|
|
|
||
|
DATE: |
|||
|
TO: |
Director, Division of the Commission Clerk & Administrative Services (Bayó) |
||
|
FROM: |
Office of the General Counsel (Brown) Division of Economic Regulation (Redemann, Rieger) |
||
|
RE: |
Docket No. 060637-EU – Joint petition to approve territorial agreement in Highlands County between Glades Electric Cooperative, Inc. and Progress Energy Florida, Inc. |
||
|
AGENDA: |
03/13/07 – Regular Agenda – Proposed Agency Action - Interested Persons May Participate |
||
|
COMMISSIONERS ASSIGNED: |
|||
|
PREHEARING OFFICER: |
Administrative |
||
|
SPECIAL INSTRUCTIONS: |
|||
|
FILE NAME AND LOCATION: |
|||
On September 20, 2006, Glades Electric Cooperative, Inc. (Glades) and Progress Energy Florida, Inc. (Progress) filed a joint petition for approval of a territorial agreement for Highlands County. As a result of the Commission’s 1992 approval of Progress’s (then known as Florida Power Corporation) purchase of Sebring Utilities Commission’s (Sebring) assets,[1] Progress assumed responsibility for Sebring’s 1987 territorial agreement with Glades.[2] The proposed agreement supercedes the 1987 agreement and is appended to this recommendation as Attachment A.
This is staff’s recommendation regarding the proposed territorial agreement. The Commission has jurisdiction over this matter pursuant to section 366.04, Florida Statutes.
Issue 1: Should the Commission approve the proposed territorial agreement between Glades Electric Cooperative, Inc. and Progress Energy Florida, Inc.?
Recommendation: Yes. The proposed territorial agreement between Glades Electric Cooperative, Inc. and Progress Energy Florida, Inc. is in the public interest and should be approved. The effective date of the agreement should be the date the Commission’s order approving the agreement becomes final and no longer subject to judicial review. (Brown, Redemann, Rieger)
Staff Analysis: The proposed territorial agreement between Glades and Progress recognizes that the retail service areas of the parties are contiguous, and without an established territorial agreement defining their respective service territories duplication of service facilities would likely occur. The proposed agreement provides that the parties each have exclusive rights to furnish retail electric service inside their respective service territories and will not knowingly serve or attempt to serve new customers whose point of use is located within the service territory of the other party. The proposed agreement, with a term duration of twenty years, specifies that the effective date will be the date on which the final order of the Commission granting approval becomes no longer subject to judicial review.
The proposed agreement contemplates the transfer between the parties of six territorial areas. The territory descriptions of these areas are appended to this recommendation as Attachment B. Four of the areas will be transferred within eighteen months, three from Progress to Glades and one from Glades to Progress. In addition, there are two areas now temporarily being served by Glades that will be transferred to Progress when Progress can economically and effectively serve those areas.
Twelve customers served by Glades and six customers served by Progress -- referred to as extra-territorial customers -- are currently served by the utilities outside of the utilities’ established territory. The proposed agreement provides for the transfer of these customers to the utility in whose territory such customers’ end-use facilities are located as soon as practicable after the agreement’s effective date. In addition to the extra-territorial customers, there are several other affected retail customers located in the two areas that Glades is temporarily serving until Progress is able to serve. All customers to be transferred have received written notification of the agreement between the parties.
In addition to the above, the proposed agreement specifies that when circumstances arise in the future, Glades and Progress may jointly petition to the Commission for approval to modify the territorial boundaries. Also, in those cases where economic constraints or good engineering practices indicate that service cannot be provided by the party in whose service territory the new customer’s point of use is located, the other party may, at its sole discretion, agree in writing to provide temporary service to that customer. Temporary service lasting more than one year shall be submitted to the Commission for approval. If inadvertent service is provided to a customer whose point of use is within the service territory of the other party, service by the other party will be established at the earliest practical time. The inadvertent service will be deemed to be a temporary service as provided in accordance with the agreement.
The proposed agreement does not provide for reimbursement for loss of revenue associated with those customers to be served temporarily. For the identified extra territorial customers, the agreement does provide for compensation based on going concern value. Also the parties may elect to purchase the electric facilities used solely to provide electric service to those customers being transferred.
Pursuant to section 366.04(2)(d), Florida Statutes, the Commission has the jurisdiction to approve territorial agreements between and among rural electric cooperatives, municipal electric utilities, and other electric utilities. Rule 25.6.0440(2), Florida Administrative Code, provides that in approving territorial agreements, the Commission may consider the reasonableness of the purchase price of any facilities being transferred, the likelihood that the agreement will not cause a decrease in the reliability of electric service to existing or future ratepayers, and the likelihood that the agreement will eliminate existing or potential uneconomic duplication of facilities. Unless the Commission determines that the agreement will cause a detriment to the public interest, the agreement should be approved. Utilities Commission of the City of New Smyrna v. Florida Public Service Commission, 469 So. 2d 731 (Fla. 1985). In this instance, the territorial agreement proposed by Glades and Progress eliminates existing or potential uneconomic duplication of facilities, and it does not cause a decrease in the reliability of electric service to existing or future ratepayers.
Based on the above, staff recommends that the territorial agreement, contained in Attachment A to this recommendation, is in the public interest and should be approved.
Issue 2: Should this Docket be closed?
Recommendation: If no person whose substantial interests are affected files a protest to the Commission’s proposed agency action order within 21 days, the docket may be closed upon issuance of a consummating order. (Brown)
Staff Analysis: If no person whose substantial interests are affected files a protest to the Commission’s proposed agency action order within 21 days, the docket may be closed upon issuance of a consummating order.
ATTACHMENT A
ATTACHMENT
A
ATTACHMENT A
ATTACHMENT A
ATTACHMENT A
ATTACHMENT A
ATTACHMENT A
ATTACHMENT A
ATTACHMENT A
ATTACHMENT A
ATTACHMENT A
ATTACHMENT A
ATTACHMENT A
ATTACHMENT A
ATTACHMENT B
Page 1 of 2
Progress Energy/Glades Electric Cooperative
Territorial Agreement – Transfer Areas
- Box Ranch (Going from Progress to Glades) - Sections 13, 14, 23, 24, 25, 26, 34, 35, 36, Township 37 South, Range 28 East.
a. Box Ranch requires 3 phase power. The only three phase service that PEF currently has in the area runs down Placid View Drive to SR 70. In order for PEF to utilize this 3 phase feed, PEF would need to build 7 miles of 3 phase line heading west to Box Ranch, while under-building FPL and paralleling Glades on SR 70 (due to limited road right-of-way).
- West Josephine Road (Going from Progress to Glades) - Sections 16,17,18 Township 36 South, Range 28 East.
- These three sections are located at the end of West Josephine Road (small dirt road), in the area where Highlands, Hardee and DeSoto Counties meet.
- Farm Road (Going from Progress to Glades) –
- Section 25, Township 35 South and Range 29 East - Located on the south end of Farm Road, using Yellow Bluff Creek to the North and East Boundaries of Section 25, Township 35 South and Range 29 East.
- Section 19, Township 35 South, Range 30 East – boundary located from the RR west and south – Located south of Pine-Dale Estates and would put the majority of Section 19 in GEC territory.
- Southwest Section 20, Township 35 South, Range 30 East – boundary located from the RR west and south of Section 20. This would make all of Section 20, Township 35 South, and Range 30 East in GEC territory.
4. Arbuckle Creek / Lake Istokpoga (Going from Glades to Progress) - Section 12, Township 35 South, Range 30 East.
- From Burke Road south to PEF territory. Burke Road will be the north boundary line and Oak View Dr. is the east boundary line.
- GEC currently feeds this area from the east. PEF currently has facilities to the west, and cross over US 98, heading south. To avoid duplication of service, PEF will purchase existing GEC facilities in the Lake Istokpoga Park area and tie into their own existing facilities that run on the east side of Arbuckle Creek. The new facility-extension is approximately 1 mile of single phase power.
5. Blinking light on curve (Going from Glades to Progress) – Southeast ¼ of Section 7 Township 35 South, Range 29 East. This is Northwest corner of the intersection of Sparta Road and Bassage Road. Glades has agreed to continue serving this area until such time PEF can efficiently and economically do so.
ATTACHMENT B
Page 2 of 2
6. Westby Ranch (Going from Glades to Progress) – (Sections 31, 32, 33) Township 37 South, Range 29 East This is 2 miles west of Placid Lakes Blvd. on north side of State Road 70.
a. The accounts located off of SR 70 and east of Box Ranch is an area known as Westby Ranch. This area is 2 miles west of Placid Lakes Blvd., on the north side of SR 70.
b. Currently, Glades serves this area from the south with 3 phase power from their facilities located on SR70. PEF’s closest 3 phase power is located 3 miles east on Placid View Dr. Westby Ranch is on private property and it would require easement acquisitions for PEF to serve the property which PEF will explore in the future. Glades has agreed to continue serving this area until such time PEF can efficiently and economically do so.