FPUC seeks to include certain capital projects in rate base

Florida Public Utilities Company (FPUC), in a July 3 petition filed with the Florida Public Service Commission, requested that the commission conduct a limited proceeding to include in the company’s rate base certain specific, limited capital projects that are designed to significantly improve the stability of, and outage response times on, the company’s system, as well as to adjust the company’s base rates accordingly.

The company said that it has made significant strides in recent years towards the modernization of its systems in its separate divisions – one of which is located on Amelia Island, while the other one serves a largely rural service territory in the north central Panhandle – and has implemented the first critical steps in a long-term, strategic plan to move the company’s electric utility into the 21st century.

The company said that now that the essential groundwork has been laid, it has moved into the second phase of its modernization plan, which involves the implementation of modernization and safety initiatives that are designed to enhance system performance and reliability, as well as to improve the company’s ability to timely respond to service issues.

In filing the request for a limited proceeding, the company said that it seeks to delay the need for a more costly full rate proceeding, but acknowledges that a full base rate proceeding may, nonetheless, be necessary within the next three to five years. Approval of the limited request will provide the company with relief for specific assets through a process that involves significantly reduced filing costs and expedited rate relief as compared to a full rate case, the company said.

Since the acquisition by Chesapeake Utilities Corporation in 2009, the company said that it has invested about $29m in capital to enhance safety, as well as to modernize and storm harden its system. Those investments have included the hardening of more than 182 miles of power lines, inspection of more than 23,692 poles, and replacement of those that are failing or no longer meeting the appropriate system standards, the company said.

The company noted that the specific capital investments covered by the July 3 petition fall under one of three main projects: grid modernization and safety; storm hardening; and the Florida Power and Light (FPL) project (FPL Interconnect).

In direct testimony, Drane Shelley, the company’s director of electric operations, said that initiatives under modernization and safety projects included installing a new Supervisory Control and Data Acquisition (SCADA) system at the J.L. Terry, Stepdown, and Gum Street substations, while capital investments under storm hardening projects include storm hardening the critical feeder that serves the Jackson County Hospital load in the company’s Northwest Division.

In direct testimony, Mark Cutshaw, director, business development and generation, with FPUC, discussed the FPL Interconnect, noting that the interconnection provides the ability to access additional wholesale power options and improves the overall transmission reliability for customers on Amelia Island.

Having the additional 138-kV transmission interconnection with FPL provides the ability to access additional wholesale energy providers through a solid and unconstrained transmission network, Cutshaw said. He also noted that the existing transmission system is connected only to the Jacksonville Electric Authority (JEA) electrical transmission grid, and that the FPL Interconnect will allow the direct connection to the FPL electrical transmission grid, while still preserving the direct connection to JEA’s electrical transmission grid.

The estimated cost for building the interconnection includes internal and external costs, and is estimated to be about $2.9m, Cutshaw said.

Providing background on the interconnect project, he noted that the company’s 138-kV transmission is directly connected to the JEA 138-kV transmission system. The FPUC 138-kV transmission line – which serves as the only off-island power supply to Amelia Island – is a dual circuit, single pole line, which includes several miles of line located in relatively inaccessible marshy areas, Cutshaw added.

Currently, FPUC, FPL, and JEA are working on separate projects that will allow completion of the transmission interconnection project before the end of 2017, Cutshaw said, noting that those projects will include modifications at the JEA Nassau substation, FPL 230-kV transmission line, FPL Yulee substation, FPL Oneil substation, as well as the FPUC 138-kV line and Stepdown substation.

Construction is underway on all phases of the project, and completion is scheduled for 4Q17, so that testing of the system can be completed and ready for the in-service date of Dec. 31, Cutshaw said.

Among other things, the company said that it is seeking recovery of the project through base rates.

About Corina Rivera-Linares 3058 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.