HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 539 Renewable Energy
SPONSOR(S): Commerce Committee, Environment, Agriculture & Flooding Subcommittee, Byrd
TIED BILLS: IDEN./SIM. BILLS: CS/SB 896
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Tourism, Infrastructure & Energy Subcommittee 17 Y, 0 N Willson Keating
2) Environment, Agriculture & Flooding 17 Y, 1 N, As CS Gawin Moore
Subcommittee
3) Commerce Committee 22 Y, 0 N, As CS Willson Hamon
SUMMARY ANALYSIS
Section 366.91, F.S., defines “renewable energy” as electrical energy produced from a method that uses one
or more of the following fuels or energy sources: hydrogen produced from sources other than fossil fuels;
biomass; solar energy; geothermal energy; wind energy; ocean energy; and hydroelectric power.
Certain renewable energy projects are eligible for a variety of financing and permitting benefits. Additionally,
public utilities and municipal utilities are required to continuously make available standard offer contracts for
the purchase of renewable energy, subject to certain price limitations, with the costs of any purchases
recoverable from the utility’s ratepayers.
The bill defines "renewable natural gas" as anaerobically-generated biogas, landfill gas, or waste-water
treatment gas refined to a methane content of 90 percent or greater which is capable of being used as
transportation fuel, for electric power generation, or is of a quality capable of being injected into a natural gas
pipeline. The bill defines “biogas” as a mixture of carbon dioxide and hydrocarbons, primarily methane gas,
which is released from the biological decomposition of organic materials.
The bill authorizes the Florida Public Service Commission (PSC) to approve cost recovery by a gas public
utility for contracts for the purchase of renewable natural gas in which the pricing provisions exceed the current
market price of natural gas, but are otherwise deemed reasonable and prudent by the PSC.
The bill does not appear to have a fiscal impact on state or local governments.
The bill provides an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
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DATE: 4/6/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Renewable Energy
Florida Renewable Energy Policy
Section 366.92, F.S. declares that it is the intent of the Legislature to:
promote the development of renewable energy;
protect the economic viability of Florida’s existing renewable energy facilities;
diversify the types of fuel used to generate electricity in Florida;
lessen Florida’s dependence on natural gas and fuel oil for the production of electricity;
minimize the volatility of fuel costs;
encourage investment within the state;
improve environmental conditions; and
minimize the costs of power supply to electric utilities and their customers.
Section 366.91, F.S., defines “renewable energy” as electrical energy produced from a method that
uses one or more of the following fuels or energy sources:
hydrogen produced from sources other than fossil fuels;
biomass;1
solar energy;
geothermal energy;
wind energy;
ocean energy; and
hydroelectric power.
Renewable energy also includes the alternative energy resource, waste heat, from sulfuric acid
manufacturing operations and electrical energy produced using pipeline-quality synthetic gas produced
from waste petroleum coke with carbon capture and sequestration.
Contracts for the Purchase of Renewable Energy
Since 2005, public utilities2 have been required to continuously make available standard offer contracts
for the purchase of renewable energy, with the costs of any purchases recoverable from the utility’s
ratepayers.3 The law limits the price paid by a utility for renewable energy to the utility’s full avoided
costs, which are defined in s. 366.051, F.S., as the costs the utility would have incurred to produce the
energy or capacity itself or purchase it from another source if not for the purchase of the renewable
energy.4 Capacity payments are not required if, due to the operational characteristics of the renewable
energy generator or the anticipated peak and off-peak availability and capacity factor of the utility's
1 Section 366.91(2)(a), F.S., defines “biomass” as “a power source that is comprised of, but not limited to, combustible
residues or gases from forest products manufacturing, waste, byproducts, or products from agricultural and orchard crops,
waste or coproducts from livestock and poultry operations, waste or byproducts from food processing, urban wood waste,
municipal solid waste, municipal liquid waste treatment operations, and landfill gas.”
2 Section 366.02(1), F.S., defines a “public utility” as “every person, corporation, partnership, association, or other legal
entity and their lessees, trustees, or receivers supplying electricity or gas (natural, manufactured, or similar gaseous
substance) to or for the public within this state.” The term “public utility” does not include rural electric cooperatives,
municipal electric utilities, special natural gas districts, natural gas transmission pipeline companies, natural gas
marketers, or propane suppliers.
3 S. 366.91(3), F.S. Each contract must provide a contract term of at least ten years.
4 This pricing scheme reflects limits established by federal law, which have been in place since adoption of the Public
Utilities Regulatory Policy Act in 1978.
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avoided unit, the renewable energy producer is unlikely to provide any capacity value to the utility or the
electric grid during the contract term.5 Prudent and reasonable costs associated with the contract must
be recovered from the ratepayers of the contracting utility, without differentiation among customer
classes, through the appropriate cost-recovery mechanism administered by the Florida Public Service
Commission (PSC).6
Similarly, each municipal electric utility7 and rural electric cooperative8 whose annual sales, as of July
1, 1993, to retail customers were greater than 2,000 gigawatt hours must continuously offer a purchase
contract with a minimum term of 10 years to producers of renewable energy. These contracts must
include payment provisions for energy and capacity which are based upon the utility’s or cooperative’s
full avoided costs, as determined by the governing body of the municipal utility or cooperative.9
A contracting producer of renewable energy must pay the actual costs of its interconnection with the
transmission grid or distribution system.10
Effect of the Bill
The bill defines "renewable natural gas" as anaerobically-generated biogas, landfill gas, or waste-water
treatment gas refined to a methane content of 90 percent or greater which is capable of being used as
transportation fuel, for electric power generation, or is of a quality capable of being injected into a
natural gas pipeline.
The bill defines "biogas" as a mixture of carbon dioxide and hydrocarbons, primarily methane gas,
which is released from the biological decomposition of organic materials.
The bill authorizes the PSC to approve cost recovery by a gas public utility for contracts for the
purchase of renewable natural gas in which the pricing provisions exceed the current market price of
natural gas, but are otherwise deemed reasonable and prudent by the PSC.
B. SECTION DIRECTORY:
Section 1 Amends s. 366.91, F.S.; defining the terms "biogas" and "renewable natural gas"; revising
the definition of the term "renewable energy" to include hydrogen resulting from certain
sources.
Section 2 Amends s. 366.92, F.S.; revising the definition of “renewable energy.”
Section 3 Amends s. 373.236, F.S.; conforming a cross-reference.
Section 4 Amends s. 403.973, F.S.; conforming a cross-references.
Section 5 Reenacts s. 288.9606(7), F.S.; relating to the issuance of revenue bonds, to incorporate
the amendments made by the bill.
5 S. 366.91(3), F.S.
6 Id.
7 There are 33 municipal electric (public power) utilities in the state, which serve approximately 3 million people or 14
percent of Florida’s population. Municipal utilities are not-for-profit and governed by an elected city commission, or an
appointed or elected utility board. They raise capital through operating revenues or the sale of tax-exempt bonds. See
Florida Municipal Electric Association, Florida Municipal Utility Map, https://www.publicpower.com/florida-municipal-utility-
map (last visited Mar. 5, 2021).
8 Rural electric cooperatives are cooperative, nonprofit membership corporations organized under ch. 425, F.S., for the
purpose of supplying electric energy and promoting and extending the use thereof in rural areas. Florida has 16
distribution cooperatives and 2 generation and transmission cooperatives that supply electricity to more than 2.7 million
Floridians in 57 of Florida’s 67 counties. Cooperatives are owned by the members they serve and provide at-cost electric
service to their consumer-members. See Florida Electric Cooperatives Association, About, https://feca.com/about/ (last
visited Mar. 5, 2021).
9 S. 366.91(4), F.S.
10 S. 366.91(8), F.S.
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Section 6 Provides an effective date of July 1, 2021.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may have a positive economic impact on the producers of renewable natural gas if the PSC
approves cost recovery for a gas public utility’s contract for renewable natural gas.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. This bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditures of funds; reduce the authority that counties or municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On March 23, 2021, the Environment, Agriculture & Flooding Subcommittee adopted an amendment and
reported the bill favorably as a committee substitute. The amendment revised the definition of “renewable
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energy” and authorized the PSC to approve cost recovery by a public gas utility for contracts for certain
purchases.
On April 6, 2021, the Commerce Committee adopted an amendment and reported the bill favorably as a
committee substitute. The amendment restored the current definition of “renewable energy” for certain
purposes.
The analysis is drafted to the committee substitute as approved by the Commerce Committee.
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Statutes affected: H 539 Filed: 366.92, 373.236
H 539 c1: 373.236
H 539 c2: 366.92, 373.236