deferred costs no later than December 31, 2025.