Florida Power Corp. v. Garcia

780 So. 2d 34, 26 Fla. L. Weekly Supp. 102, 2001 Fla. LEXIS 403, 2001 WL 197040
CourtSupreme Court of Florida
DecidedMarch 1, 2001
DocketSC94665
StatusPublished
Cited by10 cases

This text of 780 So. 2d 34 (Florida Power Corp. v. Garcia) is published on Counsel Stack Legal Research, covering Supreme Court of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Florida Power Corp. v. Garcia, 780 So. 2d 34, 26 Fla. L. Weekly Supp. 102, 2001 Fla. LEXIS 403, 2001 WL 197040 (Fla. 2001).

Opinion

780 So.2d 34 (2001)

FLORIDA POWER CORPORATION, Appellant,
v.
Joe GARCIA, etc., et al., Appellees.

No. SC94665.

Supreme Court of Florida.

March 1, 2001.

*35 Rodney Gaddy and James A. McGee, Florida Power Corporation, St. Petersburg, FL; Jodi L. Corrigan and Marylin E. Culp of Annis, Mitchell, Cockey, Edwards & Roehn, P.A., Tampa, FL; and Sylvia H. Walbolt, Chris S. Coutroulis, Robert L. Ciotti, and Joseph H. Lang, Jr. of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., for Appellant.

Robert D. Vandiver, General Counsel, and Richard C. Bellak, Associate General Counsel, Florida Public Service Commission, Tallahassee, FL, for Appellee.

John Beranek and Lee L. Willis of Ausley & McMullen, Tallahassee, FL, for Lake Cogen, Ltd., Intervenor/Appellee.

Robert Scheffel Wright and John T. Lavia, III, Tallahassee, Florida; and Gail P. Fels, Office of the County Attorney, Miami, FL, for Miami-Dade County, Florida, and Montenay-Dade, Ltd., Intervenors/Appellees.

LEWIS, J.

This case involves an appeal from a decision of the Public Service Commission (the "Commission," or the "PSC") denying Florida Power Corporation's petition for declaratory statement on the basis of res judicata. In re Petition of Florida Power Corp., 98 F.P.S.C. 12:65 (1998) (Docket No. 980509-EQ, Order No. PSC-98-1621-FOF-EQ, Dec. 4, 1998). We have jurisdiction. See art. V, § 3(b)(2), Fla. Const. The narrow question presented is whether the 1995 determination by the Florida Public Service Commission regarding its jurisdiction to entertain a certain petition for declaratory statement filed in 1994 by appellant, Florida Power Corporation (FPC), had a preclusive effect as applied to its later determination of jurisdiction to entertain a substantially similar petition for declaratory statement filed by FPC in 1998. Based upon the unique circumstances of this case, we affirm the PSC's determination that it did because the concept of administrative finality applies.

I. MATERIAL FACTS AND PROCEEDINGS BELOW

In March, 1991, FPC and certain qualifying facilities[1] ("QF"s) entered into negotiated contracts for the purchase of electrical power. One of these contracts involved the cogenerator who is the appellee here, Lake Cogen, Limited ("Lake Cogen"). All of the contracts contain the following provision, set forth as section 9.1.2:

Except as otherwise provided in Section 9.1.1 hereof, for each billing month beginning with the Contract In-Service Date, the QF will receive electric energy payments based on the Firm Energy Cost calculated on an hour-by-hour basis as follows: (i) the product of the average monthly inventory chargeout price of fuel burned at the Avoided Unit Fuel *36 Reference Plant, the Fuel Multiplier, and the Avoided Unit Heat' Rate, plus the Avoided Unit Variable Q & M, if applicable, for each hour that the Company would have had a unit with these characteristics operating; and (ii) during all other hours, the energy cost shall be equal to the As Available Energy Cost.

This provision makes apparent allowance for the fact that electric utilities such as FPC typically have a number of electricity-generating facilities, not all of which may be "on line" at the same time, but which may be cycled into operation as appropriate to meet the customers' fluctuating energy demands. See generally Leonard S. Hyman, America's Electric Utilities: Past, Present and Future 22-30 (4th ed.1992). Thus, the contract provision establishes the method to determine, on a monthly basis, when the cogenerator will be entitled to receive higher "firm" energy payments for electricity pursuant to subsection (i) (when FPC would have operated the "avoided unit"—the facility which a utility such as FPC, by purchasing electrical power from a QF, avoids having to build to meet customer demand for electricity) or lower "as-available" payments pursuant to subsection (ii) (when such unit would not have been operated).

On July 1, 1991, in In re Petition for Approval of Contracts, 91 F.P.S.C. 7:60 (1991) (Docket No. 910401-EQ, Order No. 24734, July 1, 1991), the PSC reviewed the negotiated contracts and found them to be cost-effective for FPC's ratepayers (that is, not requiring payment to the cogenerators in excess of FPC's "avoided cost") under the criteria established in Rules 25-17.082 and 25-17.0832(2), Florida Administrative Code (providing that "[n]egotiated contracts will be considered prudent for cost recovery purposes if it is demonstrated by the utility that the purchase of firm capacity and energy from the qualifying facility pursuant to the rates, terms, and other conditions of the contract can reasonably be expected to contribute towards the deferral or avoidance of additional capacity construction or other capacity-related costs by the purchasing utility at a cost to the utility's ratepayers which does not exceed full avoided costs, giving consideration to the characteristics of the capacity and energy to be delivered by the qualifying facility under the contract"). As stated by this Court in Panda-Kathleen, L.P. v. Clark, 701 So.2d 322, 324 (Fla.1997), "`[a]voided cost' is the cost that a utility avoids by purchasing electrical power from a QF rather than generating the electrical power itself or purchasing the power from another source." In arriving at the estimated energy payment structure which the Commission approved, the contract used simplified assumptions regarding the "avoided unit."

During the first three years of the contract, FPC paid cogenerators firm energy prices at all hours of the day (thus, at the very least, implying that FPC would have operated the "avoided unit" at all times). However, thereafter (according to representations made to the Commission by FPC), FPC reviewed the operational status of the "avoided unit" described in section 9.1.2 of the contracts during minimum load conditions (that is, times of minimum customer demand for energy), and determined that the "avoided unit" would be scheduled off during certain minimum load hours of the day.

Based upon this review, on July 18, 1994, FPC unilaterally notified the parties to the contracts that, effective August 1, 1994, FPC would begin implementing section 9.1.2 as a basis for making certain "as available" energy payments for electricity (i.e., assuming that the "avoided unit" would not be operating during those hours) instead of the "firm" energy payments which it had previously been making (i.e., assuming, at least by implication, that the "avoided unit" would be operating during those hours). Three days later, on July 21, 1994, in an apparent attempt to justify its planned change in payments, FPC filed a petition with the Commission seeking a declaratory statement that section *37 9.1.2 of its negotiated cogeneration contracts (including the contract with appellee here) was consistent with Rule 25-17.0832(4)(b), Florida Administrative Code.[2]

The appellee cogenerator, Lake Cogen, petitioned for leave to intervene and questioned whether the declaratory statement procedure was appropriate. In addition, Lake Cogen filed a motion to dismiss on the ground that the PSC did not have jurisdiction to consider FPC's petition. Lake Cogen also initiated a lawsuit in state court at this time, alleging breach of contract based upon FPC's planned change in payments, and seeking declaratory judgment.

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Cite This Page — Counsel Stack

Bluebook (online)
780 So. 2d 34, 26 Fla. L. Weekly Supp. 102, 2001 Fla. LEXIS 403, 2001 WL 197040, Counsel Stack Legal Research, https://law.counselstack.com/opinion/florida-power-corp-v-garcia-fla-2001.