DATE:	July 6, 2006
TO:	Director, Division of the Commission Clerk & Administrative Services (Bayó)
FROM:	Division of Economic Regulation (Fletcher,  Rendell) Office of the General Counsel (Gervasi)
RE:	Docket No. 050281-WS – Application for increase in water and wastewater rates in Volusia County by Plantation Bay Utility Company.
AGENDA:	07/18/06 – Regular Agenda – Interested Persons May Participate
COMMISSIONERS ASSIGNED:		Deason, Arriaga, Carter
PREHEARING OFFICER:		Deason
CRITICAL DATES:		11/29/06 (8-Month Effective Date)
SPECIAL INSTRUCTIONS:		This recommendation should immediately precede the recommendation in Docket No. 060165-WS.
FILE NAME AND LOCATION:		S:\PSC\ECR\WP\050281.RCM.DOC

 

 Case Background

Plantation Bay Utility Company (Plantation or utility) is a Class B utility providing water and wastewater service to approximately 1,473 customers in Volusia and Flagler Counties.  Water and wastewater rates were last established for this utility by Order No. PSC-02-1449-PAA-WS, issued October 21, 2002, in Docket No. 011451-WS, In re: Investigation of water and wastewater rates for possible overearnings by Plantation Bay Utility Co. in Volusia County.  Consummating Order No. PSC-02-1565-CO-WS, issued November 14, 2002, made Order No. PSC-02-1449-PAA-WS effective and final.

On August 8, 2005, Plantation filed the Application for Rate Increase at issue in the instant docket.  By Order No. PSC-05-1039-PCO-WS, issued October 24, 2005, in this docket, the Commission denied an interim revenue increase for water and approved an interim revenue increase of $214,097 (95.19%) for wastewater.  By Order No. PSC-06-0710A-PAA-WS (“PAA Order”), issued March 9, 2006, the Commission approved rates that were designed to generate a water revenue requirement of $406,689 and a wastewater revenue requirement of $490,260.

On March 29, 2006, Plantation timely filed a protest of the PAA Order.  On March 30, 2006, the Office of Public Counsel (OPC) also timely filed a protest of the PAA Order.  On June 14, 2006, the utility and OPC (collectively, “parties”) filed a Joint Motion to Approve Stipulation and Settlement which would resolve all issues addressed in their respective protests.  That motion and the stipulation and settlement are incorporated in this recommendation as Attachment A.

The purpose of this recommendation is to present the parties’ stipulation and settlement to the Commission for approval.  The Commission has jurisdiction pursuant to Sections 367.081 and 367.121, Florida Statutes.

 

 

 

 

 

 

 

Discussion of Issues

Issue 1: 

 Should the Commission approve the Joint Motion to Approve Stipulation and Settlement filed by the Office of Public Counsel and Plantation Bay Utility Company?

Recommendation: 

  Yes.  The proposed stipulation and settlement should be approved.  The utility should file a proposed customer notice within 15 days of the Commission vote, which is consistent with the Commission’s decision.  The approved rates should be effective for service rendered on or after the stamped approval date of the tariff pursuant to Rule 25-30.475(1), Florida Administrative Code, after staff has verified that the proposed customer notice is adequate and the notice has been provided to the customers. The utility should provide proof that the customers have received notice within 10 days after the date of the notice. (Fletcher, Gervasi)

Staff Analysis: 

 In the proposed stipulation and settlement, the parties state that they disagree with methodologies utilized by the Commission in making its determinations in the PAA Order.  However, the parties have agreed to stipulate to the revenue requirements and rates set forth in the PAA Order for purposes of settling all disputes between the utility and OPC in this docket and for no other purpose.  Specifically, the parties assert that the Commission’s findings and conclusions for its rate case expense determination and used and useful calculation for water supply and treatment should be stricken from the PAA Order and not serve as precedence in any future proceeding before the Commission. 

In addition, the parties have agreed that the last two paragraphs of the subsection entitled “SERVICE AVAILABILITY CHARGES AND POLICY”, except for the first sentence of the second to last paragraph should be stricken from the PAA Order.  The one sentence that would remain in that subsection reads as follows: “Due to the high growth rate that the service area is experiencing, we find it appropriate to require the utility to begin collecting donated water transmission and distribution and wastewater collection system expansions immediately.”  Further, the parties have agreed that all water transmission and distribution lines and wastewater collection system expansions completed after March 19, 2006 shall be contributed to the utility and booked as contributions in aid of construction (CIAC).  Finally, the parties state that these water and wastewater line expansions treated as CIAC shall include, but are not limited to, the expansions in the following subdivisions: Korona Park, 2EV Unit3-Prestwick X, 2EV Unit 4-Prestwick XI, 2AF Unit 5-Westlake V, 2AF Unit 6-Westlake VI, and 2AF Unit 7-Westlake VII.

Staff agrees that the language of the PAA Order which the parties seek to strike can be stricken because each rate case is decided on its own merits.  Staff believes that the parties’ proposed stipulation and settlement is a reasonable resolution because it addresses all protested issues and it agrees with the Commission’s water and wastewater revenue requirements as set forth in the PAA Order.  Further, staff believes that it is in the public interest for the Commission to approve the stipulation and settlement proposal because it promotes administrative efficiency and avoids the time and expense of a hearing.  Therefore, staff recommends that the Commission approve the parties’ proposed stipulation and settlement.

If the Commission approves the stipulation and settlement, staff recommends that the utility file a proposed customer notice within 15 days of the Commission vote, which is consistent with its decision.  The approved rates should be effective for service rendered on or after the stamped approval date of the tariff pursuant to Rule 25-30.475(1), Florida Administrative Code, after staff has verified that the proposed customer notice is adequate and the notice has been provided to the customers. The utility should provide proof that the customers have received notice within 10 days after the date of the notice.

 

 

 

 

 

 

 

Issue 2: 

 Should this docket be closed?

Recommendation: 

  Yes.  If the Commission approves staff's recommendation in Issue 1, this docket should be closed upon the issuance of the final order approving the parties’ stipulation and settlement. (Fletcher, Gervasi)

Staff Analysis: 

  If the Commission approves staff's recommendation in Issue 1, this docket should be closed upon the issuance of the final order approving the parties’ stipulation and settlement.