Opinion ID: 1822103
Heading Depth: 1
Heading Rank: 4

Heading: Need Determination

Text: In Panda's second claim, it asserts that the PSC applied an incorrect standard in conducting its needs analysis for the Hines 2 power plant. Commission orders come to this Court `clothed with the statutory presumption that they have been made within the [PSC's] jurisdiction and powers, and that they are reasonable and just and such as ought to have been made.' Gulf Coast Elec. Coop., Inc. v. Johnson, 727 So.2d 259, 262 (Fla.1999). Section 403.519, Florida Statutes (2000), sets forth the criteria the PSC must consider in conducting its needs analysis. Section 403.519 provides, in pertinent part: In making its determination, the commission shall take into account the need for electric system reliability and integrity, the need for adequate electricity at a reasonable cost, and whether the proposed plant is the most cost-effective alternative available. The commission shall also expressly consider the conservation measures taken by or reasonably available to the applicant or its members which might mitigate the need for the proposed plant and other matters within its jurisdiction which it deems relevant. In the PSC's final order, the PSC explained that the PSC and FPC stipulated that the proposed Hines 2 Unit will be fully committed to helping FPC meet its obligation to provide reliable electric services to ratepayers at a reasonable rate. [5] Furthermore, the PSC's order stated: We find that Florida Power Corporation has a need for additional capacity to maintain the reliability and integrity of its system, as contemplated by Section 403.519, Florida Statutes. The record shows that FPC has demonstrated a need for additional capacity to meet its 20 percent minimum reserve margin criteria. [6] We conclude, however, that the decision to construct Hines 2 in the time frame sought is driven primarily by economics, including its equipment arrangements, and the use of the existing Hines Energy Complex as discussed below relating to cost-effectiveness. FPC is projected to grow into the capacity to be provided by Hines 2, particularly given the projected attrition in FPC's residential load management program. [7] . . . . We find that FPC has demonstrated that the cost of the electricity to be provided by Hines 2 is reasonable, based on cost-effectiveness. FPC has demonstrated ... that Hines 2 will improve projected reserve margins such that FPC will exceed its minimum reserve margin criteria.... If Hines 2 is not brought into service, winter reserve margins for the years 2004-2010, will fall below the 20 percent minimum criterion. Thus, the addition of Hines 2 will contribute to the provision of adequate electricity to FPC's system. The PSC's grant of a determination of need for a proposed power plant creates a presumption of public need. See § 403.519, Fla. Stat. (2001). Panda concedes that in certifying the need for all 530 megawatts of Hines 2 capacity in 2003, the PSC has acted consistently with the applicable statutory criteria, its own rules, and a multitude of previous need determination decisions. [8] Panda contends, however, that this Court clarified this need standard set forth in section 403.519 in Tampa Electric by requiring the utility to demonstrate an actual present in-service need for all the electrical power to be generated at the proposed plant. [9] We reject Panda's argument that our decision in Tampa Electric altered the requirements for the PSC in granting a certificate of need to a Florida regulated utility. Instead, Tampa Electric addressed whether the PSC had the statutory authority under the Siting Act to grant a determination of need to an entity other than a Florida retail utility regulated by the PSC whose petition was based upon a specified demonstrated need of Florida retail utilities for serving Florida power customers. In Tampa Electric, a Florida municipal electric company filed a joint determination of need with an out-of-state wholesale generator who was not subject to regulation by the PSC as a public utility. 767 So.2d at 430. The PSC granted the companies' determination of need, and this Court reversed. See id. at 436. Based upon our interpretation of the statutes governing the PSC, we concluded that the Legislature had not intended to extend jurisdiction to the PSC to grant a determination of need to an applicant who was a non-regulated out-of-state wholesale power company where only thirty megawatts of the proposed 514-megawatt capacity had been committed by contract to be sold to a Florida utility. See id. at 436. Therefore, contrary to Panda's assertion, the Court did not address, let alone change, the need determination standards pertinent to Florida retail utilities such as FPC. Consequently, we conclude that the PSC properly applied the criteria contained in section 403.519 in conducting its needs analysis in this case. [10] The PSC appropriately considered the economic benefit to the rate-payers, the integrity and reliability of the system in FPC's willingness to maintain a 20% reserve margin and to replace demand-site management with more firm assets, and that FPC was expected to grow into the capacity provided by Hines 2. All of the power generated will be available for the present and future needs of FPC's customers. Accordingly, competent substantial evidence supports the PSC's determination of need.