The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Regulated Industries
BILL: SB 1764
INTRODUCER: Senator Albritton
SUBJECT: Municipal Solid Waste-to-Energy Program
DATE: January 24, 2022
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Sharon Imhof RI Pre-meeting
2. AEG
3. AP
I. Summary:
SB 1764, creates s. 377.814, F.S., to establish the Municipal Solid Waste-to-Energy Program,
within the Department of Agriculture and Consumer Services, (DACS) comprised of a financial
assistance grant program and an incentive grant program.
The stated purpose of the program is to provide financial assistance grants and incentive grants
to municipal solid waste-to-energy (MSWE) facilities in order to incentivize the production and
sale of energy and reduce waste disposed of in landfills.
The bill defines “municipal solid waste-to-energy facility” as a publicly owned or government
affiliate-owned facility using an enclosed device with controlled combustion to thermally break
down solid waste to an ash residue containing little or no combustible material, producing
electricity, steam, or other energy. It does not include facilities primarily burning fuels other than
solid waste; nor facilities primarily burning vegetative, agricultural, or silvicultural wastes,
bagasse, clean dry wood, methane or other landfill gas, wood fuel derived from construction or
demolition debris, or waste tires, alone or in combination with fossil fuels.
The Financial Assistance Grant will provide the MSWE facilities funding at a rate of 2 cents per
kilowatt-hour of electricity purchased by an electric utility during the preceding state fiscal year,
not to exceed the difference between the electric utility’s avoided cost and the commercial retail
rate. If funds are insufficient to cover every qualifying kilowatt-hour from all qualifying
applicants, the DACS must prorate the available funds on an equitable basis, taking into
consideration the commercial retail rate within the applicable service territory.
To qualify, the facility must have previously entered into a power purchase agreement with an
electric utility that included capacity payments which the facility will no longer receive under the
agreement. The facility owner must submit an application to the DACS, including the MSWE
REVISED: BILL: SB 1764 Page 2
facility’s name and the amount of energy purchased from the facility by an electric utility during
the preceding state fiscal year.
The bill requires the DACS to establish a process in coordination with the PSC to verify
eligibility and the amount of energy purchased from the facility.
The incentive grant will provide facilities with matching funds on a dollar-for-dollar basis to
assist with planning and design for constructing, upgrading, or expanding the MSWE facilities,
including necessary legal or administrative expenses.
To qualify, the facility owner must apply to the DACS and demonstrate that the project is cost-
effective, permittable, and implementable and complies with s. 403.7061, F.S., which establishes
the requirements for review of new waste-to-energy (WTE) facility capacity by the Department
of Environmental Protection (DEP).
The bill requires the DEP to assist the DACS with determining eligibility and with establishing
requirements to ensure long-term and efficient operation and maintenance of such facilities.
The Department of Agriculture and Consumer Services must perform adequate overview of
applications and awards, including technical review, regular inspections, disbursement
approvals, and auditing. If the DACS determines that program requirements are not being met,
the bill requires termination or repayment of incentive grant funds.
The bill requires appropriated funds to be used first for financial assistance grants and then
remaining funds may be used for incentive grants.
The bill requires the DACS to adopt rules to implement and administer the program. The rules
must:
Establish an application processes for both grant types;
Include application deadlines; and
Establish supporting documentation to be provided to the DACS.
Rules for the financial assistance grant program must be developed by the DACS in consultation
with the Public Service Commission (PSC).
Rules for the incentive grant program must be developed by the DACS in consultation with the
DEP.
The bill appropriates $100 million in recurring funds from the General Revenue Fund to the
DACS for the 2022-2023 fiscal year.
The bill is effective July 1, 2022. BILL: SB 1764 Page 3
II. Present Situation:
Municipal Solid Waste-to-Energy
Energy recovery from waste is the conversion of non-recyclable waste materials into usable heat,
electricity, or fuel through processes, including combustion, gasification, pyrolization, anaerobic
digestion and landfill gas recovery.
1
This process is often called waste-to-energy.
Municipal solid waste (MSW), simply garbage or trash, can be used to produce energy at WTE
plants and landfills.
2
WTE plants burn MSW to produce steam in a boiler and generate
electricity.
3
MSW can contain:
Biomass, or biogenic (plant or animal products), materials such as paper, cardboard, food
waste, grass clippings, leaves, wood, and leather products;
Nonbiomass combustible materials such as plastics and other synthetic materials made from
petroleum; and
Noncombustible materials such as glass and metals.
4
In 2018, about 12 percent of the 292 million tons of MSW produced in the United States was
burned in WTE plants.
5
The remaining MSW was managed as follows:
50 percent was landfilled;
23.6 percent was recycled;
8.5 percent was composted; and
6.1 percent is listed as “other.”
6
MSW is usually burned at WTE plants, using heat to make steam for generating electricity.
7
In
2020, 65 U.S. power plants generated around 13.5 billion kilowatt-hours of electricity from
25 million tons of MSW.
8
In addition to producing electricity, WTE is a waste management option, reducing the amount of
material otherwise buried in landfills by about 87 percent.
9
A WTE plant can reduce 2,000
pounds of MSW down to around 300 to 600 pounds of ash.
10
Energy recovery from waste is important in the development of sustainable energy policies and
is encouraged by the U.S. Environmental Protection Agency.
11
Recognized as a renewable
1
U.S. Environmental Protection Agency, Energy Recovery from the Combustion of Municipal Solid Waste (MSW),
https://www.epa.gov/smm/energy-recovery-combustion-municipal-solid-waste-msw (last visited Jan 24, 2022).
2
U.S. Energy Information Admin., Biomass explained, Waste-to-energy (Municipal Solid Waste), Basics,
https://www.eia.gov/energyexplained/biomass/waste-to-energy.php (last visited Jan. 24, 2022).
3
U.S. Energy Information Admin., Biomass explained, Waste-to-energy (Municipal Solid Waste), In Depth, How waste-to-
energy plants work, https://www.eia.gov/energyexplained/biomass/waste-to-energy-in-depth.php (last visited Jan. 24, 2022).
4
U.S. EIA, supra note 2.
5
Id.
6
Id.
7
Id.
8
Id.
9
Id.
10
Id.
11
U.S. EPA, supra note 1. BILL: SB 1764 Page 4
energy source, WTE facilities produce relatively clean, renewable energy through the
combustion of municipal solid waste in specially designed power plants equipped with pollution
control equipment to clean emissions.
Municipal Solid Waste-to-Energy in Florida
For over thirty years, WTE has been an integral component of Florida’s solid waste management
program.
12
In the 1993 revisions to the 1988 Solid Waste Management Act, the Legislature
recognized the need to use an integrated approach to municipal solid waste management by using
waste reduction, recycling, WTE facilities, and landfills.
13
Section 403.7061, F.S., relating to the requirements for review of new WTE facility capacity by
the DEP, defines the term “waste-to-energy facility” as:
[A] facility that uses an enclosed device using controlled combustion to
thermally break down solid, liquid, or gaseous combustible solid waste to
an ash residue that contains little or no combustible material and that
produces electricity, steam, or other energy as a result. The term does not
include facilities that primarily burn fuels other than solid waste even if such
facilities also burn some solid waste as a fuel supplement. The term also
does not include facilities that burn vegetative, agricultural, or silvicultural
wastes, bagasse, clean dry wood, methane or other landfill gas, wood fuel
derived from construction or demolition debris, or waste tires, alone or in
combination with fossil fuels.
Florida has the largest MSW burn capacity in the country.
14
The state went from having one
small WTE plant in 1982 to operating twelve facilities.
15
The following counties have at least
one facility:
Bay;
Broward;
Miami-Dade;
Hillsborough;
Lake;
Palm Beach;
Pasco; and
Pinellas.
16
These counties are among Florida’s most populous, accounting for 48 percent of Florida’s
population.
17
12
See s. 403.7061(1), F.S.
13
Id.
14
Florida Department of Environmental Protection, Waste-to-Energy, https://floridadep.gov/waste/permitting-compliance-
assistance/content/waste-energy (last visited Jan. 24, 2022).
15
Id.
16
Florida Department of Environmental Protection, Florida Waste-to-Energy Facilities,
https://floridadep.gov/sites/default/files/WTE_Contacts-2016.pdf (last visited Jan. 24, 2022).
17
Florida Waste-to-Energy Coalition, Fact Sheet, (on file with the Senate Committee on Regulated Industries). BILL: SB 1764 Page 5
Florida Public Service Commission
The Florida Public Service Commission (PSC) is an arm of the legislative branch of
government.
18
The role of the PSC is to ensure that Florida’s consumers receive utility services,
including electric, natural gas, telephone, water, and wastewater, in a safe, reasonable, and
reliable manner.
19
In order to do so, the PSC exercises authority over public utilities in one or
more of the following areas: (1) Rate or economic regulation; (2) Market competition oversight;
and/or (3) Monitoring of safety, reliability, and service issues.
20
Public Utilities
A public utility includes any person or legal entity supplying electricity or gas, including natural,
manufactured, or similar gaseous substance, to or for the public within the state.
21
The term does
not include municipal electric utilities and rural electric cooperatives.
22
Therefore, the PSC does
not regulate the rates of publicly owned municipal or cooperative electric utilities.
23
There are five investor-owned electric utility companies (IOU) in Florida: Florida Power & Light
Company (FPL), Duke Energy Florida (Duke), Tampa Electric Company (TECO), Gulf Power
Company (Gulf), and Florida Public Utilities Corporation.
24
IOU rates and revenues are
regulated by the PSC.
25
These utilities must file periodic earnings reports, which allow the PSC
to monitor earnings levels on an ongoing basis and adjust customer rates quickly if a company
appears to be overearning.
26
Public Utility Regulatory Policies Act (PURPA)
In 1978, the federal government enacted the Public Utility Regulatory Policies Act (PURPA),
27
which required promotion of energy efficiency and use of renewables. The act requires utilities
to purchase power, at the utility’s full avoided cost, from “qualifying facilities,” (QF)
28
which
fall into two categories: qualifying small power production facilities and qualifying cogeneration
facilities.
29
The PURPA directed the Federal Energy Regulatory Commission to implement the
provisions, which in turn directed the states to implement the provisions. In response, the Florida
18
Section 350.001, F.S.
19
See Florida Public Service Commission, The PSC’s Role, http://www.psc.state.fl.us (last visited Jan. 24, 2022).
20
Id.
21
Section 366.02(1), F.S.
22
Id.
23
See PSC, Florida PSC 2020 Annual Report, p. 13,
http://www.psc.state.fl.us/Files/PDF/Publications/Reports/General/Annualreports/2020.pdf (last visited Jan.24, 2022).
24
Id. FPL acquired Gulf in 2019 and merged as of January 3, 2022.
25
Florida Department of Agriculture and Consumer Services, Electric Utilities, https://www.fdacs.gov/Energy/Florida-
Energy-Clearinghouse/Electric-Utilities (last visited Jan. 24, 2022).
26
PSC, supra note 23, at p. 6.
27
16 U.S.C. s. 2601 et seq.
28
Federal Energy Regulatory Commission, PURPA Qualifying Facilities, https://www.ferc.gov/qf (last visited
Jan. 24, 2022).
29
Id. BILL: SB 1764 Page 6
Legislature created s. 366.051, F.S.,
30
directing utilities to purchase power from cogenerators or
small power producers.
31
Full Avoided Costs
A utility’s full avoided cost is the incremental costs of electric energy or capacity, which, but for
the purchase from cogenerators or small power producers, the utility would have to generate
itself or purchase from another source.
32
Traditionally, the PSC has approved electric utility
power purchase contracts that include provisions for payment, capacity, and energy based upon
either the utility’s cost to construct and operate its next planned generating unit or the cost of
purchasing capacity and energy from generating units owned by other utilities in the interchange
market.
33
Power Purchase Agreements
Standard Offer Contract
IOUs must annually establish and file with the PSC a standard offer contract
34
with terms,
conditions, and payments based on projected costs for each fossil-fueled generating unit type
identified in the IOU’s ten-year site plan.
35
Payment terms and conditions for QFs are based on
the projected cost to construct and operate the IOU’s next planned generation unit.
36
Essentially,
the next planned unit becomes an avoided unit and the basis for the avoided costs.
Negotiated Contracts
The standard offer contract provides a basis for developing negotiated contracts.
37
Rule 25-
17.240 of the Florida Administrative Code encourages IOUs and generating facilities to
negotiate contracts for firm capacity and energy to provide fuel diversity, fuel price stability, and
energy security.
30
Chapter 89-292, s. 4, Laws of Fla.
31
Rule 25-17.082 of the Florida Administrative Code, is the PSC’s rule on the utility’s obligation to purchase.
32
Section 366.051, F.S.
33
Florida Public Service Commission, States’ Electric Restructuring Activities Update: Wholesale Sales
http://www.psc.state.fl.us/Publications/ElectricRestructuringDetails#4 (last visited Jan. 24, 2022).
34
The following are the most recent PSC orders approving the standard offer contracts for the following IOUs:
FPL: http://www.floridapsc.com/library/filings/2021/07682-2021/07682-2021.pdf;
Duke: http://www.floridapsc.com/library/filings/2021/08111-2021/08111-2021.pdf;
TECO: http://www.floridapsc.com/library/filings/2021/08419-2021/08419-2021.pdf; and
Gulf: http://www.floridapsc.com/library/filings/2021/07681-2021/07681-2021.pdf
(last visited Jan. 24, 2022).
35
Fla. Admin. Code R. 25-17.250. Each electric utility must submit a ten-year site plan to the PSC, estimating the utility’s
power generating needs and general locations for proposed power plant sites over a ten-year planning horizon.
Section 186.801, F.S.; Fla. Public Service Commission, Review of The 2021 Ten-Year Site Plan of Florida’s Electric
Utilities, p. 9, http://www.psc.state.fl.us/Files/PDF/Utilities/Electricgas/TenYearSitePlans/2021/Review.pdf (last visited
Jan. 24, 2022).
36
See Florida Public Service Commission, 2022 Legislative Bill Analysis for SB 1764, p. 1 (Jan. 20, 2022) (on file with the
Senate Committee on Regulated Industries).
37
Id. BILL: SB 1764 Page 7
The PSC addresses petitions by IOUs for approval of cost recovery of negotiated contracts
between the IOU and the QFs.
38
The PSC’s review considers various matters including whether
the contract is at or below the IOU’s avoided cost and will be considered prudent if it can be
reasonably expected to defer or avoid an additional generation unit.
39
As-available contract
“As-available” energy contracts are an option for QFs, including MSWE facilities.
40
These
contracts are not subject to the PSC’s approval but must be filed with the PSC within ten
working days of being signed.
41
As-available energy is energy produced and sold on an hour-by-
hour basis for which contractual commitments regarding the quantity and time of delivery are not
required.
42
As-available energy is purchased at a rate equal to the utility’s hourly incremental
system fuel cost, which reflects the highest fuel cost of generation each hour.
43
According to the PSC, the following four facilities receive as-available energy cost payments
from FPL:
Broward County Resource Recovery – South AA QF;
Brevard County;
Miami Dade Resource Recovery; and
Lee County Solid Waste.
Firm Capacity Payments
If a QF can meet certain contractual provisions as to the quantity, time, and electricity delivery
reliability, it is eligible for both capacity payments and energy payments under a firm contract.
44
Capacity is the maximum electric output, in megawatts, that an electricity generator can produce
under ideal conditions.
45
To promote alternative and renewable energy generation, the PSC requires IOUs to offer
multiple capacity payment options, including early payments or levelized payments.
46
The
different payment options allow QFs flexibility to best meet their financial needs.
47
If an early
capacity payment option is selected, then the QF will begin receiving capacity payments earlier
than the in-service date of the avoided unit and payments will generally be lower in the later
years of the contract.
48
38
Id.
39
Fla. Admin. Code R. 25-17.240; PSC, supra note 36, at p. 2.
40
PSC, supra note 36, at p. 1.
41
Fla. Admin. Code R. 25-17.0825(1)(b); PSC, supra note 36, at p. 2.
42
Fla. Admin. Code R. 25-17.0825.
43
Fla. Admin. Code R. 25-17.0825(2)(a); PSC, supra note 36, at p. 2.
44
Fla. Admin. Code R. 25-17.0832(1); PSC, supra note 36, at p. 1.
45
See U.S. Energy Information Administration, What is the difference between electricity generation capacity and electricity
generation?, https://www.eia.gov/tools/faqs/faq.php?id=101&t=3 (last visited Jan. 24, 2022).
46
PSC, supra note 36, at p. 1.
47
Id.
48
See Notice of Proposed Agency Action Order Approving Revised Standard Offer Contract, p. 2,
http://www.floridapsc.com/library/filings/2021/07682-2021/07682-2021.pdf (last visited Jan. 24, 2022). BILL: SB 1764 Page 8
According to the PSC, the following six facilities are operating under active firm contracts with
their host IOU:
Pinellas County Resource Recovery, with Duke, ending December 2024;
Pasco County Resource Recovery, with Duke, ending December 2024;
Broward County Resource Recovery - South QF, with FPL, ending December 2026;
Palm Beach County Solid Waste Authority 1,with FPL, ending March 2034;
Palm Beach County Solid Waste Authority 2, with FPL, ending March 2034; and
Bay County/Engen LLC, with FPL/Gulf, ending July 2023.
49
Commercial Retail Rate
Commercial retail rates vary across utilities. Each IOU has various rate levels pursuant to tariffs
approved by the PSC. The retail rate depends on the kilowatt demand that a commercial
customer places on an IOU’s system. Demand provides an indication of the customer’s load size.
Demand is based on the highest usage over a specified time interval. Demand is intended to
allow a utility to recover the fixed cost of maintaining its facilities, including generation,
transmission, and distribution, which must be able to meet a customer’s highest electricity
needs.
50
The following table, published in the PSC’s Comparative Rate Statistics,
51
reflects the
commercial retail rates among the IOUs, as of December 31, 2020, and how rates change for
specific commercial customers based on demand, which is measured in kilowatts, and actual
energy used, which is measured in kilowatt hours.
52
49
PSC, supra n. 36, p. 2.
50
Id.
51
Florida Public Service Commission, Comparative Rate Statistics, Dec. 31, 2020, A-4,
http://www.floridapsc.com/Files/PDF/Publications/Reports/General/Comparative/December%2031,%202020.pdf (last visited
Jan 24, 2022).
52
See PSC, supra note 36, at p. 3. Although Gulf merged with FPL, the retail rates for the Florida panhandle service area
were not consolidated with FPL’s peninsula service area until 2022. BILL: SB 1764 Page 9
III. Effect of Proposed Changes:
The bill provides a preamble stating:
It is in the public interest to promote the development of renewable energy resources in
Florida, under s. 366.91, F.S.;
MSWE facilities using biomass as fuel or an energy source are deemed to be producing
renewable energy, under 366.91, F.S.;
MSWE facilities provide a practical and sustainable solution to reducing landfill waste,
reducing volume by about 87 percent;
The Legislature recognizes the benefits that MSWE facilities contribute to Florida and its
local communities; and
The Legislature intends to incentivize the production and sale of energy from MSWE
facilities through grant programs.
Section 1 creates s. 377.814, F.S., establishing the MSWE Program, within the Department of
Agriculture and Consumer Services (DACS), comprised of a financial assistance grant program
and an incentive grant program.
The stated purpose of the program is to provide financial assistance grants and incentive grants
to MSWE facilities in order to incentivize the production and sale of energy and reduce waste
disposed of in landfills.
The bill defines the following:
“Department” means the Department of Agriculture and Consumer Services.
“Municipal solid waste-to-energy facility” means publicly owned or government affiliate-
owned facilities using an enclosed device with controlled combustion to thermally break
down solid waste to an ash residue containing little or no combustible material, producing
electricity, steam, or other energy. It does not include facilities primarily burning fuels other
than solid waste; nor facilities primarily burning vegetative, agricultural, or silvicultural
wastes, bagasse, clean dry wood, methane or other landfill gas, wood fuel derived from
construction or demolition debris, or waste tires, alone or in combination with fossil fuels.
The Financial Assistance Grant will provide municipal solid waste-to-energy (MSWE) facilities
funding at a rate of 2 cents per kilowatt-hour of electricity purchased by an electric utility during
the preceding state fiscal year, not to exceed the difference between the electric utility’s avoided
cost and the commercial retail rate. If funds are insufficient to cover every qualifying kilowatt-
hour from all qualifying applicants, the DACS must prorate the available funds on an equitable
basis, taking into consideration the commercial retail rate within the applicable service territory.
To qualify, the facility must have previously entered into a power purchase agreement with an
electric utility that included capacity payments which the facility will no longer receive under the
agreement. The facility owner must submit an application to the DACS, including the MSWE
facility’s name and the amount of energy purchased from the facility by an electric utility during
the preceding state fiscal year.
The bill requires the DACS to establish a process in coordination with the PSC to verify
eligibility and the amount of energy purchased from the facility. BILL: SB 1764 Page 10
The incentive grant will provide facilities with matching funds on a dollar-for-dollar basis to
assist with planning and design for constructing, upgrading, or expanding MSWE facilities,
including necessary legal or administrative expenses.
To qualify, the facility owner must apply to the DACS and demonstrate that the project is cost-
effective, permittable, and implementable and complies with s. 403.7061, F.S., which establishes
the requirements for review of new WTE facility capacity by the DEP.
The bill requires the DEP to assist the DACS with determining eligibility and with establishing
requirements to ensure long-term and efficient operation and maintenance of such facilities.
The DACS must perform adequate overview of applications and awards, including technical
review, regular inspections, disbursement approvals, and auditing. If the DACS determines that
program requirements are not being met, the bill requires termination or repayment of incentive
grant funds.
The bill requires appropriated funds to be used first for financial assistance grants and then
remaining funds may be used for incentive grants.
The bill requires the DACS to adopt rules to implement and administer the program. The rules
must:
Establish an application processes for both grant types;
Include application deadlines; and
Establish supporting documentation to be provided to the DACS.
Rules for the financial assistance grant program, must be developed by the DACS in consultation
with the PSC.
Rules for the incentive grant program, must be developed by the DACS in consultation with the
DEP.
Section 2 appropriates $100 million in recurring funds from the General Revenue Fund to the
DACS for the 2022-2023 fiscal year.
Section 3 provides that the bill is effective July 1, 2022.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None. BILL: SB 1764 Page 11
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
The bill may result in a positive impact to private companies that own a government
affiliated WTE facility and qualify for a grant.
C. Government Sector Impact:
The bill may result in a positive impact to county’s which own a MSWE facility that
qualify for funds under the grant program.
The bill will likely result in an increased workload for staff of the DACS, the PSC, and
the DEP in administering the grant program. The PSC anticipates that its added workload
can be handled by existing staff.
53
VI. Technical Deficiencies:
None.
VII. Related Issues:
According to the PSC, the bill is unclear regarding the determination of a utility’s avoided cost.
While the IOU’s payments to municipal solid waste facilities are reported to the PSC, the IOU’s
avoided costs are not revisited during the term of a contract after it has been approved.
The bill is unclear regarding the applicable commercial retail rate. There is more than one
commercial retail rate approved for each IOU.
54
53
PSC, supra note 36, at p. 4.
54
Id. at p. 5. BILL: SB 1764 Page 12
VIII. Statutes Affected:
This bill creates section 377.814 of the Florida Statutes.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.