Florida 2023 2023 Regular Session

Florida Senate Bill S1162 Analysis / Analysis

Filed 04/20/2023

                    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 Rules  
 
BILL: CS/CS/SB 1162 
INTRODUCER:  Community Affairs Committee; Regulated Industries Committee; and Senator DiCeglie 
SUBJECT:  Renewable Energy Cost Recovery 
DATE: April 18, 2023 
 
 ANALYST STAFF DIRECTOR  REFERENCE  	ACTION 
1. Schrader Imhof RI Fav/CS 
2. Hunter Ryon CA Fav/CS  
3. Schrader Twogood RC Favorable 
 
Please see Section IX. for Additional Information: 
COMMITTEE SUBSTITUTE - Substantial Changes 
 
I. Summary: 
CS/CS/SB 1162 amends s. 366.91, F.S., relating to Florida’s renewable energy policy, in the 
following ways: 
 The bill allows all public utilities under ch. 366, F.S., not only natural gas companies, to be 
approved for cost recovery for renewable natural gas (RNG) contracts where the pricing of 
the natural gas exceeds the market price of conventional natural gas 
 The bill revises the test for the approval of the provision from “prudent and reasonable” to 
meeting the goals as stated in s. 366.91(1), F.S., “by promoting the development or use of 
renewable energy resources in this state and providing fuel diversification and the contract is 
otherwise reasonable.” 
 The bill also allows public utilities to recover, through an appropriate cost-recovery 
mechanism administered by the Florida Public Service Commission, reasonable incurred 
costs for certain renewable natural gas and hydrogen fuel infrastructure projects. 
 The bill specifies limitations and approval requirements for cost recovery for renewable 
natural gas or hydrogen-based fuel infrastructure projects. 
 
The bill has an effective date of July 1, 2023. 
REVISED:   BILL: CS/CS/SB 1162   	Page 2 
 
II. Present Situation: 
Florida Public Service Commission  
The Florida Public Service Commission (PSC) is an arm of the legislative branch of 
government.
1
 The role of the PSC is to ensure Florida’s consumers receive utility services, 
including electric, natural gas, telephone, water, and wastewater, in a safe, affordable, and 
reliable manner.
2
 In order to do so, the PSC exercises authority over public utilities in one or 
more of the following areas: rate base or economic regulation; competitive market oversight; and 
monitoring of safety, reliability, and service issues.
3
 
 
The PSC monitors the safety and reliability of the electric power grid
4
 and may order the 
addition or repair of infrastructure as necessary.
5
 The PSC has broad jurisdiction over the rates 
and service of investor-owned electric and gas utilities.
6
 However, the PSC does not fully 
regulate municipal electric utilities (utilities owned or operated on behalf of a municipality) or 
rural electric cooperatives. The PSC does have jurisdiction over these types of utilities with 
regard to rate structure, territorial boundaries, bulk power supply operations, and planning.
7
 
Municipally owned utility rates and revenues are regulated by their respective local 
governments. Rates and revenues for a cooperative utility are regulated by their governing body 
elected by the cooperative’s membership. 
 
There are four investor-owned electric utility companies (electric IOUs) in Florida: Florida 
Power & Light Company (FPL), Duke Energy Florida (Duke), Tampa Electric Company 
(TECO), and Florida Public Utilities Corporation (FPUC).
8
 In addition, there are eight investor-
owned natural gas utility companies (gas IOUs) in Florida: Florida City Gas, Florida Division of 
Chesapeake Utilities, FPUC, FPUC-Fort Meade Division, FPUC-Indiantown Division, Sebring 
Gas System, and St. Joe Natural Gas Company. Of these eight gas IOUs, five engage in the 
merchant function servicing residential, commercial, and industrial customers: Florida City Gas, 
FPUC, FPUC-Fort Meade Division, Peoples Gas System, and St. Joe Natural Gas Company. 
Florida Division of Chesapeake Utilities, FPUC-Indiantown Division, and Sebring Gas System 
are only engaged in firm transportation service.
9
 
 
                                                
1
 Section 350.001, F.S. 
2
 See Florida Public Service Commission, Florida Public Service Commission Homepage, available at 
http://www.psc.state.fl.us (last visited Mar 16, 2023). 
3
 Florida Public Service Commission, About the PSC, available at https://www.psc.state.fl.us/about (last visited Mar. 26, 
2023). 
4
 Section 366.04(5) and (6), F.S. 
5
 Section 366.05(1) and (8), F.S. 
6
 Section 366.05, F.S. 
7
 Florida Public Service Commission, About the PSC, supra note 3. 
8
 Florida Public Service Commission, 2022 Facts and Figures of the Florida Utility Industry, pg. 5, Apr. 2022 available at: 
https://www.floridapsc.com/pscfiles/website-files/PDF/Publications/Reports/General/FactsAndFigures/April%202022.pdf 
(last visited Mar. 26, 2023  
9
 Id. Firm transportation service is offered to customers under schedules or contracts which anticipate no interruption under 
almost all operating conditions. See Firm transportation service, 18 CFR s. 284.7.  BILL: CS/CS/SB 1162   	Page 3 
 
Electric IOU and Gas IOU rates and revenues are regulated by the PSC and the 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.
10
 
 
Section 366.041(2), F.S., requires public utilities to provide adequate service to customers. As 
compensation for fulfilling that obligation, s. 366.06, F.S., requires the PSC to allow the IOUs to 
recover honestly and prudently invested costs of providing service, including investments in 
infrastructure and operating expenses used to provide electric service.
11
 
 
Public Utilities under Chapter 366, Florida Statutes 
Pursuant to s. 366.02(8), F.S., “public utility,” as used in ch. 366, F.S., means “every person, 
corporation, partnership, association, or other legal entity and their lessees, trustees, or receivers 
supplying electricity or gas (natural, manufactured, or similar gaseous substance) to or for the 
public within this state.” However, all of the following types of utilities are exempted from this 
definition: 
 Rural electric cooperatives. 
 Municipal electric and gas utilities. 
 Dependent or independent special natural gas districts. 
 Any natural gas transmission pipeline company making only sales or transportation delivery 
of natural gas at wholesale and to direct industrial consumers.  
 Any entity, selling or arranging for sales of natural gas, that neither owns nor operates natural 
gas transmission or distribution facilities within the state.  
 A person supplying liquefied petroleum gas, in either liquid or gaseous form, irrespective of 
the method of distribution or delivery, or owning or operating facilities beyond the outlet of a 
meter through which natural gas is supplied for compression and delivery into motor vehicle 
fuel tanks or other transportation containers, unless such person also supplies electricity or 
manufactured or natural gas. 
 
Renewable Energy 
Section 366.91, F.S., establishes a number of renewable policies for the state. The purpose of 
these policies, as established in statute, states that it is in the public interest to promote the 
development of renewable energy resources in this state.
12
 Further, the statute is intended to 
encourage fuel diversification to meet Florida’s growing dependency on natural gas for electric 
production, minimize the volatility of fuel costs, encourages investment within the state, improve 
environmental conditions, and make Florida a leader in new and innovative technologies.
13
 
 
The section defines “renewable energy” as: 
 
[E]lectrical energy produced from a method that uses one or more of the following 
fuels or energy sources: hydrogen produced or resulting from sources other than fossil 
                                                
10
 PSC, 2022 Annual Report, p. 6, (available at: https://www.floridapsc.com/pscfiles/website-
files/PDF/Publications/Reports/General/AnnualReports/2022.pdf) (last visited: Mar. 26, 2023).   
11
 Id. 
12
 Section 366.91(1), F.S 
13
 Id.  BILL: CS/CS/SB 1162   	Page 4 
 
fuels, biomass, solar energy, geothermal energy, wind energy, ocean energy, and 
hydroelectric power. The term includes the alternative energy resource, waste heat, 
from sulfuric acid manufacturing operations and electrical energy produced using 
pipeline-quality synthetic gas produced from waste petroleum coke with carbon 
capture and sequestration.
14
 
 
Renewable Natural Gas 
Natural gas is a fossil energy source which forms beneath the earth’s surface. Natural gas 
contains many different compounds, the largest of which is methane.
 15
 Conventional natural gas 
is primarily extracted from subsurface porous rock reservoirs via gas and oil well drilling and 
hydraulic fracturing, commonly referred to as “fracking.” The term renewable natural gas (RNG) 
refers to biogas that has been upgraded to use in place of fossil fuel natural gas (i.e. conventional 
natural gas).
16
 
 
Section 366.91, F.S., identifies sources for producing RNG as a potential source of renewable 
energy.
17
 The section specifically defines renewable natural gas as anaerobically generated 
biogas,
18
 landfill gas, or wastewater treatment gas refined to a methane content of 90 percent or 
greater. Under the definition, such gas may be used as a transportation fuel or for electric 
generation, or is of a quality capable of being injected into a natural gas pipeline. 
 
Biogas used to produce RNG comes from various sources, including municipal solid waste 
landfills, digesters at water resource recovery facilities, livestock farms, food production 
facilities, and organic waste management operations.
19
 Raw biogas has a methane content 
between 45 and 65 percent.
20
 Once biogas is captured, it is treated in a process called 
conditioning or upgrading, which involves the removal of water, carbon dioxide, hydrogen 
sulfide, and other trace elements. After this process, the nitrogen and oxygen content is reduced 
and the RNG has a methane content comparable to natural gas and is thus a suitable energy 
source in applications that require pipeline-quality gas, such as vehicle applications.
21
  
 
                                                
14
 Section 366.91(2)(e), F.S. 
15
 United States Energy Information Administration, Natural gas explained, Dec. 27, 2022. Available at 
https://www.eia.gov/energyexplained/natural-gas/ (last visited Mar. 26, 2023) 
16
 Environmental Protection Agency, Landfill Methane Outreach Program (LMOP): Renewable Natural Gas, available at 
https://www.epa.gov/lmop/renewable-natural-gas (last visited Mar. 26, 2023). 
17
 Section 366.91(2)(e), F.S., defines “renewable energy, in part, as energy produced from biomass. Section 366.91(2)(b), 
F.S., defines “biomass” in part, as “a power source that is comprised of, but not limited to, combustible residues or gases 
from…waste, byproducts, or products from agricultural and orchard crops, waste or coproducts from livestock and poultry 
operations, waste or byproducts from food processing, urban wood waste, municipal solid waste, municipal liquid waste 
treatment operations, and landfill gas.” RNG would be such a combustible gas. 
18
 Section 366.91(2)(a) defines “biogas” as a mixture of gases produced by the biological decomposition of organic materials 
which is largely comprised of carbon dioxide, hydrocarbons, and methane gas. 
19
 Environmental Protection Agency, supra note 16. 
20
 Id. 
21
 United States Department of Energy, Renewable Natural Gas Production, available at 
https://afdc.energy.gov/fuels/natural_gas_renewable.html (last visited: Mar. 26, 2023).  BILL: CS/CS/SB 1162   	Page 5 
 
RNG meeting certain standards, qualifies as an advanced biofuel under the Federal Renewable 
Fuel Standard Program.
22
 This program was enacted by Congress in order to reduce greenhouse 
gas emissions by reducing reliance on imported oil and expanding the nation’s renewable fuels 
sector.
23
  
 
Nationally, there were 548 landfill gas facilities in operation as of September 2021, and, as of 
2017, 250 anaerobic digester systems operating at commercial livestock farms in the United 
States.
24
 Of the more than 16,000 wastewater treatment plants in operation in the United States, 
approximately 1,300 have anaerobic digesters on site and 860 of those have the equipment to use 
their biogas on site.
25
 
 
Hydrogen Fuel  
The production of hydrogen involves the separation of the element from other elements in which 
it occurs.  While there are many different sources of hydrogen and methods for producing it as a 
fuel, the most common methods used currently are steam-methane reforming and electrolysis.
26
 
Through either method, hydrogen is not an energy source, per se, since it is produced using other 
energy sources. Rather, produced hydrogen is an energy carrier.
27
 
 
Steam-Methane Reforming 
The most-widely used method for hydrogen production, which accounts for nearly all 
commercially produced hydrogen in the United States, is steam-methane reforming.  With steam-
methane reforming, hydrogen atoms are separated from carbon atoms in methane using high 
temperature (1,300-1,800 degrees Fahrenheit) under 3-25 bar pressure
28
 in the presence of a 
catalyst.  The end-result of this process is the production of hydrogen, carbon-monoxide, and a 
small amount of carbon dioxide.
29
 
 
For industrial facilities and petroleum refineries, natural gas is the typical base material from 
which to produce hydrogen by steam-methane reforming. Biogas and landfill gas is also a base 
material to produce hydrogen used by several fuel cell power plants in the United States. 
                                                
22
 United States Department of Energy, Renewable Fuel Standard, available at 
https://afdc.energy.gov/laws/RFS#:~:text=The%20Renewable%20Fuel%20Standard%20(RFS,Act%20of%202007%20(EIS
A) (last visited: Mar. 26, 2023).  
23
 Environmental Protection Agency, Renewable Fuel Standard Program, available at https://www.epa.gov/renewable-fuel-
standard-program (last visited Mar. 26, 2023). 
24
 United States Department of Energy, supra note 21. 
25
 Id. 
26
 United States Energy Information Administration, Hydrogen Explained: Production of Hydrogen, Jan. 21, 2022, available 
at https://www.eia.gov/energyexplained/hydrogen/production-of-
hydrogen.php#:~:text=The%20two%20most%20common%20methods,electrolysis%20(splitting%20water%20with%20electr
icity.(last visited Mar. 26, 2023) 
27
 International Renewable Energy Agency, Hydrogen, available at https://www.irena.org/Energy-
Transition/Technology/Hydrogen (last visited Mar. 26, 2023). 
28
 One bar equals 14.5 pounds per square inch of pressure. For comparison, at sea level, the average air pressure on Earth is 
1.0132 bars. National Oceanic and Atmospheric Administration, Air Pressure, available at 
https://www.noaa.gov/jetstream/atmosphere/air-
pressure#:~:text=The%20standard%20pressure%20at%20sea,the%20atmosphere%20decreases%20with%20height (last 
visited: Mar. 26, 2023). 
29
 United States Energy Information Administration, supra note 26.  BILL: CS/CS/SB 1162   	Page 6 
 
Electrolysis  
Electrolysis, in the sense of hydrogen production, means a process where hydrogen is split from 
water using an electric current. On a large, commercial scale, the process may be referred to as 
power-to-gas, where power is electricity and gas is hydrogen.
30
 This hydrogen is then captured 
and used or sold as an end product or as a fuel to generate electricity.
31
 The electrolysis process 
itself is emission-free and has no by-products other than hydrogen and oxygen. However, the 
energy source used to power the electrolysis (which could be from renewables, nuclear, or fossil 
fuels) may or may not be emission-free or have other byproducts.  
 
Hydrogen Categories 
Recently, to distinguish between the energy sources used to power hydrogen production, 
hydrogen producers, marketers, government agencies, and others have used a color-coded 
system. The nine commonly used color categories are detailed below: 
 Green: Hydrogen produced by water electrolysis and employing renewable electricity as the 
fuel source. It is so called because the process itself does not produce emissions. 
 Blue:  Hydrogen produced from fossil fuels, but the carbon dioxide produced by the process 
is sequestered underground. Thus, the process is considered carbon neutral. 
 Gray: Hydrogen produced by steam-methane reforming and the emissions produced from the 
burning of fossil fuels in the method are released into the atmosphere. 
 Black or Brown: Hydrogen produced from the burning of coal, “black” being from the 
burning of bituminous coal and “brown” being from the burning of lignite coal. The 
comparatively large amount of carbon dioxide and carbon monoxide is released into the 
atmosphere with this type of production. 
 Turquoise: This now experimental method of hydrogen production involves the thermal 
splitting of methane through pyrolysis. Though carbon is formed in this process, it is in a 
solid state that can be stored and not a carbon dioxide gas. 
 Purple: Hydrogen made using nuclear power and heat through combined chemo thermal 
electrolysis splitting of water. 
 Pink: This is the production of hydrogen through electrolysis where the energy source is 
electricity from a nuclear power plant. 
 Red: Hydrogen produced through high-temperature catalytic splitting of water using nuclear 
power thermal energy as an energy source. 
 White: Naturally-occurring hydrogen.
32
 
 
Transmission and Use of Hydrogen Fuel 
Due to hydrogen’s low volumetric energy density, transportation, storage, and final delivery to 
the point of use can have a significant impact on the cost of using hydrogen as a fuel carrier. 
These factors can lead to inefficiencies that increase the farther hydrogen must be transported 
                                                
30
 Id. 
31
 Florida Public Service Commission, Bill Analysis for SB 1162 (Mar. 14, 2023) (on file with the Senate Regulated 
Industries Committee). 
32
 Bulletin H2, Hydrogen Colours Codes, available at https://www.h2bulletin.com/knowledge/hydrogen-colours-codes/ (last 
visited: Mar. 26, 2023).   BILL: CS/CS/SB 1162   	Page 7 
 
before reaching its end use.
33
 Thus, currently, most hydrogen is produced in close proximity to 
its end use.
34
 However, technology is in development that may bring these costs down and allow 
for easier transport and transmission of hydrogen.
35
 
 
The two typical methods for transporting hydrogen fuel currently are via pipeline or by truck 
through the use of cryogenic liquid tanker trucks or gaseous tube trailers. Pipelines are most 
popular in areas where demand is high and expected to remain stable or grow. Trucking of 
hydrogen is used in areas with less demand.
36
 
 
Potential uses for hydrogen are in:
37
 
 Industrial uses such as powering oil refineries and powering ammonia, methanol, and steel 
production. Currently, this is the largest use, by far, for hydrogen. 
 Transportation, powering hydrogen-fueled vehicles. 
 Buildings where hydrogen can be blended into existing natural gas networks. It is possible 
currently to blend small amounts of hydrogen in existing natural gas transmission systems 
with little to no changes to infrastructure, equipment, and appliances. 
 Power generation where emerging technology is available to use hydrogen as a medium to 
store renewable energy, such as solar and wind. Hydrogen and ammonia can be used in gas 
turbines to increase power system flexibility, and ammonia can be used to reduce emissions 
from coal-fired power plants. 
 
Recently, as part of a 2021 settlement agreement, FPL was authorized by the PSC to develop a 
green hydrogen pilot project named the Cavendish NextGen Hydrogen Hub. The hub, located in 
Okeechobee, Florida, uses solar energy to power electrolysis and then, in turn, compresses and 
stores this hydrogen. The hydrogen then will be blended with natural gas to fuel its nearby 
natural-gas fired electric generation plant.
38
 In this way, energy produced by solar power can be 
essentially stored for later use. 
 
FPL Woodford Decision 
In Citizens of State v. Graham, 191 So. 3d 897 (Fla. 2016), the Florida Supreme Court found that 
the PSC lacked statutory authority to approve cost recovery for FPL's investment in a natural gas 
production facility in the Woodford Shale Gas Region in Oklahoma (Woodford Project). The 
Woodford Project involved exploration and production of natural gas and not the purchase of 
actual fuel—something that would generally be within the types of activities an electric utility 
would engage in. The Supreme Court cited to s. 366.02(2), F.S. (2014), which defines an 
“electric utility” as, “any municipal electric utility, investor-owned electric utility, or rural 
electric cooperative which owns, maintains, or operates an electric generation, transmission, or 
                                                
33
 United States Office of Energy Efficiency and Renewable Energy, Hydrogen Delivery, available at 
https://www.energy.gov/eere/fuelcells/hydrogen-delivery (last visited: Mar. 26, 2023). 
34
 Florida Public Service Commission, Bill Analysis for SB 1162, supra note 31. 
35
 See Florida Public Service Commission, Bill Analysis for SB 1162, supra note 31, which describes potential new 
technologies that can overcome the transportation and transmission cost hurdle for hydrogen. 
36
 United States Office of Energy Efficiency and Renewable Energy, supra note 33. 
37
 International Renewable Energy Agency, supra note 27. 
38
 Florida Public Service Commission, Bill Analysis for SB 1162, supra note 31, and Florida Power & Light, Welcome to the 
sunshine energy state, available at https://www.fpl.com/landing/sunshine.html?icid=hpherosb (last visited: Mar. 26, 2023).  BILL: CS/CS/SB 1162   	Page 8 
 
distribution system within the state,” and found that the Woodford Project activities did not fall 
within this definition.
39
  
 
However, in making its decision, the Supreme Court noted the following: 
 
This may be a good idea, but whether advance cost recovery of speculative capital 
investments in gas exploration and production by an electric utility is in the public 
interest is a policy determination that must be made by the Legislature. For example, 
in contrast to natural gas exploration and production, the Legislature has authorized 
the PSC to approve cost recovery for capital investments in nuclear power plants and 
energy efficient and renewable energy power sources. See ss. 366.8255; 366.92; 
366.93, Fla. Stat. (2014). Without statutory authorization from the Legislature, the 
recovery of FPL's costs and capital investment in the Woodford Project through the 
fuel clause is overreach.
40
 
 
Thus, while the Supreme Court determined that the PSC could not approve cost recovery for 
capital electric utility investments in natural gas production, it did provide that the Legislature 
would have the authority to allow for such if it chose to do so. 
III. Effect of Proposed Changes: 
Section 1 of the bill amends s. 366.91, F.S., regarding renewable energy policy in Florida. The 
bill revises s. 366.91(9), F.S., which under current law, allows the Florida Public Service 
Commission (PSC) to approve cost recovery by a gas public utility for renewable natural gas 
(RNG) contracts where the pricing of the natural gas exceeds the market price of conventional 
natural gas. The PSC may approve such pricing if it deems the contract otherwise reasonable and 
prudent. 
 
The bill revises this subsection to remove the restriction limiting its application to gas public 
utilities and applies it to all public utilities under ch. 366, F.S. The bill also revises the standards 
for the PSC’s approval of such cost recovery.  It removes the requirement that the PSC must find 
the contract “reasonable and prudent” and, instead, requires that the contract be otherwise 
reasonable and meet the overall goals established in s. 366.091(1), F.S.,
41
 for the section by 
promoting the development or use of renewable energy resources in Florida and providing fuel 
diversification. It also expands the provisions of s. 366.91, F.S., to the purchase of hydrogen-
based fuel as well. 
 
The bill also creates a new s. 366.091(10), F.S., which allows public utilities to recover, through 
an appropriate cost-recovery mechanism administered by the PSC, incurred costs for RNG and 
hydrogen-based fuel projects located in Florida. Such costs must be reasonable, not result in 
                                                
39
 Citizens of State v. Graham, 191 So. 3d 897, 901-2 (Fla. 2016). 
40
 Id. at 902. 
41
 Section 366.091(1), F.S., provides the intent for the section and states that “the Legislature finds that it is in the public 
interest to promote the development of renewable energy resources in this state. Renewable energy resources have the 
potential to help diversify fuel types to meet Florida’s growing dependency on natural gas for electric production, minimize 
the volatility of fuel costs, encourage investment within the state, improve environmental conditions, and make Florida a 
leader in new and innovative technologies.”  BILL: CS/CS/SB 1162   	Page 9 
 
undue hardship to customers, and facilitate the goals of s. 366.091(1), F.S. Under the bill, RNG 
may include mixtures of natural gas and RNG. Eligible projects would include, but not be 
limited to: 
 Capital investment in projects necessary to prepare or produce RNG and hydrogen fuel for 
pipeline distribution and usage;  
 Capital investment in facilities, including pipelines, necessary to inject and deliver RNG and 
hydrogen fuel throughout this state;  
 RNG and hydrogen-based fuel storage facilities;  
 Operation and maintenance expenses associated with any such RNG and hydrogen fuel 
infrastructure projects; and  
 An appropriate return on investment consistent with that allowed for other utility plants used 
to provide service to customers. 
 
Once approved by the PSC, the project costs are not subject to disallowance or any additional 
prudence review except where the utility has engaged in fraud, perjury, or intentional 
withholding of key information. 
 
Cost recovery for a RNG and hydrogen-based fuel project must be approved by the PSC. In 
making its determination, the PSC must consider whether the projected costs for the project are 
reasonable and consistent with the provisions of proposed s. 366.091(10), F.S. Such recovery 
may not begin until the project is placed into service; however, upon approval by the PSC, costs 
incurred before the facility is placed into service may be deferred on the public utility’s books for 
recovery once the facility is in service. This prohibition does not preclude the application of any 
other regulatory accounting rules that are otherwise deemed appropriate (such as normal 
recovery costs for construction work in progress). 
 
Section 2 of the bill provides an effective date of July 1, 2023. 
IV. Constitutional Issues: 
A. Municipality/County Mandates Restrictions: 
None. 
B. Public Records/Open Meetings Issues: 
None. 
C. Trust Funds Restrictions: 
None. 
D. State Tax or Fee Increases: 
None.  BILL: CS/CS/SB 1162   	Page 10 
 
E. Other Constitutional Issues: 
None. 
V. Fiscal Impact Statement: 
A. Tax/Fee Issues: 
None. 
B. Private Sector Impact: 
Under the new provisions of the bill, public utilities will likely expand their use and sale 
of hydrogen and RNG. 
C. Government Sector Impact: 
None. 
VI. Technical Deficiencies: 
None. 
VII. Related Issues: 
None. 
VIII. Statutes Affected: 
This bill substantially amends section 366.91 of the Florida Statutes.  
IX. Additional Information: 
A. Committee Substitute – Statement of Substantial Changes: 
(Summarizing differences between the Committee Substitute and the prior version of the bill.) 
CS/CS by Community Affairs on March 29, 2023: 
The CS makes a technical change to incorporate the substance of subsection (11) into 
subsection (10). 
 
CS by Regulated Industries on March 21, 2023: 
The committee substitute makes the following changes: 
 Specifies that the bill applies to public utilities. 
 Requires that for contracts for the purchase of hydrogen-based fuel and renewable 
natural gas authorized under the bill, the contract must be reasonable in order to allow 
for recovery. 
 Requires that, for cost recovery for renewable natural gas and hydrogen-based fuel 
infrastructure projects authorized under the bill, the project cost be reasonable  BILL: CS/CS/SB 1162   	Page 11 
 
(instead of prudently incurred), will not result in an undue hardship to customers, and 
will facilitate achieving the renewable energy goals of the section. 
 Require that renewable natural gas or hydrogen-based fuel infrastructure projects be 
in Florida. 
 Require that cost recovery for renewable natural gas or hydrogen-based fuel 
infrastructure projects be approved by the commission. 
 Require that recovery of costs for renewable natural gas or hydrogen-based fuel 
infrastructure projects may not occur until the project is placed into service. Costs 
incurred before such approval may be deferred. 
 Specify applicability of renewable natural gas or hydrogen-based fuel infrastructure 
projects cost rules. 
 Make technical changes. 
B. Amendments: 
None. 
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.