DATE:	January 23, 2014
TO:	Office of Commission Clerk (Stauffer)
FROM:	Office of the General Counsel (Klancke) Division of Economics (Rome)
RE:	Docket No. 130267-EU – Joint petition for approval of territorial agreement in Orange County by the City of Winter Park and Duke Energy Florida, Inc.
AGENDA:	02/04/14 – Regular Agenda – Proposed Agency Action – Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Balbis
CRITICAL DATES:			None
SPECIAL INSTRUCTIONS:			None

 

 Case Background

On November 6, 2013, the City of Winter Park (Winter Park) and Duke Energy Florida, Inc. (DEF) filed a joint petition for approval of a territorial agreement (agreement) in Orange County.  In Order No. PSC-05-0453-PAA-EI, the Commission granted DEF’s petition to relieve it of the statutory obligation to provide certain customers within the City of Winter Park with electrical service, thereby delineating the territorial boundary established in the 2003 award regarding Winter Park’s purchase of a portion of DEF’s distribution system.[1]  The proposed agreement would more clearly define the boundaries of each utility’s service area to allow for improvement or expansion by Winter Park or DEF without the threat of territorial disputes arising in the future.  If approved, the agreement would result in the transfer of 11 customers from DEF to Winter Park.  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 of the territorial agreement in Orange County between Winter Park and DEF?

Recommendation: 

 Yes.  The territorial agreement between Winter Park and DEF will not cause a detriment to the public interest; therefore, it should be approved.  (Klancke, Rome)

Staff Analysis: 

 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.  Rule 25-6.0440(2), Florida Administrative Code (F.A.C.), provides that 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 Beach v. Florida Public Service Commission, 469 So. 2d 731 (Fla. 1985).

The joint petitioners desire to clearly delineate the territorial boundaries in Orange County in their entirety through this agreement in order to gain further operational efficiencies and customer service improvements in Orange County, while continuing to eliminate circumstances giving rise to the uneconomic duplication of service facilities and hazardous situations.  A copy of the agreement and associated maps delineating the respective territorial areas of Winter Park and DEF is included in Attachment A.  Pursuant to Section 1.9, the proposed effective date of the agreement is the date on which a Consummating Order is issued by the Commission, provided no timely protests to the Commission’s Proposed Agency Action Order are filed.  The duration of the agreement would be 20 years from the effective date.

The petitioners state that in accordance with Rule 25-6.0440(1)(d), F.A.C., the 11 customers (2 residential, 9 commercial) to be transferred from DEF to Winter Park pursuant to this agreement were notified by mail of the transfer and a description of the difference between DEF’s and Winter Park’s rates was provided.  DEF will apply customers’ deposits to their last electric bill and will directly refund any surplus.  With regard to the degree of acceptance by affected customers, the petitioners state that no negative responses to the notification letters have been received.  The joint petitioners expect that all transfers of customers will be completed within 24 months of the effective date of the agreement and will notify the Commission in writing if circumstances require additional time.

It appears that the proposed agreement will eliminate the potential uneconomic duplication of facilities and will not cause a decrease in the reliability of electric service.  Therefore, based on the above, staff believes that the proposed territorial agreement will not cause a detriment to the public interest and should be approved.

 

Issue 2: 

 Should this docket be closed?

Recommendation: 

 Yes.  If no person whose interests are substantially affected timely files a protest to the Commission’s Proposed Agency Action Order, this docket should be closed upon issuance of a Consummating Order.  (Klancke)

Staff Analysis: 

 If no person whose interests are substantially affected timely files a protest to the Commission’s Proposed Agency Action Order, this docket should be closed upon issuance of a Consummating Order.