Commission Conference Agenda

5**PAA Docket No. 140175-WU – Application for staff-assisted rate case in Pasco County by Crestridge Utilities, LLC.

Critical Date(s):		02/08/16 (15-month effective date (SARC))
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Brisé
Staff:	AFD: Mouring ECO: Thompson ENG: Lee GCL: Corbari

(PAA except for Issues 10 and 12.)

Issue 1:

Is the overall quality of service provided by Crestridge satisfactory?

Recommendation:

Yes, staff recommends that the quality of service provided by Crestridge be considered satisfactory.

Issue 2:

What are the used and useful (U&U) percentages of Crestridge’s water treatment plant (WTP) and water distribution system?

Recommendation:

Staff recommends that Crestridge’s water system be considered 100 percent U&U with no adjustment for Excessive Unaccounted For Water (EUW).

Issue 3:

What is the appropriate average test year water rate base for Crestridge Utilities?

Recommendation:

The appropriate average test year rate base for Crestridge is $88,709.

Issue 4:

What is the appropriate return on equity and overall rate of return for Crestridge Utilities?

Recommendation:

The appropriate return on equity (ROE) is 11.16 percent with a range of 10.16 percent to 12.16 percent. The appropriate overall rate of return is 8.28 percent.

Issue 5:

What are the appropriate test year revenues for Crestridge?

Recommendation:

The appropriate test year revenues for the Crestridge water system are $100,192.

Issue 6:

What is the appropriate amount of operating expense?

Recommendation:

The appropriate amount of operating expense for the utility is $186,148.

Issue 7:

What is the appropriate revenue requirement?

Recommendation:

The appropriate revenue requirement is $193,493, resulting in an annual increase of $93,301 (93.12 percent).

Issue 8:

What is the appropriate rate structure and rates for Crestridge?

Recommendation:

The recommended rate structure and monthly water rates are shown on Schedule No. 4 of staff’s memorandum dated November 18, 2015. The utility should file revised tariff sheets and a proposed customer notice to reflect the Commission-approved rates. The approved rates should be effective for service rendered on or after the stamped approval date on the tariff sheet, pursuant to Rule 25-30.475(1), F.A.C. In addition, the approved rates should not be implemented until staff has approved the proposed customer notice and the notice has been received by the customers. The utility should provide proof of the date notice was given within 10 days of the date of the notice.

Issue 9:

Should Crestridge be authorized to collect Non-Sufficient Funds (NSF) charges?

Recommendation:

Yes. Crestridge should be authorized to collect NSF charges. Staff recommends that Crestridge revise its tariffs to reflect the NSF charges currently set forth in Sections 68.065 and 832.08(5), F.S. The NSF charges should be effective on or after the stamped approval date on the tariff sheets, pursuant to Rule 25-30.475(1), F.A.C. Furthermore, the charges should not be implemented until staff has approved the proposed customer notice. The utility should provide proof of the date the notice was given within 10 days of the date of the notice.

Issue 10:

What are the utility’s appropriate initial customer deposits for Crestridge’s water service?

Recommendation:

The appropriate initial customer deposit for water customers should be $49 for the residential 5/8” x 3/4” meter size. The initial customer deposits for all other residential meter sizes and all general service meter sizes should be two times the average estimated bill for wastewater service. The approved customer deposits should be effective for connections made on or after the stamped approval date on the tariff sheets, pursuant to Rule 25-30.475, F.A.C. The utility should be required to charge the approved charges until authorized to change them by the Commission in a subsequent proceeding.

Issue 11:

What is the appropriate amount by which rates should be reduced in four years after the published effective date to reflect the removal of the amortized rate case expense as required by Section 367.0816, F.S.?

Recommendation:

The water rates should be reduced as shown on Schedule No. 4 of staff’s memorandum dated November 18, 2015, to remove rate case expense grossed up for regulatory assessment fees and amortized over a four-year period. The decrease in rates should become effective immediately following the expiration of the four-year rate case expense recovery period, pursuant to Section 367.0816, F.S. Crestridge should be required to file revised tariffs and a proposed customer notice setting forth the lower rates and the reason for the reduction no later than one month prior to the actual date of the required rate reduction. If the utility files this reduction in conjunction with a price index or pass-through rate adjustment, separate data should be filed for the price index and/or pass-through increase or decrease and the reduction in the rates due to the amortized rate case expense.

Issue 12:

Should the Commission approve a Phase II increase for pro forma items for Crestridge?

Recommendation:

Yes. The Commission should approve a Phase II revenue requirement associated with pro forma items. The utility’s Phase II revenue requirement is $197,220, which equates to a 1.93 percent increase over the Phase I revenue requirement. Staff recommends that the increase be applied as an across-the-board increase to the Phase I rates.

Implementation of the Phase II rates is conditioned upon Crestridge completing the pro forma items within 12 months of the issuance of a consummating order in this docket. The utility should be required to submit a copy of the final invoices and cancelled checks or other payment confirmation documentation for all pro forma plant items. The utility should be allowed to implement the above rates once all pro forma items have been completed and documentation provided showing that the improvements have been made. Once verified, the rates should be effective for service rendered on or after the stamped approval date on the tariff sheet, pursuant to Rule 25-30.475(1), F.A.C. The rates should not be implemented until notice has been received by the customers. Crestridge should provide proof of the date notice was given within 10 days of the date of the notice. If the utility encounters any unforeseen events that will impede the completion of the pro forma items, the utility should immediately notify the Commission in writing.

Issue 13:

Should the recommended rates be approved for the utility on a temporary basis, subject to refund with interest, in the event of a protest filed by a party other than the utility?

Recommendation:

Yes. Pursuant to Section 367.0814(7), F.S., the recommended rates for Phase I should be approved for the utility on a temporary basis, subject to refund, in the event of a protest filed by a party other than the utility. Crestridge should file revised tariff sheets and a proposed customer notice to reflect the Commission-approved rates. The approved rates should be effective for service rendered on or after the stamped approval date on the tariff sheet, pursuant to Rule 25-30.475(1), F.A.C. In addition, the temporary rates should not be implemented until staff has approved the proposed notice, and the notice has been received by the customers. Prior to implementation of any temporary rates, the utility should provide appropriate security. If the recommended rates are approved on a temporary basis, the rates collected by the utility should be subject to the refund provisions discussed in the analysis portion of staff’s memorandum dated November 18, 2015. In addition, after the increased rates are in effect, pursuant to Rule 25-30.360(6), F.A.C., the utility should file reports with the Commission Clerk’s office no later than the 20th of each month indicating the monthly and total amount of money subject to refund at the end of the preceding month. The report filed should also indicate the status of the security being used to guarantee repayment of any potential refund.

Issue 14:

Should the utility be required to notify the Commission within 90 days of an effective order finalizing this docket, that it has adjusted its books for all the applicable National Association of Regulatory Utility Commissioners (NARUC) Uniform System of Accounts (USOA) associated with the Commission-approved adjustments?

Recommendation:

Yes. The utility should be required to notify the Commission, in writing, that it has adjusted its books in accordance with the Commission's decision. Crestridge should submit a letter within 90 days of the final order in this docket, confirming that the adjustments to all the applicable NARUC USOA accounts have been made to the utility’s books and records. In the event the utility needs additional time to complete the adjustments, notice should be provided within seven days prior to deadline. Upon providing good cause, staff should be given administrative authority to grant an extension of up to 60 days.

Issue 15:

Should this docket be closed?

Recommendation:

No. If no person whose substantial interests are affected by the proposed agency action files a protest within 21 days of the issuance of the order, a consummating order should be issued. The docket should remain open for staff’s verification that the outstanding Phase I pro forma items have been completed, the revised tariff sheets and customer notice have been filed by the utility and approved by staff, and the utility has provided staff with proof that the adjustments for all the applicable NARUC USOA primary accounts have been made. Also, the docket should remain open to allow staff to verify that the Phase II pro forma items have been completed, and the Phase II rates properly implemented. Once these actions are complete, this docket should be closed administratively.

6**PAA Docket No. 140177-WU – Application for staff-assisted rate case in Pasco County by Holiday Gardens Utilities, LLC.

Critical Date(s):		02/08/16 (15-month effective date (SARC))
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Brisé
Staff:	AFD: Mouring ECO: Thompson ENG: Lee GCL: Corbari

(PAA except for Issues 10 and 12.)

Issue 1:

Is the overall quality of service provided by Holiday Gardens satisfactory?

Recommendation:

Yes, staff recommends that the quality of service provided by the Holiday Gardens be considered satisfactory.

Issue 2:

What are the used and useful (U&U) percentages of Holiday Gardens' water treatment plant (WTP) and water distribution system?

Recommendation:

Staff recommends Holiday Gardens’ water system be considered 100 percent U&U with no adjustment for Excessive Unaccounted For Water (EUW).

Issue 3:

What is the appropriate average test year water rate base for Holiday Gardens?

Recommendation:

The appropriate average test year rate base for Holiday Gardens is $57,727.

Issue 4:

What is the appropriate return on equity and overall rate of return for Holiday Gardens?

Recommendation:

The appropriate return on equity (ROE) is 11.16 percent with a range of 10.16 percent to 12.16 percent. The appropriate overall rate of return is 8.01 percent.

Issue 5:

What are the appropriate test year revenues for Holiday Gardens?

Recommendation:

The appropriate test year revenues for the Holiday Gardens’ water system are $79,674.

Issue 6:

What is the appropriate amount of operating expense?

Recommendation:

The appropriate amount of operating expense for the utility is $130,686.

Issue 7:

What is the appropriate revenue requirement?

Recommendation:

The appropriate revenue requirement is $135,310, resulting in an annual increase of $55,636 (69.83 percent).

Issue 8:

What is the appropriate rate structure and rates for Holiday Gardens?

Recommendation:

Issue 9:

Should Holiday Gardens be authorized to collect Non-Sufficient Funds (NSF) charges?

Recommendation:

Yes. Holiday Gardens should be authorized to collect NSF charges. Staff recommends that Holiday Gardens revise its tariffs to reflect the NSF charges currently set forth in Sections 68.065 and 832.08(5), F.S. The NSF charges should be effective on or after the stamped approval date on the tariff sheets, pursuant to Rule 25-30.475(1), F.A.C. Furthermore, the charges should not be implemented until staff has approved the proposed customer notice. The utility should provide proof of the date the notice was given within 10 days of the date of the notice.

Issue 10:

What are the utility’s appropriate initial customer deposits for Holiday Gardens’ water service?

Recommendation:

The appropriate initial customer deposit for water customers should be $46 for the residential 5/8” x 3/4” meter size. The initial customer deposits for all other residential meter sizes and all general service meter sizes should be two times the average estimated bill for wastewater service. The approved customer deposits should be effective for connections made on or after the stamped approval date on the tariff sheet, pursuant to Rule 25-30.475, F.A.C. The utility should be required to charge the approved charges until authorized to change them by the Commission in a subsequent proceeding.

Issue 11:

Recommendation:

The water rates should be reduced as shown on Schedule No. 4 of staff’s memorandum dated November 18, 2015, to remove rate case expense grossed up for regulatory assessment fees and amortized over a four-year period. The decrease in rates should become effective immediately following the expiration of the four-year rate case expense recovery period, pursuant to Section 367.0816, F.S. Holiday Gardens should be required to file revised tariffs and a proposed customer notice setting forth the lower rates and the reason for the reduction no later than one month prior to the actual date of the required rate reduction. If the utility files this reduction in conjunction with a price index or pass-through rate adjustment, separate data should be filed for the price index and/or pass-through increase or decrease and the reduction in the rates due to the amortized rate case expense.

Issue 12:

Should the Commission approve a Phase II increase for pro forma items for Holiday Gardens?

Recommendation:

Yes. The Commission should approve a Phase II revenue requirement associated with pro forma items. The utility’s Phase II revenue requirement is $136,913, which equates to a 1.18 percent increase over the Phase I revenue requirement. Staff recommends that the increase be applied as an across-the-board increase to the Phase I rates.

Implementation of the Phase II rates is conditioned upon Holiday Gardens completing the pro forma items within 12 months of the issuance of a consummating order in this docket. The utility should be required to submit a copy of the final invoices and cancelled checks or other payment confirmation documentation for all pro forma plant items. The utility should be allowed to implement the above rates once all pro forma items have been completed and documentation provided showing that the improvements have been made. Once verified, the rates should be effective for service rendered on or after the stamped approval date on the tariff sheet, pursuant to Rule 25-30.475(1), F.A.C. The rates should not be implemented until notice has been received by the customers. Holiday Gardens should provide proof of the date notice was given within 10 days of the date of the notice. If the utility encounters any unforeseen events that will impede the completion of the pro forma items, the utility should immediately notify the Commission in writing.

Issue 13:

Should the recommended rates be approved for the utility on a temporary basis, subject to refund with interest, in the event of a protest filed by a party other than the utility?

Recommendation:

Yes. Pursuant to Section 367.0814(7), F.S., the recommended rates for Phase I should be approved for the utility on a temporary basis, subject to refund, in the event of a protest filed by a party other than the utility. Holiday Gardens should file revised tariff sheets and a proposed customer notice to reflect the Commission-approved rates. The approved rates should be effective for service rendered on or after the stamped approval date on the tariff sheet, pursuant to Rule 25-30.475(1), F.A.C. In addition, the temporary rates should not be implemented until staff has approved the proposed notice, and the notice has been received by the customers. Prior to implementation of any temporary rates, the utility should provide appropriate security. If the recommended rates are approved on a temporary basis, the rates collected by the utility should be subject to the refund provisions discussed in the analysis portion of staff’s memorandum dated November 18, 2015. In addition, after the increased rates are in effect, pursuant to Rule 25-30.360(6), F.A.C., the utility should file reports with the Commission Clerk’s office no later than the 20th of each month indicating the monthly and total amount of money subject to refund at the end of the preceding month. The report filed should also indicate the status of the security being used to guarantee repayment of any potential refund.

Issue 14:

Recommendation:

Yes. The utility should be required to notify the Commission, in writing, that it has adjusted its books in accordance with the Commission's decision. Holiday Gardens should submit a letter within 90 days of the final order in this docket, confirming that the adjustments to all the applicable NARUC USOA accounts have been made to the utility’s books and records. In the event the utility needs additional time to complete the adjustments, notice should be provided within seven days prior to deadline. Upon providing good cause, staff should be given administrative authority to grant an extension of up to 60 days.

Issue 15:

Should this docket be closed?

Recommendation:

9**PAA Docket No. 150091-WS – Application for approval of transfer of Certificate Nos. 490-W and 425-S from East Marion Sanitary Systems, Inc. to East Marion Utilities, LLC, in Marion County.

Critical Date(s):		None
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Patronis
Staff:	ENG: Hill, King AFD: Fletcher, Frank, Norris ECO: Bruce GCL: Mapp, Brownless

(Proposed Agency Action for Issue 2.)

Issue 1:

Should the transfer of East Marion Sanitary Systems, Inc.’s water and wastewater systems and Certificate Nos. 490-W and 425-S to East Marion Utilities, LLC be approved?

Recommendation:

Yes. The transfer of the water and wastewater systems and Certificate Nos. 490-W and 425-S is in the public interest and should be approved effective the date of the Commission vote. The resultant order should serve as the buyer’s certificate and should be retained by the buyer. The existing rates and charges should remain in effect until a change is authorized by the Commission in a subsequent proceeding. The tariff pages reflecting the transfer should be effective on or after the stamped approval date on the tariff sheets, pursuant to Rule 25-30.475(1), Florida Administrative Code (F.A.C.). The seller should be responsible for all Regulatory Assessment Fees (RAFs) payable through the date of closing. The buyer should be responsible for filing the 2015 Annual Report and all future annual reports, and RAFs subsequent to the date of closing.

Issue 2:

What is the appropriate net book value for the East Marion Sanitary Systems, Inc.’s water and wastewater systems for transfer purposes and should an acquisition adjustment be approved?

Recommendation:

The net book value of the water and wastewater systems for transfer purposes is $24,676 and $60,414, respectively, as of December 31, 2014. An acquisition adjustment should not be included in rate base. Within 90 days of the date of the final order, East Marion Utilities, LLC should be required to notify the Commission in writing, that it has adjusted its books in accordance with the Commission’s decision. The adjustments should be reflected in East Marion Utilities, LLC’s 2015 Annual Report when filed.

Issue 3:

Should this docket be closed?

Recommendation:

If no protest to the proposed agency action issues is filed by a substantially affected person within 21 days of the date of the order, a consummating order should be issued and the docket should be closed administratively after East Marion Utilities, LLC has provided proof that its general ledgers have been updated to reflect the Commission-approved balances as of January 1, 2015.

10**PAA Docket No. 150162-EI – Petition for approval of 2015 depreciation study by Florida Public Utilities Company.

Critical Date(s):		None
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Patronis
Staff:	ECO: Higgins, Wu AFD: Cicchetti GCL: Leathers

Issue 1:

Should FPUC's current depreciation rates and amortization schedules be changed?

Recommendation:

Yes. A review of the company’s plant-associated planning and activities indicates a need for revising FPUC’s currently prescribed depreciation rates.

Issue 2:

What are the appropriate depreciation rates and amortization schedules for FPUC?

Recommendation:

Staff’s recommended average remaining lives, net salvages, reserve percentages, and resultant depreciation rates for FPUC are shown on Attachment A of staff’s memorandum dated November 18, 2015. The reserve percentages and depreciation rates are calculated using the reserve transfers recommended in Issue 3. The result of staff’s proposals is a decrease in annual depreciation expense of approximately $229,415 in total, which is shown on Attachment B of its memorandum dated November 18, 2015. Depreciation expenses are based on plant investment levels as of January 1, 2015.

Issue 3:

What, if any, corrective reserve allocations should be made?

Recommendation:

Staff recommends the reserve allocations shown in Attachment C of its memorandum dated November 18, 2015. These allocations bring these accounts more in line with their theoretically correct reserve levels.

Issue 4:

If the Commission votes in Issue 1 to change FPUC’s depreciation rates and amortization schedules, what should be the implementation date for FPUC’s revised depreciation rates and amortization schedules that may be approved in Issue 2?

Recommendation:

Staff recommends approval of FPUC’s proposed January 1, 2015, date of implementation for the company’s revised depreciation rates.

Issue 5:

Should the current amortization of investment tax credits (ITCs) and flow back of excess deferred income taxes (EDITs) be revised to reflect the approved depreciation rates and amortizations schedules?

Recommendation:

Yes. The current amortization of ITCs should be revised to match the actual recovery periods for the related property. The company should file detailed calculations of the revised ITC amortization at the same time it files its earnings surveillance report covering the period ending December 31, 2015, as specified in Rule 25-6.1352, F.A.C.

Issue 6:

Should this docket be closed?

Recommendation:

If no person whose substantial interests are affected by the proposed agency action files a protest within 21 days of the issuance of the order, this docket should be closed upon the issuance of a consummating order.

19**PAA Docket No. 150102-SU – Application for increase in wastewater rates in Charlotte County by Utilities, Inc. of Sandalhaven.

Critical Date(s):		12/05/15 (5-Month Effective Date (PAA Rate Case))
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Edgar
Staff:	ECO: Bruce, Hudson AFD: Archer, D. Buys, Cicchetti, Yeazel ENG: King, Watts GCL: Brownless

(Proposed Agency Action except Issue Nos. 19 and 24.)

Issue 1:

Is the quality of service provided by Sandalhaven satisfactory?

Recommendation:

Yes. The utility has taken reasonable actions to comply with DEP’s consent order and to address customer concerns. All quality of service issues have been resolved. Staff recommends that the quality of service provided by the utility be considered satisfactory.

Issue 2:

Should the audit adjustments to rate base and operating expense to which the utility and staff agree be made?

Recommendation:

Yes. Based on the audit adjustments agreed to by the utility and staff, the adjustments should be made to rate base and net operating income as set forth in the analysis portion of staff’s memorandum dated November 18, 2015.

Issue 3:

Should any further adjustments be made to test year rate base?

Recommendation:

Yes. Plant should be decreased by $23,335, accumulated depreciation should be decreased by $297,173, CIAC should be increased by $258,674, and accumulated amortization of CIAC should be increased by $19,536. Corresponding adjustments should also be made to increase net depreciation expense by $6,160. Staff recommends that Sandalhaven reflect any change in property taxes in its next pass through filing with the Commission. The amortization expense related to the cost of removal of the WWTP should be decreased by $642 to $9,770 and amortized over a period of 10 years. After the expiration of the amortization period, the wastewater rates should be reduced by $9,770, as shown on Schedule No. 4 of staff’s memorandum dated November 18, 2015, to remove removal costs grossed up for regulatory assessment fees (RAFs) and amortized over a 10-year period. The decrease in rates should become effective immediately following the expiration of the 10-year recovery period of removal costs associated with the decommissioning of the utility’s WWTP. Sandalhaven should be required to file revised tariffs and a proposed customer notice setting forth the lower rates and the reason for the reduction no later than one month prior to the actual date of the required rate reduction. If the utility files this reduction in conjunction with a price index or pass-through rate adjustment, separate data should be filed for the price index and/or pass-through increase or decrease and the reduction in the rates due to the amortized expense.

Issue 4: Should any adjustments be made to the utility's pro forma plant?

Recommendation:

Yes. Pro forma plant should be decreased by $153,873. Corresponding adjustments should be made to decrease accumulated depreciation and depreciation expense by $4,870. An additional corresponding adjustment should be made to decrease credit ADITs by $481.

Issue 5:

What are the used and useful percentages for the utility's wastewater collection and interconnection systems?

Recommendation:

Sandalhaven’s wastewater collection system, purchased wastewater treatment capacity, and primary master lift station should be considered 100 percent used and useful (U&U); and its interconnection force main should be considered 74.9 percent U&U. To reflect the appropriate U&U percentages, staff recommends that plant be decreased by $755,064, accumulated depreciation be decreased by $252,979, CIAC be decreased by $19,144, and accumulated amortization of CIAC be decreased by $7,337. In addition, Land should be decreased by $4,662. Corresponding adjustments should be made to decrease depreciation expense and amortization expense by $26,089 and $637, respectively. As such, rate base should be decreased by $490,278 and net depreciation expense should be decreased by $25,451. Staff recommends that wastewater purchased power, chemical expenses, and purchased wastewater treatment should be reduced by 26.07 percent for excessive infiltration and inflow (I&I).

Issue 6:

What is the appropriate working capital allowance?

Recommendation:

The appropriate working capital allowance is $70,647. As such, the working capital allowance should be decreased by $16,610.

Issue 7:

What is the appropriate rate base for the test year period ended December 31, 2014?

Recommendation:

Consistent with staff’s other recommended adjustments, the appropriate rate base for the test year ended December 31, 2014, is $3,561,327.

Issue 8:

What is the appropriate return on equity?

Recommendation:

Based on the Commission leverage formula currently in effect, the appropriate allowed return on equity (ROE) is 10.36 percent with a range of plus or minus 100 basis points.

Issue 9:

What is the appropriate balance of accumulated deferred income taxes?

Recommendation:

The appropriate 2014 average net used and useful credit accumulated deferred income taxes (ADITs) balance to include in the capital structure is $214,874.

Issue 10:

What is the appropriate weighted average cost of capital including the proper components, amounts, and cost rates associated with the capital structure for the test year ended December 31, 2014?

Recommendation:

The appropriate weighted average cost of capital is 7.92 percent.

Issue 11:

What are the appropriate test year revenues for the utility's wastewater system?

Recommendation:

The appropriate test year revenues for Sandalhaven’s wastewater system, including miscellaneous revenues are $666,122.

Issue 12:

Should any adjustment be made to the utility’s salaries and wages expense?

Recommendation:

Yes. Salaries and wages expense should be decreased by $67,362. Employee Pensions and Benefit expense should be decreased by $897. In addition, payroll tax expense should be decreased by $4,027.

Issue 13:

Should further adjustments be made to the utility’s O&M expense?

Recommendation:

Yes. O&M expense should be decreased by $83,287.

Issue 14:

What is the appropriate amount of rate case expense?

Recommendation:

The appropriate amount of rate case expense is $123,015. This expense should be recovered over four years for an annual expense of $30,754. Therefore, annual rate case expense should be decreased by $2,830 from the respective levels of expense included in the MFRs.

Issue 15: Should any further adjustment be made to Taxes other than Income?

Recommendation:

Yes. Property Taxes should be decreased by $7,460.

Issue 16:

What is the appropriate revenue requirement for the test year ended December 31, 2014?

Recommendation:

Staff recommends the following revenue requirement be approved.

Test Year Revenue

$ Increase

Revenue

Requirement

% Increase

$666,122

$626,375

$1,292,497

94.03%

Issue 17:

What are the appropriate rate structures and rates for Sandalhaven's wastewater systems?

Recommendation:

The recommended rate structures and monthly wastewater rates are shown on Schedule No. 4 of staff’s memorandum dated November 18, 2015. The utility should file revised tariff sheets and a proposed customer notice to reflect the Commission-approved rates. The approved rates should be effective for service rendered on or after the stamped approval date on the tariff sheets, pursuant to Rule 25-30.475(1), F.A.C. In addition, the approved rates should not be implemented until staff has approved the proposed customer notice and the notice has been received by the customers. The utility should provide proof of the date notice was given within 10 days of the date of the notice.

Issue 18:

In determining whether any portion of the interim water and wastewater revenue increase granted should be refunded, how should the refund be calculated, and what is the amount of the refund, if any?

Recommendation:

The appropriate refund amount should be calculated by using the same data used to establish final rates, excluding rate case expense and other items not in effect during the interim period. The revised revenue requirements for the interim collection period should be compared to the amount of interim revenues granted. Based on this methodology, no refund is necessary. As a result, the corporate undertaking amount of $356,608 should be released.

Issue 19:

What is the appropriate amount by which rates should be reduced four years after the established effective date to reflect the removal of the amortized rate case expense as required by Section 367.0816, Florida Statutes?

Recommendation:

The wastewater rates should be reduced as shown on Schedule No. 4 of staff’s memorandum dated November 18, 2015, to remove rate case expense grossed up for regulatory assessment fees (RAFs) and amortized over a four-year period effective immediately following the expiration of the four-year rate case expense recovery period, pursuant to Section 367.0816, F.S. Sandalhaven should be required to file revised tariffs and a proposed customer notice setting forth the lower rates and the reason for the reduction no later than one month prior to the actual date of the required respective rate reductions. If the utility files this reduction in conjunction with a price index or pass-through rate adjustment, separate data should be filed for the price index and/or pass-through increase or decrease and the reduction in the rates due to the amortized rate case expense.

Issue 20:

What are the appropriate customer deposits for Sandalhaven's wastewater system?

Recommendation:

The appropriate initial customer deposit for the residential wastewater customers should be $166 for all meter sizes. The initial customer deposits for all general service meter sizes should be two times the average estimated bill for wastewater. The approved customer deposits should be effective for services rendered or connections made on or after the stamped approval date on the tariff sheets, pursuant to Rule 25-30.475, F.A.C. The utility should be required to charge the approved charges until authorized to change them by the Commission in a subsequent proceeding.

Issue 21:

Should Sandalhaven’s guaranteed revenue charge be revised?

Recommendation:

Yes. Sandalhaven’s guaranteed revenue charge should be revised. Staff’s recommended guaranteed revenue charge is $50.31. The approved charge should be effective on or after the stamped approval date of the tariff, pursuant to Rule 25-30.475, F.A.C.

Issue 22:

Should Sandalhaven’s existing service availability policy and charges be revised, and if so, what is the appropriate policy and charges?

Recommendation:

Yes. Staff recommends that the utility’s existing main extension policy remain in effect and a plant capacity charge of $3,270 per ERC should be approved. The approved service availability charges should be effective for connections made on or after the stamped approval date of the tariff, pursuant to Rule 25-30.475, F.A.C.

Issue 23: Should Sandalhaven’s existing Allowance for Funds Prudently Invested (AFPI) charges be revised, and if so, what are the appropriate charges?

Recommendation:

Yes. Sandalhaven’s existing AFPI charges should be revised. The beginning date of the new AFPI charges should be January 1, 2015. After December 31, 2020, the utility should be allowed to collect the constant charge until 792 future ERCs have been added, at which time the charge should be discontinued. The charge should be collected from future connection based upon the time of the initial connection. The revised tariff sheets should be approved upon staff’s verification that the tariffs are consistent with the Commission’s decision. The approved AFPI charges should be effective for connections made on or after the stamped approval date of the tariff, pursuant to Rule 25-30.475, F.A.C.

Issue 24:

Should the utility be required to provide proof, within 90 days of an effective order finalizing this docket, that it has adjusted its books for all the applicable National Association of Regulatory Utility Commissioners (NARUC) Uniform System of Accounts (USOA) associated with the Commission-approved adjustments?

Recommendation:

Yes. To ensure that the utility adjusts its books in accordance with the Commission’s decision, Sandalhaven should notify the Commission in writing within 90 days of the final order in this docket that the adjustments to all the applicable NARUC USOA accounts have been made to the utility’s books and records.

Issue 25:

Should this docket be closed?

Recommendation:

If no person whose substantial interests are affected by the proposed agency action files a protest within 21 days of the issuance of the order, a consummating order should be issued. The docket should remain open for staff’s verification that the revised tariff sheets and customer notice have been filed by the utility and approved by staff. Once these actions are complete, this docket should be closed administratively.

20 Docket No. 140226-EI – Request to opt-out of cost recovery for investor-owned electric utility energy efficiency programs by Wal-Mart Stores East, LP and Sam's East, Inc. and Florida Industrial Power Users Group.

Critical Date(s):		None
Commissioners Assigned:			Graham, Edgar, Brown
Prehearing Officer:			Graham
Staff:	ECO: Harlow, Lingo, Margolis, Shafer GCL: Tan

(Post-Hearing Decision - Participation is Limited to Commissioners and Staff.)

Issue 1:

Should the Commission require the utilities to separate their Energy Conservation Cost Recovery expenditures into two categories, one for Energy Efficiency programs and the other for Demand-Side Management programs?

Primary Recommendation:

The petitioners have suggested separating the costs in the Energy Conservation Cost Recovery (ECCR) clause as a means of implementing the proposed opt-out provision. If the Commission approves staff’s primary recommendation in Issue 2 to deny the petitioners’ request, then no changes to current ECCR clause practices are necessary.

Alternative Recommendation:

If the Commission approves alternative staff’s recommendation in Issue 2, the four largest IOUs will be required to develop a pilot opt-out program. Implementing the pilot program would require the IOUs to determine the proportion of total ECCR costs related to energy efficiency programs paid by each customer that chooses to participate in the pilot. Alternative staff recommends that the appropriate methodology for determining the category and level of costs from which opt-out customers are seeking relief should be subject to discussion among the parties at a workshop as recommended in Issues 2 and 3.

Issue 2:

Should the Commission allow proactive non-residential customers who implement their own energy efficiency programs and meet certain other criteria to opt out of the utility's Energy Efficiency programs and not be required to pay the cost recovery charges for the utility's Energy Efficiency programs approved by the Commission, pursuant to Section 366.82, F.S.?

Primary Recommendation:

Primary staff recommends that the Commission not pursue an opt-out policy at this time. There is insufficient evidence in the record for the Commission to change its existing policy that all ratepayers benefit from cost-effective DSM programs, therefore all ratepayers should share in the costs. Further, an opt-out policy could result in cost shifting to residential and commercial/industrial customers that are not eligible to opt out under the petitioners’ proposals. Additionally, it is probable that an opt-out provision would introduce equity concerns into Florida’s DSM programs. Finally, primary staff recommends that the Commission direct the utilities to work with the petitioners to make their existing energy conservation Custom Incentive programs less burdensome and more responsive to customer needs in order to increase customer participation.

Alternative Recommendation:

Alternative staff recommends that the Commission direct staff to conduct a workshop for discussion among the parties and the four largest IOUs on a pilot program that meets the parameters discussed in Issue 3. The Commission should direct the four largest IOUs to develop a pilot opt-out program, and the associated tariffs, within 90 days of the workshop, for Commission review and approval. To the extent possible, the utility proposals shall reflect common program specifics to enable reasonably comparable for evaluation at the conclusion of the pilot. The purpose of the pilot program is to collect data regarding the impact of an opt-out policy on: (1) customer energy and demand savings relative to expected savings under utility-sponsored programs; (2) whether these demand and energy savings are cost-effective under the Commission’s approved cost-effectiveness methodology; and (3) whether cost shifting occurs and, if so, at what level.

Issue 3:

If the Commission allows proactive customers to opt out of participating in, and paying for, a utility's Energy Efficiency programs, what criteria should the Commission apply in determining whether customers who wish to opt out are eligible to do so?

Primary Recommendation:

If the Commission approves the primary recommendation in Issue 2, then Issue 3 is moot.

Alternative Recommendation:

If the Commission approves the alternative staff recommendation in Issue 2, the Commission should direct staff to conduct a workshop with the parties to develop implementation of an opt-out pilot program for the four largest IOUs. Following the workshop, these four IOUs should be required to file an opt-out pilot proposal, and the associated tariffs, within 90 days based on the framework provided in alternative staff’s discussion of this issue, including: (1) eligible customers should be determined based on an annual energy usage threshold of 15 million kWh, with no account aggregation allowed; (2) any administrative costs associated with an opt-out policy must be paid by the customers that elect to opt out and (3) any energy efficiency savings from an opt-out customer counted toward utility DSM goals must be incremental savings that meet the same cost-effectiveness criteria that utility-sponsored energy efficiency savings already must meet, and must be measureable and verified. The resulting proposed opt-out program standards and other necessary implementation details would be subject to Commission approval through the PAA process. Alternative staff also recommends that, to the extent possible, the four largest IOUs strive for commonality in their opt-out programs. The Commission should also direct the IOUs to engage with staff and the parties in fulfilling the intent of these guidelines as questions arise.

Issue 4:

Should this docket be closed?

Recommendation:

If staff’s primary recommendation in Issue 2 is approved, the docket should be closed after the time for filing an appeal has run. If the Commission denies staff’s primary recommendation in Issue 2, this docket should remain open pending further Commission action.

Rule Status:		Proposed
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Patronis
Staff:	GCL: Page ECO: Rome, Draper

Critical Date(s):		Decision must be rendered by 12/03/15 in order to implement new fuel factors with the first billing cycle in 2016.
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Graham
Staff:	AFD: Barrett, Bulecza-Banks, Lester ECO: Draper ENG: Matthews GCL: Brownless, Janjic, Villafrate

Critical Date(s):		03/31/16
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Administrative
Staff:	AFD: Frank, Norris GCL: Villafrate

Critical Date(s):		Commission must grant or deny the petition by January 11, 2016, pursuant to Section 120.542(8), F.S.
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Brown
Staff:	GCL: Harper ECO: Rome, Guffey

Critical Date(s):		8-Month Effective Date: 05/01/16 (60-day suspension date waived by the utility)
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Administrative
Staff:	ECO: Guffey, Draper GCL: Janjic

Critical Date(s):		8-Month Effective Date: 5/17/16 (60-Day Suspension Date Waived by the Utility)
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Administrative
Staff:	ECO: Ollila GCL: Mapp

Critical Date(s):		8-Month Effective Date: 6/9/2016 (60-day suspension date waived by the utility)
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Administrative
Staff:	ECO: Rome, Draper GCL: Villafrate