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DATE: |
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TO: |
Office of Commission Clerk (Cole) |
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FROM: |
Office of the General Counsel (Klancke) Division of Economic Regulation (Redemann, Rieger) |
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RE: |
Docket No. 070669-EU – Joint petition for approval of territorial agreement in Bradford County by Clay Electric Cooperative, Inc. and City of Starke, Florida. |
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AGENDA: |
01/29/08 – Regular Agenda – Proposed Agency Action - Interested Persons May Participate |
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COMMISSIONERS ASSIGNED: |
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PREHEARING OFFICER: |
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SPECIAL INSTRUCTIONS: |
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FILE NAME AND LOCATION: |
S:\PSC\GCL\WP\070669.RCM.DOC |
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On October 31, 2007, Clay Electric Cooperative, Inc. (Clay) and the City of Starke, Florida (City) filed a joint petition for approval of a territorial agreement dated September 27, 2007. The petition indicated that the agreement has been entered into by the parties after lengthy deliberation and consideration of the best interests of their electric consumers and citizens of the areas served by both parties, and is intended to prevent uneconomic, costly and unnecessary duplication of electric facilities in the territorial areas covered by the agreement. This is the first territorial agreement that has been entered into between these two parties.
This is staff’s recommendation regarding the parties’ joint petition for approval of the territorial agreement. The territorial agreement is appended to the recommendation as Attachment A. The Commission has jurisdiction over the matter pursuant to section 366.04, Florida Statutes.
Issue 1:
Should the Commission approve the joint petition for approval of the territorial agreement between Clay Electric Cooperative, Inc. and the City of Starke?
Recommendation:
Yes. The joint petition for approval of the territorial agreement between Clay Electric Cooperative, Inc. and the City of Starke, appended to this recommendation as Attachment A, is in the public interest and should be approved. (Klancke, Redemann, Rieger)
Staff Analysis:
As stated in the case background, the joint petition provides that the agreement between Clay and the City was entered into by the parties after lengthy deliberation and consideration of the best interests of their electric consumers and the citizens of the areas served by both parties. The agreement is intended to prevent uneconomic, costly and unnecessary duplication of electric facilities. No customers or facilities will be transferred between the parties as a result of the agreement. Acknowledging that any modifications, changes or amendments to the agreement must be approved by the Commission, the parties represent that the agreement will not cause a decrease in the reliability of electrical service and that it will likely eliminate uneconomic duplication of facilities. The petition provides that the agreement will also promote the Commission’s stated policy of encouraging territorial agreements between and among Florida’s electric utilities.
The agreement states that the parties desire to avoid duplications and possible hazards within the retail service areas in which they desire to operate. The parties have agreed upon territorial boundary lines in portions of the City of Starke and Bradford County. A geographic boundary description with maps are included with the territorial agreement in Attachment A. The petitioners noted that the boundary line does not close in two areas. In those two areas, another electric utility which is not a party to this agreement is providing electric service. The agreement did note that there is nothing intended to define, establish or affect in any manner the rights of either party relative to any other electric utility not a party to the agreement. The third party electric utility that provides service in the area is Florida Power & Light (FPL). Staff has been informed that FPL has been apprised of the territorial agreement currently being proposed between the City and Clay, and FPL does not object to it. The City is currently in the process of negotiating a territorial agreement with FPL.
Except in those cases where wholesale power service is intended for resale, and franchise agreements to serve retail customers occur, neither party shall serve any existing or new customers located in the territorial area of the other party. Although “any municipality” was included in the wording of the franchise portion of the agreement, the parties later clarified with staff that the party’s intention with regard to this section was to include the phrase “the City” instead. The agreement recognizes that it may be necessary, under certain circumstances, to make arrangements for the joint use of service facilities. Also, an interim service provision has been included to address new customers that are best served by the other party until provisions are made for the switch to the utility who will provide the permanent service. In addition, existing and new facilities which are used in serving customers of either party shall be allowed in the territorial area of the other party.
The term of the agreement shall continue in effect for a period of twenty (20) years, starting with its effective date as of the Commission order granting final approval. Thereafter, the agreement can be automatically extended for succeeding periods of one (1) year each, and may also be cancelled with adequate notice before the beginning of any extension period. Although it is not clearly stated within the agreement, it should be noted that the Commission must approve any and all alterations, modifications, enlargements or supplements made to the agreement. Also, since no customers or equipment are to be traded as a result of the agreement, no reporting or monitoring is required.
Based on the above, staff recommends that the joint petition for approval of the territorial agreement between Clay Electric Cooperative, Inc. and the City of Starke, appended to the recommendation as Attachment A, 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. (Klancke)
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.