DATE:	November 22, 2011
TO:	Office of Commission Clerk (Cole)
FROM:	Office of the General Counsel (Barrera) Division of Economic Regulation (Rieger)
RE:	Docket No. 110263-EU – Joint Petition for approval to amend territorial agreement in Lake and Orange Counties by Progress Energy Florida, Inc. and the City of Mount Dora.
AGENDA:	12/06/11 – Regular Agenda – Proposed Agency Action – Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Brisé
CRITICAL DATES:			None
SPECIAL INSTRUCTIONS:			None
FILE NAME AND LOCATION:			S:\PSC\GCL\WP\110263.RCM.DOC

 

  Case Background

On August 30, 2011, Progress Energy Florida, Inc. (PEF) and the City of Mount Dora (Mount Dora) filed a joint petition for approval of an amended territorial agreement (amended agreement) between the two utilities in Lake and Orange Counties.  PEF and Mount Dora are parties to a currently effective territorial agreement (current agreement) delineating their respective territories in Lake and Orange counties, which was approved by Order No. 10267.[1] 

The current agreement approved by Order No. 10267 had a duration period of thirty years.  This recommendation addresses the parties’ joint petition for approval of an amended agreement to replace the current agreement.  The Commission has jurisdiction over the matter pursuant to Section 366.04, Florida Statutes (F.S.).

Discussion of Issues

Issue 1: 

 Should the Commission approve the joint petition for approval to amend a territorial agreement in Lake and Orange Counties between PEF and Mount Dora?

Recommendation: 

 Yes.  The joint petition to amend a territorial agreement between PEF and Mount Dora should be approved.  (Barrera, Rieger)

Staff Analysis: 

 On August 30, 2011, PEF and Mount Dora filed a joint petition for approval of an amended agreement.  According the parties’ petition, except for certain boundary revisions necessary to memorialize existing service relationships and avoid uneconomic service and duplication of facilities, the boundaries otherwise remain the same as set forth in the current agreement.  The petition also points out that there are no customer transfers associated with this amended agreement, and the agreement has been negotiated for a term of 20 years.   The amended agreement, as well as associated maps delineating the respective territorial areas of PEF and Mount Dora was attached to the petition as Exhibits A and B respectively, and are attached as Attachment A.

According to the amended agreement, the parties desire to restate and amend the current agreement in its entirety, in order to gain further operational efficiencies and customer service improvements in their respective retail service territories.  The amended agreement will continue to eliminate circumstances giving rise to the uneconomic duplication of service facilities and hazardous situations that the current agreement is intended to avoid.  The amended agreement goes on to state that each party shall operate and maintain its lines and facilities in a manner that minimizes any interference with the operations of the other party.

                        Staff would point out that this amended agreement relates to a similar agreement between Mount Dora and Sumter Electric Cooperative, Inc. (SECO).[2]  In that agreement, a territorial boundary was established between the Mount Dora and SECO that encompasses some of the same geographical areas as this proposed agreement.  SECO has been apprised of this territorial agreement, and it does not have any objections to it.  The parties have indicated that there is no change to the territorial boundary abutting SECO’s service territory under the amended agreement

Pursuant to Section 366.04(2)(d), F.S., the Commission has the jurisdiction to approve territorial agreements between and among rural electric cooperatives, municipal electric utilities, and other electric utilities.  Pursuant to Rule 25-6.0440(2), F.A.C., 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). 

It appears that the amended agreement proposed by PEF and Mount Dora eliminates existing or potential uneconomic duplication of facilities and does not cause a decrease in the reliability of electric service to existing or future ratepayers.  Based on all of the above, staff recommends that the joint petition for approval of the amended territorial agreement between PEF and Mount Dora is in the public interest and should be approved.

  Issue 2: 

 Should this docket be closed?

Recommendation: 

 Yes.  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.   (Barrera)

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.