The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Rules
BILL: CS/CS/CS/SB 1024
INTRODUCER: Rules Committee; Community Affairs Committee; Regulated Industries Committee and
Senator Bradley
SUBJECT: Renewable Energy Generation
DATE: March 3, 2022 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Sharon Imhof RI Fav/CS
2. Hackett Ryon CA Fav/CS
3. Sharon Phelps RC Fav/CS
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/CS/CS/SB 1024 amends s. 163.04, F.S., relating to energy devices based on renewable
resources, to allow governing entities with a deed restriction, covenant, declaration, or similar
binding agreement affecting the alteration of residential dwellings or condominiums to prohibit
the installation of solar collectors in locations outside of specifically designated parameters.
The bill also amends s. 366.91, F.S., relating to renewable energy, requiring the Public Service
Commission (PSC) to revise its rules on net metering of customer renewable generation,
providing for two sets of rulemaking.
Under the bill, the PSC must first propose a revised net metering rule by January 1, 2024, which
provides the following:
 Excess electricity used by the customer is billed in accordance with normal billing practices;
and
 Electricity delivered to the utility’s grid during the customer’s regular billing cycle is
credited toward the customer’s energy consumption for the next month’s billing cycle as
follows:
o For energy credits produced from customer-owned or -leased renewable generation for
which a standard interconnection agreement is executed by both parties during calendar
years 2024 and 2025, the customer’s energy usage is offset by 75 percent of the amount
credited.
BILL: CS/CS/CS/SB 1024 Page 2
o For energy credits produced from customer-owned or -leased renewable generation for
which a standard interconnection agreement is executed by both parties during calendar
years 2026 and 2027, the customer’s energy usage is offset by 50 percent of the amount
credited.
The bill allows customers who own or lease renewable generation systems before
December 31, 2023, to continue to use the net metering rate design and rates that applied at the
time the standard interconnection agreement was executed by both parties for twenty years. This
provision also applies to customers who purchase or lease real property with renewable
generation systems installed for all or part of the twenty-year period.
The bill requires the PSC to provide for subsequent rules that must become effective
January 1, 2028, establishing a new program design for customer-owned or -leased renewable
generation for which a standard interconnection agreement was executed by both parties on or
after January 1, 2028. The subsequent rules must comply with the following criteria:
 Ensure that customers owning or leasing renewable generation systems pay the full cost of
electric service and are not subsidized by the general body of ratepayers;
 All energy delivered by the public utility must be purchased at the applicable retail rate;
 All energy delivered by a customer generation system to the public utility must be credited to
the customer at the public utility’s full avoided costs; and
 Establish revised guidelines for net metering credits, netting intervals, fees, and charges,
ensuring that the renewable generation subsidy is zero by January 1, 2028.
After the subsequent rules become effective, the bill allows public utilities to petition the PSC for
approval of fixed charges, base facilities charges, electric grid access fees, or monthly minimum
bills, which ensure that the public utility recovers the fixed costs of serving customers and that
the general body of ratepayers is not subsidizing customers with renewable generation systems.
The bill requires the PSC to initiate rulemaking to implement the bill’s subsequent rule criteria if
the statewide penetration rate of customer-owned or-leased renewable generation exceeds 6.5%.
This may be done at any time, upon petition or on the PSC’s own motion, and the rules become
effective 60 days after adoption.
The bill provides that the penetration rate is calculated by dividing the aggregate gross power
rating (alternating current) of all in-service customer-owned or-leased renewable generation for
all investor-owned electric utility service territories by the total summer peak demand of all
investor-owned electric utilities.
The bill provides that it establishes the minimum requirements for each public utility net
metering program, and allows a public utility to petition the PSC at any time for approval of a
net metering program with terms more favorable to customers.
The bill is effective July 1, 2022.
BILL: CS/CS/CS/SB 1024 Page 3
II. Present Situation:
Florida Public Service Commission
The Florida Public Service Commission (PSC) is an arm of the legislative branch of
government.1 The role of the PSC is to ensure that Florida’s consumers receive utility services,
including electric, natural gas, telephone, water, and wastewater, in a safe, reasonable, and
reliable manner.2 In order to do so, the PSC exercises authority over public utilities in one or
more of the following areas: (1) Rate or economic regulation; (2) Market competition oversight;
and/or (3) Monitoring of safety, reliability, and service issues.3
Public Utilities
A public utility includes any person or legal entity supplying electricity or gas, including natural,
manufactured, or similar gaseous substance, to or for the public within the state.4 The term does
not include municipal electric utilities and rural electric cooperatives.5 Therefore, the PSC does
not regulate the rates of publicly owned municipal or cooperative electric utilities.6
There are five investor-owned electric utility companies (IOU) in Florida: Florida Power & Light
Company (FPL), Duke Energy Florida (Duke), Tampa Electric Company (TECO), Gulf Power
Company (Gulf), and Florida Public Utilities Corporation.7 IOU rates and revenues are regulated
by the PSC.8 These utilities must file periodic earnings reports, which allow the PSC to monitor
earnings levels on an ongoing basis and adjust customer rates quickly if a company appears to be
overearning.9
Section 366.041(2), F.S., requires public utilities to provide adequate service to customers. To
fulfill that obligation, public utilities monitor customer usage patterns in order to plan for future
energy needs. Utilities use billing data to predict and make investments in their infrastructure.10
Section 366.06, F.S., requires the PSC to allow the IOUs to recover honestly and prudently
invested costs of providing service, including investments in infrastructure and operating
expenses used to provide electric service.11
Renewable Energy
Section 377.803, F.S., defines “renewable energy” to mean “electrical, mechanical, or thermal
energy produced from a method that uses one or more of the following fuels or energy sources:
1
Section 350.001, F.S.
2
See Florida Public Service Commission, The PSC’s Role, http://www.psc.state.fl.us (last visited Mar. 2, 2022).
3
Id.
4
Section 366.02(1), F.S.
5
Id.
6
See PSC, Florida PSC 2020 Annual Report, p. 13, available at
http://www.psc.state.fl.us/Files/PDF/Publications/Reports/General/Annualreports/2020.pdf (last visited Mar.2, 2022).
7
Id. FPL acquired Gulf in 2019 and merged as of January 3, 2022.
8
Florida Department of Agriculture and Consumer Services, Electric Utilities, https://www.fdacs.gov/Energy/Florida-
Energy-Clearinghouse/Electric-Utilities (last visited Mar. 2, 2022).
9
PSC, 2020 Annual Report, supra at n. 6, p. 6.
10
PSC, Bill Analysis for SB 1024 (Dec. 20, 2021) p. 2 (on file with the Senate Committee on Regulated Industries).
11
Id.
BILL: CS/CS/CS/SB 1024 Page 4
hydrogen, biomass, as defined in s. 366.91, F.S., solar energy, geothermal energy, wind energy,
ocean energy, waste heat, or hydroelectric power.”
Section 366.91, F.S.,12 requires utilities whose annual sales are greater than 2,000 gigawatt
hours, to continuously offer a purchase contract to renewable energy producers, containing
payment provisions for energy and capacity,13 based on the utility’s full avoided costs,14 for a
minimum of ten years.15
Public Utility Regulatory Policies Act (PURPA)
In 1978, the federal government enacted the Public Utility Regulatory Policies Act (PURPA),16
which required promotion of energy efficiency and use of renewables. The act required utilities
to purchase power from “qualifying facilities,” 17 which fall into two categories: qualifying small
power production facilities and qualifying cogeneration facilities.18 The PURPA directed the
Federal Energy Regulatory Commission to implement the provisions, which in turn, directed the
states to implement the provisions. In response, the Florida Legislature created s. 366.051, F.S.,19
directing the utilities to purchase power from the cogenerators or small power producers.
Full Avoided Costs
A utility’s full avoided cost is the incremental costs of electric energy or capacity, which, but for
the purchase from cogenerators or small power producers, the utility would have to generate
itself or purchase from another source.20 Traditionally, the PSC has approved electric utilities
power purchase contracts that include provisions for payment, capacity, and energy based upon
either the utility’s cost to construct and operate its next planned generating unit or the cost of
purchasing capacity and energy from generating units owned by other utilities in the interchange
market.21
The utility’s full avoided costs and the utility’s as-available tariff rate are not the same. Full
avoided costs can include capacity and energy avoided costs, while the as-available rate only
includes avoided energy costs, which is largely fuel.22
12
Originally enacted by Chapter 2005-259, s. 1, Laws of Fla.
13
Capacity is the maximum electric output, in megawatts, that an electricity generator can produce under ideal conditions.
See U.S. Energy Information Administration, What is the difference between electricity generation capacity and electricity
generation? https://www.eia.gov/tools/faqs/faq.php?id=101&t=3 (last visited Mar. 2, 2022).
14
See “Full avoided Costs,” on p. 3.
15
Section 366.91, F.S.
16
16 U.S.C. s. 2601 et seq.
17
Federal Energy Regulatory Commission, PURPA Qualifying Facilities, https://www.ferc.gov/qf (last visited Mar. 2, 2022).
18
Id.
19
Chapter 89-292, s. 4, Laws of Fla.
20
Section 366.051, F.S.
21
Florida Public Service Commission, States’ Electric Restructuring Activities Update: Wholesale Sales
http://www.psc.state.fl.us/Publications/ElectricRestructuringDetails#4 (last visited Mar. 2, 2022).
22
PSC, SB 1024 Analysis, supra at n. 10, p. 2.
BILL: CS/CS/CS/SB 1024 Page 5
Customer-Owned Renewable Energy Generation Systems
Customer-owned renewable energy generation systems, primarily solar systems in Florida, 23
allow customers to generate their own electricity.24 It is defined as an electric generating system
located on a customer’s premises that is primarily intended to offset part or all of the customer’s
electricity requirements with renewable energy.25
Interconnection26 with the electric grid allows customers to reliably power their homes even
when the sun is not shining.27 When a customer-owned system generates more electricity than
needed, the electricity flows onto the electric grid for distribution to another customer and the
generating customer receives a credit toward future usage from the utility.28 Utilities are
federally required to purchase excess power from small renewable energy generators.29
Utility customers primarily benefit from interconnected renewable generation systems through
personal use and reducing the amount of electricity they purchase from the utility.30 In turn, this
effectively lowers the demand for electricity that the utility must meet for these customers.31 The
average full life of renewable energy generating equipment is approximately 20 years.32
Net Metering
Net metering is a metering and billing methodology whereby customer-owned renewable
generation is allowed to offset the customer’s electricity consumption on site.33 Under net
metering, customers are credited for excess energy produced which flows back to the grid. A
meter is used to record both electricity drawn from the grid and excess electricity that flows to
the grid from the customer-owned system.34
Florida’s net metering rule was established in 2008 requiring IOUs to offer a standardized
interconnection agreement for expedited interconnection and net metering of customer-owned
renewable generation up to two megawatts.35 The rule’s purpose is to:
23
PSC, Interconnection and Net Metering of Customer-Owned Renewable Generation 2020, available at
http://www.floridapsc.com/Files/PDF/Utilities/Electricgas/CustomerRenewable/2020/2020%20Net%20Metering%20Summa
ry%20Spreadsheet/2020%20Net%20Metering%20Report.pdf#search=Interconnection%20and%20Net%20Metering%20of%
20Customer-Owned%20Renewable%20Generation (last visited Mar. 2, 2022).
24
U.S. Department of Energy, Grid-Connected Renewable Energy Systems, https://www.energy.gov/energysaver/grid-
connected-renewable-energy-systems (last visited Mar. 2, 2022).
25
Section 366.91, F.S.
26
“Interconnection is defined as the technical procedures and legal requirements surrounding energy customers’ ability to
connect their small-scale renewable energy projects to the electricity grid. U.S. Department of Energy, Renewable Energy:
Distributed Generation Policies and Programs, https://www.energy.gov/eere/slsc/renewable-energy-distributed-generation-
policies-and-programs (last visited Mar. 2, 2022).
27
USDE, Grid-Connected Renewable Energy Systems, supra at n. 24.
28
Id.
29
Id.
30
PSC, SB 1024 Analysis, supra at n. 10, p. 1.
31
Id.
32
PSC, SB 1024 Analysis, supra at n. 10 p. 5.
33
Section 366.91, F.S.
34
USDE, Grid-Connected Renewable Energy Systems, supra at n. 24.
35
Fla. Admin. Code R. 25-6.065(3).
BILL: CS/CS/CS/SB 1024 Page 6
Promote the development of small customer-owned renewable generation,
particularly solar and wind energy systems; diversify the types of fuel used
to generate electricity in Florida; lessen Florida’s dependence on fossil fuels
for the production of electricity; minimize the volatility of fuel costs;
encourage investment in the state; improve environmental conditions; and,
at the same time, minimize costs of power supply to investor-owned utilities
and their customers.36
Under the rule, customers are categorized into tiers, with varying requirements, based on system
capacity:37
 Tier 1 Systems, have a capacity of 10 kilowatts or less; there is no application fee, no
interconnection study requirement, no insurance requirement, and no manual disconnect
switch requirement.
 Tier 2 Systems, have a capacity greater than 10 kilowatts and less than 100 kilowatts; there is
an application fee if approved by the PSC, no interconnection study requirement, a $1 million
insurance requirement, and a manual disconnect switch requirement.
 Tier 3 Systems, are greater than 100 kilowatts and less than 2 megawatts; there is an
application fee if approved by the PSC, an interconnection study may be required, a $2
million insurance requirement, and a manual disconnect switch requirement.
All electric utilities, as defined in s. 366.02(2), F.S., must annually report the total:
 Number of customer-owned renewable generation interconnections;
 Kilowatt capacity of the interconnections;
 Kilowatt hours received by interconnected