Florida Public Service Commission

Florida Senate
-
2026

CS for SB 126

By
the Committee on Regulated Industries; and Senators Gaetz and
Bradley

580-01755A-26 2026126c1
1 A bill to be entitled
2 An act relating to the Florida Public Service
3 Commission; amending s. 350.01, F.S.; revising the
4 membership of the Florida Public Service Commission;
5 creating s. 350.0615, F.S.; requiring a group of
6 parties to certain proceedings to negotiate the terms
7 of a settlement with the Public Counsel before
8 presenting such settlement to the commission; creating
9 s. 350.129, F.S.; requiring that orders issued by the
10 commission contain adequate support and rationale for
11 any conclusions made by the commission; requiring the
12 commission to provide an explanation and a discussion
13 of major elements and the rationale of the settlement
14 when the commission issues an order accepting or
15 denying certain settlement agreements; providing that
16 the Public Counsel is not a required party to any such
17 settlements; prohibiting the commission from approving
18 certain settlements that are not negotiated with the
19 Public Counsel; creating s. 350.130, F.S.; authorizing
20 certain persons to make a motion to intervene in a
21 pending commission proceeding; providing requirements
22 for an association’s motion to intervene in certain
23 commission proceedings; requiring the commission to
24 make certain rulings in a specified timeframe to avoid
25 certain expenses; creating s. 350.131, F.S.; requiring
26 the commission to consider and address the
27 affordability of proceedings that have certain
28 potential impacts; amending s. 366.06, F.S.;
29 authorizing the commission to fix affordable, in
30 addition to fair, just, and reasonable, rates;
31 requiring that certain applications for changes in
32 rates be made according to a certain schedule and
33 procedure; requiring that certain requests for a
34 change in return on equity be made according to a
35 certain schedule and procedure; conforming provisions
36 to changes made by the act; providing requirements for
37 any financial model used by the commission to set and
38 evaluate the return on equity for a public utility;
39 requiring the commission to consider and address
40 certain financial benefits and reductions of certain
41 risks provided by specified cost financing systems or
42 other processes when setting and evaluating the return
43 on equity for a public utility; amending s. 366.07,
44 F.S.; conforming provisions to changes made by the
45 act; requiring the commission to establish a schedule
46 by which requests for changes to a public utility’s
47 return on equity may be submitted to the commission by
48 each public utility company; prohibiting the
49 commission from accepting certain requests from a
50 public utility to modify its return on equity outside
51 of its schedule; providing an exception; authorizing a
52 public utility to petition the commission to deviate
53 from the return on equity revision schedule; requiring
54 the commission to grant the petition under certain
55 circumstances; requiring the commission to adopt
56 rules; creating s. 366.077, F.S.; requiring the
57 commission to provide a report to the Governor and the
58 Legislature by a specified date annually; providing
59 requirements for the report; creating s. 366.8261,
60 F.S.; defining terms; requiring the commission to
61 permit an electric utility to implement a certain
62 charge within a specified timeframe after the electric
63 utility files a certain petition, subject to specified
64 conditions; requiring the commission to establish a
65 recovery period for interim storm-recovery costs,
66 based upon a reasonable balancing of certain factors;
67 subjecting certain funds to true-up; providing
68 construction; requiring the commission to adopt rules;
69 amending s. 367.081, F.S.; providing requirements for
70 financial models used by the commission in setting and
71 evaluating the return on equity for a utility;
72 conforming provisions to changes made by the act;
73 amending s. 377.814, F.S.; conforming a cross
74 reference; providing an effective date.
75
76 Be It Enacted by the Legislature of the State of Florida:
77
78 Section 1. Subsection (1) of section 350.01, Florida
79 Statutes, is amended to read:
80 350.01 Florida Public Service Commission; terms of
81 commissioners; vacancies; election and duties of chair; quorum;
82 proceedings; public records and public meetings exemptions.—
83 (1) The Florida Public Service Commission shall
be composed

84
consist
of
seven

five
commissioners appointed pursuant to s.
85 350.031.
One member must be a certified public accountant, and

86
one member must be a chartered financial analyst.

87 Section 2. Section 350.0615, Florida Statutes, is created
88 to read:
89
350.0615 Public Counsel; requirement to negotiate.—For

90
proceedings before the commission in which the Public Counsel is

91
participating as a party, any other group of parties to the

92
proceeding, before presenting a settlement of the proceeding to

93
the commission, must negotiate in good faith with the Public

94
Counsel the terms of such settlement.

95 Section 3. Section 350.129, Florida Statutes, is created to
96 read:
97
350.129 Orders of the Florida Public Service Commission.—

98
(1) All orders issued by the commission must contain

99
adequate support and rationale for the commission’s conclusions,

100
including the specific facts and factors on which the

101
conclusions are based. While the commission may make conclusions

102
based upon the public interest, it shall specify in its orders a

103
rationale for such conclusions.

104
(2) For commission orders that affect substantial interests

105
pursuant to s. 120.569, when issuing an order accepting or

106
denying a settlement agreement reached by any of the parties to

107
a proceeding, all of the following requirements apply:

108
(a)

The commission shall provide a reasoned explanation,

109
citing the specific facts and factors on which it relied.

The

110
commission shall provide in its order a discussion of the major

111
elements of the settlement and a rationale for its conclusions.

112
(b)

The Public Counsel is not a required party to such a

113
settlement. However, the commission may not approve a settlement

114
presented by parties that have not negotiated the terms of such

115
settlement in good faith with the Public Counsel.

116 Section 4. Section 350.130, Florida Statutes, is created to
117 read:
118
350.130 Intervention into commission proceedings.—Persons

119
other than the original parties to a pending commission

120
proceeding, whose substantial interest will be affected by the

121
commission proceeding

and who desire to become parties to the

122
proceeding, may make a motion to the commission for leave to

123
intervene in the proceeding pursuant to chapter 120.

124
(1) Any trade, professional, or similar association seeking

125
to intervene in a commission proceeding on the basis of the

126
impact of such proceeding on the association’s membership must

127
include in such motion the nature of the association’s

128
membership, the manner in which such membership will be

129
substantially impacted by the proceeding, and the number and

130
percentage of total members who will be substantially impacted

131
by the proceeding.

132
(2) In order to avoid any unnecessary rate case expense

133
resulting from a party participating in a proceeding in which it

134
does not have standing, the commission shall rule on any

135
challenge to a party’s intervention in a proceeding on the basis

136
of standing on a timely basis and, at
a
minimum, within 30 days

137
after receiving such challenge.

138 Section 5. Section 350.131, Florida Statutes, is created to
139 read:
140
350.131

Affordability.—The commission must consider and

141
address affordability in any proceeding before it that has the

142
potential to impact utility rates.

143 Section 6. Present subsection (4) of section 366.06,
144 Florida Statutes, is redesignated as subsection (5), a new
145 subsection (4) is added to that section, and subsections (1) and
146 (2) of that section are amended, to read:
147 366.06 Rates; procedure for fixing and changing.—
148 (1) A public utility shall not, directly or indirectly,
149 charge or receive any rate not on file with the commission for
150 the particular class of service involved, and no change shall be
151 made in any schedule. All applications for changes in rates
152 shall be made to the commission in writing under rules and
153 regulations prescribed, and the commission shall have the
154 authority to determine and fix
affordable,
fair, just, and
155 reasonable rates that may be requested, demanded, charged, or
156 collected by any public utility for its service.
Any application

157
for a change in rates which also includes a request for a change

158
in return on equity must be made according to the schedule and

159
procedure established by the commission pursuant to s. 366.07.

160 The commission shall investigate and determine the actual
161 legitimate costs of the property of each utility company,
162 actually used and useful in the public service, and shall keep a
163 current record of the net investment of each public utility
164 company in such property which value, as determined by the
165 commission, shall be used for ratemaking purposes and shall be
166 the money honestly and prudently invested by the public utility
167 company in such property used and useful in serving the public,
168 less accrued depreciation, and shall not include any goodwill or
169 going-concern value or franchise value in excess of payment made
170 therefor. In fixing
affordable,
fair, just, and reasonable rates
171 for each customer class, the commission shall, to the extent
172 practicable, consider the cost of providing service to the
173 class, as well as the rate history, value of service, and
174 experience of the public utility; the consumption and load
175 characteristics of the various classes of customers; and public
176 acceptance of rate structures.
177 (2) Whenever the commission finds, upon request made or
178 upon its own motion, that the rates demanded, charged, or
179 collected by any public utility for public utility service, or
180 that the rules, regulations, or practices of any public utility
181 affecting such rates, are
unaffordable,
unjust, unreasonable,
182 unjustly discriminatory, or in violation of law; that such rates
183 are insufficient to yield reasonable compensation for the
184 services rendered; that such rates yield excessive compensation
185 for services rendered; or that such service is inadequate or
186 cannot be obtained, the commission shall order and hold a public
187 hearing, giving notice to the public and to the public utility,
188 and shall thereafter determine
affordable,
just
,
and reasonable
189 rates to be thereafter charged for such service and promulgate
190 rules and regulations affecting equipment, facilities, and
191 service to be thereafter installed, furnished, and used.
Any

192
request made by a public utility pursuant to this section which

193
involves a request for a change in return on equity must be made

194
according to the schedule and procedure established by the

195
commission pursuant to s. 366.07.

196
(4) In setting and evaluating the return on equity for a

197
public utility as part of a rate proceeding:

198
(a) Any financial model used by the commission must be:

199
1. Financially logical; and

200
2. Generally used and accepted by finance practitioners

201
both within and outside of the regulated utility industry; and

202
(b) The commission shall specifically consider and address

203
the financial benefits and the reduction in regulatory, weather,

204
disaster, and general financial risk to the public utility

205
provided by all of the following which are relevant to the

206
public utility:

207
1. Environmental cost recovery under s. 366.8255.

208
2. Storm-recovery financing under s. 366.8260.

209
3. Interim storm-recovery cost recovery under s. 366.8261.

210
4. Cost recovery for the siting, design, licensing, and

211
construction of nuclear and integrated gasification combined

212
cycle power plants under s. 366.93.

213
5. Financing for certain nuclear generating asset

214
retirement or abandonment costs under s. 366.95.

215
6. Storm protection plan cost recovery under s. 366.96.

216
7. Public utility liability arising out of emergencies and

217
disasters under s. 366.98.

218
8. Natural gas facilities relocation costs under s. 366.99.

219 Section 7. Section 366.07, Florida Statutes, is amended to
220 read:
221 366.07 Rates; adjustment.—
222
(1)
Whenever the commission, after public hearing either
223 upon its own motion or upon complaint, shall find the rates,
224 rentals, charges or classifications, or any of them, proposed,
225 demanded, observed, charged or collected by any public utility
226 for any service, or in connection therewith, or the rules,
227 regulations, measurements, practices or contracts, or any of
228 them, relating thereto, are
unaffordable
,
unjust, unreasonable,
229 insufficient, excessive, or unjustly discriminatory or
230 preferential, or in anywise in violation of law, or any service
231 is inadequate or cannot be obtained, the commission shall
232 determine and by order fix the
affordable,
fair
,
and reasonable
233 rates, rentals, charges or classifications, and reasonable
234 rules, regulations, measurements, practices, contracts or
235 service, to be imposed, observed, furnished or followed in the
236 future.
237
(2)

The commission shall establish a schedule by which

238
requests for changes to a public utility’s return on equity may

239
be submitted to the commission by each public utility. The

240
commission may not accept a request from a public utility to

241
modify its return on equity outside of this established

242
schedule, except as provided in subsection (3).

243
(3)

A public utility may petition the commission to deviate

244
from the return on equity revision schedule established by the

245
commission under subsection (2). The commission shall grant such

246
petition if:

247
(a)

The public utility’s

rates are insufficient to yield

248
reasonable compensation for the services it is rendering;

249
(b)

This insufficiency is due to circumstances that are

250
outside of the control of the public utility; and

251
(c)

Such circumstances were not reasonably foreseeable by

252
the public utility during the last proceeding in which its

253
return on equity was approved by the commission.

254
(4)

The commission shall adopt rules to implement this

255
section.

256 Section 8. Section 366.077, Florida Statutes, is created to
257 read:
258
366.077 Report on rates.—The commission shall submit an

259
annual report to the Governor and the Legislature by March 1.

260
(1)

The report must include all of the following:

261
(a)

An investigation of contemporary economic analyses

262
related to rate changes in this state.

263
(b)

An analysis of potential cost impacts to utility

264
customers in this state if excess returns on equity have

265
occurred and, if such excess returns have not occurred at a

266
significant rate, any resulting cost savings to such customers.

267
(c)

An analysis of returns on equity models presented by

268
public utilities and used by the commission to determine

269
approved returns on equity for public utilities in this state.

270
Such analysis must:

271
1.

Compare models used by federal agencies and other state

272
utility regulatory bodies with those used by the commission;

273
2.

Determine whether the models used are generally

274
financially logical; and

275
3.

Determine whether the models used comport with generally

276
accepted economic theory both inside and outside of the utility

277
industry.

278
(d)

An assessment of long-term impacts, including the

279
economic repercussions of rising rates of returns on equity, to

280
utilities and their future customers.

281
(e)

A summary providing detailed information regarding the

282
compensation of the executive officers of each public utility

283
providing service to the residents of this state, or the

284
executive officers of a public utility’s affiliated companies or

285
parent company. Such information must include, but need not be

286
limited to, salaries, benefits, stock options, bonuses, stock

287
buybacks, and other taxable payments, expressed both as dollar

288
amounts and as a percentage of the entity’s total revenue. The

289
summary must include the profits and losses of each entity as

290
reported in its financial statements and highlight any

291
compensation that exceeds the industry average. The commission

292
shall also include any rationale provided by a public utility

293
justifying compensation exceeding the industry average and, for

294
each public utility, an explanation as to the manner in which

295
specific data gathered during the compiling of information

296
informed the commission’s decisions on the public utility’s rate

297
change requests.

298
(2)

The report must provide benchmarking, comparing public

299
utilities providing service to the residents of this state with

300
public utilities providing service to the residents of other

301
states, and include commentary on all findings.

302 Section 9. Section 366.8261, Florida Statutes, is created
303 to read:
304
366.8261

Interim storm-recovery cost.—

305
(1) As used in this section, the term:

306
(a) “Electric utility” has the same meaning as in s.

307
366.8255.

308
(b) “Storm” has the same meaning as in s. 366.8260.

309
(c) “Storm-recovery charge” has the same meaning as in s.

310
366.8260.

311
(d) “Storm-recovery costs” has the same meaning as in s.

312
366.8260.

313
(2) The commission shall permit an electric utility to

314
implement a storm-recovery charge to recover reasonably

315
estimated storm-recovery costs within 60 days after filing a

316
petition with the commission for the recovery from one or more

317
storms, subject to all of the following conditions:

318
(a)

Such charge must be on an interim basis. The

319
commission’s approval of interim storm-recovery costs and a

320
related storm-recovery charge must be on a preliminary basis and

321
is subject to refund pending further review once the total

322
actual storm-recovery costs are known. After the actual costs

323
are reviewed for prudence and reasonableness and are compared to

324
the actual amount recovered through the interim storm-recovery

325
charge, the commission shall determine whether any over or under

326
recovery has occurred. The disposition of any over or under

327
recovery, and associated interest, must be considered by the

328
commission at a separate true-up proceeding.

329
(b) Storm-recovery costs may not include any expenses

330
already being recovered by the utility in its base rates.

331
(c)

The commission may require a utility to secure funds

332
collected pursuant to this section to ensure timely refund to

333
customers in the event of over recovery.

334
(3) In approving an application for interim storm-recovery

335
costs pursuant to subsection (2), the commission shall also

336
establish a recovery period for such interim costs. This

337
recovery period shall be based upon a reasonable balancing of

338
all of the following factors:

339
(a) The financial impact of the length of the recovery

340
period on the utility.

341
(b)

Timeliness of recovery.

342
(c) Affordability to ratepayers.

343
(d)

Avoiding sudden substantial bill increases to

344
ratepayers.

345
(4) Funds collected pursuant to this section are subject to

346
true-up. The commission shall require that any refund to or

347
additional collection from ratepayers made as a part of the

348
true-up include interest.

349
(5) Nothing in this section shall be construed to prevent a

350
public utility from applying for, or the commission approving,

351
storm-recovery financing pursuant to s. 366.8260.

352
(6) The commission shall adopt rules to implement this

353
section as soon as practicable, but no later than January 1,

354
2027.

355 Section 10. Paragraph (a) of subsection (2) and subsection
356 (3) of section 367.081, Florida Statutes, are amended to read:
357 367.081 Rates; procedure for fixing and changing.—
358 (2)(a)1. The commission shall, either upon request or upon
359 its own motion, fix rates which are
affordable,
just,
360 reasonable, compensatory, and not unfairly discriminatory. In
361 every such proceeding, the commission shall consider the value
362 and quality of the service and the cost of providing the
363 service, which shall include, but not be limited to, debt
364 interest; the requirements of the utility for working capital;
365 maintenance, depreciation, tax, and operating expenses incurred
366 in the operation of all property used and useful in the public
367 service; and a fair return on the investment of the utility in
368 property used and useful in the public service. However, the
369 commission shall not allow the inclusion of contributions-in
370 aid-of-construction in the rate base of any utility during a
371 rate proceeding, nor shall the commission impute prospective
372 future contributions-in-aid-of-construction against the
373 utility’s investment in property used and useful in the public
374 service; and accumulated depreciation on such contributions-in
375 aid-of-construction shall not be used to reduce the rate base,
376 nor shall depreciation on such contributed assets be considered
377 a cost of providing utility service.
378 2. For purposes of such proceedings, the commission shall
379 consider utility property, including land acquired or facilities
380 constructed or to be constructed within a reasonable time in the
381 future, not to exceed 24 months after the end of the historic
382 base year used to set final rates unless a longer period is
383 approved by the commission, to be used and useful in the public
384 service, if:
385 a. Such property is needed to serve current customers;
386 b. Such property is needed to serve customers 5 years after
387 the end of the test year used in the commission’s final order on
388 a rate request as provided in subsection (6) at a growth rate
389 for equivalent residential connections not to exceed 5 percent
390 per year; or
391 c. Such property is needed to serve customers more than 5
392 full years after the end of the test year used in the
393 commission’s final order on a rate request as provided in
394 subsection (6) only to the extent that the utility presents
395 clear and convincing evidence to justify such consideration.
396
397 Notwithstanding the provisions of this paragraph, the commission
398 shall approve rates for service which allow a utility to recover
399 from customers the full amount of environmental compliance
400 costs. Such rates may not include charges for allowances for
401 funds prudently invested or similar charges. For purposes of
402 this requirement, the term “environmental compliance costs”
403 includes all reasonable expenses and fair return on any prudent
404 investment incurred by a utility in complying with the
405 requirements or conditions contained in any permitting,
406 enforcement, or similar decisions of the United States
407 Environmental Protection Agency, the Department of Environmental
408 Protection, a water management district, or any other
409 governmental entity with similar regulatory jurisdiction.
410 (3) The commission, in fixing rates, may determine the
411 prudent cost of providing service during the period of time the
412 rates will be in effect following the entry of a final order
413 relating to the rate request of the utility and may use such
414 costs to determine the revenue requirements that will allow the
415 utility to earn a fair rate of return on its rate base.
Any

416
financial model used by the commission in setting and evaluating

417
the return on equity for a utility as part of a proceeding

418
fixing rates must be:

419
(a) Financially logical; and

420
(b) Generally used and accepted by finance practitioners

421
both within and outside of the regulated utility industry.

422 Section 11. Paragraph (b) of subsection (5) of section
423 377.814, Florida Statutes, is amended to read:
424 377.814 Municipal Solid Waste-to-Energy Program.—
425 (5) FUNDING.—
426 (b) Funds awarded under the grant programs set forth in
427 this section may not be used to support, subsidize, or enable
428 the sale of electric power generated by a municipal solid waste
429 to-energy facility to any small electric utility eligible to
430 petition the commission under
s. 366.06(5)

s. 366.06(4)
.
431 Section 12. This act shall take effect July 1, 2026.