SUPREME COURT OF FLORIDA

Transcription

1 SUPREME COURT OF FLORIDA CASE NO. SC SOUTHERN ALLIANCE FOR CLEAN ENERGY, Appellant, vs. PSC Docket No.: EI ART GRAHAM, et al., Appellees. / ON APPEAL FROM THE FLORIDA PUBLIC SERVICE COMMISSION ANSWER BRIEF OF APPELLEE FLORIDA POWER & LIGHT COMPANY WHITE & CASE LLP Raoul G. Cantero Florida Bar No David P. Draigh Florida Bar No Jesse Green Florida Bar No Southeast Financial Center, Ste South Biscayne Boulevard Miami, FL Telephone: (305) Facsimile: (305) rcantero@whitecase.com ddraigh@whitecase.com jgreen@whitecase.com FLORIDA POWER & LIGHT COMPANY Kenneth M. Rubin Florida Bar. No Jessica A. Cano Florida Bar. No Universe Boulevard Juno Beach, FL ken.rubin@fpl.com jessica.cano@fpl.com Counsel for Florida Power & Light Company MIAMI (2K)

2 TABLE OF CONTENTS Page TABLE OF CITATIONS... iii STATEMENT OF THE CASE AND FACTS...1 A. Facts Relevant to the Appeal...2 B. Course of Proceedings and Disposition Below...8 C. Standard of Review...10 SUMMARY OF THE ARGUMENT...11 ARGUMENT...13 I. THE PSC S ORDER IS SUPPORTED BY COMPETENT, SUBSTANTIAL EVIDENCE...13 A. SACE Does Not Dispute That FPL s Costs Qualify for Recovery Under Section , or That They Were Prudently Incurred...13 B. SACE s Argument that FPL Did Not Prove an Intent to Build Fails Because No Statute or Rule Imposes Such a Requirement...16 C. SACE s Arguments Require the Court to Re-Weigh the Evidence and Second-Guess the PSC s Credibility Determinations...18 D. FPL Presented Evidence that It Does Intend to Build the Turkey Point Project...19 II. THE STATUTE S DELEGATION OF AUTHORITY TO THE PSC, AN AGENCY WITH SPECIALIZED EXPERTISE, IS CONSTITUTIONAL...20 A. The Legislature Is Not Required to Spell Out Standards in Exhaustive Detail, Especially Where an Agency Is Charged with Administering Policies Requiring Specialized Expertise...21 MIAMI (2K) i

3 B. Section Contains Sufficiently Detailed Guidelines and Standards...23 CONCLUSION...28 CERTIFICATE OF COMPLIANCE...32 MIAMI (2K) ii

4 TABLE OF CITATIONS Page CASES Askew v. Cross Key Waterways, 372 So. 2d 913 (Fla. 1978)... 22, 27 AT&T Communications of the Southern States, Inc. v. Marks, 515 So. 2d 741 (Fla. 1987) Bush v. Schiavo, 885 So. 2d 321 (Fla. 2004) Citizens of State v. Pub. Serv. Comm n, 464 So. 2d 1194 (Fla. 1985) Citizens of State v. Wilson, 569 So. 2d 1268 (Fla. 1990) Citizens v. Pub. Serv. Comm n, 448 So. 2d 1024 (Fla. 1984)... 11, 15 Crist v. Jaber, 908 So. 2d 426 (Fla. 2005) Dep t of State v. Martin, 885 So. 2d 453 (Fla. 2004) Florida Gas Transmission Co. v. Public Service Commission, 635 So. 2d 941 (Fla. 1994) Florida Home Builders Ass n v. Div. of Labor, 367 So. 2d 219 (Fla. 1979) Florida Waterworks Ass n v. Fla. Pub. Serv. Comm n, 473 So. 2d 237 (Fla. 1st DCA 1985) Friends of Great S., Inc. v. City of Hollywood, 964 So. 2d 827 (Fla. 4th DCA 2007) GTC, Inc. v. Edgar, 967 So. 2d 781 (Fla. 2007)... 2, 18, 19, 24 MIAMI (2K) iii

5 High Ridge Mgmt. Corp. v. State, 354 So. 2d 377 (Fla. 1978) In re Advisory Opinion to the Governor, 509 So. 2d 292 (Fla. 1987) Lane v. Chiles, 698 So. 2d 260 (Fla. 1997)... 11, 21 Lewis v. Bank of Pasco Cnty., 346 So. 2d 53 (Fla. 1977) McCaw Commc ns of Fla., Inc. v. Clark, 679 So. 2d 1177 (Fla. 1996) Microtel v. Fla. Pub. Serv. Comm n, 464 So. 2d 1189 (Fla. 1985)... 22, 26, 27 Orlando Regional Healthcare Sys., Inc. v. Alexander, 909 So. 2d 582 (Fla. 5th DCA 2005) Sarasota Cnty v. Berg, 302 So. 2d 737 (Fla. 1974) Shevin v. Yarborough, 274 So. 2d 505 (Fla. 1973)... 11, 15 Sims v. State, 754 So. 2d 657 (Fla. 2000) Sloban v. Fla. Bd. of Pharm., 982 So. 2d 26 (Fla. 1st DCA 2008) Smith v. Portante, 212 So. 2d 298 (Fla. 1968) State Dep t of Citrus v. Griffin, 239 So. 2d 577 (Fla. 1970) State v. Avatar Dev. Corp., 697 So. 2d 561 (Fla. 1997) MIAMI (2K) iv

6 State v. Bender, 382 So. 2d 697 (Fla. 1980) State v. Fuchs, 769 So. 2d 1006 (Fla. 2000)... 11, 21 Verizon Fla, Inc. v. Jaber, 889 So. 2d 712 (Fla. 2004) Weeks v. Fla. Birth-Related Neurological, 977 So. 2d 616 (Fla. 5th DCA 2008) West Fla. Elec. Coop. Ass n, Inc. v. Jacobs, 887 So. 2d 1200 (Fla. 2004)... 10, 16, 18 STATUTES AND RULES , Fla. Stat. (2011)... passim (1), Fla. Stat. (2011)... 3, 14, 23, (2), Fla. Stat. (2006)... passim (6), Fla. Stat. (2011) (3), Fla. Stat. (2011) (11), Fla. Stat. (2011) , Fla. Stat. (2011)... 2, (4)(b)(2), Fla. Stat. (2006) (4)(e), Fla. Stat. (2011) (1)(b), Fla. Stat. (Supp. 1992) Fla. Admin. Code R Fla. Admin. Code R (1)... 10, 14 Fla. Admin. Code R MIAMI (2K) v

7 OTHER AUTHORITY Order No. PSC FOF-EI (Jan. 7, 2008)... 5 Order No. PSC FOF-EI (Apr. 11, 2008)... 5, 9 Order No. PSC FOF-EI (Nov. 12, 2008)... 5 Order No. PSC FOF-EI (Nov. 19, 2009)... 5 Order No. PSC FOF-EI (Feb. 2, 2011)... 6, 17 Order No. PSC FOF-EI (Nov. 23, 2011)... 1, 5 MIAMI (2K) vi

8 STATEMENT OF THE CASE AND FACTS This is an appeal from an order of the Florida Public Service Commission ( PSC ) approving the cost recovery petition of Florida Power and Light Company ( FPL ) under section , Florida Statutes. That section authorizes specific, alternative mechanisms for the recovery of costs incurred in the siting, design, licensing, and construction of a nuclear power plant. See In re: Nuclear Cost Recovery Clause, Docket No EI, Order No. PSC FOF-EI (Nov. 23, 2011) (the Order ). In 2007, the PSC ruled that two projects new units 6 & 7 at the Turkey Point facility (the Turkey Point Project ), and an extended power uprate project at four existing units (the EPU Project ) are eligible for cost recovery under section PSC orders in 2008, 2009, and 2010 never appealed and not on appeal here allowed cost recovery for those Projects. The Order on appeal allowed FPL to recover costs for the EPU and Turkey Point Projects totaling $196 million, 88% of which was for the EPU Project, which Petitioner, Southern Alliance for Clean Energy ( SACE ), does not challenge. Rather, SACE argues that the PSC improperly allowed recovery for the Turkey Point Project because FPL failed to prove its intent to build the Project, even though witnesses testified, among other things, that FPL does intend to build it. SACE s only other argument is that section unconstitutionally delegates authority to the PSC. Both arguments fail. This Court should affirm the Order. MIAMI (2K) 1

9 A. Facts Relevant to the Appeal SACE concedes that a PSC order is valid if supported by competent, substantial evidence, and that SACE bears the burden of proving that the Order is invalid (br. at 13). SACE argues, however, that this Court should reweigh the evidence and reach a different result (br. at 14-15). But this Court has repeatedly held that it does not reweigh the evidence before the PSC, and that it will uphold a PSC order so long as competent, substantial evidence supports it. GTC, Inc. v. Edgar, 967 So. 2d 781, 790 (Fla. 2007). We summarize that evidence below. Nuclear Cost Recovery Legislation In 1980, the Legislature enacted section , Florida Statutes, which requires the Commission to determine the need for proposed electrical power plants. In 2006, section was amended to require the PSC to determine whether, among other things, a proposed nuclear power plant will [e]nhance the reliability of electric power production within the state by improving the balance of power plant fuel diversity and reducing Florida s dependence on fuel oil and natural gas (4)(b)(2), Fla. Stat. (2006). Also in 2006, the Legislature directed the PSC to establish, by rule, alternative cost recovery mechanisms for the recovery of costs incurred in the siting, design, licensing and construction of a nuclear power plant (2), Fla. Stat. (2006). The cost-recovery mechanism is designed to promote utility investment in nuclear... power plants MIAMI (2K) 2

10 and allow for the recovery in rates of all prudently incurred costs. Id. When the PSC determines a need for a power plant, a utility may recover its prudently incurred costs under section (4)(e), Fla. Stat. (2011) (providing that the right of a utility to recover any costs incurred prior to commercial operation, including... costs associated with the siting, design, licensing, or construction of the plant... shall not be subject to challenge unless... the commission finds, based on a preponderance of the evidence..., that certain costs were imprudently incurred ). Section defines cost to include all capital investments, including rate of return, any applicable taxes, and all expenses, including operation and maintenance expenses, related to or resulting from the siting, licensing, design, construction, or operation of the nuclear power plant, including new, expanded, or relocated electrical transmission lines or facilities of any size that are necessary thereto (1)(a), Fla. Stat. (2011). Cost includes any preconstruction costs, such as those incurred during the period of time after a site, including any related electrical transmission lines or facilities, has been selected through and including the date the utility completes site clearing work (1)(f), (2)(a), Fla. Stat. (2011). Construction costs are not immediately recoverable. If construction begins, the cost of construction is funded by FPL, and is only recovered from customers over many years when a facility goes into service. MIAMI (2K) 3

11 Section also details the cost-recovery mechanism, which shall include [r]ecovery through the capacity cost recovery clause of any preconstruction costs, and recovery through an incremental increase in the utility s capacity cost recovery clause rates of the carrying costs on the utility s projected construction cost balance associated with the nuclear or integrated gasification combined cycle power plant (2)(a), (b), Fla. Stat. (2011). That section also provides that, if the utility elects not to complete or is precluded from completing construction of the nuclear power plant,... the utility shall be allowed to recover all prudent preconstruction and construction costs incurred following the commission s issuance of a final order granting a determination of need for the nuclear power plant (6), Fla. Stat. (2011). Pursuant to section , in 2007 the PSC enacted a rule establishing alternative cost recovery mechanisms for the recovery of costs incurred in the siting, design, licensing, and construction of nuclear... plants in order to promote electric utility investment in nuclear... plants and allow for the recovery in rates of all such prudently incurred costs. Fla. Admin. Code R (1). The PSC Approves Two Projects for Cost Recovery and Issues a Series of Cost Recovery Orders That Have Not Been Appealed Also in 2007, under section , FPL applied to the PSC for need determinations for the Turkey Point and EPU Projects. In two orders in 2008, the PSC approved the two projects as eligible for annual nuclear cost recovery review. MIAMI (2K) 4

12 See In Re: Petition for determination of need for expansion of Turkey Point and St. Lucie nuclear power plants, for exemption from Bid Rule , F.A.C., and for cost recovery through the PSC s Nuclear Power Plant Cost Recovery Rule, Rule , F.A.C., Docket No EI, Order No. PSC FOF-EI (Jan. 7, 2008); In re: Petition to determine need for Turkey Point Nuclear Units 6 and 7 electrical power plant by Florida Power & Light Company, Docket No EI, Order No. PSC FOF-EI (Apr. 11, 2008). In accordance with the need determination orders, in 2008, 2009, and 2010 FPL sought PSC approval to recover costs authorized by sections and (4), Florida Statutes, and Rule , Florida Administrative Code, for both the EPU and Turkey Point Projects. FPL supported each request with several documents: a detailed analysis of the economic feasibility of completing the projects; updated project assumptions (such as cost and megawatt output); and system resource planning assumptions (such as forecasted customer demand, forecasted prices of natural gas and other fossil fuels, and costs of environmental compliance) (R ). The PSC approved those requests in three orders: In re: Nuclear cost recovery clause, Docket No EI, Order No. PSC FOF-EI (Nov. 12, 2008); In re: Nuclear cost recovery clause, Docket No EI, Order No. PSC FOF-EI (Nov. 19, 2009); In re: Nuclear cost recovery MIAMI (2K) 5

13 clause, Docket No EI, Order No. PSC FOF-EI (Feb. 2, 2011). None were appealed. FPL s 2011 Cost Recovery Request In 2011, FPL sought to recover its 2011 estimated costs and its projected 2012 costs. The EPU Project will provide an estimated 450 megawatts of additional nuclear power (R ) (A1. 36). 1 That project will be completed in 2013 (R ), and already has begun producing additional nuclear power for FPL s customers (R ). Indeed, although SACE states that its constitutional challenge to section implicate[s] these uprate projects, it expressly does not challenge cost recovery awarded in 2011 for the [EPU] uprate project[] (br. at 4 n.4). Thus, SACE does not challenge 88% of the recovery the Order authorizes. 2 Recovery for the Turkey Point Project which SACE does challenge represents only 12% of the recovery the Order allows. 3 FPL has always maintained a deliberate, stepwise approach to that project (R ). FPL s project-management strategy, which it has applied consistently since 2008, is to 1 A1. refers to Tab 1 of Petitioner s appendix, which contains the Order. 2 $171.8 million of the $196 million in costs awarded relates to the EPU Project, including a 2010 true-up of $1.5 million (A1. 62), a 2011 true-up of $17.4 million (A1. 63) and projected 2012 costs of $152.9 million (A1. 65). 3 Only $24.2 million of the $196 million relates to the Turkey Point Project. This includes a 2010 true-up of negative $18 million (A1. 29), a 2011 true-up of $5.4 million (A1. 31) and projected 2012 costs of $36.8 million (A1. 32). MIAMI (2K) 6

14 manage cost risk by adjusting the schedule as needed (R ). For example, in 2010, FPL decided it would be premature to begin construction and incur the significant cost of construction on the original timetable (R , 1636, 1679, ). FPL s primary focus, as always, is to obtain the federal, state, and local approvals necessary to move forward with the Turkey Point Project (R ). FPL s long-term feasibility analyses which used the same methodology it had used for years showed that both the EPU and Turkey Point Projects remained solidly cost-effective and beneficial for customers (R ; R ). The Turkey Point Project will provide 2,200 megawatts of nuclear power (R ), and, when completed, will significantly benefit FPL s customers (R ). Indeed, the project is estimated to save FPL customers about $1.1 billion in the first full year of operation, and about $75 billion over the project s life (R ). The project will diversify FPL s fuel sources, decreasing use of natural gas by about 13% in the first full year of operation, and decreasing annual use of fossil fuels by the equivalent of 177 million barrels of oil, or 29 million mmbtu of natural gas (R ). Over the project s life, carbon dioxide emissions will be reduced by an estimated 287 million tons the equivalent of operating FPL s entire generating system with zero carbon dioxide emissions for 7 years (R ). MIAMI (2K) 7

15 B. Course of Proceedings and Disposition Below After reviewing voluminous evidence (the record is 12,481 pages long), including FPL s written testimony and the cross-examination of FPL s witnesses at the hearing, the PSC issued the Order. The Order approves recovery of FPL s 2011 estimated costs and projected 2012 costs for both the EPU and Turkey Point Projects of about $196 million, or $2.09 on a typical 1,000 kilowatt-hour monthly residential bill (R ). As noted above, only 12% of that amount is for the Turkey Point Project. The Order, without attachments, is 108 pages long, the first 73 pages of which contain extensive findings as to FPL (A ). The Order states that Section provides for advanced cost recovery for utilities engaged in the siting, design, licensing, and construction of nuclear power plants ; that this statutory provision applies to both the building of new nuclear power plants and the modification of existing nuclear power plants ; and that it is not necessary for a utility to engage in the siting, design, licensing, and construction of nuclear power plant activities simultaneously in order to meet the statutory requirements of Section (A1. 7, 9). Under these standards, the PSC first ruled that FPL s costs related to the Turkey Point Project qualify as recoverable preconstruction costs as defined in Section (A1. 10). Those costs qualify because, among other things, FPL MIAMI (2K) 8

16 continues to pursue licenses and the approvals necessary to construct and operate [the Turkey Point Project] from both state and federal governments; FPL has maintained its reservations with the manufacturers of long-lead material by negotiating several extensions; and FPL has continued negotiations for a land exchange agreement with the Everglades National Park (A ). Therefore, the PSC concluded that FPL s activities related to [the Turkey Point Project] qualify as siting, design, licensing, and construction of a nuclear power plant as contemplated by Section (A1. 11). The PSC also approved FPL s feasibility analyses, finding that, based on the preponderance of the evidence, FPL has fully considered the economic, regulatory, technical, funding, and joint ownership considerations impacting the feasibility of the project (A1. 20). The Order addresses those analyses at length, evaluating the credibility of FPL s witnesses as it addressed SACE s counterarguments at the hearing (A ). For example, the PSC noted SACE s arguments that FPL s cost-effectiveness analysis improperly omitted sunk costs, but found that FPL witness Sim more convincingly explained that including sunk costs in a cost-effectiveness analysis of whether to go forward with a project would violate a well-accepted economic analysis principle of Rule (5)(c)5, F.A.C., and Order No. PSC FOF-EI (A1. 17). MIAMI (2K) 9

17 In addition, the Order addresses at length SACE s argument that FPL does not intend to build the Turkey Point Project, and that completing the project is not feasible (A1. 20). After extensive discussion of the testimony of FPL witnesses Scroggs and Reed and additional witnesses Fisher, Rich and Jacobs, the Order rejects SACE s argument (A ). Having found FPL s costs to qualify for recovery, the Order also analyzes the costs incurred under the prudence standard in rule (1), which is well documented in [the PSC s] past Orders (A1. 26). After reviewing the evidence and testimony, the PSC concluded that the costs sought for the Turkey Point Project were prudently incurred (A ). SACE does not appeal that finding. The Order makes similar findings with respect to the recovery authorized for the EPU Project, which, as noted above, SACE does not challenge. C. Standard of Review PSC orders come to this Court clothed with the presumption that they are reasonable and just. West Fla. Elec. Coop. Ass n, Inc. v. Jacobs, 887 So. 2d 1200, 1204 (Fla. 2004). The party challenging such an order thus must show a departure from the essential requirements of law. Id. This Court will approve the PSC s findings and conclusions if they are based upon competent, substantial evidence and are not clearly erroneous. Id. As SACE concedes (br. at 13), it is SACE s burden to prove that the Order is not supported by the evidence. Id. (citing MIAMI (2K) 10

18 Citizens v. Pub. Serv. Comm n, 448 So. 2d 1024 (Fla. 1984) (holding that the PSC s findings were supported by substantial, competent evidence); Shevin v. Yarborough, 274 So. 2d 505 (Fla. 1973) (same). This Court reviews the constitutionality of a statute with great deference. It is well established that, where reasonably possible, a statute will be interpreted in a manner that resolves all doubts in favor of its constitutionality. State v. Fuchs, 769 So. 2d 1006, 1008 (Fla. 2000). A party challenging the constitutionality of an enactment has a heavy burden to show that it is invalid. Lane v. Chiles, 698 So. 2d 260, 262 (Fla. 1997). SUMMARY OF THE ARGUMENT The PSC s Order is supported by competent, substantial evidence. SACE does not challenge the costs awarded for the EPU Project. Nor does it dispute the PSC s findings that the costs authorized for recovery by FPL for the Turkey Point Project qualify as recoverable preconstruction costs as defined in section , and that those costs were prudently incurred. Rather, SACE argues that FPL failed to prove that FPL has the requisite intent to build the Turkey Point Project. But intent to build is not a term of art in the statute or regulations; those words do not appear in either Section or the PSC s regulations. In a prior order, the PSC found that a utility must demonstrate intent to build, but the PSC used that phrase in analyzing whether MIAMI (2K) 11

19 the utility had met the express statutory requirements contained in section , namely whether the costs sought to be recovered were prudently incurred in the siting, design, licensing and construction of a nuclear power plant. Moreover, SACE admits that FPL presented evidence that FPL does intend to build the Turkey Point Project. SACE s only argument against that evidence is that it is not credible. Indeed, all of SACE s arguments demand that this Court reweigh evidence and revisit the PSC s credibility determinations, even though this Court has repeatedly held that, on review of PSC orders, it does neither. SACE next argues that section unconstitutionally delegates authority because it does not articulate any standards (br. at 32). But it is well established that the Legislature may delegate the authority to administer legislative policies, and such delegation is particularly appropriate where, as here, the agency administers a statute in an area requiring specialized expertise. Indeed, reviewing statutes similar to Section , this Court has repeatedly upheld delegations of authority to the PSC. Moreover, Section does articulate clear standards, by specifying the types of costs that are recoverable, the standard to be applied in reviewing the utility s costs, and two specific mechanisms that shall be used for recovery of those prudently incurred costs. MIAMI (2K) 12

20 ARGUMENT I. THE PSC S ORDER IS SUPPORTED BY COMPETENT, SUBSTANTIAL EVIDENCE SACE does not dispute the PSC s findings, or the evidence supporting them, that the Turkey Point Project costs awarded to FPL qualify as recoverable preconstruction costs as defined in Section , and that those costs were prudently incurred. Rather, it argues that FPL failed to prove, and that the PSC incorrectly found, that FPL has the requisite intent to build the Turkey Point Project (br. at 14). But Section does not contain an intent to build requirement. Moreover, FPL presented evidence that it does intend to build the Turkey Point Project. SACE s only argument against that evidence is that it is not credible. All of SACE s arguments demand that this Court reweigh the evidence and disregard the PSC s credibility determinations two things this Court has repeatedly held it does not do. We elaborate on these arguments below. A. SACE Does Not Dispute That FPL s Costs Qualify for Recovery Under Section , or That They Were Prudently Incurred It is undisputed that Section provides for alternative cost recovery mechanisms for the recovery of costs incurred in the siting, design, licensing and construction of a nuclear power plant (2), Fla. Stat. (2011). SACE does not dispute that Section defines cost to include all capital investments, including rate of return, any applicable taxes, and all expenses, including operation MIAMI (2K) 13

21 and maintenance expenses, related to or resulting from the siting, licensing, design, construction, or operation of the nuclear power plant; or that cost also includes any preconstruction costs, such as costs incurred during the period of time after a site, including any related electrical transmission lines or facilities, has been selected through and including the date the utility completes site clearing work (1)(a), (f), (2)(a), Fla. Stat. (2011). Nor does SACE dispute that Section applies both to the building of new nuclear power plants and to the modification of existing ones; that a utility need not engage in the siting, design, licensing, and construction of nuclear power plant activities simultaneously in order to meet the statutory requirements of Section ; or that prudently incurred costs are recoverable even if a utility elects not to complete or is precluded from completing construction of the nuclear power plant (A1. 7, 9). SACE also does not dispute that Rule (1) establishes alternative cost recovery mechanisms for the recovery of costs incurred in the siting, design, licensing, and construction of nuclear... plants in order to promote electric utility investment in nuclear... plants and allow for the recovery in rates of all such prudently incurred costs. Fla. Admin. Code R (1). The Order applied these standards to conclude that FPL s costs for the Turkey Point Project qualify as recoverable preconstruction costs as defined in MIAMI (2K) 14

22 Section (A1. 10). Among other things, the PSC found they qualified because: FPL continues to pursue licenses and the approvals necessary to construct and operate [the Turkey Point Project] from both state and federal governments; FPL has maintained its reservations with the manufacturers of longlead material by negotiating several extensions; FPL has continued negotiations for a land exchange agreement with the Everglades National Park; FPL has continued negotiations for approval of a Comprehensive Development Master Plan amendment for roadway improvements needed for construction activities; and FPL sought approval and execution of a Joint Participation Agreement for reclaimed water from Miami-Dade County for the [Turkey Point P]roject s water cooling needs. (A1. 11). SACE does not dispute any of these findings, and does not dispute the PSC s conclusion that FPL s activities related to [the Turkey Point Project] qualify as siting, design, licensing, and construction of a nuclear power plant as contemplated by Section Id. Nor does SACE dispute the Order s conclusion that the costs FPL sought to recover were prudently incurred. Moreover, as shown above, SACE concedes that the costs for the EPU Project 88% of the total costs allowed were properly awarded. Under SACE s own authority, those concessions mandate a finding that the Order is supported by competent, substantial evidence. See Citizens, 448 So. 2d at 1027 (holding that PSC s findings were supported by substantial, competent evidence); Shevin, 274 MIAMI (2K) 15

23 So. 2d at 510 (same); see also Jacobs, 887 So. 2d at 1205 (finding that an order was supported by substantial, competence evidence where the appellant did not contest PSC s factual determinations); Citizens of State v. Wilson, 569 So. 2d 1268, 1270 (Fla. 1990) (finding that a PSC order was supported by substantial, competence evidence where the petitioner s expert conceded that the PSC s factual determinations were correct). Indeed, this Court has repeatedly stated [that] we will not reweigh or reevaluate the evidence presented to the [PSC], but will examine the record only to determine... whether the agency had available to it competent substantial evidence to support its findings. Citizens of State v. Pub. Serv. Comm n, 464 So. 2d 1194, 1194 (Fla. 1985). B. SACE s Argument that FPL Did Not Prove an Intent to Build Fails Because No Statute or Rule Imposes Such a Requirement SACE argues (br. at 10) that the Order found that FPL had demonstrated the intent to build [its] proposed new nuclear reactors as required by Section And SACE s entire argument that the Order is not supported by competent, substantial evidence is based on the premise that FPL did not qualify for cost recovery... because [it] did not demonstrate intent to build (br. at 14). SACE s characterization of the Order is incorrect. The Order found that FPL s preconstruction activities regarding the Turkey Point Project qualify as siting, design, licensing, and construction of a nuclear power plant as contemplated MIAMI (2K) 16

24 by Section , and that FPL s costs were prudent (A1. 11, 31). Those are the findings required by Section and the regulations, which allow recovery of costs, prudently incurred, related to the siting, design, licensing, and construction of a nuclear power plant (2), Fla. Stat. (2011); Fla. Admin. Code R (1). An independent requirement of intent to build does not appear in either the statute or the regulations, and the Commission has not created any new obligation or requirement that must be met to prove an intent to build. The Order does acknowledge the PSC s prior decision in Order No. PSC FOF-EI, where we found that a utility must continue to demonstrate its intent to build the nuclear power plant for which it seeks advance recovery of costs (A1. 9). As shown above, FPL submitted evidence that it does intend to build the Turkey Point Project. That evidence was not refuted, and the PSC authorized the requested cost recovery under the express terms of Section SACE cannot rely on an independent intent to build requirement, which does not appear in the statute or regulations. Its argument based on such a requirement cannot undermine the conclusion that the Order is supported by competent, substantial evidence, including the PSC s finding that the costs were prudently incurred based on, among other things, FPL s intent to build. MIAMI (2K) 17

25 C. SACE s Arguments Require the Court to Re-Weigh the Evidence and Second-Guess the PSC s Credibility Determinations SACE s intent-to-build argument also repeatedly demands that this Court reweigh the evidence, reevaluate the witnesses credibility, and re-hear arguments that the PSC rejected. For example, SACE argues (br. at 15) that FPL has not to date entered into an EPC or EP & C agreement, which will be necessary before any type of engineering, procurement, or construction related activities can be commenced. But SACE ignores contrary evidence, namely testimony that such activities do not need to be initiated for several years to maintain the current project schedule (R53. Attachment 1, p. 298). SACE also argues (br. at 8-9) that FPL has only shown long-term feasibility by changing its definition and approach to determining long-term feasibility each year. But that argument ignores the Order s extensive discussion accepting FPL s long-term feasibility analyses, as well as the testimony of witness Sim that FPL has used the same long-term feasibility methodology in all of its cost-recovery petitions (R ). This Court has often warned that will not reweigh the evidence or overturn an order of the PSC because the Court might have arrived at a different result. See GTC, Inc. v. Edgar, 967 So. 2d 781, 790 (Fla. 2007). See also, e.g., Jacobs, 887 So. 2d at 1206 (finding that [i]t is not this Court s task, however, to reweigh the evidence and the factors considered by the PSC); Verizon Fla, Inc. v. Jaber, 889 So. 2d 712, 718 (Fla. 2004) (rejecting an attempt to place this Court in the MIAMI (2K) 18

26 position of the [PSC] to recalculate data and reweigh evidence, rather than framing a legal issue that this Court can address ). It is equally well established that, [w]hile there may be legitimate disagreements as to the weight and credibility of the evidence presented below, this Court s review is limited to a determination of whether evidence exists to support the Commission s findings. Crist v. Jaber, 908 So. 2d 426, 432 (Fla. 2005). Nevertheless, SACE argues at length (br. at 16-21) that FPL failed to show an intent to build. But that argument depends on several pages of discussion that FPL s witnesses only showed FPL s intent to create an option to build, and that the testimony of FPL witnesses was lacking in credibility or disingenuous and not credible (br. at 17 n.19, 19). That argument impermissibly demands that this Court reweigh the witnesses credibility. See, e.g., GTC, 967 So. 2d at 790; McCaw Commc ns of Fla., Inc. v. Clark, 679 So. 2d 1177, 1178 (Fla. 1996). D. FPL Presented Evidence that It Does Intend to Build the Turkey Point Project SACE concedes (br. at 17) that Mr. Scroggs did testify at the evidentiary hearing that FPL does in fact intend to build the Turkey Point Project. That testimony is dispositive because, as SACE concedes, this Court s role is only to determine whether any evidence supports the Order. SACE does not attack the competence of that evidence other than to argue that Scroggs s testimony is MIAMI (2K) 19

27 disingenuous and not credible. Id. But one party s unsurprising opinion about an opposing witness s credibility does not override the PSC s credibility finding. Moreover, SACE concedes (br. at 20) that FPL witnesses testified that its intentions are to go through the licensing process. That testimony, as well as the testimony of other witnesses that FPL has engaged in various preconstruction activities to advance the Turkey Point Project, is entirely consistent with an intent to build because obtaining licenses is a necessary prerequisite to construction activity. And such licensing activity is one of the many bases on which the PSC found that FPL s costs qualified for recovery. II. THE STATUTE S DELEGATION OF AUTHORITY TO THE PSC, AN AGENCY WITH SPECIALIZED EXPERTISE, IS CONSTITUTIONAL SACE next argues (br. at 32) that section unconstitutionally delegates authority because it does not provide adequate standards and guidelines. But it is well established that the Legislature may delegate to an agency the authority to administer the legislative policies identified in a statute. As this Court has held, such delegation is particularly appropriate where, as here, the agency administers a statute in an area requiring specialized expertise. Moreover, as shown below, Section does contain detailed standards and guidelines from which the PSC can administer the legislative policy embodied in the statute. MIAMI (2K) 20

28 SACE does not address the standard of review for challenging a statute s constitutionality (br. at 33-36). It is well established, however, that, where reasonably possible, a statute will be interpreted in a manner that resolves all doubts in favor of its constitutionality. State v. Fuchs, 769 So. 2d 1006, 1008 (Fla. 2000). Therefore, [a] party challenging the constitutionality of an enactment has a heavy burden to show that it is invalid. Lane v. Chiles, 698 So. 2d 260, 262 (Fla. 1997). As shown below, SACE fails to meet that burden because (A) the Legislature is not required to articulate the standards in exhaustive detail; and (B) the standards in Section sufficiently circumscribe the PSC s discretion. A. The Legislature Is Not Required to Spell Out Standards in Exhaustive Detail, Especially Where an Agency Is Charged with Administering Policies Requiring Specialized Expertise A statute contains adequate standards if it allows people of common understanding and intelligence to discern its meaning. Orlando Regional Healthcare Sys., Inc. v. Alexander, 909 So. 2d 582, 587 (Fla. 5th DCA 2005), receded from on other grounds by Weeks v. Fla. Birth-Related Neurological, 977 So. 2d 616 (Fla. 5th DCA 2008). The statutory criteria need not be intricately detailed, so long as they do not permit the decision makers to act upon whim, caprice or in response to pressures which do not permit ascertainment or correction. Friends of Great S., Inc. v. City of Hollywood, 964 So. 2d 827, 831 (Fla. 4th DCA 2007). MIAMI (2K) 21

29 Moreover, the specificity with which the legislature must set out statutory standards and guidelines may depend upon the subject matter dealt with and the degree of difficulty involved in articulating finite standards. In re Advisory Opinion to the Governor, 509 So. 2d 292, 311 (Fla. 1987). The same conditions that may operate to make direct legislative control impractical or ineffective may also, for the same reasons, make the drafting of detailed or specific legislation for the guidance of administrative agencies impractical or undesirable. Id. Therefore, as SACE concedes (br. at 35), the necessary specificity of statutory guidelines depends on the complexity of the subject, and the degree of difficulty involved in articulating finite standards. Askew v. Cross Key Waterways, 372 So. 2d 913, 918 (Fla. 1978). Where a statute s subject is complex and requires flexibility in administration, courts permit the Legislature to articulate broad standards while delegating policy administration to agencies with specialized expertise. Indeed, SACE also concedes (br. at 35) that the Legislature may constitutionally transfer subordinate functions to permit administration of legislative policy by an agency with the expertise and flexibility to deal with complex and fluid conditions. Microtel v. Fla. Pub. Serv. Comm n, 464 So. 2d 1189, 1191 (Fla. 1985). See also Askew v. Cross Key Waterways, 372 So. 2d 913, 924 (Fla. 1978) ( Flexibility by an administrative agency to administer a legislatively articulated policy is essential to meet the complexities of our modern MIAMI (2K) 22

30 society. ). Under these standards, Section constitutionally delegates authority to the PSC, an agency with the exact expertise to administer that statute. B. Section Contains Sufficiently Detailed Guidelines and Standards SACE agrees that Section articulates a legislative policy to promote utility investment in nuclear or integrated gasification combined cycle power plants and allow for the recovery in rates of all prudently incurred costs (2), Fla. Stat. (2011). But SACE argues that Section contains no standards whatsoever to guide the [PSC] in implementing and administering that policy (br. at 38). But Section contains extensive guidance to enable the PSC and the courts to determine whether the PSC is implementing the legislature s intent. Section carefully defines what is recoverable as a cost : Cost includes, but is not limited to, all capital investments, including rate of return, any applicable taxes, and all expenses, including operation and maintenance expenses, related to or resulting from the siting, licensing, design, construction, or operation of the nuclear power plant, including new, expanded, or relocated electrical transmission lines or facilities of any size that are necessary thereto (2)(a), Fla. Stat. (2011). Section also clarifies that costs shall include any preconstruction costs, which include costs incurred during the period of time after a site, including any related electrical transmission lines or facilities, has been selected through and including the date the utility completes site clearing work (1)(f), (2)(a), Fla. Stat. (2011). The statute further MIAMI (2K) 23

31 provides that such costs shall be afforded deferred accounting treatment and shall accrue a carrying charge equal to the utility s allowance for funds during construction... rate until recovered in rates. Id. In addition, the statute imposes the cost-recovery mechanism, providing that recovery of prudently incurred costs shall be by [r]ecovery through the capacity cost recovery clause of any preconstruction costs, and by an incremental increase in the utility s capacity cost recovery clause rates of the carrying costs on the utility s projected construction cost balance associated with the nuclear... power plant (2)(a), (b), Fla. Stat. (2011). SACE argues (br. at 40) that prudently incurred costs is not an objective standard which provides any real guidance. But the prudence standard is well established, and the PSC has often applied it to rate-based industries. See, e.g., GTC, 967 So. 2d at The prudence standard also has been codified in other statutes and regulations. See (3), Fla. Stat. (2011) ( All prudent costs of a reuse project shall be recovered in rates. ); (11), Fla. Stat. (2011) (allowing entities to recover the full, prudently incurred cost of [reuse project] studies and facilities ); Fla. Admin. Code R (2) (describing when [n]egotiated contracts will be considered prudent for cost recovery purposes ). MIAMI (2K) 24

32 Thus, Section describes recoverable costs, and the mechanism by which such costs will be recovered, in more detail than several other statutes delegating authority to the PSC that this Court has upheld. Indeed, SACE itself concedes that in Florida Gas Transmission Company v. Public Service Commission, 635 So. 2d 941, 944 (Fla. 1994), this Court upheld a statute granting the PSC authority to determine the need for and location of natural gas transmission pipelines. Specifically, the challenged language was: In the determination of need, the [PSC] shall take into account the need for natural gas delivery reliability, safety, and integrity; the need for abundant, clean-burning natural gas to assure the economic well-being of the public; the appropriate commencement and terminus of the line; and other matters within its jurisdiction deemed relevant to the determination of need (1)(b), Fla. Stat. (Supp. 1992). This Court rejected the argument that the reference to other matters was an abdicat[ion of] constitutional lawmaking responsibility, and held that section sets forth very specific and mandatory guidelines for the [PSC] to carry out the purpose of the legislation, and also establishes the [PSC] as a body with the appropriate expertise to evaluate the need, complex market conditions, environmental effect and other matters relating to a proposed pipeline. Id. at 944. The standards and definitions in Section are far more specific. In Microtel, this Court also rejected a constitutional challenge to a statute with guidelines broader than those in section The Court made it clear that MIAMI (2K) 25

33 [s]ubordinate functions may be transferred by the legislature to permit administration of legislative policy by an agency with the expertise and flexibility needed to deal with complex and fluid conditions. 464 So. 2d at See also Florida Waterworks Ass n v. Fla. Pub. Serv. Comm n, 473 So. 2d 237, (Fla. 1st DCA 1985) (upholding legislation broadly authorizing the PSC to regulate water and sewer utilities for the protection of the public health, safety, and welfare, and rejecting the contrary statutory interpretation, which would require constant legislative hearings to develop the necessary expertise, which is neither practically possible nor required by our constitution ) (citing State v. Bender, 382 So. 2d 697 (Fla. 1980)). Similarly, in AT&T Communications of the Southern States, Inc. v. Marks, 515 So. 2d 741, (Fla. 1987), this Court rejected the argument that PSC rules gave it unlimited authority to decide whether licensing a carrier was in the public interest because the statute articulated general guidelines such as the geographic availability of [telephone] service from other firms and the quality of service available from alternative suppliers. To support its argument that section unconstitutionally delegates power to the PSC, SACE cites a dozen cases. But not one of them involves a MIAMI (2K) 26

34 delegation of power to the PSC, and the circumstances in those cases bear no relation to the facts or law here. 4 In sum, Section delegates no more authority to the PSC than myriad other statutes that this Court has upheld against a delegation challenge. SACE s demand that the Legislature provide even more specific guidelines would require it to remain in perpetual session and devote a large portion of its time to regulation. Microtel, 464 So. 2d at That is not the Legislature s role, and SACE does not cite a single case in which this Court, or any other, held that a statutory delegation to the PSC was unconstitutional. 4 See Bush v. Schiavo, 885 So. 2d 321 (Fla. 2004) (governor s power to stay withholding of nutrition and hydration to patient); Dep t of State v. Martin, 885 So. 2d 453 (Fla. 2004) (power of Department of State to permit candidates to withdraw prior to election); Sims v. State, 754 So. 2d 657 (Fla. 2000) (lethal injection statute); State v. Avatar Dev. Corp., 697 So. 2d 561 (Fla. 1997) (power of Department of Environmental Regulation to establish permit system for shoreline installations); Florida Home Builders Ass n v. Div. of Labor, 367 So. 2d 219 (Fla. 1979) (power of Bureau of Apprenticeships to accept or reject apprenticeship programs); Askew v. Cross Keys Waterways, 372 So. 2d 913 (Fla. 1978) (land development regulations of the Department of Administration); High Ridge Mgmt. Corp. v. State, 354 So. 2d 377 (Fla. 1978) (rating system for nursing homes); Lewis v. Bank of Pasco Cnty., 346 So. 2d 53 (Fla. 1977) (comptroller s authority to publicly release list of stockholders of a bank); Sarasota Cnty v. Berg, 302 So. 2d 737 (Fla. 1974) (statute prohibiting unreasonable destruction of natural vegetation); State Dep t of Citrus v. Griffin, 239 So. 2d 577 (Fla. 1970) (statute authorizing citrus commission to issue marketing orders); Smith v. Portante, 212 So. 2d 298 (Fla. 1968) (authority of jury and county commissioners to gather information regarding prospective jurors); Sloban v. Fla. Bd. of Pharm., 982 So. 2d 26 (Fla. 1st DCA 2008) (authority of Board of Pharmacy to establish rules for reapplication of formerly licensed pharmacists). MIAMI (2K) 27

35 CONCLUSION For the reasons stated, the Court should affirm the Order. Respectfully submitted, FLORIDA POWER & LIGHT COMPANY Kenneth M. Rubin Florida Bar. No Jessica A. Cano Florida Bar. No Universe Boulevard Juno Beach, FL /s/ Raoul G. Cantero WHITE & CASE LLP Raoul G. Cantero Florida Bar No David P. Draigh Florida Bar No Jesse Green Florida Bar no Southeast Financial Center, Ste South Biscayne Boulevard Miami, FL Telephone: (305) Facsimile: (305) Counsel for Florida Power & Light Company MIAMI (2K) 28

36 CERTIFICATE OF SERVICE I certify that a copy of this brief was sent by overnight mail on May 29, 2012 to: Keino Young Pamela H. Page Samantha M. Cibula Division of Legal Services Florida Public Service PSC 2540 Shumard Oak Boulevard Tallahassee, FL kyoung@psc.state.fl.us phpage@psc.state.fl.us scibula@psc.state.fl.us Ennis Leon Jacobs, Jr. Williams & Jacobs 2510 Miccosukee Road, Suite 104 Tallahassee, FL Tel: Fax: Ljacobs50@comcast.net Gary A. Davis James S. Whitlock Gary A. Davis & Associates Post Office Box North Andrews Avenue Hot Springs, NC Tel: Fax: gadavis@enviroattorney.com jwhitlock@enviroattorney.com Counsel for Southern Alliance for Clean Energy Matthew Bernier Carlton Fields Law Firm 215 S. Monroe Street, Suite 500 Tallahassee, FL Tel: Fax: mbernier@carltonfields.com Counsel for Southern Alliance for Clean Energy Paul Lewis, Jr. Progress Energy Florida, Inc. 106 E. College Avenue, Suite 800 Tallahassee, FL Tel: Fax: Paul.lewisjr@pgnmail.com John T. Burnett Progress Energy Service Co., LLC Post Office Box st Avenue North St. Petersburg, Florida Tel: Fax: John.burnett@pgnmail.com MIAMI (2K) 29

37 Charles Rehwinkel Joseph McGlothlin Erik L. Sayler Office of Public Counsel The Florida Legislature 111 W. Madison Street, Suite 812 Tallahassee, FL Tel: James W. Brew F. Alvin Taylor Brickfield, Burchette, Ritts Stone, P.C. Eighth Floor, West Tower 1025 Thomas Jefferson St., NW Washington, DC Tel: Fax: Matthew J. Feil Gunster Law Firm 215 South Monroe Street, Suite 601 Tallahassee, FL Tel: Fax: Vicki Gordon Kaufman Jon C. Moyle, Jr. Keefe, Anchors, Gordon & Moyle FL Industrial Power Users Group 118 North Gadsden Street Tallahassee, FL Tel: Fax: J. Michael Walls Blaise N. Gamba Carlton Fields Law Firm Post Office Box 3239 Tampa, FL Tel: Fax: Stephen H. Grimes D. Bruce May, Jr. Elizabeth L. Bevington Kevin W. Cox Holland & Knight LLP 315 South Calhoun Street, Suite 600 Post Office Drawer 810 Tallahassee, FL Tel: Fax: Counsel for Progress Energy Florida MIAMI (2K) 30