Commission Conference Agenda

3**PAA Docket No. 150269-WS – Application for limited proceeding water rate increase in Marion, Pasco, and Seminole Counties, by Utilities, Inc. of Florida.

Critical Date(s):		None
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Brisé
Staff:	AFD: Slemkewicz, D. Buys, Mouring ECO: Hudson, Johnson ENG: King, Mtenga GCL: Mapp

Issue 1:

Should the Utility's requested increase associated with the Pasco County Interconnect Phase II be approved?

Recommendation:

Yes, as modified by staff.

The Commission should approve a water rate increase of $47,836 (or 5.45 percent) which is driven in large part by the expense related to the retirement of the abandoned wells, and the purchased water expense, pursuant to the Bulk Water Agreement with Pasco County (Attachment A of staff’s memorandum dated September 29, 2016).

In addition, the estimated $200,000 net cost to retire the abandoned wells, as well as the use of the hydro tank and its $5,000 salvage value, should be reviewed in the forthcoming consolidated rate case in Docket No. 160101-WS.

Further, UIF should be directed to provide secondary water quality results for portions of its Summertree distribution system at least every six months. Samples should be taken from the same sites labeled “nearby system site” shown in Appendix A of the CPH Engineering Report for consistency purposes. Such results should be filed with the Commission for informational purposes. The first report should be filed no later than two months after the completion of the interconnection with Pasco County.

Pursuant to Order No. PSC-14-0025-PAA-WS,the 100-basis point reduction in return on equity and water testing requirement should remain in place until the water quality is deemed satisfactory by the Commission.

Issue 2:

What is the appropriate application of the recommended rate increase and the effective date and implementation date?

Recommendation:

Staff’s recommended rate increase of 5.45 percent for Pasco County should be applied as an across-the-board increase to existing service rates for the Orangewood and Summertree systems.

The rates, as shown on Schedule No. 4 of staff’s memorandum dated September 29, 2016, 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. The Utility should file revised tariff sheets and a proposed customer notice to reflect the Commission-approved rates.

In addition, the approved rates should not be implemented until the interconnection is in-service and staff has approved the proposed customer notice and the notice has been provided to the customers. The Utility should provide proof of the date notice was given within 10 days of the date of the notice.

The rates should be reduced as shown on Schedule No. 4 of staff’s memorandum dated September 29, 2016, to remove rate case expense grossed up for regulatory assessment fees and amortized over a 4-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.

Issue 3:

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 whose interests are substantially affected other than the Utility?

Recommendation:

Yes. The recommended rates should be approved for the Utility on a temporary basis, subject to refund, in the event of a protest filed by a party whose interests are substantially affected other than the Utility. UIF 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 after the interconnection is in-service, staff has approved the proposed notice, the notice has been received by the customers, and only after the Utility has provided written guarantee of its corporate undertaking in a cumulative amount of $73,812. 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 September 29, 2016. 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.

Issue 4:

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.

6**PAA Docket No. 150010-WS – Application for staff-assisted rate case in Brevard County by Aquarina Utilities, Inc.

Critical Date(s):		Waived (15-Month Effective Date (SARC))
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Brisé
Staff:	ENG: Lewis, King AFD: Fletcher, Mouring, Smith II ECO: Bruce GCL: Murphy

(Proposed Agency Action - Except for Issue Nos. 11, 17, and 18.)

Issue 1:

Should the quality of service provided by Aquarina be considered satisfactory?

Recommendation:

Yes. The overall quality of service provided by Aquarina should be considered satisfactory.

Issue 2:

What are the used and useful percentages (U&U) of Aquarina’s water treatment plant (WTP), WTP storage, distribution system, wastewater treatment plant, collection system, non-potable plant, non-potable distribution system, and non-potable storage?

Recommendation:

Staff is recommending the following U&U percentages for Aquarina’s water, wastewater, and non-potable systems:

Plant	U&U Percentage

Water Treatment Plant	81.0 Percent
Water Distribution	62.6 Percent
Water Plant Storage	46.7 Percent

Wastewater Plant	55.9 Percent
Wastewater Collection System	65.4 Percent

Non-Potable Plant	100 Percent
Non-Potable Distribution	100 Percent
Non-Potable Storage	61.0 Percent

Staff also recommends that no adjustments to operating expenses be made for excessive unaccounted for water (EUW) or excessive inflow & infiltration (I&I).

Issue 3:

What is the appropriate average test year potable water rate base, non-potable water rate base, and wastewater rate base for Aquarina?

Recommendation:

The appropriate average test year potable water, non-potable water, and wastewater rate bases are $170,153, $172,587, and ($2,091), respectively.

Issue 4:

What is the appropriate return on equity and overall rate of return for Aquarina Utilities, Inc.?

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 3.66 percent.

Issue 5:

What are the appropriate test year revenues for Aquarina’s water and wastewater system?

Recommendation:

The appropriate test year revenues for Aquarina’s water and wastewater systems are $268,677 ($170,848 potable + $97,829 non-potable) and $161,821, respectively.

Issue 6:

What is the appropriate test year water and wastewater operating expenses for Aquarina Utilities, Inc.?

Recommendation:

The appropriate amount of operating expense for the Utility is $152,028 for potable water, $240,466 for non-potable water, and $169,664 for wastewater.

Issue 7:

What is the appropriate revenue requirement for potable and non-potable water?

Recommendation:

The appropriate revenue requirement is $158,255 for potable water, resulting in an annual decrease of $12,593 (or -7.37 percent). The appropriate revenue requirement is $246,783 for non-potable water, resulting in an annual increase of $148,954 (or 152.26 percent).

Issue 8:

Should the Commission utilize the operating ratio methodology as an alternative means to calculate the wastewater revenue requirement for Aquarina, and, if so, what is the appropriate margin?

Recommendation:

Yes. The Commission should utilize the operating ratio methodology for calculating wastewater revenue requirement for Aquarina. The margin should be 6.60 percent of O&M expenses.

Issue 9:

What is the appropriate wastewater revenue requirement?

Recommendation:

The appropriate wastewater revenue requirement is $179,094, resulting in an annual increase of $17,273 (or 10.67 percent).

Issue 10:

What are the appropriate rate structures and rates for Aquarina’s water and wastewater systems?

Recommendation:

The recommended rate structures and monthly water and wastewater rates are shown on Schedule Nos. 4-A and 4-B of staff’s memorandum dated September 29, 2016. 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 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?[1]

Recommendation:

The water and wastewater rates should be reduced as shown on Schedule Nos. 4-A and 4-B of staff’s memorandum dated September 29, 2016, to remove rate case expense grossed up for RAFs 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. Aquarina 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 Aquarina’s miscellaneous service charges be revised?

Recommendation:

Yes. Aquarina’s miscellaneous service charges should be revised. The charges should be effective on or after the stamped approval date on the tariff, pursuant to Rule 25-30.475, F.A.C. In addition, the approved charges 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 13:

Should Aquarina’s request for direct debit charge be approved?

Recommendation:

Yes. Aquarina’s request for a direct debit charge should be approved. The direct debit charge should be effective on or after the stamped approval date on the tariff, pursuant to Rule 25-30.475, F.A.C. In addition, the approved charge 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 14:

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

Recommendation:

Yes. Aquarina should be authorized to collect NSF charges for both systems. Staff recommends that Aquarina revise its tariffs to reflect the NSF charges currently set forth in Section 68.065, 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 15:

Should Aquarina’s existing service availability charges be revised, and if so, what are the appropriate charges?

Recommendation:

No. The appropriate service availability charges are the Utility’s existing charges for the potable and non-potable water systems. The wastewater main extension charge should be discontinued.

Issue 16:

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

Recommendation:

Yes. The Commission should approve a Phase II revenue requirement associated with pro forma items. The Utility’s Phase II revenue requirement is $171,277 for potable water, $252,165 for non-potable water, and $185,657 for wastewater, which equates to increases of 8.23 percent, 2.18 percent, and 3.34 percent, respectively, over the Phase I revenue requirements. Staff recommends that the potable water rates remain unchanged for Phase II. The Phase II wastewater rates should be designed to produce revenues of $185,002, excluding miscellaneous revenues.

Implementation of the Phase II rates is conditioned upon Aquarina 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 by staff, 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. Aquarina 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 17:

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 should 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. Aquarina 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 September 29, 2016. 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’s Office of Commission Clerk 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 18:

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. Aquarina 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 19:

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.

7**PAA Docket No. 150012-WU – Application for transfer of Certificate 390-W from County-Wide Utility Co., Inc. to Southwest Ocala Utility, Inc. in Marion County.

Critical Date(s):		None
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Brisé
Staff:	ENG: Watts AFD: Frank, Norris ECO: Johnson GCL: Janjic

(Proposed Agency Action for Issues 2 and 3.)

Issue 1:

Should the Commission approve the transfer of County-Wide Utility Co., Inc.’s water system and Certificate No. 390-W to Southwest Ocala Utility, Inc.?

Recommendation:

Yes. The transfer of County-Wide’s water system and the transfer of Certificate No. 390-W to SOU is in the public interest and should be approved effective the date of the Commission’s vote. The resultant order should serve as SOU’s certificate and should be retained by the Utility. The existing rates and charges should remain in effect until a change is authorized by the Commission in a subsequent proceeding. The tariffs reflecting the transfer should be effective for services rendered or connections made on or after the stamped approval date on the tariffs, pursuant to Rule 25-30.475, Florida Administrative Code (F.A.C.). SOU should be responsible for filing the Utility’s annual reports and paying regulatory assessment fees for 2015 and all future years.

Issue 2:

What is the appropriate net book value for the SOU water system for transfer purposes?

Recommendation:

The net book value of the water system for transfer purposes is $79,051, as of January 1, 2014. Within 90 days of the date of the final order, SOU 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 SOU’s 2015 Annual Report when filed. Specifically, the Utility should confirm that the adjustments to all applicable National Association of Regulatory Utility Commissioners, Uniform System of Accounts (NARUC USOA) primary accounts as shown on Schedule No. 2, Page 3 of 3 of staff’s memorandum dated September 29, 2016, have been made to SOU’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 the deadline. Upon providing good cause, staff should be given administrative authority to grant an extension of up to 60 days.

Issue 3:

Should an acquisition adjustment be recognized for rate-making purposes?

Recommendation:

Yes. Pursuant to Rule 25-30.0371, F.A.C., a negative acquisition adjustment of $63,014 should be recognized for rate-making purposes. Beginning with the date of the issuance of the order approving the transfer, 50 percent of the negative acquisition, which is $31,507, should be amortized over a 7-year period and the remaining 50 percent should be amortized over the remaining 33-year life of the assets.

Issue 4:

Should this docket be closed?

Recommendation:

Yes. If no protest to the proposed agency action 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 SOU has provided proof that its general ledgers have been updated to reflect the Commission-approved balances as of January 1, 2014.

8**PAA Docket No. 130209-SU – Application for expansion of certificate (CIAC) (new wastewater line extension charge) by North Peninsula Utilities Corp.

Critical Date(s):		None
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Edgar
Staff:	ENG: Lewis, King ECO: Bruce GCL: Janjic, Crawford

(Proposed Agency Action for Issue 2.)

Issue 1:

Should North Peninsula Utilities Corporation’s proposed territory amendment be approved?

Recommendation:

Yes in part and no in part. It is in the public interest to amend wastewater certificate number 249-S to include the territory as described in Attachment A of staff’s memorandum dated September 29, 2016, with the exception of the addition identified as Area 4 (i.e., Capri Drive), effective the date of the Commission’s vote. The resultant order should serve as NPUC’s amended certificate and should be retained by the Utility. If the Commission agrees with staff’s recommendation, the Utility should revise its territorial description to exclude Area 4 and file the revision within ten (10) days of the Commission’s vote.

Issue 2:

What are the appropriate service availability charges for NPUC?

Recommendation:

New customers requesting service should be required to either install the mains necessary to connect to the Utility and donate those lines to the Utility, or the Utility may extend the required lines and collect a main extension charge based on whether a road crossing and force main are required. A main extension charge associated with a road crossing of $762 per equivalent residential connection (ERC) and a main extension charge with no road crossing of $444 per ERC should be approved. The recommended main extension charges should be based on an estimated 250 gallons per day per ERC of treated wastewater demand. Also, staff recommends a force main extension charge of $1.25 per linear foot where the Utility will need to extend its force main to provide service. The Utility should be required to file tariffs reflecting the revised service availability policy and charges. The approved service availability policy and 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 3:

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, and the docket should remain open for staff’s verification that the revised tariff sheets have been filed by the Utility and approved by staff. If a protest is filed within 21 days of the issuance of the Order, the tariff should remain in effect subject to refund pending the resolution of the protest, and the docket should remain open.

[1] Section 367.0816, F.S., was repealed effective July 1, 2016. The Statute was in effect at the time Aquarina filed its staff-assisted rate case, therefore, the Statute applies.

DOCKET NO.	COMPANY NAME
160163‑TX	MIX Networks, Inc.

Critical Date(s):		Nov. 17, 2016 (Petition Deemed Approved if Not Granted or Denied within 90 Days of Receipt, pursuant to Section 20.542(8), Florida Statutes)
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Graham
Staff:	ECO: Coston, Harlow GCL: Tan, Cuello

Critical Date(s):		02/02/17 (8-Month Effective Date)
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Administrative
Staff:	ENG: Wooten, Ellis GCL: Trierweiler

Critical Date(s):		Based on a termination provision contained in the Agreement, a final Commission decision must be rendered by February 22, 2017.
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Administrative
Staff:	ENG: Wooten AFD: Brown, Cicchetti, Wilson ECO: Higgins, McNulty GCL: Corbari

Critical Date(s):		8-Month Effective Date: 01/06/17 (60-day suspension date waived by the utility)
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Administrative
Staff:	ECO: Ollila, Rome GCL: Janjic