Duke Energy Florida Submits Proposal for 20-Year Minimum Service Term for Large Load Customers

en.Wedoany.com Reported - DEF, the first investor-owned utility in Florida to submit an SB 484 compliance proposal to the Florida Public Service Commission (Florida PSC), has announced its service terms for large load customers. The proposal establishes a 20-year minimum service term for large load customers and modifies the construction assistance fee rules, requiring large load applicants to prepay all estimated costs necessary to extend service.

During the hearing, Bradley Marshall, a senior attorney with Earthjustice representing the organization Florida Rising, voiced opposition. He noted that if a data center bubble forms and bursts, the general customer base would bear tens of billions, or even hundreds of billions, of dollars in unnecessary generation and transmission infrastructure costs. Marshall emphasized, "This is the first case of its kind, and the Commission must handle it correctly"; the state already faces an affordability crisis, and the new law requiring data centers to pay for all service costs is a reasonable step, while DEF's proposal falls far short of that requirement and should be rejected.

John Moye, an attorney representing the Florida Industrial Power Users Group, held the opposite view. He stated that the state should not rush to take action on data centers, lest it inadvertently harm the interests of large load customers. DEF's attorney, Diane Triplett, argued that no party had identified a mechanism demonstrating that approving the fee rule could raise any customer rates by the end of 2027. Her reasoning was that base rates are frozen during the settlement period, DEF is unlikely to incur significant large load costs during that period, and even if it did, those costs would be absorbed by shareholders within the settlement period.

Major Ryan Thompson, an attorney with the Florida PSC's Office of General Counsel, noted while questioning Matthew Chatlain, DEF's pricing and regulatory solutions manager, that DEF's 2024 settlement agreement includes a provision allowing DEF to modify or change base rates based on government mandates. Chatlain acknowledged awareness of the provision's existence but was unclear what specific circumstances would trigger this exception. The provision stipulates that DEF cannot recover any type or category of costs historically recovered in base rates, except under three special circumstances, one of which is when costs are "a direct and unavoidable result of a new government mandate or requirement."

Thompson also questioned Steve Wishart, assistant vice president at Concentric Energy Advisors, who testified as a DEF witness, regarding his direct testimony. In his testimony, Wishart stated that utilities are actively competing to attract large load customers, but Florida is "currently not a first-tier market for data centers." Thompson then asked whether the average embedded rate structure would make Florida more or less attractive to data centers. Wishart confirmed that the average embedded rate structure is attractive to data centers "because it is perceived as fair," but also testified that, in the long run, due to asset depreciation, data centers would "definitely" pay more under this structure.