“Deference with Reasoned Explanation” — The Florida Supreme Court’s New Framework for Reviewing Public Service Commission Settlements

Introduction

Florida Rising, Inc. v. Florida Public Service Commission, decided by the Supreme Court of Florida on 17 July 2025, is the Court’s second encounter with the multi-party settlement approving Florida Power & Light Company’s (FPL) 2021–2025 base-rate plan. In Floridians Against Increased Rates, Inc. v. Clark (FAIR), 371 So. 3d 905 (Fla. 2023), the Court found the Commission’s original explanation inadequate and remanded for a fuller rationale, expressly directing the Commission to consider utilities’ performance under the Florida Energy Efficiency and Conservation Act (FEECA). On remand the Commission produced a Supplemental Final Order that again approved the settlement. Florida Rising, several environmental groups, and consumer advocates appealed, challenging three core determinations:

• The legality of expanding FPL’s “SolarTogether” solar-subscription program under § 366.03, Fla. Stat. (undue or unreasonable preference).
• Whether the package of settlement mechanisms (return on equity, capital structure, RSAM, pilot programs, minimum bill, etc.) serves the public interest.
• Whether the Commission adequately considered FPL’s FEECA performance.

Justice Sasso, writing for the majority, affirms the Commission and in doing so crystalises a two-step judicial review model for Commission decisions intertwining fact-finding and policy judgments.

Summary of the Judgment

1. Standard of Review. The Court reiterates the hybrid framework from FAIR: factual findings must be supported by competent, substantial evidence (“CSE”), while the Commission’s policy choices are judged for abuse of the broad discretion delegated by the Legislature. The Court’s own role is limited to verifying a reasoned explanation that rationally connects facts to policy outcomes.

2. SolarTogether. The Commission’s finding that the program does not create an undue or unreasonable preference is upheld. Competing expert testimony existed; the Commission credited FPL’s witness Scott Bores, whose modelling projected net savings of $648 million (CPVRR) to all ratepayers, with 103.26 % of program cost borne by subscribers. Because competent evidence supported those projections, and because the Commission articulated how promoting renewable energy aligns with legislative policy, judicial deference is required.

3. Public-Interest Review of the Settlement. The Court endorses the Commission’s holistic evaluation, rejecting the appellants’ insistence on discrete, issue-by-issue findings. By addressing capital structure, RSAM, SoBRA solar additions, pilot programs, and rate-stability goals in aggregate, the Commission adequately justified its conclusion that the settlement yields fair, just, and reasonable rates.

4. FEECA Consideration. The Supplemental Final Order’s discussion of FPL’s demand-side management goals and its consistency with Commission-approved conservation targets satisfies the statutory command of § 366.82(10).

5. Disposition. The Final and Supplemental Final Orders are affirmed. Chief Justice Muñiz dissents, contending the Commission never justified forcing the general body of ratepayers to subsidise SolarTogether participants by roughly $2 billion.

Analysis

Precedents Cited and Their Influence

• FAIR, 371 So. 3d 905 (2023) – The immediate predecessor that required a fuller explanation. The present decision builds on FAIR by operationalising its hybrid review principle and clarifying how much explanation suffices.
• Sierra Club v. Brown, 243 So. 3d 903 (Fla. 2018) – Cited for the notion that a settlement may be assessed as a whole for public interest without separate rulings on every disputed element.
• Gulf Coast Electric Cooperative v. Johnson, 727 So. 2d 259 (Fla. 1999) and Citizens of State v. PSC, 425 So. 2d 534 (Fla. 1982) – Provide the doctrinal foundation for broad legislative delegation of ratemaking authority to the Commission.
• Motor Vehicle Mfrs. Ass’n v. State Farm, 463 U.S. 29 (1983) – Quoted for the “reasoned decisionmaking” requirement; agencies must articulate the connection between facts and choices.
• Florida Power Corp. v. Mayo, 203 So. 2d 614 (Fla. 1967); Lewis v. PSC, 463 So. 2d 227 (Fla. 1985) – Support the premise that utilities may classify customer groups so long as preferences are not undue or unreasonable.

Legal Reasoning of the Court

1. Hybrid Nature of the Question. Determining whether a rate preference is “undue” involves fact-finding (costs, benefits, subsidy levels) and policy (energy strategy, fairness). The Court therefore refuses to treat it as either pure law (de novo) or pure fact (CSE) but adopts deferential review of mixed findings if a rational explanation exists.
2. Application to SolarTogether. The Commission resolved disputed cost-benefit evidence in FPL’s favour. The Court finds that enough CSE supports that choice and that the policy of renewable expansion rationally undergirds the preferential rate. Consequently, the Court will not “reweigh” evidence.
3. Public Interest as a Holistic Concept. Echoing Sierra Club, the Court reiterates that settlement review is global; granular objections may be considered but need not each be separately ruled upon if the overall package promotes rate stability, adequate service, and legislative goals.
4. Statutory Factors. Mandatory consideration of FEECA and affordability was shown; discretionary factors—including rate stability, capital market access, and grid reliability—were addressed. That suffices to stay within the “range of discretion.”
5. Administrative-Law Touchstone. Borrowing from federal cases, the Court emphasises the “reasoned decisionmaking” requirement rather than any heightened substantive scrutiny.

Impact of the Judgment

• Commission Procedures. The Court signals that future Commission orders must narrate a transparent path from empirical findings to policy choices, but once done, courts will rarely second-guess.
• Utility Rate Cases. Settlements combining traditional cost-of-service elements with policy incentives (renewables, resilience, demand-side management) are now safer from judicial reversal provided they rest on some CSE and articulate broader benefits.
• Renewable-Energy Programs. The case emboldens utilities to craft subscription-based solar programs requiring cross-customer cost allocation, so long as they can quantify system-wide benefits and tie them to statutory renewable-energy objectives.
• Litigation Strategy. Consumer and environmental challengers must marshal compelling evidence and demonstrate an irrational link between facts and Commission policy; mere disagreement over modelling assumptions is unlikely to prevail.
• Future Appeals. The decision cements “deference with reasoned explanation” as the governing appellate rubric for mixed fact–policy Commission decisions, potentially guiding not only energy but also telecommunications and water-utility matters regulated under Chapter 120.

Complex Concepts Simplified

• Competent, Substantial Evidence (CSE). Evidence that a reasonable mind would accept as adequate to support a conclusion. It is not “beyond reasonable doubt” or “clear and convincing”; it simply must be credible and relevant.
• Return on Equity (ROE). The percentage profit a utility is allowed to earn on shareholder capital. Here set at 10.6 % (range 9.7–11.7 %).
• Equity-to-Debt Ratio. The proportion of shareholder equity to borrowed capital used to finance assets. A higher equity ratio often yields higher customer prices but can improve credit metrics.
• Reserve Surplus Amortization Mechanism (RSAM). An accounting tool letting FPL smooth unforeseen expenses over time without immediate rate hikes, thereby supporting a multiyear rate plan.
• SoBRA Mechanism. “Solar Base Rate Adjustment” — permits incremental rate hikes tied to specific solar projects coming online.
• SolarTogether. A voluntary program where customers subscribe to solar capacity, pay a fixed fee, and receive monthly bill credits reflecting their portion of generation.
• Undue/Unreasonable Preference. Under § 366.03, utilities may not design rates that unjustifiably favour one group over another. A preference is permissible when grounded in rational policy and supported by evidence.
• FEECA. The Florida Energy Efficiency and Conservation Act requires utilities to pursue cost-effective conservation and demand-side management and instructs the Commission to consider that performance in rate cases.

Conclusion

Florida Rising v. PSC fortifies a pragmatic, deferential standard for courts reviewing the Public Service Commission’s blending of fact-finding with policy discretion. As long as the Commission:

1. bases its factual conclusions on competent, substantial evidence,
2. articulates a rational path from those facts to its policy outcomes, and
3. addresses mandatory statutory criteria (like FEECA),

its settlements—however controversial—will likely stand. The decision simultaneously gifts utilities a clearer roadmap for structuring innovative renewable-energy tariffs while cautioning litigants that mere modelling disputes will not upend Commission orders. In the broader regulatory landscape, “Deference with Reasoned Explanation” now operates as the guiding principle when Florida’s appellate courts gauge the propriety of complex utility settlements.