Justices Reject Challenge to FPL Solar Projects

The state Supreme Court on Thursday rejected a business group’s challenge to a decision that allowed Florida Power & Light to recoup money from customers for a series of solar-energy projects.
The Supreme Court unanimously ruled in favor of the Florida Public Service Commission, which in 2017 approved FPL’s plan to recover the costs of the projects through base electric rates. The Florida Industrial Power Users Group, which includes large commercial electricity customers, challenged the approval, contending, in part, that the projects would not be cost-effective.

But Chief Justice Charles Canady, in a 16-page opinion, pointed to a 2016 settlement agreement that set base rates for FPL. Part of that agreement allowed FPL to go back to the Public Service Commission to seek increases for solar projects.

Canady wrote that the Florida Industrial Power Users Group, which frequently is involved in utility regulation cases at the Public Service Commission, declined to take part in the 2016 base-rate settlement with FPL.

“FIPUG (the group’s acronym) was given an opportunity to review and challenge the provisions of the settlement agreement yet chose to take no position on the settlement agreement,” Canady wrote. “By failing to object to the settlement agreement’s provisions on the cost-effectiveness criteria and the base rate recovery mechanism for the (solar) projects at the time the settlement agreement was before the (Public Service) Commission and by failing to appeal the commission’s final order approving the settlement agreement, FIPUG has waived its right to challenge these provisions.”

The case involved commission decisions to approve eight FPL solar plants that came online in 2017 and 2018, according to the ruling. Those projects have been part of a broader push by FPL --- and other utilities in Florida --- to erect massive numbers of solar panels across the state.

In a filing last year at the Supreme Court, attorneys for the Florida Industrial Power Users Group said the commission’s 2017 decision on the eight plants allowed FPL to recover nearly $1 billion from ratepayers.

“FIPUG supports renewable energy. However, FIPUG made clear at the hearing below (at the Public Service Commission) that such support of renewable energy was conditioned on the cost-effectiveness and need for the renewable energy projects,” the group’s attorneys wrote. “In this case, FPL seeks commission approval to recover rates from ratepayers for solar energy projects that are neither needed nor cost effective.”

The group contended, in part, that the Public Service Commission did not use a proper standard when it evaluated the solar projects. It said the commission should have looked at whether the projects are “prudent,” a standard used in other types of utility regulatory cases.
But the Supreme Court said the commission was not required to use that standard for projects contemplated in the 2016 settlement agreement. Canady also wrote that the Supreme Court last year rejected arguments about the standards in a Sierra Club challenge to another part of the FPL settlement.

“We rejected Sierra Club’s argument that it was necessary for the commission to independently apply a prudence standard to one of the other projects contained within the settlement agreement and held that the commission was only required to apply its public interest standard to the settlement agreement as a whole,” Thursday’s ruling said. “If, as FIPUG suggests here, the commission were later required to conduct a prudence or need determination for the (solar) projects, it would have had to vacate the settlement order, which is contrary to the doctrine of administrative finality.”

Article reposted with permission from The News Service of Florida.