Florida regulators deny Duke’s large-load tariff

The Florida Public Service Commission denied Duke Energy Florida’s proposed large-load tariffs on Nov. 3 and required the utility to file a large-load rate schedule supported by evidence that qualifying customers will pay their full service costs. The unanimous decision rejected the package as filed.

Duke’s proposal excluded customers the law requires it to cover. Its policy applied to firm demand, leaving out qualifying customers taking interruptible or curtailable service. Staff said differences in planning and investment risks do not justify excluding customers who meet the statute’s definition. The commission required Duke to include all customers meeting the statutory definition.

The commission found Duke had not adequately demonstrated that existing rates, combined with its proposed contractual and financial protections, would reasonably ensure that each large customer bears its full cost of service.

Florida law requires both customer payment and protection for other ratepayers. Section 366.043 covers anticipated monthly peak loads of at least 50 megawatts at a single location, including colocated customers there. The threshold uses the highest average load over a 15-minute interval, rather than annual consumption. Its cost standard includes connection, incremental transmission and generation, other infrastructure, and operating and maintenance expenses. Neither those costs nor their nonpayment risk may be shifted to other ratepayers.

Duke relied on its settlement rate freeze to argue that other customers were protected. Under its proposed approach, large customers would initially take service on existing rates rather than a new large-load schedule. Duke maintained that shareholders would absorb any unrecovered costs during the settlement period.

Staff accepted the temporary protection for other customers but found that it answered only part of the law. Shareholders absorbing a shortfall does not demonstrate that the large customer pays its full cost, staff said. It found Duke had not supplied evidence establishing that the existing rates covered the cost of serving each large customer.

The commission rejected interim approval based on those protections. Staff had offered an alternative interpretation allowing existing rates and contractual safeguards pending consideration of supported rates in a later case. The adopted recommendation instead required a proposed large-load schedule with adequate cost support, making customer payment a separate test from keeping costs off other customers’ bills.

Duke’s rejected proposal already contained substantial customer commitments. It proposed a 20-year minimum term, minimum demand tied to contract capacity, security based on credit and termination obligations, and early exit charges. Customers would also have advanced the estimated cost of extending service, with refunds linked to collected base revenues.

The commission did not adopt staff’s detailed changes to those terms. The vote marked the separate issues addressing the policy, agreement, construction contributions and effective dates moot. Developers therefore cannot treat Duke’s proposed minimum bills, collateral or exit charges as approved contract economics.

Other Florida proceedings show different approaches rather than a uniform rate design. Florida Power & Light already has commission-approved large-load schedules and seeks a compliance finding with limited general-tariff revisions. Tampa Electric proposes new rate schedules, while Florida Public Utilities proposes customer-specific agreements backed by cost information. The commission suspended those proposed changes for review, not final approval under the new law.

The Duke decision does not mandate a particular generation charge. The statute permits several financial tools, and staff declined to recommend a separate incremental generation charge without supporting cost evidence.

Duke’s docket contained no written order on the denial or revised tariff filing as of Nov. 8. The vote in docket 20260064-EI nevertheless requires the utility’s return filing to address both statutory coverage and supported customer rates.