CS/SB 126 full text · Session Watch

Florida Senate - 2026 CS for SB 126 By the Committee on Regulated Industries; and Senators Gaetz and Bradley 580-01755A-26 2026126c1

1 A bill to be entitled

2 An act relating to the Florida Public Service

3 Commission; amending s. 350.01, F.S.; revising the

4 membership of the Florida Public Service Commission;

5 creating s. 350.0615, F.S.; requiring a group of

6 parties to certain proceedings to negotiate the terms

7 of a settlement with the Public Counsel before

8 presenting such settlement to the commission; creating

9 s. 350.129, F.S.; requiring that orders issued by the

10 commission contain adequate support and rationale for

11 any conclusions made by the commission; requiring the

12 commission to provide an explanation and a discussion

13 of major elements and the rationale of the settlement

14 when the commission issues an order accepting or

15 denying certain settlement agreements; providing that

16 the Public Counsel is not a required party to any such

17 settlements; prohibiting the commission from approving

18 certain settlements that are not negotiated with the

19 Public Counsel; creating s. 350.130, F.S.; authorizing

20 certain persons to make a motion to intervene in a

21 pending commission proceeding; providing requirements

22 for an association’s motion to intervene in certain

23 commission proceedings; requiring the commission to

24 make certain rulings in a specified timeframe to avoid

25 certain expenses; creating s. 350.131, F.S.; requiring

26 the commission to consider and address the

27 affordability of proceedings that have certain

28 potential impacts; amending s. 366.06, F.S.;

29 authorizing the commission to fix affordable, in

30 addition to fair, just, and reasonable, rates;

31 requiring that certain applications for changes in

32 rates be made according to a certain schedule and

33 procedure; requiring that certain requests for a

34 change in return on equity be made according to a

35 certain schedule and procedure; conforming provisions

36 to changes made by the act; providing requirements for

37 any financial model used by the commission to set and

38 evaluate the return on equity for a public utility;

39 requiring the commission to consider and address

40 certain financial benefits and reductions of certain

41 risks provided by specified cost financing systems or

42 other processes when setting and evaluating the return

43 on equity for a public utility; amending s. 366.07,

44 F.S.; conforming provisions to changes made by the

45 act; requiring the commission to establish a schedule

46 by which requests for changes to a public utility’s

47 return on equity may be submitted to the commission by

48 each public utility company; prohibiting the

49 commission from accepting certain requests from a

50 public utility to modify its return on equity outside

51 of its schedule; providing an exception; authorizing a

52 public utility to petition the commission to deviate

53 from the return on equity revision schedule; requiring

54 the commission to grant the petition under certain

55 circumstances; requiring the commission to adopt

56 rules; creating s. 366.077, F.S.; requiring the

57 commission to provide a report to the Governor and the

58 Legislature by a specified date annually; providing

59 requirements for the report; creating s. 366.8261,

60 F.S.; defining terms; requiring the commission to

61 permit an electric utility to implement a certain

62 charge within a specified timeframe after the electric

63 utility files a certain petition, subject to specified

64 conditions; requiring the commission to establish a

65 recovery period for interim storm-recovery costs,

66 based upon a reasonable balancing of certain factors;

67 subjecting certain funds to true-up; providing

68 construction; requiring the commission to adopt rules;

69 amending s. 367.081, F.S.; providing requirements for

70 financial models used by the commission in setting and

71 evaluating the return on equity for a utility;

72 conforming provisions to changes made by the act;

73 amending s. 377.814, F.S.; conforming a cross

74 reference; providing an effective date.

76 Be It Enacted by the Legislature of the State of Florida:

78 Section 1. Subsection (1) of section 350.01, Florida

79 Statutes, is amended to read:

80 350.01 Florida Public Service Commission; terms of

81 commissioners; vacancies; election and duties of chair; quorum;

82 proceedings; public records and public meetings exemptions.—

83 (1) The Florida Public Service Commission shall be composed

84 ~~consist~~ of seven ~~five~~ commissioners appointed pursuant to s.

85 350.031. One member must be a certified public accountant, and

86 one member must be a chartered financial analyst.

87 Section 2. Section 350.0615, Florida Statutes, is created

88 to read:

89 350.0615 Public Counsel; requirement to negotiate.—For

90 proceedings before the commission in which the Public Counsel is

91 participating as a party, any other group of parties to the

92 proceeding, before presenting a settlement of the proceeding to

93 the commission, must negotiate in good faith with the Public

94 Counsel the terms of such settlement.

95 Section 3. Section 350.129, Florida Statutes, is created to

96 read:

97 350.129 Orders of the Florida Public Service Commission.—

98 (1) All orders issued by the commission must contain

99 adequate support and rationale for the commission’s conclusions,

100 including the specific facts and factors on which the

101 conclusions are based. While the commission may make conclusions

102 based upon the public interest, it shall specify in its orders a

103 rationale for such conclusions.

104 (2) For commission orders that affect substantial interests

105 pursuant to s. 120.569, when issuing an order accepting or

106 denying a settlement agreement reached by any of the parties to

107 a proceeding, all of the following requirements apply:

108 (a) The commission shall provide a reasoned explanation,

109 citing the specific facts and factors on which it relied. The

110 commission shall provide in its order a discussion of the major

111 elements of the settlement and a rationale for its conclusions.

112 (b) The Public Counsel is not a required party to such a

113 settlement. However, the commission may not approve a settlement

114 presented by parties that have not negotiated the terms of such

115 settlement in good faith with the Public Counsel.

116 Section 4. Section 350.130, Florida Statutes, is created to

117 read:

118 350.130 Intervention into commission proceedings.—Persons

119 other than the original parties to a pending commission

120 proceeding, whose substantial interest will be affected by the

121 commission proceeding and who desire to become parties to the

122 proceeding, may make a motion to the commission for leave to

123 intervene in the proceeding pursuant to chapter 120.

124 (1) Any trade, professional, or similar association seeking

125 to intervene in a commission proceeding on the basis of the

126 impact of such proceeding on the association’s membership must

127 include in such motion the nature of the association’s

128 membership, the manner in which such membership will be

129 substantially impacted by the proceeding, and the number and

130 percentage of total members who will be substantially impacted

131 by the proceeding.

132 (2) In order to avoid any unnecessary rate case expense

133 resulting from a party participating in a proceeding in which it

134 does not have standing, the commission shall rule on any

135 challenge to a party’s intervention in a proceeding on the basis

136 of standing on a timely basis and, at a minimum, within 30 days

137 after receiving such challenge.

138 Section 5. Section 350.131, Florida Statutes, is created to

139 read:

140 350.131 Affordability.—The commission must consider and

141 address affordability in any proceeding before it that has the

142 potential to impact utility rates.

143 Section 6. Present subsection (4) of section 366.06,

144 Florida Statutes, is redesignated as subsection (5), a new

145 subsection (4) is added to that section, and subsections (1) and

146 (2) of that section are amended, to read:

147 366.06 Rates; procedure for fixing and changing.—

148 (1) A public utility shall not, directly or indirectly,

149 charge or receive any rate not on file with the commission for

150 the particular class of service involved, and no change shall be

151 made in any schedule. All applications for changes in rates

152 shall be made to the commission in writing under rules and

153 regulations prescribed, and the commission shall have the

154 authority to determine and fix affordable, fair, just, and

155 reasonable rates that may be requested, demanded, charged, or

156 collected by any public utility for its service. Any application

157 for a change in rates which also includes a request for a change

158 in return on equity must be made according to the schedule and

159 procedure established by the commission pursuant to s. 366.07.

160 The commission shall investigate and determine the actual

161 legitimate costs of the property of each utility company,

162 actually used and useful in the public service, and shall keep a

163 current record of the net investment of each public utility

164 company in such property which value, as determined by the

165 commission, shall be used for ratemaking purposes and shall be

166 the money honestly and prudently invested by the public utility

167 company in such property used and useful in serving the public,

168 less accrued depreciation, and shall not include any goodwill or

169 going-concern value or franchise value in excess of payment made

170 therefor. In fixing affordable, fair, just, and reasonable rates

171 for each customer class, the commission shall, to the extent

172 practicable, consider the cost of providing service to the

173 class, as well as the rate history, value of service, and

174 experience of the public utility; the consumption and load

175 characteristics of the various classes of customers; and public

176 acceptance of rate structures.

177 (2) Whenever the commission finds, upon request made or

178 upon its own motion, that the rates demanded, charged, or

179 collected by any public utility for public utility service, or

180 that the rules, regulations, or practices of any public utility

181 affecting such rates, are unaffordable, unjust, unreasonable,

182 unjustly discriminatory, or in violation of law; that such rates

183 are insufficient to yield reasonable compensation for the

184 services rendered; that such rates yield excessive compensation

185 for services rendered; or that such service is inadequate or

186 cannot be obtained, the commission shall order and hold a public

187 hearing, giving notice to the public and to the public utility,

188 and shall thereafter determine affordable, just , and reasonable

189 rates to be thereafter charged for such service and promulgate

190 rules and regulations affecting equipment, facilities, and

191 service to be thereafter installed, furnished, and used. Any

192 request made by a public utility pursuant to this section which

193 involves a request for a change in return on equity must be made

194 according to the schedule and procedure established by the

195 commission pursuant to s. 366.07.

196 (4) In setting and evaluating the return on equity for a

197 public utility as part of a rate proceeding:

198 (a) Any financial model used by the commission must be:

199 1. Financially logical; and

200 2. Generally used and accepted by finance practitioners

201 both within and outside of the regulated utility industry; and

202 (b) The commission shall specifically consider and address

203 the financial benefits and the reduction in regulatory, weather,

204 disaster, and general financial risk to the public utility

205 provided by all of the following which are relevant to the

206 public utility:

207 1. Environmental cost recovery under s. 366.8255.

208 2. Storm-recovery financing under s. 366.8260.

209 3. Interim storm-recovery cost recovery under s. 366.8261.

210 4. Cost recovery for the siting, design, licensing, and

211 construction of nuclear and integrated gasification combined

212 cycle power plants under s. 366.93.

213 5. Financing for certain nuclear generating asset

214 retirement or abandonment costs under s. 366.95.

215 6. Storm protection plan cost recovery under s. 366.96.

216 7. Public utility liability arising out of emergencies and

217 disasters under s. 366.98.

218 8. Natural gas facilities relocation costs under s. 366.99.

219 Section 7. Section 366.07, Florida Statutes, is amended to

220 read:

221 366.07 Rates; adjustment.—

222 (1) Whenever the commission, after public hearing either

223 upon its own motion or upon complaint, shall find the rates,

224 rentals, charges or classifications, or any of them, proposed,

225 demanded, observed, charged or collected by any public utility

226 for any service, or in connection therewith, or the rules,

227 regulations, measurements, practices or contracts, or any of

228 them, relating thereto, are unaffordable, unjust, unreasonable,

229 insufficient, excessive, or unjustly discriminatory or

230 preferential, or in anywise in violation of law, or any service

231 is inadequate or cannot be obtained, the commission shall

232 determine and by order fix the affordable, fair , and reasonable

233 rates, rentals, charges or classifications, and reasonable

234 rules, regulations, measurements, practices, contracts or

235 service, to be imposed, observed, furnished or followed in the

236 future.

237 (2) The commission shall establish a schedule by which

238 requests for changes to a public utility’s return on equity may

239 be submitted to the commission by each public utility. The

240 commission may not accept a request from a public utility to

241 modify its return on equity outside of this established

242 schedule, except as provided in subsection (3).

243 (3) A public utility may petition the commission to deviate

244 from the return on equity revision schedule established by the

245 commission under subsection (2). The commission shall grant such

246 petition if:

247 (a) The public utility’s rates are insufficient to yield

248 reasonable compensation for the services it is rendering;

249 (b) This insufficiency is due to circumstances that are

250 outside of the control of the public utility; and

251 (c) Such circumstances were not reasonably foreseeable by

252 the public utility during the last proceeding in which its

253 return on equity was approved by the commission.

254 (4) The commission shall adopt rules to implement this

255 section.

256 Section 8. Section 366.077, Florida Statutes, is created to

257 read:

258 366.077 Report on rates.—The commission shall submit an

259 annual report to the Governor and the Legislature by March 1.

260 (1) The report must include all of the following:

261 (a) An investigation of contemporary economic analyses

262 related to rate changes in this state.

263 (b) An analysis of potential cost impacts to utility

264 customers in this state if excess returns on equity have

265 occurred and, if such excess returns have not occurred at a

266 significant rate, any resulting cost savings to such customers.

267 (c) An analysis of returns on equity models presented by

268 public utilities and used by the commission to determine

269 approved returns on equity for public utilities in this state.

270 Such analysis must:

271 1. Compare models used by federal agencies and other state

272 utility regulatory bodies with those used by the commission;

273 2. Determine whether the models used are generally

274 financially logical; and

275 3. Determine whether the models used comport with generally

276 accepted economic theory both inside and outside of the utility

277 industry.

278 (d) An assessment of long-term impacts, including the

279 economic repercussions of rising rates of returns on equity, to

280 utilities and their future customers.

281 (e) A summary providing detailed information regarding the

282 compensation of the executive officers of each public utility

283 providing service to the residents of this state, or the

284 executive officers of a public utility’s affiliated companies or

285 parent company. Such information must include, but need not be

286 limited to, salaries, benefits, stock options, bonuses, stock

287 buybacks, and other taxable payments, expressed both as dollar

288 amounts and as a percentage of the entity’s total revenue. The

289 summary must include the profits and losses of each entity as

290 reported in its financial statements and highlight any

291 compensation that exceeds the industry average. The commission

292 shall also include any rationale provided by a public utility

293 justifying compensation exceeding the industry average and, for

294 each public utility, an explanation as to the manner in which

295 specific data gathered during the compiling of information

296 informed the commission’s decisions on the public utility’s rate

297 change requests.

298 (2) The report must provide benchmarking, comparing public

299 utilities providing service to the residents of this state with

300 public utilities providing service to the residents of other

301 states, and include commentary on all findings.

302 Section 9. Section 366.8261, Florida Statutes, is created

303 to read:

304 366.8261 Interim storm-recovery cost.—

305 (1) As used in this section, the term:

306 (a) “Electric utility” has the same meaning as in s.

307 366.8255.

308 (b) “Storm” has the same meaning as in s. 366.8260.

309 (c) “Storm-recovery charge” has the same meaning as in s.

310 366.8260.

311 (d) “Storm-recovery costs” has the same meaning as in s.

312 366.8260.

313 (2) The commission shall permit an electric utility to

314 implement a storm-recovery charge to recover reasonably

315 estimated storm-recovery costs within 60 days after filing a

316 petition with the commission for the recovery from one or more

317 storms, subject to all of the following conditions:

318 (a) Such charge must be on an interim basis. The

319 commission’s approval of interim storm-recovery costs and a

320 related storm-recovery charge must be on a preliminary basis and

321 is subject to refund pending further review once the total

322 actual storm-recovery costs are known. After the actual costs

323 are reviewed for prudence and reasonableness and are compared to

324 the actual amount recovered through the interim storm-recovery

325 charge, the commission shall determine whether any over or under

326 recovery has occurred. The disposition of any over or under

327 recovery, and associated interest, must be considered by the

328 commission at a separate true-up proceeding.

329 (b) Storm-recovery costs may not include any expenses

330 already being recovered by the utility in its base rates.

331 (c) The commission may require a utility to secure funds

332 collected pursuant to this section to ensure timely refund to

333 customers in the event of over recovery.

334 (3) In approving an application for interim storm-recovery

335 costs pursuant to subsection (2), the commission shall also

336 establish a recovery period for such interim costs. This

337 recovery period shall be based upon a reasonable balancing of

338 all of the following factors:

339 (a) The financial impact of the length of the recovery

340 period on the utility.

341 (b) Timeliness of recovery.

342 (c) Affordability to ratepayers.

343 (d) Avoiding sudden substantial bill increases to

344 ratepayers.

345 (4) Funds collected pursuant to this section are subject to

346 true-up. The commission shall require that any refund to or

347 additional collection from ratepayers made as a part of the

348 true-up include interest.

349 (5) Nothing in this section shall be construed to prevent a

350 public utility from applying for, or the commission approving,

351 storm-recovery financing pursuant to s. 366.8260.

352 (6) The commission shall adopt rules to implement this

353 section as soon as practicable, but no later than January 1,

354 2027.

355 Section 10. Paragraph (a) of subsection (2) and subsection

356 (3) of section 367.081, Florida Statutes, are amended to read:

357 367.081 Rates; procedure for fixing and changing.—

358 (2)(a)1. The commission shall, either upon request or upon

359 its own motion, fix rates which are affordable, just,

360 reasonable, compensatory, and not unfairly discriminatory. In

361 every such proceeding, the commission shall consider the value

362 and quality of the service and the cost of providing the

363 service, which shall include, but not be limited to, debt

364 interest; the requirements of the utility for working capital;

365 maintenance, depreciation, tax, and operating expenses incurred

366 in the operation of all property used and useful in the public

367 service; and a fair return on the investment of the utility in

368 property used and useful in the public service. However, the

369 commission shall not allow the inclusion of contributions-in

370 aid-of-construction in the rate base of any utility during a

371 rate proceeding, nor shall the commission impute prospective

372 future contributions-in-aid-of-construction against the

373 utility’s investment in property used and useful in the public

374 service; and accumulated depreciation on such contributions-in

375 aid-of-construction shall not be used to reduce the rate base,

376 nor shall depreciation on such contributed assets be considered

377 a cost of providing utility service.

378 2. For purposes of such proceedings, the commission shall

379 consider utility property, including land acquired or facilities

380 constructed or to be constructed within a reasonable time in the

381 future, not to exceed 24 months after the end of the historic

382 base year used to set final rates unless a longer period is

383 approved by the commission, to be used and useful in the public

384 service, if:

385 a. Such property is needed to serve current customers;

386 b. Such property is needed to serve customers 5 years after

387 the end of the test year used in the commission’s final order on

388 a rate request as provided in subsection (6) at a growth rate

389 for equivalent residential connections not to exceed 5 percent

390 per year; or

391 c. Such property is needed to serve customers more than 5

392 full years after the end of the test year used in the

393 commission’s final order on a rate request as provided in

394 subsection (6) only to the extent that the utility presents

395 clear and convincing evidence to justify such consideration.

397 Notwithstanding the provisions of this paragraph, the commission

398 shall approve rates for service which allow a utility to recover

399 from customers the full amount of environmental compliance

400 costs. Such rates may not include charges for allowances for

401 funds prudently invested or similar charges. For purposes of

402 this requirement, the term “environmental compliance costs”

403 includes all reasonable expenses and fair return on any prudent

404 investment incurred by a utility in complying with the

405 requirements or conditions contained in any permitting,

406 enforcement, or similar decisions of the United States

407 Environmental Protection Agency, the Department of Environmental

408 Protection, a water management district, or any other

409 governmental entity with similar regulatory jurisdiction.

410 (3) The commission, in fixing rates, may determine the

411 prudent cost of providing service during the period of time the

412 rates will be in effect following the entry of a final order

413 relating to the rate request of the utility and may use such

414 costs to determine the revenue requirements that will allow the

415 utility to earn a fair rate of return on its rate base. Any

416 financial model used by the commission in setting and evaluating

417 the return on equity for a utility as part of a proceeding

418 fixing rates must be:

419 (a) Financially logical; and

420 (b) Generally used and accepted by finance practitioners

421 both within and outside of the regulated utility industry.

422 Section 11. Paragraph (b) of subsection (5) of section

423 377.814, Florida Statutes, is amended to read:

424 377.814 Municipal Solid Waste-to-Energy Program.—

425 (5) FUNDING.—

426 (b) Funds awarded under the grant programs set forth in

427 this section may not be used to support, subsidize, or enable

428 the sale of electric power generated by a municipal solid waste

429 to-energy facility to any small electric utility eligible to

430 petition the commission under s. 366.06(5) ~~s. 366.06(4)~~ .

431 Section 12. This act shall take effect July 1, 2026.