Discussion
of Issues
Issue 1:
Should the Commission approve the proposed
territorial agreement between Clay and Newberry?
Recommendation:
Yes, the Commission should approve the proposed
territorial agreement between Clay and Newberry. (Ollila)
Staff Analysis:
Pursuant to Section 366.04(2)(d), F.S. and Rule
25-6.0440(2), Florida Administrative Code (F.A.C.), the Commission has
jurisdiction to approve territorial agreements between and among rural electric
cooperatives, municipal electric utilities, and other electric utilities.
Unless the Commission determines that the agreement will cause a detriment to
the public interest, the agreement should be approved.
The petitioners stated that the proposed agreement was
entered into primarily to replace the expired agreement. The proposed agreement
includes the exchange of service areas where each petitioner believes it can
provide better service. These service areas are, for the most part, undeveloped
and on the edge of each petitioner’s respective territory. Two customers will
be transferred from Clay to Newberry under the proposed agreement. All facilities
to be transferred under the proposed agreement are secondary service facilities
(i.e., the connection of service drops from the transformer to the meter). The
joint petitioners stated that due to the age and condition of the facilities,
there will not be a purchase price for the facilities. The duration of the proposed
agreement is an initial term of 30 years. Five-year automatic renewals will
follow the initial term, unless Clay or Newberry notifies the other in writing one
year in advance of the expiration of the initial term or any subsequent
five-year renewal.
The proposed transfer of two customers results from
combining a section of land currently served by Clay and Newberry. A
development with residential and retail commercial use is planned for this land
and the joint petitioners agree that the development is best served by one
utility and that Newberry should serve the development. As a result of this
proposed transfer, two Clay customers will be transferred to Newberry. One
customer receives residential service on a farm and the other customer, the
construction company for the development, is a general service commercial customer.
Pursuant to Rule 25-6.0440(1)(d), F.A.C., letters were sent to the customers on
November 14, 2016, advising them of the proposed transfer and the rate change;
no responses have been received. The rate comparison for the residential
customer is $111.90 for Clay and $113.50 for Newberry (1,000 kWh per month).
The rate comparison for the general service customer is $171.05 for Clay and
$181.80 for Newberry (1,500 kWh per month). Clay will refund any deposits
either as a credit on the customer’s final bill or send a check refunding the
deposit. The joint petitioners anticipate the transfers will be completed
within 12 months of the effective date of the order and will notify the
Commission in writing if more time is needed. According to the joint
petitioners, there will be no compensation for the transfer of customers.
The joint petitioners assert that the proposed agreement
will avoid duplication of services and wasteful expenditures and will protect
the health and safety of the public from potentially hazardous conditions. The
joint petitioners believe and represent that the Commission’s approval of the
proposed agreement is in the public interest.
After review of the petition, the proposed agreement, and
the joint petitioners’ responses to staff’s data request, staff believes that
the proposed agreement is in the public interest and will enable Clay and
Newberry to better serve their current and future customers. It appears that
the proposed agreement eliminates any potential uneconomic duplication of
facilities and will not cause a decrease in the reliability of electric
service. As such, staff believes that the proposed agreement between Clay and
Newberry creates no detriment and is in the public interest and recommends that
the Commission approve it.
Issue 2:
Should this docket be closed?
Recommendation:
If no protest is filed by a person whose substantial
interests are affected within 21 days of the issuance of the Order, this docket
should be closed upon the issuance of a Consummating Order. (Brownless)
Staff Analysis:
If no protest is filed by a person whose substantial
interests are affected within 21 days of the issuance of the Order, this docket
should be closed upon the issuance of a Consummating Order.
