Case Background
On July 14,
2025, Duke Energy Florida, LLC (DEF or Company) filed a petition for Commission
approval of a negotiated as-available energy agreement (Contract) between DEF
and Placid Solar II, LLC (Placid). While Placid has not obtained qualifying
facility (QF) status from the Federal Energy Regulatory Commission (FERC), as a
74.9 MW solar generating facility it qualifies as a “renewable generating
facility,” as that term is defined in Rule 25-17.210(1), Florida Administrative
Code (F.A.C.). Pursuant to Rule 25-17.220, F.A.C., renewable generating
facilities shall be treated as QFs by the Florida Public Service Commission
(Commission) and shall be subject to Rules 25-17.082 through 25-17.091, F.A.C.
Placid obtained
Market-Based Rate (MBR) Authorization and tariff approval from FERC in January
2025, which allowed Placid to legally engage in the sale of renewable wholesale
electricity to DEF under a FERC-jurisdictional interconnection agreement. DEF
and Placid entered into a Large Generator Interconnection Agreement (LGIA) to
satisfy the requirement for a FERC-jurisdictional interconnection agreement. On
July 8, 2025, DEF and Placid finalized the Contract, which is addressed by this
recommendation. The comparison document
showing the changes from DEF’s approved as-available tariff contract and the
negotiated as-available energy agreement is included as Attachment A.
The Commission
has jurisdiction in this matter pursuant to Sections 366.04, 366.051, and 366.91,
Florida Statutes (F.S.).
Discussion
of Issues
Issue 1:
Should the Commission approve DEF's proposed
negotiated as-available energy agreement with Placid?
Recommendation:
Yes. The Commission should approve DEF’s negotiated
as-available energy agreement because the terms of the Contract would not
result in higher cost electric service or negatively affect the reliability of
electric service to the general body of ratepayers and is consistent with the
requirements of Rules 25-17.082 through 25-17.091, F.A.C. Therefore, DEF should
be allowed to seek cost recovery through the Fuel and Purchased Power Cost
Recovery Clause for payments made pursuant to the Contract, consistent with
Commission rules. (Wooten)
Staff Analysis:
DEF seeks approval of a negotiated contract, which
would allow Placid to sell as-available energy to DEF. The Contract is
substantively similar to DEF’s currently approved as-available energy tariff
with modifications made to account for Placid’s status as a renewable
generating facility and the terms of the LGIA. Under the Contract, Placid has
elected to sell all as-available energy to DEF exclusively. Because Placid will
exclusively provide as-available energy to DEF, Placid will not seek
transmission services under Rule 25-17.0889(1), F.A.C., to deliver electricity
to any other party during the term of the agreement. In addition, Placid has
agreed to pay for all interconnection costs. The Contract also dictates that
Placid must maintain its FERC MBR tariff approval status in addition to its QF
status throughout the term of the agreement. Furthermore, the Contract
indicates that Placid intends to begin energy deliveries by December 31, 2026.
However, the term of the Contract may not commence until the Commission has
issued a final, non-appealable order approving the Contract. This means the
term will begin either upon the issuance date of a Consummating Order (if no
protest is filed) or, in the event of a protest, after the time to appeal a
Final Order has expired.
Rule 25-17.087, F.A.C., details the necessary requirements
for electric utilities to interconnect with QFs, which for the Contract are
defined by the terms and conditions outlined in the LGIA. Subsections (5)–(9)
of the Rule define safety, operational, and cost requirements for these
interconnection agreements. According to the Company, the terms of the LGIA
contain operational and safety requirements that would conform with all but the
cost responsibility requirements outlined in Rule 25-17.087(9), F.A.C.
Specifically, the LGIA required that DEF’s network upgrade costs would be
initially paid for by Placid and then reimbursed by DEF. The Contract provides
that Placid has agreed to pay DEF all costs associated with interconnecting,
including network upgrade costs. Thus Placid will return any reimbursed network
upgrade costs to DEF, which is consistent with the requirement of Rule 25-17.087(9),
F.A.C., that a QF bear all such costs. Furthermore, Placid attests that it is
subject to, and agrees to comply with, the Commission’s relevant QF rules. Upon
review, staff believes that the terms of the Contract and the applicable terms
of the LGIA are not inconsistent with the requirements outlined in Rule
25-17.087, F.A.C.
Pursuant to Rule 25-17.0825(6), F.A.C., as-available
energy payments made to QFs pursuant to negotiated contracts shall be
recoverable through the Fuel and Purchased Power Cost Recovery Clause if the
payments are not projected to result in higher cost electric service to the
general body of ratepayers or negatively affect the reliability of electric
service to ratepayers. In regards to the cost of electric service, the Contract
sets energy payments at the Company’s standard as-available energy payment
rates, which the Commission has defined as the avoided cost of non-firm energy.
Therefore, staff believes the energy payments under the Contract would not
result in higher cost electric service to the general body of ratepayers.
Regarding the reliability of electric service, the safety and operational
requirements outlined by the LGIA comply with the standards set forth in Rule
25-17.087, F.A.C., and provide both economic and equipment protections for DEF.
As these safety and operational requirements are referenced by the Contract,
staff believes that the energy payments under the Contract would not negatively
affect DEF’s ability to provide reliable electric service to the general body
of ratepayers. Based on the information in the docket, staff believes that the
terms of the Contract satisfy the requirements of Rules 25-17.082 through 25-17.091, F.A.C.,
and DEF should be allowed to seek cost recovery for payments made pursuant to
the Contract, consistent with Commission rules, in accordance with Rule
25-17.0825(6), F.A.C.
Conclusion
The Commission should approve DEF’s negotiated
as-available energy agreement because the terms of the Contract would not
result in higher cost electric service or negatively affect the reliability of
electric service to the general body of ratepayers, and is consistent with the
requirements of Rules 25-17.082 through 25-17.091, F.A.C. Therefore, DEF should
be allowed to seek cost recovery through the Fuel and Purchased Power Cost
Recovery Clause for payments made pursuant to the Contract, consistent with
Commission rules.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. If no person whose substantial interests are
affected by the proposed agency action files a protest within 21 days of the
issuance of the proposed agency action order, then this docket should be closed
upon the issuance of a consummating order. (Marquez, Farooqi)
Staff Analysis:
If no person whose substantial interests are
affected by the proposed agency action files a protest within 21 days of the
issuance of the proposed agency action order, then this docket should be closed
upon the issuance of a consummating order.
