173 Ferc ¶ 61030
Total Page:16
File Type:pdf, Size:1020Kb
173 FERC ¶ 61,030 UNITED STATES OF AMERICA FEDERAL ENERGY REGULATORY COMMISSION Before Commissioners: Neil Chatterjee, Chairman; Richard Glick and James P. Danly. Florida Power & Light Company Docket No. ER20-1741-000 ORDER ACCEPTING PROPOSED REVISIONS AND GRANTING WAIVER REQUESTS (Issued October 15, 2020) On May 1, 2020, Florida Power & Light Company (FPL), pursuant to section 205 of the Federal Power Act and Part 35 of the Federal Energy Regulatory Commission’s (Commission) regulations, filed amendments to the FPL Open Access Transmission Tariff (OATT) and a request for waiver of 18 C.F.R. § 35.28 (2020).1 The filing is related to FPL’s parent company NextEra Energy Inc.’s (NextEra) acquisition of Gulf Power Company (Gulf Power) and the subsequent merger of Gulf Power into FPL. FPL requests the OATT revisions to be effective as of, and contingent upon, the closing of the merger of Gulf Power into FPL, which is expected to occur on January 1, 2021. To allow for the requested effective date, FPL requests waiver of the Commission’s prior notice requirements.2 As discussed below, we accept FPL’s amendments to its OATT and grant FPL’s waiver requests.3 I. Background On January 1, 2019, NextEra acquired from Southern Company 100% of the ownership interests in Gulf Power pursuant to a transaction authorized by the 1 18 C.F.R. § 35.28(c)(3) (2020) requires “[e]very public utility that owns, controls, or operates facilities used for the transmission of electric energy in interstate commerce, and that is a member of a power pool, public utility holding company, or other multi-lateral trading arrangement or agreement that contains transmission rates, terms or conditions, [to] have on file a joint pool-wide or system-wide open access transmission tariff….” 2 18 C.F.R. § 35.3 (2020). 3 See Appendix for a list of approved tariff records. Docket No. ER20-1741-000 - 2 - Commission.4 As a result of this transaction, NextEra became the parent company of both Gulf Power and FPL, and Gulf Power no longer provided transmission service under the OATT of the then-Southern Company subsidiary Gulf Power. Accordingly, Gulf Power filed a standalone OATT to ensure the continuity of service for wholesale customers previously taking service under the Southern Company OATT.5 To facilitate NextEra’s acquisition of Gulf Power from Southern Company, the parties agreed to a five-year transition period in which during the first year the rates for transmission service under the Gulf Power OATT are the same as the rates in effect on the day preceding the closing under the OATT of the then-Southern Company subsidiary Gulf Power for the same services. Southern Company and NextEra determined that Gulf Power should continue to participate in the Southern Company power pool, remain an unaffiliated party to the Intercompany Interchange Contract, and remain in the Southern Company balancing authority area for a transitional period of five years (which could be terminated early by Gulf Power with 180 days’ notice).6 Concurrent with the instant filing, NextEra, FPL and Gulf Power filed an application (Application) under section 203(a)(1)(B) of the Federal Power Act (FPA)7 and Part 33 of the Commission’s regulations,8 for approval of an internal reorganization under which Gulf Power will merge into FPL, with FPL as the surviving entity (Reorganization).9 As part of the Reorganization, the applicants state that FPL will continue to provide service to customers in Gulf Power’s service territory in Northwest Florida under the existing Gulf Power brand during 2021. In 2022, the existing Gulf Power and FPL systems will become separate rate zones under a consolidated FPL OATT, utility services in Northwest Florida will be provided under the unified FPL brand, and FPL will file a consolidated FERC Form No. 1 for the 2022 reporting year and thereafter.10 4 NextEra Energy, Inc., 165 FERC ¶ 61,263 (2018). 5 Gulf Power Co., 165 FERC ¶ 61,265 (2018). 6 Southern Co. Servs., Inc., Docket No. ER18-1942-000, at 2 (Dec. 20, 2018) (delegated order). 7 16 U.S.C. § 824b(a)(1)(B). 8 18 C.F.R. pt. 33 (2020). 9 See Docket No. EC20-60-000. 10 Application at 9. Docket No. ER20-1741-000 - 3 - II. Filing Summary A. Request for Waiver of 18 C.F.R. § 35.28 In its waiver request, FPL notes that the transmission systems of Gulf Power and FPL are not directly interconnected and will not be interconnected at the time of the Reorganization. FPL states that, therefore, any transmission service flowing from one of the companies’ transmission systems to the other must use intervening third-party transmission to complete such a transaction. FPL states Gulf Power is in the process of developing the North Florida Resiliency Connection (“NFRC”), which will provide the first direct interconnection between the companies’ respective transmission systems. FPL states the planned in-service date for the NFRC is on or before January 1, 2022.11 Since the Gulf Power and FPL systems are not interconnected, and the pending reorganization application will feature a one year transition period, FPL requests waiver of 18 C.F.R. § 35.28 to the extent these regulations would require FPL to file a single, combined OATT for its two transmission systems upon consummation of the Reorganization.12 FPL states good cause exists to grant the requested waiver of 18 C.F.R. § 35.28 because the companies’ systems are not directly interconnected and will continue to be operated independently (until the NFRC is energized) following the Reorganization. Furthermore, the term of the requested waiver is limited to one year following the effective date of the Reorganization, which FPL anticipates will occur on or about January 1, 2021.13 FPL adds that Commission precedent supports FPL’s requested waiver of 18 C.F.R. § 35.28. Specifically, FPL asserts the Commission has allowed utilities to maintain separate OATTs following a merger, particularly where the transmission systems of the merging utilities are not directly interconnected.14 B. Proposed Revisions FPL proposes to modify its existing OATT effective as of the date of the Reorganization to make clear that it applies to transmission service provided by FPL in Peninsular Florida. Therefore, FPL states, the title on the cover page of the OATT would 11 Transmittal at 3. 12 Id. at 4 (citing 18 C.F.R. § 35.28(c)(3)). 13 Id. 14 Id. (citing Bangor Hydro Elec. Co., 144 FERC ¶ 61,031 (2013)). Docket No. ER20-1741-000 - 4 - be modified to read: “Florida Power & Light Company Open Access Transmission Tariff for Service Provided in Peninsular Florida.”15 In its filing, FPL proposes revisions to clarify the definition of “Transmission Provider” and adds new terms to the OATT to reflect a post-Reorganization structure. Specifically, FPL proposes to modify the definition of “Transmission Provider” to include the following: All references herein to Transmission Provider or FPL shall be understood to refer exclusively to the Florida Power & Light Company transmission system in Peninsular Florida, and not to the Florida Power & Light Company transmission system in the Florida Panhandle, where Florida Power & Light Company does business as Gulf Power. FPL states this proposed revision to the definition of “Transmission Provider” clarifies that FPL, not Gulf Power, is the “Transmission Provider” following the Reorganization.16 FPL also proposes three new terms to the OATT to provide clarity in the post- Reorganization structure:17 1.15A Gulf Power: The operating division of Florida Power & Light Company, doing business as Gulf Power, which controls or operates facilities in the Florida Panhandle used for the transmission of electric energy in interstate commerce and provides transmission service under the Florida Power & Light Company Open Access Transmission Tariff for Service Provided in the Florida Panhandle. 1.14A Florida Panhandle: That portion of the State of Florida located to the West of the Apalachicola River. 15 Id. 16 Id. at 5. 17 Id. at 5-6. Docket No. ER20-1741-000 - 5 - 1.34A Peninsular Florida: That portion of the State of Florida located to the East of the Apalachicola River. Additionally, FPL proposes modifications to Attachment H-2 of the OATT, which contains the Formula Rate Implementation Protocols. Specifically, FPL states, the proposed changes to Attachment H-2 are intended to make clear that the formula rate template and protocols in the OATT are to be used to determine the rate for the FPL division (i.e., the Transmission Provider under the OATT) for service in Peninsular Florida, and not the Gulf Power division. FPL also proposes accompanying revisions to Attachment C and Attachment P to the OATT.18 In addition to the above clarifications and new definitions, FPL proposes amendments to the OATT to eliminate any pancaked transmission or ancillary service charges for transactions that require the use of both the FPL division and Gulf Power division transmission systems after the consummation of the Reorganization. FPL proposes several changes to the OATT to ensure that Transmission Customers taking either Point-to-Point Transmission Service or Network Integration Transmission Service do not pay pancaked rates.19 First, FPL proposes to add language to Schedules 7 and 8 of the OATT to make clear that a Transmission Customer taking Point-to-Point Transmission Service that uses the transmission systems of both the FPL division and the Gulf Power division will only pay the rate for the system that provides delivery to the Transmission Customer’s load or is the last used transmission system of the FPL division or Gulf Power division for a specific transaction.20 Specifically, FPL proposes the following addition to the OATT: When a Transmission Customer requires Transmission Service for a transaction over both the Transmission Provider’s and Gulf Power’s transmission systems, the applicable rate for Firm Point-to-Point Transmission Service or Non-Firm Point-to-Point Transmission Service shall be the rate applicable to: (1) the transmission system which provides delivery to the load, or (2) the transmission system where a customer’s transaction last exits the transmission 18 Id.