Florida Administrative Code › 25 - PUBLIC SERVICE COMMISSION › 25 - Departmental › Chapter 25-6 - ELECTRIC SERVICE BY ELECTRIC PUBLIC UTILITIES › Part II - RECORDS AND REPORTS › Section 25-6.0143 - Use of Accumulated Provision Accounts 228.1, 228.2, and 228.4

Current through Reg. 50, No. 138; July 16, 2024
(1) Account No. 228.1 Accumulated Provision
				  for Property Insurance.
(a) This account may
				  be established to provide for losses through accident, fire, flood, storms,
				  nuclear accidents and similar type hazards to the utility's own property or
				  property leased from others, which is not covered by insurance. This account
				  would also include provisions for the deductible amounts contained in property
				  loss insurance policies held by the utility as well as retrospective premium
				  assessments stemming from nuclear accidents under various insurance programs
				  covering nuclear generating plants. A schedule of risks covered must be
				  maintained, giving a description of the property involved, the character of
				  risks covered and the accrual rates used.
(b) Except as provided in paragraphs (1)(f),
				  (1)(g) and (1)(h) charges to this account must be made for all occurrences in
				  accordance with the schedule of risks to be covered which are not covered by
				  insurance. Recoveries, insurance proceeds or reimbursements for losses charged
				  to this account must be credited to the account.
(c) A separate subaccount must be established
				  for that portion of Account No. 228.1 which is designated to cover
				  storm-related damages to the utility's own property or property leased from
				  others that is not covered by insurance. The records supporting the entries to
				  this account must be so kept that the utility can furnish full information as
				  to each storm event included in this account.
(d) In determining the costs to be charged to
				  cover storm-related damages, the utility must use an Incremental Cost and
				  Capitalization Approach methodology (ICCA). Under the ICCA methodology, the
				  costs charged to cover storm-related damages must exclude those costs that
				  normally would be charged to non-cost recovery clause operating expenses in the
				  absence of a storm. Under the ICCA methodology for determining the allowable
				  costs to be charged to cover storm-related damages, the utility will be allowed
				  to charge to Account No. 228.1 costs that are incremental to costs normally
				  charged to non-cost recovery clause operating expenses in the absence of a
				  storm. All costs charged to Account 228.1 are subject to review for prudence
				  and reasonableness by the Commission. In addition, capital expenditures for the
				  removal, retirement and replacement of damaged facilities charged to cover
				  storm-related damages must exclude the normal cost for the removal, retirement
				  and replacement of those facilities in the absence of a storm. The utility must
				  notify the Commission Clerk in writing for each incident expected to exceed 1.5
				  percent of jurisdictional revenues for the most recent calendar year.
(e) The types of storm related costs allowed
				  to be charged to the reserve under the ICCA methodology include the following:
1. Additional contract labor hired for storm
				  restoration activities incurred in any month in which storm damage restoration
				  activities are conducted, that are greater than the actual monthly average of
				  contract labor costs charged to operation and maintenance expense for the same
				  month in the three previous calendar years. The utility may adjust historical
				  monthly contract labor costs charged to operation and maintenance expense from
				  calculated monthly average. Each adjustment shall be accompanied by a detailed
				  explanation of the nature and derivation of the adjustment;
2. Logistics costs of providing meals,
				  lodging, and linens for tents and other staging areas;
3. Transportation of crews and other
				  personnel for storm restoration;
4.
				  Vehicle costs for vehicles specifically rented for storm restoration
				  activities;
5. Waste management
				  costs specifically related to storm restoration activities;
6. Rental equipment specifically related to
				  storm restoration activities;
7.
				  Materials and supplies used to repair and restore service and facilities to
				  pre-storm condition, such as poles, transformers, meters, light fixtures, wire,
				  and other electrical equipment, excluding those costs that normally would be
				  charged to non-cost recovery clause operating expenses in the absence of a
				  storm;
8. Payroll and
				  payroll-related costs for utility personnel included in storm restoration
				  activities incurred in any month in which storm damage restoration activities
				  are conducted, that are greater than the actual monthly average of payroll and
				  payroll-related costs charged to operation and maintenance expense for the same
				  month in the previous three calendar years. The utility may adjust historical
				  monthly payroll and payroll-related costs charged to operation and maintenance
				  expense from calculated monthly average. Each adjustment shall be accompanied
				  by a detailed explanation of the nature and derivation of the
				  adjustment;
9. Fuel cost for
				  company and contractor vehicles used in storm restoration activities incurred
				  in any month in which storm damage restoration activities are conducted, that
				  are greater than the actual monthly average of fuel costs charged to operation
				  and maintenance expense for the same month in the previous three calendar
				  years. The utility may adjust historical monthly fuel costs charged to
				  operation and maintenance expense from calculated monthly average. Each
				  adjustment shall be accompanied by a detailed explanation of the nature and
				  derivation of the adjustment;
10.
				  Cost of public service announcements regarding key storm-related issues, such
				  as safety and service restoration estimates;
11. Vegetation management costs specifically
				  related to storm restoration activities incurred in any month in which storm
				  damage restoration activities are conducted, that are greater than the actual
				  monthly average of vegetation management costs charged to operation and
				  maintenance expense for the same month in the previous three calendar years.
				  The utility may adjust historical monthly vegetation management costs charged
				  to operation and maintenance expense from calculated monthly average. Each
				  adjustment shall be accompanied by a detailed explanation of the nature and
				  derivation of the adjustment; and
12. Other costs or expenses not specifically
				  identified in subparagraphs (1)(e)1. through (1)(e)11. that are directly and
				  solely attributable to a storm restoration event.
(f) The types of storm related costs
				  prohibited from being charged to the reserve under the ICCA methodology include
				  the following:
1. Bonuses or any other special
				  compensation for utility personnel not eligible for overtime pay;
2. Depreciation expenses, insurance costs and
				  lease expenses for utility-owned or utility-leased vehicles and
				  aircraft;
3. Utility employee
				  assistance costs;
4. Utility
				  employee training costs incurred prior to 72 hours before the storm
				  event;
5. Utility advertising,
				  media relations or public relations costs, except for public service
				  announcements regarding key storm-related issues as listed above in
				  subparagraph (1)(e)10.;
6. Utility
				  call center and customer service costs, except for non-budgeted overtime or
				  other non-budgeted incremental costs associated with the storm event;
7. Utility lost revenues from services not
				  provided; and
8. Replenishment of
				  the utility's materials and supplies inventories.
(g) Under the ICCA methodology for
				  determining the allowable costs to be charged to cover storm-related damages,
				  certain costs may be charged to Account 228.1 only after review and approval by
				  the Commission. Prior to the Commission's determination of the appropriateness
				  of including such costs in Account No. 228.1, the costs may be deferred in
				  Account No. 186, Miscellaneous Deferred Debits. The deferred costs must be
				  incurred prior to June 1 of the year following the storm event. 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. These costs include the following:
1.
				  Costs of normal non-storm related activities which must be performed by
				  employees or contractors not assigned to storm damage restoration activities
				  ("back-fill work") or normal non-storm related activities which must be
				  performed following the restoration of service after a storm by an employee or
				  contractor assigned to storm damage restoration activities in addition to the
				  employee's or contractor's regular activities ("catch-up work"); and
2. Uncollectible accounts
				  expenses.
(h) A utility
				  may, at its own option, charge storm-related costs as operating expenses rather
				  than charging them to Account No. 228.1. The utility must notify the Commission
				  Clerk in writing and provide a schedule of the amounts charged to operating
				  expenses for each incident exceeding 0.5 percent of jurisdictional revenues for
				  the most recent calendar year. The schedule must be filed annually by February
				  15 of each year for information pertaining to the previous calendar
				  year.
(i) If the charges to Account
				  No. 228.1 exceed the account balance, the excess must be carried as a debit
				  balance in Account No. 182.3 and no request for a deferral of the excess or for
				  the establishment of a regulatory asset is necessary.
(j) A utility may petition the Commission for
				  the recovery of a debit balance in Account No. 182.3 discussed in paragraph
				  (1)(i) plus an amount to replenish the storm reserve through a surcharge,
				  securitization or other cost recovery mechanism.
(k) A utility must not establish or change an
				  annual accrual amount or a target accumulated balance amount for Account No.
				  228.1 without prior Commission approval.
(l) Each utility must file a Storm Damage
				  Self-Insurance Reserve Study (Study) with the Commission Clerk by January 15,
				  2011 and at least once every 5 years thereafter from the submission date of the
				  previously filed study. A Study must be filed whenever the utility is seeking a
				  change to either the target accumulated balance or the annual accrual amount
				  for Account No. 228.1. At a minimum, the Study must include data for
				  determining a target balance for, and the annual accrual amount to, Account No.
				  228.1.
(m) Each utility must file a
				  report with the Commission Clerk providing information concerning its efforts
				  to obtain commercial insurance for its transmission and distribution facilities
				  and any other programs or proposals that were considered. The report must also
				  include a summary of the amounts recorded in Account 228.1. The report must be
				  filed annually by February 15 of each year for information pertaining to the
				  previous calendar year.