SB 126 — Florida Public Service Commission

requiring the commission to establish a recovery period for interim storm-recovery costs, based upon a reasonable balancing of certain factors;

subjecting certain funds to true-up;

providing construction;

requiring the commission to adopt rules;

367.081, F.S.;

providing requirements for financial models used by the commission in setting and evaluating the return on equity for a utility;

conforming provisions to changes made by the act;

amending s.

terms of Pagecommissioners; 1 of 5 CODING:

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Florida Senate - 2026 SB 126 1-00126A-26 2026126__ commissioners;

Section 350.0615, Florida Statutes, is created Page 3 of 15 CODING:

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Florida Senate - 2026 CS for SB 126 580-01755A-26 2026126c1 to read:

350.0615 Public Counsel;

requirement to negotiate.—For proceedings before the commission in which the Public Counsel is participating as a party, any other group of parties to the proceeding, before presenting a settlement of the proceeding to the commission, must negotiate in good faith with the Public Counsel the terms of such settlement.

Section 3.

While the commission may make conclusions based upon the public interest, as provided in chapters 350-368, it shall specify in its orders a rationale for such conclusions.

120.569, when issuing an order accepting or denying a settlement agreement reached by any of the parties to a proceeding, theall commissionof shall provide a reasoned explanation, citing the specificfollowing factsrequirements andapply: factors on which it relied.

In(a) addition,The the commission shall provide in its order a discussionreasoned ofexplanation, theciting major elements of the settlementspecific facts and afactors rationaleon forwhich itsit conclusions.relied.

SectionThe 3.commission shall provide in its order a discussion of the major elements of the settlement and a rationale for its conclusions.

Present(b) subsectionThe (4)Public ofCounsel section 366.06, Florida Statutes, is redesignatednot as subsection (5), and a newrequired subsectionparty (4) is added to thatsuch section,a tosettlement. read:

However, the commission may not approve a settlement presented by parties that have not negotiated the terms of such settlement in good faith with the Public Counsel.

Section 4.

Section 350.130, Florida Statutes, is created to Page 4 of 15 CODING:

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Florida Senate - 2026 CS for SB 126 580-01755A-26 2026126c1 read:

350.130 Intervention into commission proceedings.—Persons other than the original parties to a pending commission proceeding, whose substantial interest will be affected by the commission proceeding and who desire to become parties to the proceeding, may make a motion to the commission for leave to intervene in the proceeding pursuant to chapter 120.

(1) Any trade, professional, or similar association seeking to intervene in a commission proceeding on the basis of the impact of such proceeding on the association’s membership must include in such motion the nature of the association’s membership, the manner in which such membership will be substantially impacted by the proceeding, and the number and percentage of total members who will be substantially impacted by the proceeding.

(2) In order to avoid any unnecessary rate case expense resulting from a party participating in a proceeding in which it does not have standing, the commission shall rule on any challenge to a party’s intervention in a proceeding on the basis of standing on a timely basis and, at a minimum, within 30 days after receiving such challenge.

Section 5.

Section 350.131, Florida Statutes, is created to read:

350.131 Affordability.—The commission must consider and address affordability in any proceeding before it that has the potential to impact utility rates.

Section 6.

Present subsection (4) of section 366.06, Florida Statutes, is redesignated as subsection (5), a new subsection (4) is added to that section, and subsections (1) and Page 5 of 15 CODING:

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Florida Senate - 2026 CS for SB 126 580-01755A-26 2026126c1 (2) of that section are amended, to read:

procedure for fixing and changing.— (4)(1) InA orderpublic toutility bestshall meetnot, thedirectly needsor ofindirectly, Floridacharge households,or receive any rate not on file with the commission shallfor ensurethe thatparticular theclass allowableof returnservice oninvolved, equityand Pageno 2change ofshall 5be CODING:made in any schedule.

All applications for changes in rates shall be made to the commission in writing under rules and regulations prescribed, and the commission shall have the authority to determine and fix affordable, fair, just, and reasonable rates that may be requested, demanded, charged, or collected by any public utility for its service.

Any application for a change in rates which also includes a request for a change in return on equity must be made according to the schedule and procedure established by the commission pursuant to s.

366.07.

The commission shall investigate and determine the actual legitimate costs of the property of each utility company, actually used and useful in the public service, and shall keep a current record of the net investment of each public utility company in such property which value, as determined by the commission, shall be used for ratemaking purposes and shall be the money honestly and prudently invested by the public utility company in such property used and useful in serving the public, less accrued depreciation, and shall not include any goodwill or going-concern value or franchise value in excess of payment made therefor.

In fixing affordable, fair, just, and reasonable rates for each customer class, the commission shall, to the extent practicable, consider the cost of providing service to the class, as well as the rate history, value of service, and experience of the public utility;

the consumption and load Page 6 of 15 CODING:

Florida Senate - 2026 SBCS 126 1-00126A-26 2026126__ for publicSB utilities126 does580-01755A-26 not2026126c1 exceedcharacteristics of the nationalvarious averageclasses authorizedof returncustomers; on equity for comparable public utilities across the country.

Sectionand 4.public acceptance of rate structures.

(2) Whenever the commission finds, upon request made or upon its own motion, that the rates demanded, charged, or collected by any public utility for public utility service, or that the rules, regulations, or practices of any public utility affecting such rates, are unaffordable, unjust, unreasonable, unjustly discriminatory, or in violation of law;

that such rates are insufficient to yield reasonable compensation for the services rendered;

that such rates yield excessive compensation for services rendered;

or that such service is inadequate or cannot be obtained, the commission shall order and hold a public hearing, giving notice to the public and to the public utility, and shall thereafter determine affordable, just, and reasonable rates to be thereafter charged for such service and promulgate rules and regulations affecting equipment, facilities, and service to be thereafter installed, furnished, and used.

Any request made by a public utility pursuant to this section which involves a request for a change in return on equity must be made according to the schedule and procedure established by the commission pursuant to s.

366.07.

(4) In setting and evaluating the return on equity for a public utility as part of a rate proceeding:

(a) Any financial model used by the commission must be:

1.

Financially logical;

and 2.

Generally used and accepted by finance practitioners both within and outside of the regulated utility industry;

and (b) The commission shall specifically consider and address the financial benefits and the reduction in regulatory, weather, Page 7 of 15 CODING:

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Florida Senate - 2026 CS for SB 126 580-01755A-26 2026126c1 disaster, and general financial risk to the public utility provided by all of the following which are relevant to the public utility:

1.

Environmental cost recovery under s.

366.8255.

2.

Storm-recovery financing under s.

366.8260.

3.

Interim storm-recovery cost recovery under s.

366.8261.

4.

Cost recovery for the siting, design, licensing, and construction of nuclear and integrated gasification combined cycle power plants under s.

366.93.

5.

Financing for certain nuclear generating asset retirement or abandonment costs under s.

366.95.

6.

Storm protection plan cost recovery under s.

366.96.

7.

Public utility liability arising out of emergencies and disasters under s.

366.98.

8.

Natural gas facilities relocation costs under s.

366.99.

Section 7.

adjustment.— (1) Whenever the commission, after public hearing either upon its own motion or upon complaint, shall find the rates, rentals, charges or classifications, or any of them, proposed, demanded, observed, charged or collected by any public utility for any service, or in connection therewith, or the rules, regulations, measurements, practices or contracts, or any of them, relating thereto, are unaffordable, unjust, unreasonable, insufficient, excessive, or unjustly discriminatory or preferential, or in anywise in violation of law, or any service is inadequate or cannot be obtained, the commission shall determine and by order fix the fairaffordable, andfair, reasonable rates, rentals, charges or classifications, and reasonable rules,Page regulations,8 measurements,of practices,15 contractsCODING: or service, to be imposed, observed, furnished or followed in the future.

(2)Words Thestricken commissionare shalldeletions; establish a schedule by which rate change requests may be submitted to the commission by each public utility company.

Sectionwords 5.underlined are additions.

Florida Senate - 2026 CS for SB 126 580-01755A-26 2026126c1 rates, rentals, charges or classifications, and reasonable rules, regulations, measurements, practices, contracts or service, to be imposed, observed, furnished or followed in the future.

(2) The commission shall establish a schedule by which requests for changes to a public utility’s return on equity may be submitted to the commission by each public utility.

The commission may not accept a request from a public utility to modify its return on equity outside of this established schedule, except as provided in subsection (3).

(3) A public utility may petition the commission to deviate from the return on equity revision schedule established by the commission under subsection (2).

The commission shall grant such petition if:

(a) The public utility’s rates are insufficient to yield reasonable compensation for the services it is rendering;

(b) This insufficiency is due to circumstances that are outside of the control of the public utility;

and (c) Such circumstances were not reasonably foreseeable by the public utility during the last proceeding in which its return on equity was approved by the commission.

(4) The commission shall adopt rules to implement this section.

Section 8.

(a) An investigation of contemporary economic analyses Page 39 of 515 CODING:

Florida Senate - 2026 CS for SB 126 1-00126A-26580-01755A-26 2026126__2026126c1 related to rate changes in this state.

(d) An assessment of long-term impacts, including the economic repercussions of rising rates of returns on equity, to utilities and their customersfuture incustomers. the future.

The summary must include the profits and losses of each entity as reported in its financial statements and highlight any Page 410 of 515 CODING:

Florida Senate - 2026 CS for SB 126 1-00126A-26580-01755A-26 2026126__2026126c1 compensation that exceeds the industry average.

The commission shall also include any rationale provided by a public utility justifying compensation exceeding the industry average and, for each public utility, an explanation as to howthe manner in which specific data gathered during the compiling of information informed the commission’s decisions on the public utility’s rate change requests.

Section 6.9.

Section 366.8261, Florida Statutes, is created to read:

366.8261 Interim storm-recovery cost.— (1) As used in this section, the term:

(a) “Electric utility” has the same meaning as in s.

366.8255.

(b) “Storm” has the same meaning as in s.

366.8260.

(c) “Storm-recovery charge” has the same meaning as in s.

366.8260.

(d) “Storm-recovery costs” has the same meaning as in s.

366.8260.

(2) The commission shall permit an electric utility to implement a storm-recovery charge to recover reasonably estimated storm-recovery costs within 60 days after filing a petition with the commission for the recovery from one or more storms, subject to all of the following conditions:

(a) Such charge must be on an interim basis.

The commission’s approval of interim storm-recovery costs and a Page 11 of 15 CODING:

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Florida Senate - 2026 CS for SB 126 580-01755A-26 2026126c1 related storm-recovery charge must be on a preliminary basis and is subject to refund pending further review once the total actual storm-recovery costs are known.

After the actual costs are reviewed for prudence and reasonableness and are compared to the actual amount recovered through the interim storm-recovery charge, the commission shall determine whether any over or under recovery has occurred.

The disposition of any over or under recovery, and associated interest, must be considered by the commission at a separate true-up proceeding.

(b) Storm-recovery costs may not include any expenses already being recovered by the utility in its base rates.

(c) The commission may require a utility to secure funds collected pursuant to this section to ensure timely refund to customers in the event of over recovery.

(3) In approving an application for interim storm-recovery costs pursuant to subsection (2), the commission shall also establish a recovery period for such interim costs.

This recovery period shall be based upon a reasonable balancing of all of the following factors:

(a) The financial impact of the length of the recovery period on the utility.

(b) Timeliness of recovery.

(c) Affordability to ratepayers.

(d) Avoiding sudden substantial bill increases to ratepayers.

(4) Funds collected pursuant to this section are subject to true-up.

The commission shall require that any refund to or additional collection from ratepayers made as a part of the true-up include interest.

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Florida Senate - 2026 CS for SB 126 580-01755A-26 2026126c1 (5) Nothing in this section shall be construed to prevent a public utility from applying for, or the commission approving, storm-recovery financing pursuant to s.

366.8260.

(6) The commission shall adopt rules to implement this section as soon as practicable, but no later than January 1, 2027.

Section 10.

Paragraph (a) of subsection (2) and subsection (3) of section 367.081, Florida Statutes, are amended to read:

367.081 Rates;

procedure for fixing and changing.— (2)(a)1.

The commission shall, either upon request or upon its own motion, fix rates which are affordable, just, reasonable, compensatory, and not unfairly discriminatory.

In every such proceeding, the commission shall consider the value and quality of the service and the cost of providing the service, which shall include, but not be limited to, debt interest;

the requirements of the utility for working capital;

maintenance, depreciation, tax, and operating expenses incurred in the operation of all property used and useful in the public service;

and a fair return on the investment of the utility in property used and useful in the public service.

However, the commission shall not allow the inclusion of contributions-in- aid-of-construction in the rate base of any utility during a rate proceeding, nor shall the commission impute prospective future contributions-in-aid-of-construction against the utility’s investment in property used and useful in the public service;

and accumulated depreciation on such contributions-in- aid-of-construction shall not be used to reduce the rate base, nor shall depreciation on such contributed assets be considered a cost of providing utility service.

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Florida Senate - 2026 CS for SB 126 580-01755A-26 2026126c1 2.

For purposes of such proceedings, the commission shall consider utility property, including land acquired or facilities constructed or to be constructed within a reasonable time in the future, not to exceed 24 months after the end of the historic base year used to set final rates unless a longer period is approved by the commission, to be used and useful in the public service, if:

a.

Such property is needed to serve current customers;

b.

Such property is needed to serve customers 5 years after the end of the test year used in the commission’s final order on a rate request as provided in subsection (6) at a growth rate for equivalent residential connections not to exceed 5 percent per year;

or c.

Such property is needed to serve customers more than 5 full years after the end of the test year used in the commission’s final order on a rate request as provided in subsection (6) only to the extent that the utility presents clear and convincing evidence to justify such consideration.

Notwithstanding the provisions of this paragraph, the commission shall approve rates for service which allow a utility to recover from customers the full amount of environmental compliance costs.

Such rates may not include charges for allowances for funds prudently invested or similar charges.

For purposes of this requirement, the term “environmental compliance costs” includes all reasonable expenses and fair return on any prudent investment incurred by a utility in complying with the requirements or conditions contained in any permitting, enforcement, or similar decisions of the United States Page 14 of 15 CODING:

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Florida Senate - 2026 CS for SB 126 580-01755A-26 2026126c1 Environmental Protection Agency, the Department of Environmental Protection, a water management district, or any other governmental entity with similar regulatory jurisdiction.

(3) The commission, in fixing rates, may determine the prudent cost of providing service during the period of time the rates will be in effect following the entry of a final order relating to the rate request of the utility and may use such costs to determine the revenue requirements that will allow the utility to earn a fair rate of return on its rate base.

Any financial model used by the commission in setting and evaluating the return on equity for a utility as part of a proceeding fixing rates must be:

(a) Financially logical;

and (b) Generally used and accepted by finance practitioners both within and outside of the regulated utility industry.

Section 11.

Section 7.12.

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