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ORDER NO. PSC -2017 -0359 -PAA -EI
<br />DOCKET NO. 20170097 -EI
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<br />resolved all issues in FPL's 2016 rate case and associated dockets.3 Currently, the Company
<br />does not specifically classify nor have an authorized depreciation rate for the types of equipment
<br />required to effectuate its planned Battery Storage Pilot or any other energy storage endeavors.
<br />We have not received any public comments on this matter. We have jurisdiction in this matter
<br />pursuant to Sections 366.04, 366.05, and 366.06, Florida Statutes (F.S.).
<br />DECISION
<br />As outlined in its petition, FPL does not currently maintain a stand-alone classification,
<br />nor does it have a specifically -authorized depreciation rate, for investments related to energy
<br />storage. The Company is requesting authorization to record and depreciate energy storage -
<br />related investments by plant function in Federal Energy Regulatory Commission (FERC)
<br />Accounts; 348 - Energy Storage Equipment — Production, 351 - Energy Storage Equipment —
<br />Transmission, and 363 - Energy Storage Equipment — Distribution. These accounts were
<br />originally established by the FERC in 2013, by Order No. 784, with the primary purpose of
<br />accounting for energy storage investments based on how specific assets are used in providing
<br />electric service.4
<br />Requested Depreciation Parameters
<br />The Company has requested approval of a 10 -year average service life (ASL), and a zero
<br />percent net salvage level (NS), for depreciating its energy storage equipment. An annual
<br />depreciation rate of 10 percent is computed by using these parameters.'
<br />•Industry -wide depreciation data and regulatory guidance regarding energy storage
<br />equipment is limited. However, through data request responses, FPL provided documentation
<br />detailing regulatory approvals of ASL and NS values similar to its proposals that are applicable
<br />to other electric utilities operating in the United States; namely, Consolidated Edison of New
<br />York (ConEd) and Pacific Gas & Electric (PG&E).6 With respect to the ConEd decision, the
<br />New York Public Service Commission authorized an ASL of either 10 or 15 years (depending on
<br />the specific project), and a zero percent NS level. The California Public Utilities Commission
<br />authorized an ASL of 15 years, and a zero percent NS level applicable to PG&E's energy storage
<br />equipment.8
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<br />3 Id.
<br />4 U.S. Federal Energy Regulatory Commission, Order No. 784, issued July 18, 2013, in Docket Nos. RM11-24-000
<br />and AD10-13-000, In re: Third -Party Provision of Ancillary Services: Accounting and Financial Reporting for New
<br />Electric Storage Technologies.
<br />5 Rule 25-6.0436(1)(e), F.A.C., and Rule 25-6.0436(1)(m), F.A.C., specify the Commission's depreciation rate
<br />formulae and methodologies.
<br />6 See FPL's Responses to Staff's First Data Request, No. 8, and Staff's First Request for Production of Documents,
<br />No. 1.
<br />7 State of New York Public Service Commission, Order Approving Electric and Gas Rate Plans, issued January 25,
<br />2017, CASE 16-E-0060, In re: Proceeding on Motion of the Commission as to the Rates, Charges, Rules and
<br />Regulations of Consolidated Edison Company of New York, Inc. for Electric Service.
<br />8 Public Utilities Commission of the State of California, Decision 17-05-013, issued May 11, 2017, Application 15-
<br />09-001, In re: Application of Pacific Gas and Electric Company for Authority, Among Other Things, to Increase
<br />Rates and Charges for Electric and Gas Service Effective on January 1, 2017 (U39M).
<br />T. 2-i3
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