DATE:	March 26, 2009
TO:	Office of Commission Clerk (Cole)
FROM:	Division of Economic Regulation (Rieger) Office of the General Counsel (Sayler)
RE:	Docket No. 080536-WU – Application for quick-take amendment of and application for amendment of Certificate No. 002-W to extend water service to certain territory (Oakwood) in Brevard County, by Aqua Utilities Florida, Inc. County:  Brevard
AGENDA:	04/07/09 – Regular Agenda – Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Edgar
CRITICAL DATES:			None
SPECIAL INSTRUCTIONS:			Place in consecutive order on the agenda.
FILE NAME AND LOCATION:			S:\PSC\ECR\WP\080536.RCM.DOC

 

Case Background

Aqua Utilities Florida, Inc. (Aqua or Utility) is a Class A water and wastewater utility with 82 water and wastewater systems located in sixteen counties throughout Florida.  By Order No. 5033, issued January 27, 1971, the Commission granted a water certificate for the Oakwood service area.[1]  There has also been multiple certificate transfer and amendment activities that have occurred over the years (see Attachment A, page 3 of 3).  On August 12, 2008, the Utility filed both its initial application and completed follow-up application for a “Quick Take” amendment to Certificate 002-W for certain territory at its Oakwood system in Brevard County, pursuant to Rule 25-30.036(2), Florida Administrative Code (F.A.C.).  The Utility provides water service to approximately 191 customers at its Oakwood system.  The Utility’s service area in Brevard County is in the St. Johns River Water Management District.  Bulk water is purchased from the County of Brevard.  Three of these customers were recently determined to be outside of its service territory.  The Utility has indicated that service to these residential customers occurred sometime between 1987 and 1996.  The Utility has indicated that a petition for certificate amendments to serve these customers was overlooked.  It was discovered during the 2006 rate case (Docket No. 060368-WS) that the Utility was serving outside its territory at this system  The proposed amended area is contiguous to Aqua’s existing Commission approved service territory.  The Commission has jurisdiction pursuant to section 367.045, Florida Statutes (F.S.).

Discussion of Issues

 

Issue 1: 

 Should Aqua Utilities Florida, Inc. be required to show cause, in writing, within 21 days why it should not be fined for its apparent violation of Section 367.045, Florida Statutes?

Recommendation: 

 No.  A show cause proceeding should not be initiated.  (Sayler)

Staff Analysis: 

 As stated in the case background, Aqua, is serving customers outside of its certificated territory.  Section 367.045(2), F.S., states in pertinent part: “A utility may not delete or extend its service outside the area described in its certificate of authorization until it has obtained an amended certificate of authorization from the [C]ommission . . . .”  If a utility is found to have knowingly refused to comply with, or to have willfully violated any provision of Chapter 367, F.S., Section 367.161(2), F.S., authorizes the Commission to assess a penalty of not more than $5,000 for each offense.  By serving customers outside of its certificated territory without obtaining an amended certificate of authorization, the Utility’s act was “willful” within the meaning of Section 367.161, F.S.  In Order No. 24306, issued April 1, 1991, in Docket No. 890216-TL, In Re: Investigation Into The Proper Application of Rule 25-14.003, Florida Administrative Code, Relating To Tax Savings Refund For 1988 and 1989 For GTE Florida, Inc., the Commission, having found that the company had not intended to violate the rule, nevertheless found it appropriate to order it to show cause why it should not be fined, stating that “[i]n our view, ‘willful’ implies an intent to do an act, and this is distinct from an intent to violate a statute or rule;” see also Order No. PSC-99-2390-FOF-WU, issued on December 7, 1999, in Docket No. 980543-WU, In Re: Application for amendment of Certificate No. 363-W to add territory in Marion County by Sunshine Utilities of Central Florida, Inc.  (finding that the utility’s apparent violation of Section 367.045, F.S., did not warrant the initiation of a show cause proceeding).

 

            Although Aqua’s failure to obtain an amended certificate of authorization for its Oakwood system in Brevard County from the Commission prior to serving outside of its certificated area is an apparent violation of Section 367.045(2), F.S., according to its application, the Utility erroneously believed that the territory in question was included in its service area.  When the error was discovered, Aqua filed the instant application to correct the mistake and include the territory to its service area.  The Utility has indicated that throughout this time period, the calculation of the annual regulatory assessment fees (RAFs) for Aqua was inclusive of all these customers.

 

Staff does not believe that the apparent violation of Section 367.045, F.S., rises in these circumstances to the level which warrants the initiation of a show cause proceeding.  Therefore, staff recommends that the Commission not order Aqua to show cause for failure to obtain an amended certificate of authorization prior to serving outside of its certificated territory.

Issue 2: 

 Should the Commission acknowledge Aqua's "Quick Take" application to amend Certificate 002-W?

Recommendation: 

 Yes, the Commission should acknowledge Aqua’s amendment application to expand its territory.  The proposed territory is described in Attachment A.  The resultant order should serve as Aqua’s amended certificate and it should be retained by the Utility.  The existing charges contained in its tariff should be applied to the customers in the new territory until it is authorized by the Commission to change them in a subsequent proceeding.  In addition, the Utility should be ordered to file revised tariff sheets that incorporate the additional territory within 30 days from the date of the Commission order approving the amendment.  (Rieger, Sayler)

 

Staff Analysis: 

 The “Quick Take” amendment is designed to provide water and/or wastewater service quickly for areas that serve less than 25 equivalent residential connections (ERCs).  The request for service territory expansion and amendment of existing certificates is considered approved when the Utility complies with Rule 25-30.036(2), F.A.C., and if no protest is timely filed to the notice of application. 

On August 12, 2008, the Utility filed both its initial application and completed follow-up application for a “Quick Take” amendment to Certificate 053-W for new territory in Brevard County, pursuant to Rule 25-30.036(2), F.A.C..  The proposed territory includes three residential customers.  The Utility has indicated that service to these residential customers occurred sometime between 1987 and 1996.  The application is in compliance with the governing statute, Section 367.045, F.S., and other pertinent statutes and administrative rules concerning an application for amendment of certificate.

A description of the proposed territory and a list of orders identifying the Utility’s authorized service territory are appended to this recommendation as Attachment A.  In addition, the application contains proof of compliance with the noticing provisions set forth in Rule 25-30.036(2), F.A.C.  No objections to the application have been received and the time for filing such has expired.  Staff has contacted the Department of Environmental Regulation and learned that there are no outstanding notices of violation issued for Aqua’s Oakwood water distribution system.  It appears that the Utility has sufficient capacity to serve the existing and proposed customers.  The Utility has filed revised tariff sheets incorporating the additional territory into its tariff.  However, these tariff sheets are still incomplete, and further revision is necessary.

Based on the above information, staff believes it is in the public interest to acknowledge the “Quick Take” amendment application filed by Aqua to amend its territory to reflect the area described in Attachment A.  Also, existing charges contained in Aqua’s tariff should be applied to the customers in the new service territory until it is authorized by the Commission to change them in a subsequent proceeding.  In addition, the Utility has indicated that throughout this time period, the calculation of the annual regulatory assessment fees (RAFs) for Aqua was inclusive of all of these customers.  In addition, the Utility should be ordered to file revised tariff sheets that incorporate the additional territory within 30 days from the date of the Commission order approving the amendment.

Issue 3: 

 Should this docket be closed?

Recommendation: 

 Yes.  If the Commission approves staff’s recommendations in Issues 1 and 2, no further action will be necessary and this docket should be closed.  (Sayler)

 

Staff Analysis: 

 If the Commission approves staff’s recommendations in Issues 1 and 2, no further action will be necessary and this docket should be closed.

Aqua Utilities Florida, Inc.

Brevard County

Description of Water Territory Added

 

 

Oakwood

           

Township 21 South, Range 35 East

 

1. Commence From The Southeast Corner Of Section 6 And Run S89°56'59"W A Distance Of 994 Feet To The Point Of Beginning, Thence Run N89°40'36"E A Distance Of 176.0' Feet, Thence Run N00°00'02"W A Distance Of 67.8 Feet, Thence Run S89°11'14"W A Distance Of 176.2 Feet, Thence Run S00°52'52"E A Distance Of 65.4 Feet To The Point Of Beginning.

 

2. Commence From The Northwest Corner Of Section 8 And Run S0°57'18"E A Distance Of 1322.1 Feet To The Point Of Beginning, Thence Run N89°32'53"E A Distance Of 663.3 Feet, Thence Run S0°20'54"E A Distance Of 344.7 Feet, Thence Run N89°11'12"W A Distance Of 270.4 Feet, Thence Run S0°04'07"W A Distance Of 323.1 Feet, Thence Run S89°27'08"W A Distance Of 386.0 Feet, Thence Run N0°48'50"W A Distance Of 662.5 Feet To The Point Of Beginning.

Aqua Utilities Florida, Inc.

Brevard County

Composite Water Service Area

 

Oakwood

 

Township 21 South, Range 35 East

 

Begin At The Northwest Corner Of Section 8 And Run N89°25'19"E A Distance Of 1,332.2 Feet, Thence Run S0°32'29"E A Distance Of 2000.5 Feet, Thence Run S89°54'49"W A Distance Of 1321.0 Feet, Thence Run N0°57'30"W A Distance Of 1268.3 Feet, Thence Run S89°28'53"W A Distance Of 1340.8 Feet, Thence Run N1°2'3"W A Distance Of 724.9 Feet, Thence Run N89°32'9"E A Distance Of 174.1 Feet, Thence Run N00°00'02"W A Distance Of 67.8 Feet, Thence Run S89°11'14"E A Distance Of 176.2 Feet, Thence Run S0°52'52"E A Distance Of 65.4 Feet, Thence Run N89°26'24"E A Distance Of 992.5 Feet To The Point Of Beginning.

FLORIDA PUBLIC SERVICE COMMISSION

authorizes

Aqua Utilities Florida, Inc.

pursuant to

Certificate No. 002-W

 

to provide water service in Brevard County in accordance with the provisions of Chapter 367, Florida Statutes, and the Rules, Regulations, and Orders of this Commission in the territory described by the Orders of this Commission.  This authorization shall remain in force and effect until superseded, suspended, cancelled or revoked by Order of this Commission.

 

Order Number	Date Issued	Docket Number	Filing Type
5033	01/27/71	70572-W	Grandfather Certificate
9886	03/17/81	800618-WS	Transfer
19505	06/16/88	880206-WU	Transfer
PSC-94-1011-FOF-WU	08/22/94	930737-WU	Amendment
PSC-97-0427-FOF-WS	04/16/97	970028-WS	Name Change
PSC-05-1242-PAA-WS	12/20/05	040951-WS	Transfer
*	*	080536-WU	Amendment

 

*Order Number and date to be provided at time of issuance.