Discussion
of Issues
Issue 1:
Should the Office of Public Counsel’s Request for
Oral Argument on its Motion for Reconsideration of Order No. PSC-17-0147-PCO-WS
before the Full Commission be granted?
Recommendation:
The pleadings
are clear on their face; however, it is within the Commission’s discretion to
grant oral argument if the Commission finds that it would assist the Commission
in its disposition of the motion. If oral argument is granted, staff recommends
5 minutes per side. (Trierweiler)
Staff Analysis:
Law
Rule
25-22.0022(1), F.A.C., allows a party to request oral argument before the
Commission for any motion by separate written pleading filed concurrently with
the motion on which argument is requested, or no later than 10 days after
exceptions to a recommended order. Failure to timely file a request for oral
argument constitutes a waiver thereof. Rule 25-22.0022(1), F.A.C. Granting or
denying oral argument is within the sole discretion of the Commission. Rule 25-22.0022(3), F.A.C. Only parties to
the docket and the staff attorney may participate in the oral argument when
conducted at an agenda conference. Rule 25-22.0022(7)(a), F.A.C. Parties should
be prepared to proceed with oral argument on all issues pertaining to the
motion being discussed, whether raised in the request for oral argument or not.
Rule 25-22.0022(7)(c), F.A.C.
OPC’s Position
OPC states
that oral argument on its Motion for Reconsideration will assist the Commission
in understanding and evaluating the alleged mistakes of law and fact overlooked
in rendering Order No. PSC-17-0147-PCO-WS. OPC contends that the Motion for
Reconsideration at issue involves complex legal and factual matters, the
resolution of which will be facilitated by oral argument. Specifically, oral argument will assist the
Commission in understanding why the contested rebuttal testimony and exhibits
significantly and adversely impacted Intervenors’ ability to adequately prepare
meaningful testimony, and adversely affected OPC’s rights in this proceeding.
UIF did not file a response to OPC’s Request for Oral Argument.
Staff’s Analysis and Conclusion
Staff
believes the pleadings are clear on their face. However, it is within the
Commission’s discretion to grant oral argument if the Commission finds that it
would assist the Commission in its disposition of the motion. If oral argument
is granted, staff recommends 5 minutes per side.
Issue 2:
Should the Office of Public Counsel's Motion for
Reconsideration of Order No. PSC-17-0147-PCO-WS before the Full Commission be
granted?
Recommendation:
No, the Office of Public Counsel’s Motion for
Reconsideration of Order No. PSC-17-0147-PCO-WS before the Full Commission
should be denied because it does not meet the standard for reconsideration. (Trierweiler)
Staff Analysis:
Law
The
standard of review for reconsideration of a Commission order is whether the
motion identifies a point of fact or law that the Prehearing Officer overlooked
or failed to consider in rendering the order.
See Stewart Bonded Warehouse, Inc. v. Bevis, 294 So. 2d
315 (Fla. 1974); Diamond Cab Co. of Miami v. King, 146 So. 2d 889 (Fla.
1962); and Pingree v. Quaintance, 394 So. 2d 162 (Fla. 1st DCA
1981). In a motion for reconsideration,
it is not appropriate to reargue matters that have already been
considered. Sherwood v. State,
111 So. 2d 96, 98 (Fla. 3d DCA 1959)(citing State ex. rel. Jaytex Realty Co.
v. Green, 105 So. 2d 817 (Fla. 1st DCA 1958)). Furthermore, a motion for reconsideration
should not be granted “based upon an arbitrary feeling that a mistake may have
been made, but should be based upon specific factual matters set forth in the
record and susceptible to review.” Stewart Bonded Warehouse, 294 So. 2d
at 317.
OPC’s Position
OPC argues
that its Motion for Reconsideration meets the standard for reconsideration by
identifying six errors of fact or law that it believes are fundamental and
cumulatively constitute an error of law resulting in a violation of its due
process rights. OPC alleges that
violation of its due process rights includes the Section 120.57(1)(b), F.S.,
hearing requirements of having the “opportunity to respond, to present evidence
and argument on all issues involved, to conduct cross-examination and submit
rebuttal evidence.” The six alleged
errors are as follows:
1)
It was factual error to characterize the information in
UIF witness Flynn’s rebuttal testimony exhibits PCF-9, PCF-13 and PCF-17 as
“updated” when the information provided was brand new on March 2, 2017.
2)
It was factual error to characterize the information in
UIF witness Flynn’s rebuttal testimony exhibits PCF-3, PCF-10, PCF-20, PCF-23,
PCF-27, PCF-33, PCF-35, or PCF-41 in material percentage and gross dollar amounts
as “rebuttal,” “updates,” or “updated.”
OPC argues that Mr. Flynn’s rebuttal testimony filed April 3, 2017, was
actually direct testimony raising supplemented and new information.
3)
It was error to state that commencement of discovery on
September 16, 2016, allowed for discovery that could be utilized in responsive
expert testimony when the very first of the missing or incomplete cost support
was not provided prior to February 6, 2017, and, further, that such information
was materially changed in the rebuttal filed on April 3, 2016, or was provided
after the close of business on March 2, 2017.
4)
It was legal and factual error to conclude that Order
No. PSC-10-0611-PCO-WU, issued October 4, 2010, Docket No. 100104-WU, In
re: Application for increase in water
rates in Franklin County by Water Management Services, Inc.; Order No.
PSC-11-0563-PCO-EI, issued December 8, 2011, Docket No. 110138-EI, In
re: Petition for increase in rates by
Gulf Power Company; and Order No. PSC-09-0640-PCO-EI, issued September 21,
2009, in Docket No. 090079-EI, In re:
Petition for increase in rates by Progress Energy Florida, Inc., have
a precedential or factual bearing on the facts of this case.
5)
It was legal and factual error to conclude that Gulf
Power Company v. Bevis, 289 So. 2d 401 (Fla. 1974), applies or governs the disposition
of this case.
6)
In the aggregate, the Order Denying the Motion to
Strike overlooks the fact that the totality of circumstances meant that OPC was
deprived of its right to file responsive expert testimony on 11 enumerated
projects that represent over $8 million of costs that had never been subject to
expert witness scrutiny in time for responsive testimony to be filed. OPC maintains that as a matter of law, its
due process rights are violated by the failure to afford it a reasonable
opportunity to provide responsive expert testimony on the information to which
it objects.
OPC states that it is a mistake of law to suggest that
OPC, as an intervenor, had a burden to “determine the reasonableness of” the
“outrageously late-filed direct evidence that was six months overdue.” OPC maintains that only the utility has the
burden of proof to justify all costs for which it seeks recovery.
OPC argues that if the Order Denying Motion to Strike is
allowed to stand, companies in all industries will be able to file
“placeholder” exhibits promising to provide actual supporting documentation
months later, as was done in this case, instead of filing required cost support
at the outset of a filing. As a result,
OPC states, “customers can be stiff-armed on discovery” and then later when the
omissions are noted in intervenor responsive testimony, the required
documentation will be filed as “rebuttal,” thus thwarting any critical
evaluation by an expert. OPC contends that allowing piecemeal filing is not
contemplated by Section 120.57, F.S., and is inconsistent with Rule 25-30.436,
F.A.C., which establishes the required information to initiate a general rate
increase. OPC contends that this is a case of first impression and has no
antecedent in Commission practice either on basic facts or the sheer breadth of
the number of separate projects with new or radically altered cost estimates.
UIF’s Response
UIF argues
that OPC’s Motion for Reconsideration does not meet the standard for
reconsideration because the six alleged errors are simply more detailed
arguments and factual allegations that were argued in OPC’s Motion to
Strike. Further, UIF maintains that OPC
is not arguing facts or law that were overlooked but devotes its entire
argument to attempting to distinguish the prior Commission orders cited in the
Order Denying the Motion to Strike.
UIF alleges that OPC caused its alleged due process
violation because it had a strategy to not address the merits of the pro forma projects
at issue, and that it made a conscious decision to make sure it did not have an
opportunity to file supplemental testimony.
UIF argues that a party cannot claim a due process violation it has
caused.
UIF contends that OPC had a strategy, at least as far back
as March 6, 2017, of not addressing the merits of witness Flynn’s documentation
of the pro forma project costs. UIF points out that even though OPC’s position
was apparent at that time, it waited three weeks after Mr. Flynn’s prefiled
rebuttal testimony was filed before filing its Motion to Strike, which was
filed at the Prehearing Conference.
UIF acknowledges that the Order Establishing Procedure,
Order No. PSC-16-0558-PCO-WS, issued December 14, 2016, set the deadline for
filing a Motion to Strike as the date of the Prehearing Conference. UIF further states that when OPC took the
deposition of Mr. Flynn, consistent with its strategy to create a due process
issue, it did not address the specific costs of any pro forma project, or why
such costs may have changed. UIF states that although OPC had every opportunity
to cross-examine Mr. Flynn at hearing on the pro forma project costs, it chose
not to do so. UIF believes that if OPC had filed its Motion to Strike earlier,
it would have had the opportunity to file supplemental testimony.
UIF maintains that OPC’s due process rights have not been
infringed upon because all of the pro forma projects were identified and
described in Mr. Flynn’s Prefiled Direct Testimony, witness Woodcock had the
opportunity to visit all of UIF’s systems, and witness Woodcock does not
question the reasonableness or prudence of any project. UIF states that it provided updated
documentation as it became available, and that most of the updates were
provided in discovery responses before Mr. Woodcock filed his Prefiled
Testimony. UIF alleges that OPC
incorrectly states that Mr. Woodcock only had four days to review documents
provided after-hours on March 2, 2017, before he filed his March 6th
testimony. UIF contends that Mr. Woodcock testified on page 43, line 14 of his
prefiled testimony that this documentation was provided “a little more than a
week” before his Prefiled Testimony was due, which UIF contends was sufficient
time “to focus on the significant ones.”
UIF reaffirms that it is not requesting more than the
proposed revenue requirement requested in its MFRs. UIF points to the Pluris Wedgefield
rate case, Order No. PSC-13-0187-PAA-WS, issued May 2, 2013, in Docket No.
120152-WS, for the proposition that the Commission has allowed changes in
individual elements of the revenue requirement so long as the amount originally
requested is not exceeded. Citing to Commission orders addressed in the Order
Denying Motion to Strike, UIF contends that the Commission may or may not agree
to allow all of the pro forma projects in the revenue requirement, but it
should be afforded the opportunity to consider them.
Staff’s Analysis
As
discussed above, OPC raises six alleged errors in its Motion for
Reconsideration. Staff addresses each of the alleged errors below.
Alleged Error 1
OPC argues
that it was a factual error to characterize the information in UIF witness
Flynn’s rebuttal testimony exhibits PCF-9, PCF-13 and PCF-17 as “updated” when
the information was brand new on March 2, 2017. OPC is essentially making the
same argument it made its Motion to Strike — that exhibits PCF-9, PCF-13 and PCF-17 should
have been included in the utility’s direct testimony, not the utility’s
rebuttal testimony. The Prehearing Officer considered OPC’s arguments in regard
to exhibits PCF-9, PCF-13 and PCF-17 in rendering the Order Denying the Motion
to Strike. It is not appropriate to reargue matters that have already been
considered in a motion for reconsideration.
Sherwood, 111 So. 2d at 98.
Alleged Error 2
OPC also argues that it was factual error to characterize
the information in UIF witness Flynn’s rebuttal testimony exhibits PCF-3,
PCF-10, PCF-20, PCF-23, PCF-27, PCF-33, PCF-35, or PCF-41 in material
percentage and gross dollar amounts as “rebuttal,” “updates,” or “updated.” OPC argues that Mr. Flynn’s rebuttal
testimony filed April 3, 2017, was actually direct testimony raising
supplemented and new information. Again, OPC is essentially rearguing its
position in its Motion to Strike that information in exhibits PCF-3, PCF-10,
PCF-20, PCF-23, PCF-27, PCF-33, PCF-35, and PCF-41 should have been included in
the utility’s direct testimony, not its rebuttal testimony. The Prehearing
Officer considered OPC’s arguments in regard to exhibits PCF-3, PCF-10, PCF-20,
PCF-23, PCF-27, PCF-33, PCF-35, and PCF-41 in rendering the Order Denying the
Motion to Strike. It is not appropriate to reargue matters that have already
been considered in a motion for reconsideration. Sherwood, 111 So. 2d at 98.
Alleged Error 3
OPC
further argues that it was error to state that commencement of discovery on
September 16, 2016, allowed for discovery that could be utilized in responsive
expert testimony when the very first of the missing or incomplete cost support
was not provided prior to February 6, 2017, and, further, that such information
was materially changed in the rebuttal filed on April 3, 2017, or was provided
after the close of business on March 2, 2017.
Like its prior arguments, OPC is essentially making the same arguments
it made in its Motion to Strike, which is not appropriate for a motion for
reconsideration. Sherwood, 111 So. 2d at 98.
Alleged Error 4
OPC also asserts that it was legal and factual error to
conclude that Order No. PSC-10-0611-PCO-WU, issued October 4, 2010, in Docket
No. 100104-WU, In re: Application for increase in water rates in Franklin
County by Water Management Services, Inc. (denying OPC’s motion to strike
portions of WMSI’s rebuttal testimony); Order No. PSC-11-0563-PCO-EI, issued
December 8, 2011, in Docket No. 110138-EI, In re: Petition for increase in
rates by Gulf Power Company (denying motion to strike portions of
rebuttal); and Order No. PSC-09-0640-PCO-EI, issued September 21, 2009, in
Docket No. 090079-EI, In re: Petition for increase in rates by Progress
Energy Florida, Inc. (denying intervenors’ motion to reschedule evidentiary
hearings and not allowing the updated load forecast study provided in rebuttal
to result in additional revenue requirements), have a precedential or factual
bearing on the facts of this case. Although characterizing its argument as a
legal or factual error, a close look at OPC’s argument shows that OPC is really
attempting to distinguish the orders from the facts of this case. Disagreement
in the application of prior Commission orders does not represent fact or law
overlooked or not considered and is not an appropriate basis for a motion for
reconsideration. See Stewart Bonded Warehouse, 294 So. 2d at 317;
Diamond Cab Co., 146 So. 2d at 891; and Pingree, 394 So. 2d at
162.
The above orders illustrate that the Commission routinely
considers updated cost information on pro forma projects included in water and wastewater
Minimum Filing Requirements (MFRs). As the Order Denying the Motion to Strike
recognizes, the Commission’s consideration of updated cost information that is
provided during discovery is important to setting fair and reasonable rates,
and may result in the cost of an individual pro forma project either being
increased or decreased from the cost shown in the MFRs.
Alleged Error 5
OPC also
argues that it was legal and factual error to conclude in the Order Denying the
Motion to Strike that Gulf Power Company v. Bevis, 289 So. 2d 401 (Fla.
1974), applies or governs the disposition of this case. Disagreement in the application of case law
does not represent fact or law overlooked or not considered and is not an
appropriate basis for a motion for reconsideration. See Stewart
Bonded Warehouse, 294 So. 2d at 317; Diamond Cab Co., 146 So. 2d at 891;
and Pingree, 394 So. 2d at 162.
Staff agrees with the Prehearing Officer’s interpretation
of Bevis, 289 So. 2d at 401. Disallowing all cost information provided
after the filing of the MFRs, with no consideration of existing facts would be
contrary to law and the ultimate goal of the Commission, “for it is a correct result which is the goal of the
determination and not merely the means or
formula used in arriving at the answer.” Id. at 406.
In a similar docket, Order No. PSC-13-0187-PAA-WS, issued
May 2, 2013, in Docket No. 120152-WS, In re: Application for increase in
water and wastewater rates in Orange County by Pluris Wedgefield, Inc.,
where the utility sought roughly $56,000 in pro forma project costs, but over
the course of the proceeding added approximately $92,000 in additional pro
forma projects, the Commission noted that while the utility submitted pro forma
expense subsequent to filing its MFRs, the utility did not request an increase
in revenue requirement and the evidence was permitted. In its response to the
current motion, UIF has reaffirmed that it is not requesting an increase to its
proposed revenue requirement.
Alleged Error 6
OPC’s
final argument is that the Order Denying the Motion to Strike overlooks the
fact that the totality of circumstances meant that OPC was deprived of its
right to file responsive expert testimony on 11 enumerated projects that
represent over $8 million of costs that had never been subject to expert
witness scrutiny in time for responsive testimony to be filed and that, as a consequence,
its due process rights are violated by the failure to afford it a reasonable
opportunity to provide responsive expert testimony on the information to which
it objects. The whole crux of OPC’s Motion to Strike concerned its due process
arguments. The Prehearing Officer considered OPC’s due process arguments and
specifically found in the Order Denying the Motion to Strike that OPC’s due
process rights have not been violated. It is not appropriate to reargue matters
that have already been considered. Sherwood, 111 So. 2d at 98.
OPC’s due process argument rests
primarily on the assertion that OPC witness Mr. Woodcock did not have the
reasonable and necessary time required to adequately respond to the updated pro
forma project costs submitted by UIF in late February and early March, when his
prefiled testimony was due to be filed on March 6, 2017. These are the same
facts considered in OPC’s Motion to Strike. It is established law that due
process requires that parties to a proceeding be given adequate notice and an
opportunity to be heard. Bresch v. Henderson, 761 So. 2d 449, 451 (Fla.
2d DCA 2000). However, the concept of due process in an administrative
proceeding is less stringent than in a judicial proceeding, and the extent of
procedural due process protections is flexible and calls for such protections
as the particular situation demands. Hadley v. Department of Administration,
411 So. 2d 184, 187 (Fla. 1982). Likewise, in Commission proceedings, where testimony
is prefiled and the witness is subject to cross-examination during the hearing,
the concept of due process is not so limited as OPC argues. In this case, there
were many due process opportunities to test the validity of updated information
throughout the discovery and hearing process, including, but not limited to,
filing supplemental testimony of witness Woodcock, or through
cross-examination, even if OPC chose not to avail itself of such opportunities.
As the Prehearing Officer stated in the Order Denying the
Motion to Strike, the pro forma updated cost information supplied in this case
is not out of the ordinary and can be distinguished from those cases where a
utility seeks to fundamentally change its rate case by correcting what appear
to be material errors in the initial filing. Order No. PSC-96-0279-FOF-WS,
issued February 26, 1996, in Docket No. 950495-WS, In re: Application for
Rate Increase by Southern States Utilities, Inc., citing to Order No.
18335, issued October 22, 1987, in Docket No. 870239-WS, In re: Application
of General Development Utilities (wherein the Commission continued hearing
where utility’s correction to MFRs resulted in an increased revenue requirement
request from its original filing), and Order No. 23123, issued June 26, 1990,
in Docket No. 891114-WS, In re: Application of Sailfish Point Utility
(case dismissed where revised MFR filing resulted in a revised revenue
requirement request). In this docket, UIF has not sought to either add more pro
forma projects, nor is it seeking a revenue requirement higher than its
original filing.
In this case, the MFRs were satisfied, and all the
projects in question were identified at the time of the initial filing and were
then outlined in UIF witness Flynn’s direct testimony. Updates to pro forma are
contemplated by our statute. Section 367.081(2)(a)2, F.S. The updates in this docket
did not constitute any new projects or evidence that substantially changed the
scope of the case.
Conclusion
Based upon the above analysis,
staff recommends the Commission deny OPC’s Motion for Reconsideration as it
does not meet the required standard for a motion for reconsideration.
Issue 3:
Should this docket be closed?
Recommendation:
No, this docket should remain open pending final
resolution of UIF’s rate case. (Trierweiler)
Staff Analysis:
This docket should remain open pending final
resolution of UIF’s rate case.
