Case Background
On February 16,
2017, the Florida Division of Chesapeake Utilities Corporation (Chesapeake) and
Sebring Gas System, Inc., (Sebring) filed a joint petition for approval of a
territorial agreement in DeSoto County. On April 3, 2017, the petitioners filed
an amended joint petition with a corrected proposed territorial agreement
(proposed agreement) and map. The proposed agreement corrects an inaccurate description
of the Sebring service area contained in the February 16, 2017 filing. The
proposed agreement is Attachment A to the petition and the map is Attachment B
to the petition (due to the voluminous nature of the exhibits, they have not
been attached to this recommendation).
The joint
petitioners responded to staff’s data request on March 2, 2017. The Commission
has jurisdiction over this matter pursuant to Section 366.04, Florida Statutes
(F.S.).
Discussion
of Issues
Issue 1:
Should the Commission approve the proposed agreement
between Chesapeake and Sebring?
Recommendation:
Yes, the Commission should approve the proposed
agreement between Chesapeake and Sebring. (Ollila)
Staff Analysis:
Pursuant to Section 366.04(3)(a), F.S., and Rule
25-7.0471, Florida Administrative Code (F.A.C.), the Commission has jurisdiction
to approve territorial agreements between and among natural gas utilities.
Unless the Commission determines that the agreement will cause a detriment to
the public interest, the agreement should be approved.
The joint petitioners stated that over the past year they
have independently pursued plans to extend service in DeSoto County,
specifically to customers in and around the City of Arcadia. The joint
petitioners stated that without the proposed agreement the joint petitioners’
extension plans would likely result in the uneconomic duplication of facilities
and, potentially, a territorial dispute. The joint petitioners assert that
approval of the proposed agreement will enable as many customers as possible to
receive natural gas service.
Currently, Chesapeake and Sebring both have customers in
DeSoto County; however, neither petitioner has facilities capable of serving
the City of Arcadia. Under the proposed agreement, the joint petitioners have
agreed that Chesapeake’s service territory will be defined as all of DeSoto
County, except for customers within Arcadia’s municipal boundary and two specifically
identified customers who are located just outside the Arcadia city limits and
are currently served by Sebring. Sebring’s service area will include customers
within Arcadia’s municipal boundaries and the two specifically identified customers
outside Arcadia’s municipal limits. The two customers are identified in the
proposed agreement and in the map.
There are no customers or facilities to be transferred. The
proposed agreement includes a provision that provides Chesapeake with a right
of first refusal if Sebring decides to sell any portion of its natural gas or
propane facilities. The proposed agreement states that prior to the second
anniversary of the effective date (the date the Commission’s decision becomes
final), Sebring and Chesapeake will meet to review the status of the proposed
agreement and will submit a status report to the Commission. After the second anniversary,
the parties will meet no more than every fifth anniversary to review the status
of the proposed agreement and provide a status report to the Commission.
The joint petitioners represent that the proposed
agreement will not cause a decrease in the availability or reliability of
natural gas service provided by Chesapeake or Sebring to existing or future
ratepayers of either company. The joint petitioners represent that the
Commission’s approval of the proposed agreement will be consistent with Section
366.04, F.S., and Rule 25-7.0471, F.A.C. Further, the joint petitioners attest
that the proposed agreement is in the public interest, will not adversely
impact any customers, and will facilitate expansion by facilitating service to
new customers and areas in an efficient manner.
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, that it eliminates any
potential uneconomic duplication of facilities and will not cause a decrease in
the reliability of gas service. As such, staff believes that the proposed
agreement 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. (Taylor)
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.
