Title: Citizens of the State of Florida v. Art Graham, etc.
Citation: N/A
Docket Number: SC15-95, SC15-113, SC15-115, SC15-274
State: Florida
Issuer: Florida Supreme Court
Date: May 19, 2016

Supreme Court of Florida 
____________ 
 
Nos. SC15-95, SC15-113, SC15-115 
____________ 
 
CITIZENS OF THE STATE OF FLORIDA,  
Appellant, 
 
vs. 
 
ART GRAHAM, ETC., et al.,  
Appellees. 
 
____________ 
 
No. SC15-274 
____________ 
 
FLORIDA INDUSTRIAL POWER USERS GROUP,  
Appellant, 
 
vs. 
 
ART GRAHAM, ETC., et al.,  
Appellees. 
 
[May 19, 2016] 
 
POLSTON, J. 
This case is before the Court on appeal from three orders of the Florida 
Public Service Commission (PSC).1  The PSC approved the recovery of Florida 
                                          
 
 
1.  We have jurisdiction.  See art. V, § 3(b)(2), Fla. Const. 
 
 
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Power and Light’s (FPL) costs incurred through its joint venture with an oil and 
natural gas company to engage in the acquisition, exploration, drilling, and 
development of natural gas wells in Oklahoma.  The recovery as fuel costs paid by 
FPL’s customers in its utility rates were considered by the PSC to be a long-term 
physical hedge.  Treating these activities as a hedge requires FPL’s end-user 
consumers to guarantee the capital investment and operations of a speculative oil 
and gas venture without the Florida Legislature’s authority.  Accordingly, we 
reverse.   
I.  BACKGROUND 
 
Each year, the PSC creates a docket (fuel docket or fuel clause) to review 
and allow cost-recovery of fuel expenditures as well as to review hedging activities 
intended to minimize fuel price volatility by Florida’s investor-owned utilities.  In 
2014, FPL filed its petition seeking cost recovery for its fuel costs, and, in 
determining the proper amount for which FPL could receive cost recovery, the 
PSC approved FPL’s hedging activities.   
In the 2014 fuel clause proceeding, FPL also filed a petition requesting 
approval and recovery of a specific gas reserves investment, the Woodford Project.  
This petition requested a determination that FPL would be eligible to recover, 
through the fuel clause, its “exploration expense, depletion expense, operating 
expenses, G&A, taxes, transportation costs and a return on the unrecovered 
 
 
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investment, including working capital” for investments in the exploration, drilling, 
and production of natural gas in the Woodford Shale Gas Region in Oklahoma.  
The Woodford Project is a joint venture agreement between FPL and PetroQuest, a 
publically traded independent oil and natural gas company.  Pursuant to the 
agreement, FPL would invest directly in PetroQuest’s shale gas reserves in the 
Woodford Shale region and in return receive the rights to a share of the physical 
gas produced.   
 
FPL alleged that it was looking for opportunities to acquire natural gas at 
production costs (as an investor), rather than at market prices (as a purchaser), in 
order to help insulate customers from the volatility of the gas market.  Specifically, 
FPL asserted that its ownership interest in the Woodford Project would operate as a 
long-term physical hedge against the market volatility of natural gas prices used to 
provide electric service to FPL’s customers.  FPL also asserted that the Woodford 
Project would benefit its customers by providing natural gas at a lower cost than 
market prices. 
 
Citizens of the State of Florida, through the Office of Public Counsel, 
(Citizens), Florida Industrial Power Users Group (FIPUG), and Florida Retail 
Federation (FRF) participated as intervenors in the proceedings.  Citizens and the 
Florida Industrial Power Users Group (FIPUG) moved to dismiss the Woodford 
Petition, alleging that the PSC lacked the authority to consider and approve the 
 
 
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project.  The PSC denied the motion, concluding that it had jurisdiction under its 
statutory authority to set rates for public utilities. 
 
Thereafter, the PSC heard FPL’s testimony that investment in the Woodford 
Project would provide fuel savings and price stability, effectively acting as a long-
term hedge.  The PSC also heard testimony from Appellants that the costs 
associated with the Woodford Project do not satisfy the criteria for fuel clause 
recovery and that these projected costs went beyond PSC policy for dealing with 
fossil fuel-related costs normally recovered through base rates.  Following the two-
day evidentiary proceeding, the PSC approved the Woodford Project, concluding 
as follows: 
 
We find the Woodford Project, in the manner described in the 
FPL petition and evidence on the record, is expected to produce 
customer benefits and is in the public interest.  We find its costs are 
recoverable through the Fuel Clause.  In order to provide additional 
protections for FPL customers, we find it necessary to add two 
conditions for compliance with this Order.  First, FPL shall add the 
appropriate subaccounts, under the FERC system of accounting, 
which will correspond on a one-on-one basis with the accounts used 
by the Gas Reserve Company (GRCO).  Second, FPL shall utilize an 
independent auditor in performing the audits provided in the 
agreement and shall work with [PSC] staff to develop the scope of the 
audits. 
 
 
 
 
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II.  ANALYSIS 
 
Appellants argue that the PSC lacks the authority to allow FPL to recover 
the capital investment and operations costs of its partnership in the Woodford gas 
reserves through the rates it charges consumers.  We agree.2 
This Court has repeatedly stated that, although “orders of the 
Commission come before this Court clothed with the statutory presumption that 
they have been made within the Commission’s jurisdiction and powers, and that 
they are reasonable and just and such as ought to have been made,” “[s]uch 
deference . . . cannot be accorded when the commission exceeds its authority.  At 
the threshold, we must establish the grant of legislative authority to act since the 
[C]ommission derives its power solely from the legislature.”  United Tel. Co. of 
Fla. v. Pub. Serv. Comm’n, 496 So. 2d 116, 118 (Fla. 1986); see also Sprint-
Florida, Inc. v. Jaber, 885 So. 2d 286, 290 (Fla. 2004).  Whether the PSC has the 
authority to act is a question of law, which is subject to de novo review.  See 
D’Angelo v. Fitzmaurice, 863 So. 2d 311, 314 (Fla. 2003). 
 
Chapter 366, Florida Statutes (2014), provides the PSC with jurisdiction to 
regulate and supervise each public utility with respect to its rates and service and to 
prescribe a rate structure for all electric utilities.  § 366.04(1)-(2), Fla. Stat. (2014); 
                                          
 
 
2.  We reject, without further comment, all the other arguments raised in the 
briefs by the parties. 
 
 
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Pub. Serv. Comm’n v. Bryson, 569 So. 2d 1253, 1254 (Fla. 1990) (noting that “[i]n 
section 366.04(1) . . . the [L]egislature granted the PSC exclusive jurisdiction over 
matters respecting the rates and service of public utilities”).  The regulation of 
public utilities is in the public interest and “an exercise of the police power of the 
state for the protection of the public welfare and all the provisions [of chapter 366] 
shall be liberally construed for the accomplishment of that purpose.”  § 366.01, 
Fla. Stat. (2014).  The PSC may set rates that are “fair, just, and reasonable.”  See § 
366.06(1), Fla. Stat. (2014) (“[T]he commission shall have the authority to 
determine and fix fair, just, and reasonable rates that may be requested, demanded, 
charged, or collected by any public utility for its service.”); see also § 366.03, Fla. 
Stat. (2014) (“All rates and charges made, demanded, or received by any public 
utility . . . shall be fair and reasonable.”); § 366.05(1), Fla. Stat. (2014) (“In the 
exercise of such jurisdiction, the commission shall have power to prescribe fair and 
reasonable rates and charges.”).  In fixing the fair, just, and reasonable rates 
charged for service by the “public utilities under its jurisdiction, the commission is 
authorized to give consideration, among other things, to . . . the cost of providing 
such service and the value of such service to the public[.]”  § 366.041(1), Fla. Stat. 
(2014).   
Section 366.02(1), Florida Statutes (2014), defines a “public utility” as 
“every person, corporation, partnership, association, or other legal entity and their 
 
 
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lessees, trustees, or receivers supplying electricity or gas (natural, manufactured, or 
similar gaseous substance) to or for the public within this state[.]”  An “electric 
utility” is “any municipal electric utility, investor-owned electric utility, or rural 
electric cooperative which owns, maintains, or operates an electric generation, 
transmission, or distribution system within the state.”  § 366.02(2), Fla. Stat. 
(2014).   
It is undisputed that FPL is an electric utility.  It is also undisputed that the 
PSC’s ratemaking authority encompasses the authority to examine fuel cost 
expenditures and approve cost recovery to compensate for utilities’ fuel expenses 
through the fuel clause.  See Gulf Power Co. v. Fla. Publ. Serv. Comm’n, 487 So. 
2d 1036, 1037 (Fla. 1986).   
However, the PSC does not have the statutory authority to approve cost 
recovery for FPL’s investment in the Woodford Project.  As explained above, 
section 366.06(1) provides that the PSC has the authority to determine and fix fair, 
just, and reasonable rates for public utilities, and section 366.02(2) defines an 
electric utility as owning, maintaining, or operating an electric generation, 
transmission, or distribution system.  Therefore, under the plain meaning of these 
two statutes, cost recovery is permissible only for costs arising from the 
“generation, transmission, or distribution” of electricity.  The Woodford Project’s 
exploration, drilling, and production of natural gas fuel in Oklahoma do not 
 
 
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constitute generating, transmitting, or distributing electricity in Florida as the 
meaning of those terms are plainly understood.  In other words, the exploration, 
drilling, and production of fuel falls outside the purview of an electric utility as 
defined by the Legislature.   
Additionally, the PSC does not have the statutory authority necessary to 
approve cost recovery for the Woodford Project through the characterization of the 
project as “a long-term physical hedge.”  While PSC’s ratemaking authority 
includes examining and approving cost recovery for public utilities’ hedging of 
fuel costs, see In re: Fuel and Purchased Power Cost Recovery Clause with 
Generating Performance Incentive Factor, Order No. PSC-08-0667-PAA-EI, 2008 
WL 6347188 (Fla. P. S. C. Oct. 8, 2008), the Woodford Project does not involve a 
certain quantity of fuel for a certain price.   
The fuel cost adjustment clause is a cash flow mechanism to allow utilities 
to recover costs for unanticipated changes in fuel costs between ratemaking 
proceedings.  See Gulf Power Co., 487 So. 2d at 1037 (“Fuel adjustment charges 
are authorized to compensate for utilities’ fluctuating fuel expenses.  The fuel 
adjustment proceeding is a continuous proceeding and operates to a utility’s benefit 
by eliminating regulatory lag.”).  The mechanism also permits utilities to recover 
actual costs of financial derivatives and physical hedges that help prevent price 
shocks from volatile fuel costs.  However, regulated utilities through the fuel 
 
 
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clause do not earn a return on money spent to purchase fuel.  Likewise, while the 
costs of hedging contracts are pass-through costs, utilities through the fuel clause 
do not earn a return on the cost of hedging positions purchased.         
Specifically, hedging involves locking in a future price to avoid the adverse 
effects of price fluctuations, and utilities can hedge by entering into financial 
arrangements to secure natural gas at a future point in time at a fixed price.  See 
Stephen Maloney, When the Price is Right, 145 No. 10 Pub. Util. Fort. 24, 25-26 
(Oct. 2007).  “While comprising mostly options and swaps, financial hedging 
instruments can include futures, basis swaps, and fixed-price swaps involving 
natural gas.”  Id. at 25.  Moreover, “[i]n addition to financial instruments, weather 
derivatives and natural-gas storage provide important vehicles for mitigating price 
volatility through physical hedges against shortages and disruptions to pipeline 
operations.”  Id. at 26.     
Permitting advance recovery of FPL’s investment in the Woodford Project’s 
exploration and production of natural gas will not pay for the costs of actual fuel.  
It will provide recovery, instead, for investment, operation, and maintenance and 
operation of assets that will provide access to an unknown quantity of fuel in the 
future.  It is impossible to know what the costs of the natural gas will be until it is 
actually produced.  There is more uncertainty from this investment rather than less.  
Therefore, it cannot be characterized as a physical hedge.   
 
 
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Additionally, under FPL’s proposal for the Woodford Project, ratepayers 
(not FPL) bear the risk of natural gas price volatility and all of the production risks.  
If the production cost of extracting natural gas from the Woodford wells, including 
profit paid to FPL on its capital investment, is less than the natural gas market 
price, the ratepayers will benefit.  However, if the production costs of extracting 
natural gas from the Woodford wells is more than the natural gas market, the 
ratepayers do not benefit but will instead suffer a loss.  The monies spent on the 
Woodford Project are not a mere pass-through, like other fuel expenses, because 
FPL will earn a return on its capital expenditures.  Accordingly, the Woodford 
Project is a guaranteed capital investment for FPL; it is not a hedge to stabilize fuel 
costs.          
This may be a good idea, but whether advance cost recovery of speculative 
capital investments in gas exploration and production by an electric utility is in the 
public interest is a policy determination that must be made by the Legislature.  For 
example, in contrast to natural gas exploration and production, the Legislature has 
authorized the PSC to approve cost recovery for capital investments in nuclear 
power plants and energy efficient and renewable energy power sources.  See  
§§ 366.8255; 366.92; 366.93, Fla. Stat. (2014).  Without statutory authorization 
from the Legislature, the recovery of FPL’s costs and capital investment in the 
Woodford Project through the fuel clause is overreach.       
 
 
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III.  CONCLUSION 
 
Accordingly, because the PSC exceeded its statutory authority when 
approving recovery of FPL’s costs and investment in the Woodford Project, we 
reverse. 
 
It is so ordered. 
LABARGA, C.J., and PARIENTE, LEWIS, QUINCE, and PERRY, JJ., concur. 
CANADY, J., dissents with an opinion. 
 
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND 
IF FILED, DETERMINED.   
 
CANADY, J., dissenting. 
 
Because I conclude that the PSC acted within its statutory authority in 
approving cost recovery through the fuel clause for FPL’s Woodford Project and 
that competent, substantial evidence supports the PSC’s conclusion that the 
Woodford Project acts as a long-term physical hedge, I dissent. 
I disagree with the majority’s conclusion that under sections 366.06(1) and 
366.02(2), Florida Statutes (2014), “cost recovery is permissible only for costs 
arising from the ‘generation, transmission, or distribution’ of electricity.”  Majority 
op. at 7.  Section 366.02(2) defines an “[e]lectric utility” as “any municipal electric 
utility, investor-owned electric utility, or rural electric cooperative which owns, 
maintains, or operates an electric generation, transmission, or distribution system 
within the state[,]” and section 366.06(1) provides that the PSC “shall have the 
 
 
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authority to determine and fix fair, just, and reasonable rates that may be requested, 
demanded, charged, or collected by any public utility for its service.”  But even 
when read together, the plain language of these statutes contains no legislatively 
imposed limitation on the types of costs that an electric utility can recover through 
the PSC’s ratemaking proceedings.   
“The [only] statutory standard imposed upon the Commission is to fix ‘fair, 
just and reasonable rates.’ ”  Citizens of State v. Pub. Serv. Comm’n, 425 So. 2d 
534, 540 (Fla. 1982) (citing §§ 366.06(2), 366.05(1), Fla. Stat. (1979)).  Indeed, the 
Legislature mandated that the provisions of chapter 366 “be liberally construed” 
“for the protection of the public welfare[.]”  § 366.01, Fla. Stat. (2014).  And 
“[t]his Court has consistently recognized the broad legislative grant of authority 
which these statutes confer and the considerable license the Commission enjoys as 
a result of this delegation.”  Citizens, 425 So. 2d at 540.  Neither section 366.02(2), 
section 366.06(1), nor any other provision in chapter 366 limit the PSC’s authority 
to approve cost recovery to costs directly expended on generating, transmitting, or 
distributing electricity.  To insert such a limitation has the effect of rewriting the 
statutes, which this Court may not do.  See Hawkins v. Ford Motor Co., 748 So. 2d 
993, 1000 (Fla. 1999) (“[T]his Court may not rewrite statutes contrary to their 
plain language.”).   
 
 
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Under the broad discretion afforded to it in chapter 366, the PSC regularly 
allows utilities to recover costs through the fuel clause for non-fuel items as long 
as they are projected to result in fuel savings.  See e.g., In re: Fuel & Purchased 
Power Cost Recovery Clause and Generating Performance Incentive Factor, Order 
No. PSC-01-2516-FOF-EI, 2001 WL 1677492 (Fla. P.S.C. Dec. 26, 2001) 
(approving cost recovery through the fuel clause for incremental power plant 
security costs); Re Fuel & Purchase Power Cost Recovery Clause, Order No. PSC-
97-0359-FOF-EI, 1997 WL 199376 (Fla. P.S.C. March 31, 1997) (approving cost 
recovery through the fuel clause for FPL’s investment in rail cars).  The Woodford 
Project is projected to result in fuel savings of $51.9 million, and the magnitude of 
potential positive savings exceeds the magnitude of potential losses.  Although it is 
not possible to know exactly what the actual cost of the gas produced by the 
Woodford Project will be until it is produced or what the market price of natural 
gas will be over the course of the next thirty years, the PSC has historically relied 
on projections to determine whether a capital investment will result in fuel savings 
to customers and should be recovered through the fuel clause.  See, e.g., Re Fuel & 
Purchased Power Cost Recovery Clause, Order No. PSC-95-1089-FOF-EI, 1995 
WL 553104 (Fla. P.S.C. Sept. 5, 1995) (relying on projected savings of $24 million 
over fifteen years).   
 
 
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Even assuming that chapter 366 implicitly limits the PSC’s authority to 
approve cost recovery to costs of generation, transmission, or distribution of 
electricity, I would still conclude that the PSC acted within its authority in 
approving cost recovery for the Woodford Project.  The purpose of the Woodford 
Project is to acquire natural gas, which is used to produce approximately 65% of 
the electricity FPL generates.  Acquiring natural gas is therefore necessary for and 
integrally related to FPL’s primary function of generating electricity.   
Until now, FPL has purchased natural gas on the wholesale market.  There is 
no dispute that acquiring fuel on the wholesale market is sufficiently related to the 
generation of electricity for the PSC to authorize cost recovery through the fuel 
clause.  The Woodford Project would provide FPL the ability to acquire natural gas 
fuel directly from the ground at the production cost, rather than paying market 
price.  There is no principled distinction between purchasing natural gas on the 
wholesale market and purchasing it in the ground and extracting it.  Nor is there 
any requirement that fuel used in the generation of electricity be purchased on the 
market in order for an electric utility to be able to recover the cost of the fuel 
through the fuel clause.  Thus, the Woodford Project is sufficiently related to “the 
 
 
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generation, distribution, and transmission of electricity” to come within the PSC’s 
ratemaking authority.3 
I also disagree with the majority’s conclusion that the Woodford Project 
does not qualify as a long-term physical hedge because it does not involve “a 
certain quantity of fuel for a certain price.”  Majority op. at 8.  The primary 
purpose of hedging programs is to reduce the variability or volatility in fuel costs 
paid by customers over time.  E.g., In Re: Fuel & Purchased Power Cost Recovery 
Clause with Generating Performance Incentive Factor, Order No. PSC-06-1057-
FOF-EI, 2006 WL 3837488 (Fla. P.S.C. Dec. 22, 2006).  Purchasing a certain 
quantity of fuel for a certain price is not the only way to reduce the variability or 
volatility in fuel costs.  See Stephen Maloney, When the Price is Right, 145 No. 10 
Pub. Util. Fort. 24, 25 (Oct. 2007) (“A hedging strategy employs various physical 
and financial strategies with the goal of offsetting the risk of unfavorable price 
swings when purchasing energy.”).  The PSC’s conclusion that the Woodford 
Project qualifies as a long-term physical hedge is supported by testimony at the 
evidentiary hearing that the costs of the Woodford Project are essentially fixed, 
highly predictable, well understood, more stable than prices in the natural gas 
                                          
 
 
3.  Although the majority repeatedly mentions that the Woodford Project 
involves exploration for natural gas, there was evidence presented at the 
evidentiary hearing that exploration is not a component of the Woodford Project. 
 
 
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market, and likely to decrease over the life of the project due to continuing 
technological advances.   
In concluding that the Woodford Project acts as a long-term physical hedge, 
the PSC stated: 
The objective of any hedging program is to minimize price volatility.  
We have found that minimizing price volatility produces customer 
benefits.  Financial hedging programs have different terms, from 
several weeks to up to two years.  At the end of the year, the actual 
costs associated with the programs are passed on to customers.  
Because natural gas prices are uncertain and volatile, there will be 
periods when the companies have hedging gains and other periods 
where the companies will have hedging losses.  We note that utilities 
are not expected to predict or speculate on whether markets will 
ultimately rise or fall and actually settle higher or lower than the price 
levels that existed at the time hedges were put into place.  We have 
found that hedging maintains flexibility for a utility to create the type 
of risk management program for fuel procurement that it finds most 
appropriate while allowing us to retain the discretion to evaluate, and 
the parties the opportunity to address, the prudence of such programs 
at the appropriate time.   
Any type of hedging is still going to be subject to market 
conditions.  Historically, production costs have been less volatile than 
market prices.  We find the Woodford Project will act as a hedge that 
is designed to decouple costs from market prices.  [n.7]  The 
Woodford Project costs are based solely on the operations and 
maintenance costs, and on the investment that is required, and is 
essentially fixed.  FPL purchases more natural gas than any other 
electric utility in the country.  The reality is that in this state, and 
nationally, we continue to grow the need for natural gas to provide 
electricity as we move away from coal.  Although the Woodford 
Project is relatively small and will have a small effect on FPL’s 
overall cost of natural gas and on price hedging, it will act as a long-
term physical hedge (30 years or longer in duration) compared to 
financial hedges, which typically lock in prices for 12-24 months.   
 
 
 
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[N.7]  We note that customers currently bear certain 
drilling, production, and shale gas risks (earthquakes, 
environmental issues, etc.) as these factors are embedded 
in the market price of gas. 
In re: Fuel & Purchased Power Cost Recovery Clause with Generating 
Performance Incentive Factor, Order No. PSC-15-0038-FOF-EI, 2015 WL 183883 
(Fla. P.S.C. Jan. 12, 2015) (some footnotes omitted). 
The Woodford Project is a capital investment that is designed to decouple 
the cost of the gas obtained from the market price.  The majority points out that if 
the production cost for the Woodford Project is less than the market price of 
natural gas, ratepayers will benefit, but if the production cost is higher than the 
market price, ratepayers will suffer a loss.  But as the PSC recognized, such a risk 
is inherent with any type of hedging.   
In characterizing the Woodford Project as “a speculative oil and gas 
venture[,]” majority op. at 2, and concluding that it will result in “more 
uncertainty . . . rather than less[,]” majority op. at 9, the majority is merely 
substituting its judgment for the PSC’s judgment and expressing disagreement with 
the PSC’s factual findings.  But it is the PSC’s “prerogative to evaluate the 
testimony of competing experts and accord whatever weight to the conflicting 
opinions it deems necessary.”  Gulf Power Co. v. Fla. Pub. Serv. Comm’n, 453 So. 
2d 799, 805 (Fla. 1984) (citing United Tel. Co. v. Mayo, 345 So. 2d 648, 654 (Fla. 
1977).  We have stated that we “will not overturn an order of the PSC because we 
 
 
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would have arrived at a different result had we made the initial decision and we 
will not re-weigh the evidence.  Our task is to determine whether competent 
substantial evidence supports a PSC order.”  S. All. for Clean Energy v. Graham, 
113 So. 3d 742, 753 (Fla. 2013) (quoting Gulf Power Co., 453 So. 2d at 803).  The 
testimony and exhibits presented at the evidentiary hearing provide competent, 
substantial evidence to support the PSC’s conclusion that the Woodford Project 
acts as a long-term physical hedge. 
Finally, I disagree with the majority’s conclusion that costs for the 
Woodford Project cannot be recovered through the fuel clause because “regulated 
utilities through the fuel clause do not earn a return on money spent to purchase 
fuel” or “on the cost of hedging positions purchased.”  Majority op. at 8-9.  The 
majority is correct that utilities do not earn a profit on fuel by marking up fuel 
purchased at market price, but the Woodford Project is not a purchase of fuel at 
market price, it is a capital investment.  It is well established that “a regulated 
public utility is entitled to ‘an opportunity to earn a fair or reasonable rate of return 
on its invested capital.’ ”  Gulf Power Co. v. Wilson, 597 So. 2d 270, 273 (Fla. 
1992) (quoting United Tel. Co. v. Mann, 403 So. 2d 962, 966 (Fla. 1981)); see also 
Gulf Power Co. v. Bevis, 289 So. 2d 401, 403 n.1 (Fla. 1974) (“A regulated public 
utility is, of course, entitled to an opportunity to earn a fair rate of return on its 
invested capital.” (citing City of Miami v. Fla. Pub. Serv. Comm’n, 208 So. 2d 249 
 
 
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(Fla. 1968))).  And the PSC has historically allowed a utility to earn a return on 
investment for fuel-related capital projects included in the fuel clause.  See In re: 
Fuel & Purchased Power Cost Recovery Clause with Generating Performance 
Incentive Factor, Order No. PSC-12-0425-PAA-EU, 2012 WL 3775984, at *1 (Fla. 
P.S.C. Aug. 16, 2012) (“This Commission, when appropriate, allows recovery of a 
return on capital investments through the Fuel and Purchased Power Cost 
Recovery Clause[.]”); In re: Petition by Florida Power & Light Co. to Recover 
Scherer Unit 4 Turbine Upgrade Costs Through Envtl. Cost Recovery Clause or 
Fuel Cost Recovery Clause, Order No. PSC-11-0080-PAA-EI, 2011 WL 339538 
(Fla. P.S.C. Jan. 31, 2011) (citing capital projects recoverable through the fuel 
clause that included a return on investment).  Thus, the fact that FPL will earn a 
reasonable rate of return on its capital investment in the Woodford Project does not 
preclude cost recovery through the fuel clause. 
For these reasons, I would conclude that the PSC acted within its authority 
in approving cost recovery through the fuel clause for the Woodford Project, and I 
would affirm the orders on review. 
An Appeal from the Florida Public Service Commission 
 
James Ray Kelly, Public Counsel, Charles J. Rehwinkel, Deputy Public Counsel, 
John Joseph Truitt, Associate Public Counsel, and Erik Louis Sayler, Associate 
Public Counsel, Office of Public Counsel, Tallahassee, Florida, 
 
 
for Appellant Citizens of the State of Florida 
 
 
 
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Robert Scheffel Wright and John Thomas LaVia, III of Gardner, Bist, Bowden, 
Bush, Dee, LaVia & Wright, P.A., Tallahassee, Florida, 
 
for Appellant Florida Retail Federation 
 
Jon Cameron Moyle, Jr. and Karen Ann Putnal of the Moyle Law Firm, P.A., 
Tallahassee, Florida,  
 
for Appellant Florida Industrial Power Users Group 
 
Charles J. Beck, General Counsel, Samantha M. Cibula, Associate General 
Counsel, and Adria Elise Harper, Associate General Counsel, Tallahassee, Florida, 
 
for Appellee Florida Public Service Commission 
 
Raoul G. Cantero, III, Thomas Neal McAliley, and Jesse Luke Green of White & 
Case LLP, Miami, Florida; and John T. Butler and Maria Jose Moncada, Florida 
Power & Light Company, Juno Beach, Florida, 
 
 
for Appellee Florida Power & Light Company 
 
Jack L. McRay, AARP Florida, Tallahassee, Florida, and Julie Nepveu, AARP 
Foundation Litigation, Washington, District of Columbia, 
 
 
for Amicus Curiae AARP