Discussion
of Issues
Issue 1:
Should the transfer of Certificate No. 288-W in
Pasco County from Orangeland Water Supply to Orange Land Utilities, LLC be
approved?
Recommendation:
Yes. The transfer of the water system and
Certificate No. 288-W 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 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.). 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 2016 Annual Report and all future
Annual Reports, and RAFs subsequent to the date of closing (May 1, 2016). (Friedrich,
Lewis, Sewards)
Staff Analysis:
On
June 6, 2016, Orange Land Utilities, LLC. filed an
application for the transfer of Certificate No. 288-W from OrangeLand Water
Supply in Pasco County. The application is in compliance with Section 367.071,
F.S., and Commission rules concerning applications for transfer of certificates.
The sale occurred on May 1, 2016, contingent upon Commission approval, pursuant
to Section 367.071(1), F.S.
Noticing,
Territory, and Land Ownership
On July 6,
2016, staff notified OLU that its application was not in compliance with the
noticing provisions set forth in Section 367.071, F.S., and Rule 25-30.030,
F.A.C. The Utility filed a corrected notice on September 9, 2016. No objections
to the transfer were filed, and the time for doing so has expired. The
application also contains a description of the water service territory which is
appended to this recommendation as Attachment A. The application contains a
copy of a quit claim deed that was executed on May 6, 2016, as evidence that
the Applicant owns the land upon which the water treatment facilities are
located pursuant to Rule 25-30.037(2)(q), F.A.C.
Purchase Agreement and Financing
Pursuant to Rule 25-30.037(2)(i), and (j), F.A.C., the
application contains a statement regarding financing and a copy of the purchase
agreement, which includes the purchase price, terms of payment, and a list of
the assets purchased. There are no customer deposits, guaranteed revenue
contracts, developer agreements, customer advances, leases, or debt of
Orangeland that must be disposed of with regard to the transfer. According to
the purchase agreement, the total purchase price for the assets is $8,500.
According to the Buyer, the sale took place on May 1, 2016, subject to
Commission approval, pursuant to Section 367.071(1), F.S.
Facility Description and
Compliance
The water treatment system consists of two wells, a steel hydropneumatic
ground storage tank with a storage capacity of 1,000 gallons, and a liquid
chlorination system used for disinfection. The last Florida Department of
Environmental Protection (DEP) sanitary survey was conducted on May 27, 2014,
and there were three deficiencies, which have been corrected. On July 15, 2015,
DEP deemed the Utility to be in compliance, therefore, the system appears to be
in compliance with DEP rules.
Technical and Financial Ability
Pursuant to Rule
25-30.037(2)(l), F.A.C., the application contains statements describing the
technical and financial ability of the Applicant to provide service to the
proposed service area. As referenced in the transfer application, the Buyer was
appointed to the Citrus County Water and Wastewater Authority, the local
regulatory body for Citrus County, where he served for seven years. The Buyer
also served as the "Class C" representative for the Governors Study
Committee for Investor Owned Water and Wastewater Utility Systems in 2013. He
attends yearly training classes through the Florida Rural Water Association and
completed the National Association of Regulatory Utility Commissioners (NARUC)
Utility Rate School in 2001. The Buyer owns, is the receiver of, or is the
manager of, a total of seven Class C water and wastewater facilities that are
regulated by the Commission.
Staff reviewed the
personal financial statements of the Buyer, as well as the financial statements
of Florida Utility Services 1, LLC, an unregulated Company owned by the Buyer.
Based on the above, the Buyer has demonstrated the technical and financial
ability to provide service to the existing service territory.
Rates and Charges
The
Utility’s rates and charges were last approved by a settlement in a
staff-assisted rate case. In
2014, the rates were subsequently reduced to reflect the expiration of rate
case expense amortized in 2008. The Utility’s
existing and recommended rates and charges are shown on Schedule No. 1. Rule 25-9.044(1), F.A.C., provides that, in the case of a change
of ownership or control of a utility, the rates, classifications, and
regulations of the former owner must continue unless authorized to change by
this Commission. Therefore, staff recommends that the Utility’s existing rates
and charges remain in effect until a change is authorized
by this Commission in a subsequent proceeding.
Regulatory
Assessment Fees and Annual Reports
Staff has verified
that the Seller is current with respect to Annual Reports and RAFs through
December 31, 2015. The Buyer will be responsible for filing Annual Reports and
paying RAFs after May 1, 2016, and all future years.
Conclusion
Based on the
foregoing, staff recommends that the transfer of the water system and
Certificate No. 288-W 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.
Issue 2:
What is the appropriate net book value for the
Orangeland water system for transfer purposes and should an acquisition
adjustment be approved?
Recommendation:
The net book value (NBV) of the water
system for transfer purposes is $4,958 as of May 1, 2016. An acquisition
adjustment should not be included in rate base. Within 90 days of the date of
the final order, OLU 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 the 2016 Annual Report when filed.
(Sewards)
Staff Analysis:
Rate base
was last established as of June 30, 2007. The purpose of establishing net book
value for
transfers is to determine whether an acquisition adjustment should be approved.
The NBV does not include normal ratemaking adjustments for used and
useful plant or working capital. The NBV has been updated to reflect balances
as of May 1, 2016. Staff’s recommended NBV, as described below, is shown on Schedule No. 3.
The Seller did not provide its books and records to the Buyer. Staff
auditors were not able to determine if the records were maintained in
accordance with the National Association of Regulatory Utility Commissioners’
Uniform System of Accounts (NARUC USOA). Staff auditors obtained the beginning
balances of the components of NBV as of June 30, 2007, established in Docket
No. 070601-WU.Auditorstraced asset
additions to supporting documentation and ensured retirements were made when a
capital item was removed or replaced.
Utility
Plant in Service (UPIS)
Staff auditors reviewed UPIS additions since the last rate
case proceeding and calculated a UPIS balance of $47,939. However, in the
response to the Staff Audit Report, OLU stated the UPIS amount should be
$50,816 to reflect the correct retirement amount for a well pump. After
recalculating UPIS, staff agrees with OLU’s balance. Therefore, staff
recommends a UPIS balance of $50,816 as of May 1, 2016.
Land
In Order No. PSC-08-0309-PAA-WU,
issued May 13, 2008, the Commission established the value of the land to be
$1,000. There have been no additions to land purchased since that order was
issued. Therefore, staff recommends a land balance
of $1,000, as of May 1, 2016.
Accumulated Depreciation
Based on the UPIS adjustment
discussed earlier, staff auditors calculated an accumulated depreciation
balance of $47,939. However, in the response to the Staff Audit Report, OLU
states the accumulated depreciation amount should be $45,625. After
recalculating accumulated depreciation, staff agrees with OLU’s balance. As a
result, accumulated depreciation should be $45,625 as
of May 1, 2016.
Contributions-in-Aid-of-Construction
(CIAC) and Accumulated Amortization of CIAC
The staff auditors reviewed CIAC additions and calculated
a CIAC balance of $7,350. Staff auditors also reviewed accumulated amortization
of CIAC since the last rate case proceeding and has calculated a balance of
$5,936. However, in response to the Staffs Audit Report, OLU stated that the
CIAC balance should be $7,350 and stated the accumulated amortization of CIAC
should be $6,117. After recalculating, staff agrees with OLU’s accumulated
amortization of CIAC balance. Thus, staff recommends CIAC and accumulated
amortization of CIAC balances of $7,350 and $6,117, respectively, as of May 1,
2016.
Net Book Value
Based on the adjustments described above, staff recommends
that the NBV is $4,958 as of May 1, 2016, which is shown on Schedule No. 2.
Acquisition Adjustment
An acquisition adjustment results when the purchase price
differs from the NBV of the assets at the time of the acquisition. The assets
were purchased for $8,500. As stated above, staff has determined the
appropriate NBV total to be $4,958. Pursuant to Rule 25-30.0371, F.A.C., a
positive acquisition adjustment may be appropriate when the purchase price is
greater than the NBV, and a negative acquisition adjustment may be appropriate
when the purchase price is less than NBV. However, pursuant to Rule 25-30.0371(2), F.A.C., a
positive acquisition adjustment shall not be included in rate base unless there
is proof of extraordinary circumstances. The Buyer did not request a positive
acquisition adjustment. As such, staff recommends that no positive acquisition
adjustment be approved.
Conclusion
Based on the above, staff recommends that the NBV of the
water system for transfer purposes is $4,958 as of May 1, 2016. No acquisition
adjustment should be included in rate base. Within 90 days of the date of the
final order, the Buyer 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 the 2016 Annual Report when filed.
Issue 3:
Should the Commission approve Orange Land
Utilities, LLC’s request to implement miscellaneous service charges?
Recommendation:
Yes. OLU’s request to implement miscellaneous
service charges should be approved. 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. (Friedrich)
Staff Analysis:
The Utility currently does not have miscellaneous
service charges. Section 367.091, F.S., authorizes the Commission to approve
miscellaneous service charges. During the course of this proceeding, the
Utility requested $30 each for initial connection, normal reconnection, and
violation reconnection charges. The Utility also requested a $23 premises visit
charge. The Utility provided cost justification in support of its requested
charges as required by Section 367.091(6) F.S. The cost justification included
a 4.5 percent markup for RAFs that is based on the revenues generated by the
proposed charges. The Commission has previously approved regulatory assessment
fees for new miscellaneous service charges.[5]
In addition, staff utilized the hourly salaries provided by the Utility for the
administrative employee and the field employee who processes and administers
miscellaneous service charges. However, staff adjusted the time allotment for
processing these charges and adjusted the amount per mile allowed for
transportation consistent with Commission practice.[6]
Staff’s recommended miscellaneous service charges are rounded up to the nearest
tenth.
Initial
Connection
The initial connection
charge is levied for service initiation at a location where service did not
exist previously. An OLU representative makes one trip when performing the
service of an initial connection. Based on labor and transportation to and from
the service territory, staff recommends initial connection charges of $18.60
for normal hours and $21.60 for after hours. Staff’s calculation is shown below
in Table 3-1.
Table 3-1
Initial Connection Charge Calculation
|
Activity
|
Normal Hours Cost
|
Activity
|
After
Hours Cost
|
|
Labor (Administrative)
($18.00/hr x1/4hr)
|
$4.50
|
Labor (Administrative)
($18.00/hr x1/4hr)
|
$4.50
|
|
Labor (Field)
($17.25/hr x 1/3 hr)
|
$5.75
|
Labor (Field)
($25.88/hr x 1/3 hr)
|
$8.63
|
|
Transportation
($0.535/mile x 14 miles-to/from)
|
$7.49
|
Transportation
($0.535/mile x 14 miles-to/from)
|
$7.49
|
|
Mark up for RAF (4.5%)
|
$0.80
|
Mark up for RAF (4.5%)
|
$0.93
|
|
Total
|
$18.54
|
Total
|
$21.55
|
Source:
Utility’s cost justification documentation.
Normal
Reconnection Charge
A normal
reconnection charge is levied for the transfer of service to a new customer
account at a previously served location, or reconnection of service subsequent
to a customer requested disconnection. A normal reconnection requires two
trips, which includes one to turn service on and the other to turn service off.
Based on labor and
transportation to and from the service territory, staff recommends that the
normal reconnection charge should be $29.40 for normal hours and $33.90 for
after hours. Staff’s calculations are shown below in Table 3-2.
Table 3-2
Normal
Reconnection Charge Calculation
|
Activity
|
Normal Hours Cost
|
Activity
|
After
Hours Cost
|
|
Labor (Administrative)
($18.00/hr x1/4hr)
|
$4.50
|
Labor (Administrative)
($18.00/hr x1/4hr)
|
$4.50
|
|
Labor (Field)
($17.25/hr x 1/4 hr x 2)
|
$8.63
|
Labor (Field)
($25.88/hr x 1/4hr x 2)
|
$12.94
|
|
Transportation
($0.535/mile x 14 miles-to/from x 2)
|
$14.98
|
Transportation
($0.535/mile x 14 miles-to/from x 2)
|
$14.98
|
|
Mark up for RAF (4.5%)
|
$1.26
|
Mark up for RAF (4.5%)
|
$1.46
|
|
Total
|
$29.37
|
Total
|
$33.88
|
Source:
Utility’s cost justification documentation
Violation
Reconnection Charge
The violation
reconnection charge is levied prior to reconnection of an existing customer
after discontinuance of service for cause. The service performed for violation
reconnection requires two trips, which includes one trip to turn off service
and a subsequent trip to turn on service once the violation has been remedied.
Based on labor and transportation to and from the service territory, staff
recommends violation reconnection charges of $29.40 for normal hours and $33.90
for after hours. Staff’s calculations are shown below in Table 3-3.
Table 3-3
Violation Reconnection
Charge Calculation
|
Activity
|
Normal
Hours Cost
|
Activity
|
After
Hours Cost
|
|
Labor (Administrative)
($18.00/hr x1/4hr)
|
$4.50
|
Labor (Administrative)
($18.00/hr x1/4hr)
|
$4.50
|
|
Labor (Field)
($17.25/hr x 1/4 hr x 2)
|
$8.63
|
Labor (Field)
($25.88/hr x 1/4 hr x 2)
|
$12.94
|
|
Transportation
($0.535/mile x 14 miles-to/from) x 2
|
$14.98
|
Transportation
($0.535/mile x 14 miles-to/from) x 2
|
$14.98
|
|
Mark up for RAF (4.5%)
|
$1.26
|
Mark up for RAF (4.5%)
|
$1.46
|
|
Total
|
$29.37
|
Total
|
$33.88
|
Source:
Utility’s cost justification documentation.
Premises
Visit
The premises visit charge is levied when a service representative
visits premises at the customer’s request for complaint resolution and the
problem is found to be the customer’s responsibility. In addition, the premises
visit can be levied when a service representative visits a premises for the
purpose of discontinuing service for nonpayment of a due and collectible bill,
and does not discontinue service because the customer pays the service
representative or otherwise makes satisfactory arrangements to pay the bill. A
premises visit requires one trip.
Based on labor and
transportation to and from the service territory, staff recommends a premises
visit charges of $18.60 for normal hours and $22.50 for after hours. Staff’s
calculations are shown below in Table 3-4.
Table 3-4
Premises
Visit Charge Calculation
|
Activity
|
Normal
Hours Cost
|
Activity
|
After
Hours Cost
|
|
Labor (Administrative)
($18.00/hr x1/4hr)
|
$4.50
|
Labor (Administrative)
($18.00/hr x1/4hr)
|
$4.50
|
|
Labor (Field)
($17.25/hr x 1/3 hr)
|
$5.75
|
Labor (Field)
($25.88/hr x 1/3 hr)
|
$8.63
|
|
Transportation
($0.535/mile x 14 miles-to/from)
|
$7.49
|
Transportation
($0.535/mile x 14 miles-to/from)
|
$7.49
|
|
Mark up for RAF (4.5%)
|
$0.80
|
Mark up for RAF (4.5%)
|
$1.82
|
|
Total
|
$18.54
|
Total
|
$22.44
|
Source: Utility’s cost
justification documentation.
Below, in Table 3-5, are the
Utility’s requested and staff’s recommended miscellaneous service charges.
Table 3-5
Miscellaneous Service
Charges
|
|
Utility Requested
|
Staff Recommended
|
|
Normal and After Hours
|
Normal Hours
|
After Hours
|
|
Initial Connection Charge
|
$30.00
|
$18.60
|
$21.60
|
|
Normal Reconnection Charge
|
$30.00
|
$29.40
|
$33.90
|
|
Violation Reconnection Charge
|
$30.00
|
$29.40
|
$33.90
|
|
Premises Visit Charge (in lieu of Disconnection)
|
$23.00
|
$18.60
|
$22.50
|
Conclusion
OLU’s request to
implement miscellaneous service charges should be approved. 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 4: What are the
appropriate initial customer deposits for Orange Land Utilities, LLC ?
Recommendation:
The appropriate initial customer deposit for water
service should be $42 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 water service. The approved initial 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. (Friedrich)
Staff Analysis:
Rule 25-30.311, F.A.C.,
contains the criteria for collecting, administering, and refunding customer
deposits. Customer deposits are designed to minimize the exposure of bad debt
expense for a utility and, ultimately, the general body of ratepayers.
Historically, the Commission has set initial customer deposits equal to two
times the average estimated bill.
Currently, the Utility does not have approved initial customer deposits in
place. Based on the average water demand, the appropriate initial customer
deposit should be $42 to reflect an average residential customer bill for two
months.
Based on the above, staff
recommends that the appropriate water initial customer deposit should be
$42 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 water service. The approved initial 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.
Issue 5:
Should Orange Land Utilities, LLC be authorized to
collect Non-Sufficient Funds Charges (NSF)?
Recommendation:
Yes. OLU should be authorized to collect NSF
charges. Staff recommends that OLU 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. OLU should provide proof
of the date the notice was given within 10 days of the date of the notice.
(Friedrich)
Staff Analysis:
Section 367.091, F.S., requires rates, charges, and customer service
policies to be approved by the Commission. The Commission has authority to
establish, increase, or change a rate or charge. Staff believes that OLU should
be authorized to collect NSF charges consistent with Section 68.065, F.S.,
which allows for the assessment of charges for the collection of worthless
checks, drafts, or orders of payment. As currently set forth in Section
68.065(2), F.S., the following NSF charges may be assessed:
(1) $25, if the face value does not exceed $50,
(2) $30, if the face value exceeds
$50 but does not exceed $300,
(3) $40, if the face value exceeds
$300,
(4) or five percent of the face
amount of the check, whichever is greater.
Approval of NSF charges is consistent with prior
Commission decisions. Furthermore,
NSF charges place the cost on the cost-causer, rather than requiring that the
costs associated with the return of the NSF checks be spread across the general
body of ratepayers. As such, OLU should be authorized to collect NSF charges
for its water system. Staff recommends that OLU revise its tariff sheet 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
sheet pursuant to Rule 25-30.475(1), F.A.C. Furthermore, the NSF charges should
not be implemented until staff has approved the proposed customer notice. OLU
should provide proof of the date the notice was given within 10 days of the date
of the notice.
Issue 6:
Should Orange Land Utilities, LLC’s requested meter
tampering charge be approved?
Recommendation:
Yes. OLU’s request to implement a $50 meter
tampering charge should be approved. The charge should be effective for
services rendered 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. OLU should provide proof of the date
notice was given within 10 days of the date of the notice. (Friedrich)
Staff Analysis: The
Utility requested a $50 charge to recover the cost of changes in piping on
equipment necessary as a result of meter tampering. Rule
25-30.320(2)(i), F.A.C., provides that a customer’s service
may be discontinued without notice in the event of tampering with the meter or
other facilities furnished or owned by the Utility. In addition, Rule
25-30.320(2)(j), F.A.C., provides that a customer’s service may be discontinued
in the event of an unauthorized or fraudulent use of service. The rule allows
the Utility to require the customer to reimburse the utility an amount reasonably
estimated as the deficiency in revenue resulting from the customer’s fraudulent
use before restoring service.
Pursuant to Rule 25-30.345,
F.A.C., a utility may charge a reasonable fee to defray the cost of restoring
service that was discontinued for proper cause as specified in Rule 25-30.320,
F.A.C. The Commission has previously
approved a meter tampering charge of $50 for sister utilities of OLU.
OLU provided the appropriate cost justification pursuant to Section 367.091,
F.S. Staff believes this is reasonable and consistent with prior Commission
decisions and should be approved. However, the charge is appropriate only where
an investigation reveals evidence of meter tampering.
Based on the above, staff recommends that OLU’s request to
implement a $50 meter tampering charge should be approved. The charge should be
effective for services rendered 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 7:
Should the Commission approve Orange Land Utilities,
LLC’s request for approval of a convenience charge for customers who opt to pay
their bill by debit or credit card?
Recommendation:
Yes. OLU’s request for approval of a convenience
charge of $3.43 for customers who opt to pay their bill by debit or credit card
should be approved. The convenience 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. (Friedrich)
Staff Analysis:
Section 367.091, F.S.,
authorizes the Commission to establish, increase, or change a rate or charge
other than monthly rates or service availability charges. The Utility is
requesting a $3.43 convenience charge and provided cost justification as
required by Section 367.091, F.S. The Utility’s cost analysis breakdown for its
requested charge is shown below in Table 7-1.
Table 7-1
Convenience Charge Cost
Justification
|
Activity
|
Cost
|
|
Labor
|
$0.54
|
|
Ink and Paper per Transaction
|
$0.06
|
|
Credit Card Machines
|
$2.83
|
|
Total
|
$3.43
|
Source:
Utility’s cost justification documentation.
The
Commission recently approved a convenience charge of $3.00 for customers who
opt to pay their bill with debit or credit cards for Charlie Creek Utilities,
LLC, a sister utility.
The charge was designed to recover the cost of supplies, administrative labor,
and equipment. Staff believes that the
Utility’s requested charge of a $3.43 convenience charge is reasonable for
customers who opt to pay their water bill by debit or credit card. The
Utility’s requested charge benefits the customers by allowing them to expand
their payment options. Furthermore, this fee will insure the Utility’s
remaining customers do not subsidize those customers who choose to pay using
this option.
Based on the above, staff recommends that OLU’s request
for approval of a convenience charge of $3.43 for customers who opt to pay
their bill by debit or credit card should be approved. The convenience 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 8:
Should Orange Land Utilities, LLC’s request to implement
a $5.25 late payment charge be approved?
Recommendation:
Yes. OLU’s request to implement a $5.25 late payment
charge should be approved. The Utility should be required to file a proposed
customer notice and tariff to reflect the Commission-approved charge. The
approved charge should be effective 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 charge should not be implemented until staff has approved the proposed
customer notice. The Utility should provide proof of the date notice was given
no less than 10 days after the date of the notice. (Friedrich)
Staff Analysis:
The Utility is requesting a
$5.25 late payment charge to recover the cost of supplies and labor associated
with processing late payment notices. The Utility’s request for a late payment
charge was accompanied by its reason for requesting the charge, as well as the
cost justification required by Section 367.091, F.S. In its cost justification,
OLU’s total cost for a late payment charge is $5.28, but OLU is requesting this
charge to be rounded down to $5.25. Staff believes OLU’s requested late payment
charge of $5.25 is appropriate. OLU’s labor cost of $4.75 accounts for the
office personnel time to search, determine, and process delinquent accounts.
The provided justification by OLU also includes costs for supplies and postage
for printing and sending out late payment notices. OLU’s cost basis for the
late payment charge is shown below in Table 8-1.
Table 8-1
Late Payment Charge Cost Justification
|
Activity
|
Cost
|
|
Labor
|
$4.75
|
|
Supplies
|
0.06
|
|
Postage
|
0.47
|
|
Total Cost
|
$5.28
|
Source: Utility’s cost justification documentation
Since the 1990s, the Commission
has approved late payment charges ranging from $2.00 to $7.00. The
purpose of this charge is to provide an incentive for customers to make timely
payments and to place the cost burden of processing delinquent accounts solely
upon those who are cost causers.
Based on the above, OLU’s request to implement a $5.25
late payment charge should be approved. The Utility should be required to file
a proposed customer notice and tariff to reflect the Commission-approved
charge. The approved charge should be effective 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 charge should not be implemented until staff has
approved the proposed customer notice. The Utility should provide proof of the
date notice was given no less than 10 days after the date of the notice.
Issue 9:
Should this docket be closed?
Recommendation:
The docket should remain open pending staff’s
verification that the revised tariff sheets and customer notice have been filed
by Orange Land Utilities, LLC. and approved by staff. If a protest is filed
within 21 days of the issuance date of the Order, the tariff sheets should
remain in effect with the charges held subject to refund pending resolution of
the protest. If no timely protest is filed, a consummating order should be
issued and, once staff verifies that the notice of the charge has been given to
customers, the docket should be administratively closed. (Trierweiler)
Staff Analysis:
The docket should remain open pending staff’s
verification that the revised tariff sheets and customer notice have been filed
by Orange Land Utilities, LLC. and approved by staff. If a protest is filed
within 21 days of the issuance date of the Order, the tariff sheets should
remain in effect with the charges held subject to refund pending resolution of
the protest. If no timely protest is filed, a consummating order should be
issued and, once staff verifies that the notice of the charges has been given
to customers, the docket should be administratively closed.
