DATE:	November 21, 2006
TO:	Director, Division of the Commission Clerk & Administrative Services (Bayó)
FROM:	Office of the General Counsel (Brown) Division of  Economic Regulation (Clapp, Kummer) Division of Consumer Services (Plescow)
RE:	Docket No. 060745-EI - Complaint of Danielle Dobbs against Progress Energy Florida, Inc. and request for reconfiguration of overhead distribution facilities to serve Dommerich Hills neighborhood in Maitland
AGENDA:	12/05/06 - Regular Agenda – Proposed Agency Action - Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Administrative
CRITICAL DATES:			None
SPECIAL INSTRUCTIONS:			None
FILE NAME AND LOCATION:			S:\PSC\GCL\WP\060745.RCM.DOC

 

 Case Background

This customer complaint arises from Progress Energy Florida, Inc.’s (Progress) implementation of its arbitrated agreement to transfer its electric facilities in and around the City of Winter Park (Winter Park) to the city’s new municipal electric utility.  An arbitration panel established the price and other terms for the transfer of Progress’ distribution system to Winter Park, including approval of the geographic area that Progress and Winter Park agreed would be the “City Territorial Area.”[1]  Detailed maps delineate the service area established by the 2003 arbitration award for Progress and the Winter Park utility.  The transfer was successfully accomplished on June 1, 2005. 

In order to make the transfer to Winter Park safe and reliable, and to maintain reliability for customers in the area remaining on its distribution system, Progress needed to make changes to the configuration of its system along the boundary of the “City Territorial Area.”  One of the changes it made to its system occurred in Mrs. Danielle Dobbs’ Dommerich Hills neighborhood along Waumpi Trail in Seminole County, which was divided by the new territorial boundary and located across the street from the new Winter Park service territory.  Progress transferred the overhead distribution lines that had served part of Mrs. Dobbs’ neighborhood to Winter Park as the arbitration agreement required, and installed new distribution lines and 50 foot poles in the front of and at the entrance to Mrs. Dobbs’ neighborhood.  The neighborhood had previously been served from overhead distribution facilities in the backyards of the neighborhood, which had left the front and entrance to the neighborhood free of poles and power lines.   

Progress made these changes in Mrs. Dobbs’ neighborhood and all along the new “City Territorial Area” in April of 2005, in anticipation of the Winter Park transfer June 1.  Mrs. Dobbs states in her complaint, and Progress confirms, that no one in the neighborhood was notified that the changes were to occur until the trucks arrived and started installing the poles.  Ms. Dobbs confronted Progress at that time, and asked that the new lines in the front of her neighborhood be placed across the Seminole County line either next to the lines that were transferred to Winter Park, in the backyards of residents who had become customers of Winter Park, or underground.  Progress responded that it would place the lines across the Seminole County line, if Mrs. Dobbs and her neighbors could persuade the residents there to grant Progress easements to install the lines.  Progress also indicated to Mrs. Dobbs that it could not place new lines next to the ones transferred to Winter Park for safety reasons.  Finally, Progress indicated that, pursuant to its tariffs and Commission rules, the customers in Dommerich Hills would have to pay the differential to place the new lines underground, which Progress estimated to be approximately $45,000.  Ms. Dobbs then filed a complaint requesting that Progress place the new lines across the street from her neighborhood, or underground, at Progress’s expense.  An informal conference held April 05, 2006, did not settle the matter, and therefore this recommendation will address whether Progress complied with all regulatory statutes, or Commission rules and policies when it reconfigured its distribution system in Mrs. Dobbs’ neighborhood and refused to comply with Mrs. Dobbs’ demands.  The Commission has not received any other complaints regarding the facilities transfer to Winter Park, and Progress has indicated that it has not received any other complaints either. A Commission safety engineer inspected the new facilities installed to serve Mrs. Dobbs’ neighborhood and found them to be in compliance with the National Electrical Safety Code. The Commission has jurisdiction over this matter pursuant to Section 366.03, Florida Statutes.

 

Discussion of Issues

Issue 1:  Should the Commission dismiss Mrs. Dobbs’ complaint against Progress Energy?

Recommendation:  Yes.  Progress Energy Florida, Inc. complied with all regulatory statutes and Commission rules and policies when it reconfigured its electrical distribution system in Mrs. Dobbs’ neighborhood to accommodate the transfer to the City of Winter Park.  Accordingly, complaint #663875E should be dismissed. (Brown, Plescow, Clapp, Kummer)

Staff Analysis:  In her complaint (see Attachment A), Mrs. Dobbs claims that Progress should have notified her and her neighbors of its plans to place new facilities in their neighborhood, so that they could have consulted with Progress on the best placement of the poles and lines.  She asserts that the infrastructure changes have doubled the number of power poles on the Seminole County side of the territorial line, thereby doubling the safety hazards during hurricanes, increasing fire potential with trees and depreciating property values. Mrs. Dobbs claims that her due process rights were violated, and a hearing should have been held to present the residents with options and to receive the residents’ input on the proposed changes.  Mrs. Dobbs claims that Progress abused its monopoly position by refusing to take the residents’ interests into account and by abusing its use of the county right of way along Waumpi Trail to save money.  Mrs. Dobbs asserted that alternatives were available that would have been acceptable to the residents, such as rerouting part of the system underground or adding a parallel line at the Seminole County line where poles would have remained in backyards hidden from view.

            Mrs. Dobbs also claims that the residents of her neighborhood should not have to pay to underground the new lines pursuant to the utility’s undergrounding tariff and the Commission’s rules, because they are not the “applicants” for the installation of the new facilities.  The residents, Mrs. Dobbs asserts, were happy with the overhead facilities in their backyards, as they had been for forty years.  Progress provided the impetus for the installation of new lines, and accordingly, Mrs. Dobbs asserts, should bear the cost of converting them to underground facilities or securing easements from the Winter Park customers to place the lines across the territorial boundary on their property.[2]

            At the informal conference on Mrs. Dobb’s complaint, Progress stated that it is not required by any statute or Commission rule to notify customers when it makes changes to its distribution system to serve those customers.  Such a requirement would be burdensome and inefficient.  Rather, it is required to configure its distribution system in the most cost-effective manner in compliance with the National Electrical Safety Code -- which it did in this case-- not in a manner most favored by the customers.  Progress also stated that it could not place additional lines to serve Mrs. Dobbs’ neighborhood in the same location as the lines transferred to Winter Park, because there was not enough space to meet the required clearances.  Further, it did not believe it could acquire easements from the Winter Park customers, but it was able to acquire permits to install facilities in the Seminole County right-of-way along Waumpi Trail.  Progress also stated that it installed 50 foot poles rather than shorter ones to accommodate Mrs. Dobbs’ concern about having to trim too much from the large trees along the entrance to Dommerich Hills.

            With regard to Mrs. Dobbs suggestion that it place the new facilities underground at its expense, Progress responded that it would violate its tariffs and Commission Rule 25-6.115, Florida Administrative Code, if it did so, thereby imposing those additional costs on its other ratepayers.  According to Progress, Commission policy requires it to choose the most cost-effective means to serve its customers, which in this instance were new overhead facilities along the Seminole County right of way.

            The facts of this complaint do not show that Progress violated any regulatory statute or rule or policy of the Commission when it reconfigured its distribution system in anticipation of the transfer of facilities to Winter Park.  Staff agrees that Progress is not required to notify its customers every time it makes a change to its distribution system.  While under some circumstances it might be advisable to do so, as it might have been in this circumstance, any such requirement to notify customers every time a change is made to an electric utility’s system would be unworkable.  Customers do not have a due process right to a hearing regarding Progress’ configuration of its electrical system.  As long as the modifications are made in a cost-effective manner and comply with the National Electrical Safety Code, Progress has fulfilled its obligation to its customers to provide “ . . . reasonably sufficient, adequate and efficient service upon terms as required by the Commission.”  Section 366.03, Florida Statutes.  In this case Progress complied with those requirements.

            In addition, Progress complied with Commission Rule 25-6.115, Florida Administrative Code, Facility Charges for Providing Underground Facilities of Public Distribution Facilities Excluding New Residential Subdivisions.  That rule provides, in pertinent part:

(1) Each public utility shall file a tariff showing the non-refundable deposit amounts for standard applications addressing new construction and the conversion of existing overhead to underground facilities excluding new residential subdivisions.  The tariff shall include the general provisions and terms under which the public utility and applicant may enter into a contract for the purpose of new construction or conversion of existing overhead electric facilities to underground electric facilities.  The non-refundable deposit amounts shall approximate the engineering costs for underground facilities serving each of the following scenarios: urban commercial, urban residential, rural residential, existing low-density single family home subdivision and existing high-density single family home subdivision service areas.

(2)  For purposes of this rule, the applicant is the person or entity seeking the undergrounding of existing overhead electric distribution facilities. . . .

(7)  The charge paid by the applicant shall be the charge for the proposed underground facilities as indicated in subsection (8) minus the charge for overhead facilities as indicated in subsection (9) minus the non-refundable deposit amount. . . .

(8)  For the purpose of this rule, the charge for the proposed underground facilities shall include:

(a)  The estimated cost of construction of the underground distribution facilities including the construction cost of the underground service lateral(s) to the meter(s) of the customers(s);

(b)  For conversions, the estimated remaining net book values of the existing facilities to be removed less the estimated net salvage value of the facilities to be removed.

(9)  For the purpose of this rule, the charge for overhead facilities shall be the estimated construction cost to build new overhead facilities, including the service drop(s) to the meter(s) of the customer(s).

Progress’ tariffs Part XI, Underground Residential Distribution Policy, and Part XII, Underground Electric Distribution Facility Charges, comport with the Commission’s undergrounding rules.  Progress would have violated its tariff and Rule 25-6.115 if it had borne the additional costs to underground the new facilities as Mrs. Dobbs requested.

            In conclusion, staff recommends that Mrs. Dobbs’ complaint No. 663875E should be dismissed.  Progress has complied with all applicable rules and statutes, and the Commission cannot grant the relief requested.

 

 

 

 

 

 

 

 

 

 

 

Issue 2:  Should this docket be closed?

Recommendation:  Yes, if no person whose substantial interests are substantially affected files a timely protest of the Commission’s Proposed Agency Action Order, this docket should be closed upon the issuance of a consummating order.

Staff Analysis:  If no person whose substantial interests are substantially affected files a timely protest of the Commission’s Proposed Agency Action Order, this docket should be closed upon the issuance of a consummating order.