Case Background
Crooked Lake
Park Sewerage Company (Crooked Lake or utility) is a Class C wastewater utility
serving approximately 416 customers in Polk County. Water service is provided
by Park Water Company, Inc. The utility’s service area is comprised of two
mobile home parks.
By Order No.
PSC-15-0142-PAA-SU, issued March 26, 2015, the Commission approved Phase I and
Phase II rates for Crooked Lake. The Phase II rates were to be implemented upon
the utility’s completion of four pro forma projects, one of which was a condition
of the utility’s Department of Environmental Protection (DEP) wastewater
treatment plant (WWTP) operating permit, and staff’s verification of
completion. The utility was given 12 months from the effective date of the
consummating order to complete the projects. The consummating order was issued
on April 20, 2015; therefore, the pro forma projects were to
be completed by April 20, 2016. In addition, the utility was required to
purchase commercial general liability insurance and provide proof of purchase
and continued payment of the insurance premiums prior to the implementation of
the Phase II rate increase.
On March 31,
2016, the utility requested an extension of approximately three months to
complete the projects due to scheduling delays from subcontractors and
emergency repair work in the service area. By Order No. PSC-16-0204-FOF-SU,
issued May 19, 2016, in this docket, the utility was given until July 31, 2016,
to complete the Phase II pro forma projects. In the event the utility did not
meet its July 31, 2016 deadline, staff was given administrative authority to
grant the utility an additional six months to complete the Phase II pro forma
projects. Pursuant to that order, the utility has requested and been granted
additional extensions through January 31, 2017, to complete the pro forma
projects. The utility has provided documentation in support of two of the four
pro forma projects. On August 30, 2017,
the utility requested an extension until December 31, 2017, to complete the
remaining Phase II pro forma projects and subsequently, on October 25, 2017,
the utility requested an additional extension until March 31, 2018 to complete
the projects.
This
recommendation addresses the utility’s request for an extension through March
31, 2018, to complete the remaining pro forma projects. The Commission has
jurisdiction pursuant to Section 367.121, F.S.
Discussion
of Issues
Issue 1:
Should the Commission approve Crooked Lake's request
for extension of time to complete the remaining Phase II pro forma projects?
Recommendation:
Yes. The Commission should approve Crooked Lake’s request
for an extension of time to complete the remaining Phase II pro forma projects
by March 31, 2018. Upon completion of the pro forma plant items, the utility
should submit a copy of the final invoices and cancelled checks for the
remaining Phase II pro forma projects and documentation that the general
liability insurance is being maintained by April 30, 2018. (Bruce)
Staff Analysis:
As discussed in the case background, pursuant to
Order No. PSC-16-0204-FOF-SU, Crooked Lake was given an extension to complete
the four pro forma projects by July 31, 2016, and provide documentation that
the general liability insurance was renewed. In the event the utility did not
complete the pro forma projects by the July 31, 2016 deadline, staff was given
administrative authority to grant additional time.
On June 16, 2016, the utility requested a three-month
extension to complete the projects; on June 30, 2016, staff granted the
utility’s request for an extension, which extended the completion deadline to
October 31, 2016. On October 24, 2016, the utility requested another extension
of time until January 31, 2017, to complete the pro forma projects. By letter
dated November 7, 2016, staff granted the three-month extension and indicated
that the pro forma projects should be completed by January 31, 2017.
The utility failed to provide the required documentation
by the January 31, 2017 deadline and, on March 3, 2017, staff sent the utility
a Notice of Noncompliance for failing to submit documentation to show the
completion of the Phase II pro forma projects as required by Order No.
PSC-16-0204-FOF-SU. The Notice of Noncompliance described the potential
consequences of noncompliance pursuant to Section 367.161, F.S. On March 20,
2017, the utility responded to staff’s Notice of Noncompliance indicating that
one of the four projects, the project that was the subject of the DEP WWTP
permit, had been completed. Following several attempts by staff to contact the
utility, on June 19, 2017, staff sent a letter requesting that the utility
provide documentation of the remaining three projects by June 30, 2017. The
letter further indicated that, if the documentation was not received, staff
would prepare a recommendation to have the Phase II rates adjusted to reflect
only the pro forma costs that had been verified. On August 30, 2017, the
utility provided documentation to confirm that a second project, the electrical
control panel replacement, was completed in 2014 and requested that it be
granted an extension through December 31, 2017, to complete the remaining Phase
II pro forma projects. Subsequently, on October 25, 2017, the utility requested
an additional extension through March 31, 2018.
Staff has reviewed the documentation related to the
construction of the surge tank, digester tank, and sludge bed, which was a
condition of the utility’s DEP WWTP operating permit, as well as the
replacement of the electrical control panel and believes the projects are
completed. According to the utility, it is currently working on completing the
remaining projects, mapping and cleaning the collection system and replacement
of approximately 2,100 feet of 4” force main, and is very close to being
completed. However, the utility requested an extension to allow for scheduling
delays resulting from subcontractor labor shortage, weather delays, and
emergency work to lines and manholes as well the impact that Hurricane Irma has
had in the area. The utility further indicated that it had to re-direct its
crews and revise schedules to fix various lines and emergency work in the
service area. Staff believes the request for an extension of time to complete
the construction is reasonable.
Based on the foregoing, staff recommends that the
Commission should approve Crooked Lake’s request for an extension of time to
complete the remaining Phase II pro forma projects by March 31, 2018. Upon
completion of the pro forma plant items, the utility should submit a copy of
the final invoices and cancelled checks for the remaining Phase II pro forma
projects and documentation that the general liability insurance is being
maintained by April 30, 2018.
Issue 2:
Should this docket be closed?
Recommendation:
No. The docket should remain open to allow staff
time to verify that the Phase II pro forma projects have been completed, that
the supporting documentation related to the pro forma projects and insurance
have been provided, and the Phase II rates have been properly implemented. Once
these actions are complete and verified by staff this docket should be closed
administratively. (DuVal)
Staff Analysis:
No. The docket should remain open to allow staff
time to verify that the Phase II pro forma projects have been completed, that
the supporting documentation related to the pro forma projects and insurance
have been provided, and the Phase II rates have been properly implemented. Once
these actions are complete and verified by staff this docket should be closed
administratively.
