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DATE:
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April 9, 2010
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TO:
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Office of Commission Clerk (Cole)
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FROM:
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Division of Economic Regulation (Daniel,
Fletcher, Rieger, Stallcup, Williams)
Office of the General Counsel (Jaeger)
Division of Regulatory Analysis (King)
Division of Service, Safety & Consumer Assistance
(Hicks)
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RE:
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Docket No. 080121-WS – Application for increase in water and wastewater rates in Alachua, Brevard, DeSoto, Highlands,
Lake, Lee, Marion, Orange, Palm Beach, Pasco, Polk, Putnam, Seminole, Sumter,
Volusia, and Washington Counties by Aqua Utilities Florida, Inc.
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AGENDA:
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04/20/10 – Regular Agenda – Proposed Agency Action - Interested
Persons May Participate
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COMMISSIONERS ASSIGNED:
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All Commissioners
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PREHEARING OFFICER:
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Edgar
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CRITICAL DATES:
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None
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SPECIAL INSTRUCTIONS:
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None
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FILE NAME AND LOCATION:
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S:\PSC\ECR\WP\080121.RCM.DOC
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Case Background
By Order No. PSC-09-0385-FOF-WS (Final Order), issued on May 29, 2009, in this docket, the Commission found
that the quality of service provided by Aqua Utilities Florida, Inc. (AUF) was
marginal for all systems, except for the Chuluota system, which was
unsatisfactory. (Final Order, p. 21) Also, the Commission noted that a consent
order for The Woods’ water and wastewater systems had just been closed, and
made the increased rates for those systems subject to refund with interest
should the systems become subject to a Department of Environmental Protection
(DEP) consent order within 18 months of the issuance of the Final Order. (Final
Order, p. 144)
Because of concerns with AUF’s customer service, the
Commission created an AUF Monitoring Plan which was to last six months. The
three major areas of concern targeted in the Monitoring Plan included: (1)
AUF’s failure to handle customer complaints properly, (2) AUF’s Call Center’s
process for handling complaints, and (3) incorrect meter readings and resulting
improper bills. AUF was required to submit monthly reports and sound
recordings of customer complaints, as well as meter reading route schedules and
meter reading logs, in order to verify the accuracy of the meter readings and
resulting customer bills. Upon the completion of these reporting requirements,
staff was to present to the Commission its conclusions and recommendations
regarding AUF’s performance. If it was determined that AUF was not performing
adequately, the Commission could initiate show cause proceedings or take such
other action as may be deemed appropriate. (Final Order, p. 22)
Staff filed a recommendation for the March 16, 2010,
Agenda Conference presenting the results of its review into the quality of
service provided by AUF as required by the Final Order. In addition, in its
recommendation, staff provided an update of the Utility’s compliance with the
DEP and County Health Departments which oversee AUF’s quality of product and
the operational condition of the water and wastewater facilities.
After hearing from staff, parties, and a number of
customers at the Agenda Conference, the Commission concluded that, while
preliminary results show substantial improvement in AUF’s customer service,
additional monitoring is required to ultimately render a determination as to
the adequacy of AUF’s quality of service. The Commission ordered staff to
continue monitoring the customer service provided by AUF through calendar year
2010, including customer complaints, meter reading and billing accuracy, and
environmental compliance.
In preparing a subsequent monitoring plan, the Commission directed staff to
emphasize specific areas that were discussed at the Agenda Conference,
including the procedures and accuracy of estimated bills, and the appropriate
methods and costs to improve the aesthetic quality of water in certain targeted
systems. Further, staff was instructed to work collaboratively with AUF and
the other parties in order to develop a cost-effective, efficient, and
meaningful monitoring plan, and to bring the supplemental monitoring plan to
the Commission within 45 days. Staff met in noticed meetings with
representatives from AUF, the Office of Public Counsel (OPC), and the Office of
the Attorney General (AG) on March 25 and April 5, 2010, to discuss the
specifics of a cost-effective monitoring plan consistent with the Commission’s
direction. In addition, several customer representatives participated in the
meetings via conference call. At the April 5th meeting, AUF and OPC
agreed to a joint proposed Phase II Monitoring Plan. This memorandum presents
staff’s recommendation on the AUF/OPC Proposed Phase II Monitoring Plan of
AUF’s Quality of Service and additional requirements for the Supplemental
Monitoring Plan as ordered by the Commission in Order No. PSC-10-0218-PAA -WS, issued April 6, 2010.
The Commission has jurisdiction pursuant to Sections
367.011(2), 367.081, and 367.111, Florida Statutes (F.S.).
Discussion
of Issues
Issue 1:
Should the Phase II Monitoring Plan proposed by AUF
and OPC be approved?
Recommendation:
Yes, the plan proposed by AUF and OPC outlines an
efficient, cost-effective means of monitoring the quality of service of AUF and
should be approved. In addition, staff recommends that the Phase II Monitoring
Plan should address environmental compliance and a further evaluation of the
customer billing samples. (King, Stallcup, Rieger)
Staff Analysis:
As mentioned in the Case Background, at the March 16
Agenda Conference, the Commission concluded that, while preliminary results
show substantial improvement in AUF’s customer service, additional monitoring
is required to ultimately render a determination as to the adequacy of the
quality of service. The Commission ordered staff to continue monitoring the
customer service provided by AUF through calendar year 2010, and to work
collaboratively with AUF and the other parties in order to develop a
cost-effective, efficient and meaningful monitoring plan. Staff met with
representatives from AUF, OPC, and the AG’s Office in noticed meetings on March
25 and April 5, 2010, to discuss the specifics of a cost-effective monitoring
plan consistent with the Commission’s direction. In addition, several customer
representatives participated in the meetings via conference call. At the April
5th meeting, AUF and OPC agreed to a joint proposed Phase II Monitoring Plan. AUF
and OPC ultimately submitted their Agreement on Scope of Phase II Monitoring,
and that document is appended to this recommendation as Attachment 1.
AUF/OPC PROPOSED
PHASE II MONITORING PLAN
In essence, the Phase II Monitoring Plan proposed by AUF
and OPC includes monitoring through calendar year 2010 customer complaints,
estimated meter readings, and aesthetic water quality for seven of AUF’s water
systems. The specific methods to accomplish this monitoring are discussed
below.
Customer Complaints
With regard to customer complaints, AUF will provide
reports and supporting documents on a monthly basis that track the customer
calls received by AUF’s call centers. (See Nos. 1(a) and (b) and 4 on
Attachment 1.) These documents will be provided to all parties in the docket
and placed in the Commission’s docket file within one month and ten days of the
end of the relevant reporting period. For example, reports for the month of
May will be filed no later than July 10, 2010. The documents include:
·
Management Quality Performance Report – This report tracks on a
monthly basis the reasons for customer calls. It is used by AUF management to
gain an understanding of recent performance and any adverse trends. AUF has
agreed to provide the historical trend line for this report and a monthly
“Florida Scorecard,” which includes quality of service metrics. In addition,
the supporting non-proprietary information for each of the complaint-related
calls that underlies the monthly Management Quality Performance Reports will be
provided each month.
·
Call Center Monitoring Statistics – This report tracks the key
performance indicators of its call centers on a monthly basis and is used to
ascertain whether AUF is meeting its targeted service performance levels. AUF
will also provide the monthly Call Quality Report for all call centers through
the end of calendar year 2010 and on a historical basis. This report will be
formatted such that monthly data can be tracked for each of the call centers
separately. In the initial report, AUF will provide a narrative of its efforts
to ensure quality control at its call centers.
·
Aged Service Order Status Report – This report tracks AUF’s
service order log and the timeliness of closing service order requests. This
report should address concerns raised by OPC and customers regarding missed
commitments.
In addition, in its proposed Phase II Monitoring Plan, AUF
agrees to provide an opportunity for an OPC representative to visit one of its
call centers and tour the facility.
Staff agrees with AUF and OPC that the data contained in
the above-described documents should contain relevant information for all
parties to use in evaluating AUF’s response to customer complaints. After
reviewing these reports, staff and the parties can conduct discovery, if
necessary, in order to follow up on questions that may arise or trends that are
identified. Further, since these documents are currently being produced for
use by AUF management, staff believes this is an efficient and cost-effective
means of gathering the necessary monitoring information with regard to customer
complaints.
Item No. 2 of the proposed Phase II Monitoring Plan states
that the PSC staff will track complaints filed at the Commission by AUF
customers. In this regard, staff will produce a monthly report which tracks
complaints filed at the Commission Call Center. This report will indicate the
number of complaints received for the month, the type of complaint, the dates
the complaint was opened and closed, and the county in which the customer
resides. Staff will provide this report each month to all parties and place it
in the docket file.
During both meetings held with the parties to discuss a
subsequent monitoring plan, one of the customers suggested that, in addition to
the filing of the above reports, a survey of AUF customers should be conducted
in order to determine whether customers’ concerns are adequately being
addressed by AUF. Staff does not believe another survey would be an effective
method of evaluating AUF’s efforts to address customer concerns at this time.
As noted in the staff recommendation dated March 4, 2010, during the initial
monitoring phase, staff sent out a customer satisfaction survey to 900
customers selected at random over a six-month period from the AUF monthly
customer complaint logs. After analyzing the responses, reviewing the customer
comments, and talking to over 100 customers, staff concluded that the survey
did not accurately measure AUF’s customer service performance. Rather it
appeared that many customers were evaluating AUF’s rates, not whether their
specific concerns were appropriately addressed. Staff believes the monitoring
plan proposed by AUF and agreed to by OPC is a more efficient, cost-effective
and focused method to evaluate AUF’s performance. As mentioned previously,
these monthly reports will provide meaningful data with which to evaluate
recent performance and identify trends. Also, staff and the parties will be
able to conduct discovery on the reports to obtain more granular data, if
necessary.
Estimated Meter Readings
According to Item No. 1(c) in the proposed Phase II
Monitoring Plan, AUF will provide an Estimated Read Report on a monthly basis
to the parties and the Commission’s docket file. Staff and the parties can use
this report to track the number of estimated reads and as a basis to
investigate adverse trends. If necessary, the parties or staff can request
more detail in order to ascertain the cause of the estimated readings and how
it has or will be resolved. Since this is also a report that is currently
being produced and used by AUF management, staff believes this is a
cost-effective means of monitoring estimated meter readings.
Secondary Drinking Water Standards (Aesthetics)
In Item No. 6 in the proposed Phase II Monitoring Plan,
AUF agrees to monitor, on a monthly basis through the end of 2010, the
secondary drinking water constituents under the Florida and Federal Safe
Drinking Water Acts and report the results. This monitoring will be performed
on the following seven water systems:
Name of
System County Number
of Residential Customers
Lake Josephine Highlands 514
Leisure Lakes Highlands 248
Sebring Lakes Highlands
66
Rosalie Oaks Polk
81
Tangerine Orange 236
Tomoka View Volusia 258
Zephyr Shores Pasco 389
AUF chose seven systems to monitor, believing that to be a
manageable number of systems to include in the project. The systems were
selected based upon the following criteria:
·
Review of customer comments at public hearings
·
Internal review of number of customer complaints on water quality
issues
·
Review of water quality data from Secondary Drinking Water test
results
·
Input from AUF area coordinators on aesthetic water quality
issues
·
Results of AUF’s customer survey
Staff agrees
that this is a cost-effective method to study the cause of, and solutions for,
aesthetic water quality concerns. Staff has also reviewed the customer
testimony from service hearings and other data regarding secondary water
quality testing results and believes the seven systems selected by AUF are
appropriate for an initial monitoring project. It is staff’s understanding
that AUF’s efforts to address aesthetic water quality issues are not limited to
these seven systems. AUF has also been actively working on improving
aesthetics for a number of its systems and has already begun to spend capital
dollars associated with those solutions.
Item No. 6
of the proposed Phase II Monitoring Plan also establishes a Joint Secondary
Water Quality Task Force, consisting of representatives from AUF, OPC, other
parties, and one or two designated customer representatives from each of the
seven system locations. There will be two meetings of the task force at each
of the seven chosen locations to discuss the aesthetic concerns affecting the
system, possible solutions, and associated costs. The monitoring plan also
includes a mid-point meeting with the staff, OPC, and the other parties to
discuss the results of the aesthetics monitoring and possible solutions.
According to
Item No. 7 of the proposed monitoring plan, AUF will submit a report by
February 2011, summarizing the results of its Phase II reporting requirements,
including a briefing on the results of its meetings with customers in
connection with the Joint Secondary Water Quality Task Force. The report will
be provided to all parties and staff, and filed in the docket file. Parties
will have an opportunity to respond to the AUF report. Staff will subsequently
present its conclusions on the results of the Phase II Monitoring Plan along
with its recommendations, if any, for further action.
STAFF RECOMMENDED
ADDITIONS TO THE PROPOSED PLAN
In addition to the
items contained in the AUF/OPC Proposed Phase II Monitoring Plan, staff
recommends that the plan address environmental compliance and a further
evaluation of the customer billing samples. These two items were specifically
discussed by Commissioners at the March 16 Agenda Conference, and staff
believes it is appropriate to include them in the Phase II plan. A description
of the monitoring effort for these areas of concern follows.
Environmental Compliance
With regard to
environmental compliance, staff will obtain and review copies of enforcement
actions taken by the DEP, the County Health Departments, and the Water
Management Districts (WMDs) through the end of 2010 for each of AUF’s water and
wastewater systems under the Commission’s jurisdiction. As part of the
monitoring plan, staff recommends that AUF be required to provide quarterly
updates by July 10, 2010, and September 10, 2010, describing the status of all
outstanding warning letters, consent orders, and notices of violation. The
quarterly updates should include those enforcement actions identified in the
Final Order and any additional warning letters, consent orders or notices of
violation issued during the period. The reports should further include AUF’s
plan to resolve each violation. This information should also be provided by
AUF as part of its final report on all aspects of the Phase II Monitoring Plan
that will be submitted by February 2011.
Meter Reading and Customer
Billing Samples
This part of the
monitoring plan looks at whether AUF is properly reading customers’ meters and
whether the bills customers receive reflect the usage indicated by these meter
readings. In its initial evaluation, staff randomly sampled 358 meter readings
taken by AUF and compared those readings to a corresponding set of meter
readings taken by Commission staff. Of these 358 meter readings taken by AUF,
none were found to be significantly different from the meter readings taken by
staff. Staff therefore recommends that no further testing of AUF’s meter
reading accuracy is necessary.
Also as part of its
initial evaluation, staff randomly sampled 50 customer bills to determine if
these bills were properly based upon the meter readings taken by AUF. Although
all of the customer bills were appropriately based upon the usage indicated by
the meter readings, concern was expressed at the March 16 Agenda Conference
that the sample size of 50 may not be sufficient to provide adequate assurance
that all customer bills are appropriately based on actual meter readings.
Therefore, staff recommends that this sample be expanded to the same sample
size of 358 used to determine the adequacy of AUF’s meter reading. This will
allow a determination to be made of the adequacy of AUF’s billing system on the
same basis as the aggregate meter reading sample.
Conclusion
As discussed above,
the Phase II Monitoring Plan submitted by AUF and OPC outlines an efficient,
cost-effective means of monitoring AUF’s quality of service. Staff therefore
recommends that the plan should be approved. In addition, staff recommends
that the Phase II Monitoring Plan address environmental compliance and a
further evaluation of the customer billing samples.
Issue 2:
Should this docket be closed?
Recommendation:
No. If no person whose substantial interests
are affected by the proposed agency action files a protest within twenty-one
days of the issuance of the Order, a Consummating Order will be issued.
However, the docket should remain open pending the outcome of the Phase II
Monitoring Plan. In addition, the docket should remain open contingent on the
DEP not issuing any further consent orders regarding the Woods water and
wastewater systems within 18 months of the Final Order, issued on May 29,
2009. (Jaeger)
Staff Analysis: If
no person whose substantial interests are affected by the proposed agency
action files a protest within twenty-one days of the issuance of the Order, a
Consummating Order will be issued. However the docket should remain open
pending the outcome of the Phase II Monitoring Plan. In addition, the
docket should remain open contingent on the DEP not issuing any further consent
orders regarding the Woods water and wastewater systems within 18 months of the
Final Order, issued on May 29, 2009. Once the 18-month timeframe has expired
without any further DEP consent orders issued regarding the Woods water and
wastewater systems, the increased revenue will no longer be subject to refund.
However, if new consent order activity for The Woods systems does occur before
the 18-month timeframe has expired, staff will report back to the Commission
with a recommendation as to how to proceed with the appropriate disposition of
the rates made subject to refund.
Aqua Utilities Florida/OPC
Agreement on Scope of Phase II Monitoring
- Reports to Provide Staff and OPC
Aqua will file the following
monthly reports that are utilized by Aqua to track service performance:
a) Management
Quality Performance Report (Example attached as Exhibit "A").
This report tracks on a monthly
basis the reasons for customer calls. The report provides management an
understanding of recent performance and any concerning trends. Variances or
changes are reviewed and investigated by management each month. For
example, if a month shows elevated “no water” calls, the outage history in that
area is investigated. Aqua will provide the historical trend line for this
report. Aqua will also provide the supporting non-proprietary information for
each of the complaint-related calls that underlies the monthly reports. In
addition, Aqua will provide a monthly “Florida Scorecard", which will
include quality of service metrics, with the understanding that this
"Scorecard" is a work in progress and is used internally by Aqua for
evaluating job performance.
b) Call
Center Monitoring Statistics Report (Example attached as Exhibit
"B").
Using this report, Aqua tracks the
key performance indicators of its call centers on a monthly basis. This
information is used to ascertain whether Aqua is meeting its targeted service
performance levels. Aqua will also provide a monthly CSR Call Quality Report
for all call centers through December 31, 2010, and on a historical basis. The
CSR Call Quality Report will be formatted such that monthly data can be
tracked for each of the calls centers separately, including the Cary, N.C. call center. In its initial report, Aqua will provide a narrative of the
company's efforts to ensure quality control at its call centers.
c) Estimated Read Report (Example
attached as Exhibit "C").
An estimated read report is
circulated and reviewed to track estimated reads on a monthly basis. Estimated
reads can occur for varying reasons, e.g. weather, malfunction of the
meter, etc. Aqua tracks its estimated reads and investigates concerning
trends.
2. Tracking
of PSC complaints will be covered by PSC staff under the Pac’s current tracking
system.
3. Aqua
and OPC agree that the production of sound recordings and meter logs should be
eliminated.
- Aged Service Order Status Report (Example attached
as Exhibit "D").
In order to address the OPC’s
concern regarding “missed commitments” Aqua will file its monthly Aged Service
Order Status Reports for all customer initiated calls. This report is utilized
by management to track AUF’s service order log and the timeliness of closing of
service order requests. This report includes, for example, service orders
related to water quality service, no water reports, and requests to fix a
broken meter.
5. In
order to better apprise the OPC of Aqua's commitment to quality of service,
during the Phase II Monitoring, Aqua will provide for an OPC representative to
visit one of its call centers and tour the facility.
6. Establish
Joint Secondary Water Quality Task Force
§
Monitoring Aesthetics. AUF will agree to monitor on a monthly
basis through December 31, 2010 secondary constituents under the Florida and Federal Safe Drinking Water Acts, and report the results. Monitoring will be
performed on seven of AUF's systems: Tangerine, Zephyr Shores, Tomoka, Leisure Lakes, Lake Josephine, Rosalie Oaks and Sebring Lakes. AUF identified these 7 systems
utilizing the following criteria:
§
Review of comments from customers at public hearing
§
Internal review of number of customer inquiries dealing with
water quality issues
§
Review of water quality data on Secondary Water Quality results
§
Information from Area Coordinators on aesthetic issues they deal
with in their systems
§
Survey results from customers
§
Meetings with OPC, parties and Designated Customer
Representatives (14 in Total)
§
First Meeting: By the end of Month 2 of the monitoring program,
AUF will meet with OPC, parties and 1 or 2 designated customer representatives at
each of the 7 system locations to constructively discuss the aesthetic concern
effecting the system and possible solutions to the aesthetic concern
§
Second Meeting: By end of Month 4, AUF will have follow-up
meetings with those participating in the First Meeting to continue to discuss
aesthetic concerns and focus more on possible solutions and associated costs
§
Mid-Point Meeting with FPSC Staff
§
By the end of Month 3, AUF will meet with staff (and OPC and
the other parties) in Tallahassee to discuss the results of aesthetics
monitoring and possible solutions to aesthetic concerns
- Annual Report by Aqua to
the Commission
Aqua will submit a report by
February 2011 summarizing the results of its Phase II reporting requirements,
which will include a briefing on the results of its meetings with customers in
connection with the Joint Secondary Water Quality Task Force.
- During Phase II Monitoring, Aqua will file copies of
the reports within 1 month and 10 days of the end of the relevant period.
For example, reports for the month of May will be filed not later than
July 10, 2010.
- The Commission will decide whether the docket should be
closed after reviewing all of the data submitted during the Phase II
Monitoring process.
Exhibit B
