DATE:	March 28, 2013
TO:	Office of Commission Clerk (Cole)
FROM:	Office of the General Counsel (Miller) Division of Economics (Daniel, Hudson, McNulty)
RE:	Docket No. 120246-WS – Revision to Rule 25-30.335, Customer Billing, Revision to Rule 25-30.350, Backbilling, Adoption of Rule 25-30.351, Unauthorized Use, F.A.C.
AGENDA:	04/09/13 – Regular Agenda – Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Brown
RULE STATUS:			Rule proposal may be deferred.
SPECIAL INSTRUCTIONS:			None
FILE NAME AND LOCATION:			S:\PSC\GCL\WP\120246.RCM.DOC

 

 Case Background

Rule 25-30.355, Florida Administrative Code (F.A.C.), addresses customer billings for water and wastewater companies.  Rule 25-30.350, F.A.C., addresses underbillings and overbillings for water and wastewater companies.  New rule 25-30.351, F.A.C., addresses unauthorized use of water and wastewater service.  In our continuing review of rules, staff thought it important to clarify existing practices by revising two existing rules and recommending a new rule.  In addition, the Office of Public Counsel (OPC) suggested several additions relating to estimated bills in Rule 25-30.335, F.A.C.

A Notice of Rule Development appeared in the March 2, 2012 edition of the Florida Administrative Register, and a rule development workshop was held May 10, 2012.  The OPC and Aqua Utilities Florida, Inc. (AUF) participated at the workshop.  After receiving additional e-mail comments on the rules, staff held a second rule development workshop on February 28, 2013.  The OPC and U.S. Water Services Corporation (U.S. Water) participated at the second workshop and utility owner, Mr. Mike Smallridge, although unable to attend the workshop, submitted written comments on the draft rules.

This recommendation addresses whether the Commission should propose the amendment of Rule 25-30.335, F.A.C., Customer Billing, and Rule 25-30-350, F.A.C., Backbilling, and the adoption of Rule 25-30.351, F.A.C., Unauthorized Use.  The Commission has jurisdiction pursuant to Section 120.541, Florida Statutes (F.S.).

Discussion of Issues

Issue 1: 

 Should the Commission propose the amendment of Rule 25-30.335, F.A.C., Customer Billing, and Rule 25-30.350, F.A.C., Backbilling, and the adoption of Rule 25-30.351, F.A.C., Unauthorized Use?

Recommendation: 

 Yes.  The Commission should propose the amendment of Rules 25-30.335 and 25-30.350 and the adoption of Rule 25-30.351, as set forth in Attachment A.  (Miller, Daniel)

Staff Analysis: 

 

Rule 25-30.335, F.A.C., Customer Billing

Staff is recommending amendments to Rule 25-30.335, F.A.C., as set forth in Attachment A.  During the rule development workshops, OPC and the industry suggested amendments to this rule to address concerns about estimated bills. Staff recommended amendments to Rule 25-30.335, F.A.C., are designed to address such concerns.

Subsection (2)(a) is amended to state that estimated bills may be provided when a utility is unable to obtain an actual meter reading and the bill must prominently show the word “Estimated” on the face of the bill.  Mr. Smallridge suggested that the language expressly allow for stamping or hand writing the word “Estimated” on the bill.  His concern is about the cost of re-programing to add the word “Estimated.”  However, staff believes that the draft rule language would allow for the stamping or handwriting of the word “Estimated” on the bill, and, thus, it is not necessary to expressly state this in the rule.

Subsection (2)(b) is amended to require that the utility must timely correct any problem within the utility’s control causing the need to estimate bills.  In no event, shall a utility provide an estimated bill to any one customer more than four times in any 12-month period due to circumstances within the utility’s control.  This provision is intended to discourage the use of estimated bills.  Customers have a more difficult time budgeting to pay water bills when there are frequent estimated bills.  There was general agreement with this requirement.

Subsection (2)(c) requires, upon issuance of a second estimated bill in a 6-month period, the utility must provide the customer with an explicit written explanation of the reason for the estimate, along with the utility contact information and the Commission toll-free complaint number.  OPC suggested this concept and staff agrees.  This requirement will enable customers to contact the utility or the Commission if they have any questions about the estimation.  It was suggested to add the word “consecutive” in front of “second estimated bill.”  OPC responded that a company could game this by using estimated bills every other month to avoid the requirement.  Staff agrees, and, thus is not recommending that the word “consecutive” be in the rule language.

Subsection (2)(d) requires the utility to maintain records, for a minimum of two years, detailing the number, frequency, and causes of estimated bills, which shall be made available upon request to the Commission or to any party to a rate proceeding for the utility.  OPC recommended this concept and the utilities did not appear to have a concern.  Staff agrees that the information would be useful.

Rule 25-30.350, F.A.C., Backbilling

Staff is also recommending amendments to Rule 25-30.350, F.A.C.  Rule 25-30.350, F.A.C., is re-named Underbillings and Overbillings for Water and Wastewater Service.  Currently, the rule only addresses backbilling.  Staff recommends that the rule require utilities to calculate a revised bill for underbilling on a monthly basis, using uniform consumption during the period subject to underbilling, based on the individual customer’s average usage for the time period covered by the underbilling.  All calculations used to arrive at the rebilled amount shall be made available to the customer upon the customer’s request.

Staff recommends that Rule 25-30.350, F.A.C., provide that, in the event of an overbilling, the utility must refund the overbilling to the customer based on available records.  If the commencement of the overcharging cannot be determined, then an estimate of the overbilling shall be made based on the customer’s past consumption.  Subsection (1)(b) is amended to require the revised bill to be calculated on a monthly basis, assuming uniform consumption during the period subject to underbilling, based on the individual customer’s average usage for the time period covered by the underbilling.

Subsection (3) states that, in the event of an overbilling, the customer may elect to receive the refund as a one-time payment, if the refund is in excess of $20, or as a credit to future billings.  Mr. Smallridge suggested that there be a minimum amount for the one-time payment refund because the cost of staff time and printing the check would cost the company more than the refund amount.  OPC agreed, and it was suggested at the workshop that $20 would be a reasonable threshold.

Rule 25-30.351, F.A.C., Unauthorized Use

Staff recommends the Commission adopt Rule 25-30.351, F.A.C., Unauthorized Use, to address unauthorized or fraudulent use of service, or meter tampering.  The utility will bill the customer on an estimate of the water and/or wastewater service used based on the customer’s past consumption.  Other Commission-regulated industries have separate rules addressing unauthorized use.  Therefore, staff recommends removing this provision from Rule 25-30.335, and adopting the language in Rule 25-30.351, F.A.C, to make it easier to find the information.

Mr. Smallridge questioned whether the  meter tampering fee contained in a company’s tariff sheets would still be applicable or would be superseded by the new rule.  Staff believes that any meter tampering fee contained in a tariff would remain in effect under the new rule.

Statement of Estimated Regulatory Costs (SERC)

In accordance with Section 120.541(2), F.S., the SERC (Attachment B) includes an economic analysis addressing whether the draft rule amendments and the new draft rule were likely to have any of the following impacts, in the aggregate, within 5 years after the implementation of the rule:

1.      an adverse impact on economic growth, private sector job creation or employment, or private sector investment in excess of $1 million,

2.      an adverse impact on business competitiveness, including the ability of persons doing business in the state to compete with persons doing business in other states or domestic markets, productivity, and innovation in excess of $1 million, and

3.      an increase in regulatory costs, including any transactional costs, in excess of $1 million. 

Data requests were sent to Commission-regulated water and wastewater companies on October 5, 2013, and January 29, 2013, to collect information about the cost impacts of the draft amendments to Rules 25-30.335 and 25-30.350, F.A.C., as well as the cost impacts of draft Rule 25-30.351, F.A.C.  Twelve water and wastewater companies responded.  The company responses indicate the expected impacts of the draft amendments and draft rule would not approach the statutory thresholds identified above pertaining to economic growth, business competitiveness, and regulatory costs.  Thus, the rule amendments would not require legislative ratification pursuant to Section 120.541(3), F.S. 

Staff recommends that the Commission propose the amendment of Rules 25-30.335 and 25-30.350, F.A.C., and the adoption of Rule 25-30.351, F.A.C.

Issue 2: 

 Should this docket be closed?

Recommendation: 

 Yes.  If no requests for hearing or comments are filed, the rules should be filed with the Department of State, and the docket should be closed.  (Miller)

Staff Analysis: 

 If no requests for hearing or comments are filed, the rules should be filed with the Department of State, and the docket should be closed.

           

25-30.335 Customer Billing.

(1) Except as provided in this rule, a utility shall render bills to customers at regular intervals, and each bill shall indicate: the billing period covered; the applicable rate schedule; beginning and ending meter reading; the amount of the bill; the delinquent date or the date after which the bill becomes past due; and any authorized late payment charge.

(2) When a utility is unable to obtain an actual meter read, estimated bills may be provided.

(a)  If the utility estimates a bill, the bill statement shall prominently show the word “Estimated” on the face of the bill. If the utility estimates the bill, the utility shall indicate on the bill that the amount owed is an estimated amount.

(b)  The utility is obligated to timely correct any problems within the utility’s control causing the need to estimate bills.  In no event shall a utility provide an estimated bill to any one customer more than four times in any 12-month period due to circumstances that are within the utility’s control and service obligations.

(c)  Upon issuance of a second estimated bill in a 6 month period, the utility shall provide the customer with an explicit written explanation for the estimation, along with the utility contact information and the Commission toll-free complaint number, 1-800-342-3552.

(d)  The utility shall maintain records, for a minimum of two years, detailing the number, frequency, and causes of estimated bills, which shall be made available upon request to the Commission or to any party to a rate proceeding for the utility.

(3) When service is rendered for less than 50 percent of the normal billing cycle, the utility shall prorate the base facility charges as though the normal billing cycle were 30 days, except that the utility may elect not to issue an initial bill for service if the service is rendered during a time period which is less than 50 percent of the normal billing cycle. Instead, the utility may elect to combine the amount owed for the service rendered during the initial time period with the amount owed for the next billing cycle, and issue a single bill for the combined time period. For service taken under flat rate schedules, 50 percent of the normal charges may be applied.

(4) A utility may not consider a customer delinquent in paying his or her bill until the 21st day after the utility has mailed or presented the bill for payment.

(5) Each utility shall establish each point of delivery as an independent customer and shall calculate the amount of the bill accordingly, except where physical conditions make it necessary to use additional meters or points of delivery for one class of service to a single customer on the same premises, or where such multiple meters or delivery points are used for the convenience of the utility.

(6) A utility may not incorporate municipal or county franchise fees into the amount indicated as the cost for service on the customer’s bill. Rather, the utility shall show any such franchise fee as a separate item.

(7) The utility shall maintain a record of each customer’s account for the most current 2 years so as to permit reproduction of the customer’s bills during the time that the utility provided service to that customer.

(8) In the event of unauthorized use of service by a customer, a utility may bill the customer on a reasonable estimate of the service taken. In addition, the utility may assess a fee to defray the cost of restoring service to such a customer provided that the fee is specified in the utility’s tariff.

(9) If a utility utilizes the base facility and usage charge rate structure and does not have a Commission authorized vacation rate, the utility shall bill the customer the base facility charge regardless of whether there is any usage.

Specific Authority 350.127(2), 367.121 FS. Law Implemented 367.091, 367.121 FS. History–Amended 9-14-74, 6-21-79, Formerly 25-10.97, 25-10.097, Amended 11-10-86, 11-30-93, ___________

25-30.350 Underbillings and Overbillings for Water and Wastewater Service.  Backbilling.

(1)  A utility may not backbill customers for any period greater than 12 months for any undercharge in billing which is the result of the utility’s mistake.

(a)  The utility shall allow the customer to pay for the unbilled service over the same time period as the time period during which the under billing occurred or some other mutually agreeable time period.  The utility shall not recover in a ratemaking proceeding, any lost revenues which inure to the utility’s detriment on account of this provision.

(b)  The revised bill shall be calculated on a monthly basis, assuming uniform consumption during the month(s) subject to underbilling, based on the individual customer’s average usage for the time period covered by the underbilling.  The monthly bills shall be recalculated by applying the tariff rates in effect for that time period.  The customer shall be responsible for the difference between the amount originally billed and the recalculated bill. All calculations used to arrive at the rebilled amount shall be made available to the customer upon the customer’s request.

(2)  In the event of an overbilling. the utility shall refund the overcharge to the customer, based on available records.  If the commencement date of the overbillling cannot be determined, then an  estimate of the overbilling shall be made based on the customer’s past consumption.  

(3)  In the event of an overbilling, the customer may elect to receive the refund as a one-time disbursement, if the refund is in excess of $20, or as a credit to future billings.

Specific Authority 350.127(2), 367.121 FS. Law Implemented 367.091, 367.121 FS. History–New 11-10-8, Amended________.

 

 

25-30.351 Unauthorized Use.

In the event of unauthorized or fraudulent use of service, or meter tampering, the utility shall bill the customer on an estimate of the water and/or wastewater services used based on the customer’s past consumption.

Rulemaking Authority 350.127, 367.121 F. S. Law Implemented 367.091, 367.121, F.S, New______.