Discussion
of Issues
Issue 1:
Should the miscellaneous service charges requested
by Deer Creek RV Golf & County Club, Inc. be approved?
Recommendation:
Yes. The utility’s requested miscellaneous service
charges should be approved. The utility’s requested miscellaneous service
charges are identified in Table 1-5. The charges should be effective on or
after the stamped approval date on the tariff pursuant to Rule 25-30.475,
Florida Administrative Code (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:
Deer Creek currently does not have any authorized
miscellaneous service charges. Section 367.091, F.S., authorizes the Commission
to establish miscellaneous service charges. Deer Creek’s request was
accompanied by its reason for requesting the charges, as well as the cost
justification required by Section 367.091(6), F.S. The utility did not request
recovery of transportation costs within its miscellaneous service charges
because the field employee performing the miscellaneous services will travel by
a golf cart to the customer rather than an automobile. The utility further
explained the appropriateness of transportation by golf cart since the service
territory of the utility is composed of five compact mobile home parks in close
proximity. Additionally, the utility is requesting recovery of regulatory assessment
fees (RAFs) associated with miscellaneous service charges.
The utility’s cost justification for its requested
miscellaneous service charges is shown in Tables 1-1 though 1-4. Staff believes
the utility’s request is appropriate and the charges should be approved. Table
1-5 displays a summary of the utility’s requested miscellaneous service charges.
Initial Connection Charge
The initial connection charge is levied for service
initiation for new customers. A utility representative makes one trip when
performing the service of an initial connection. Staff recommends an initial
connection charge for Deer Creek’s water and wastewater systems of $11.70. The calculation
is shown in Table 1-1.
Table 1-1
Initial Connection Charge
Calculation
|
Activity
|
Cost
|
|
Administrative Labor
($22/hr x 1/4 hr)
|
$5.50
|
|
Field Labor
($17/hr x 1/3 hr)
|
$5.67
|
|
Markup for RAFs
|
$0.53
|
|
Total
|
$11.70
|
Source:
Utility’s Cost Justification
Normal Reconnection Charge
A normal reconnection charge is levied for the
reconnection of service subsequent to a customer requested disconnection. A
normal reconnection requires two trips, which includes one to turn service off
and the other to turn service on. Staff recommends a normal reconnection charge
for Deer Creek’s water and wastewater systems of $20.50. The calculation is
shown in Table 1-2.
Table 1-2
Normal Reconnection Charge
Calculation
|
Activity
|
Cost
|
|
Administrative Labor
($22/hr x 1/4 hr x 2)
|
$11.00
|
|
Field Labor
($17/hr x 1/4 hr x 2)
|
$8.50
|
|
Markup for RAFs
|
$0.92
|
|
Total
|
$20.42
|
Source:
Utility’s Cost Justification
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. Staff recommends a violation reconnection
charge for Deer Creek’s water system of $20.50. However for Deer Creek’s
wastewater system, this charge should be at actual cost pursuant to Rule
25-30.460(1)(c), F.A.C. The calculation is shown in Table 1-3.
Table 1-3
Violation Reconnection
Charge Calculation
|
Activity
|
Cost
|
|
Administrative Labor
($22/hr x 1/4 hr x 2)
|
$11.00
|
|
Field Labor
($17/hr x 1/4 hr x 2)
|
$8.50
|
|
Markup for RAFs
|
$0.92
|
|
Total
|
$20.42
|
Source: Utility’s Cost Justification
Premises Visit Charge
The premises visit charge is levied when a service
representative visits the 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 charge 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. Staff recommends a premises
visit charge for Deer Creek’s water and wastewater systems of $11.70. The
calculation is shown in Table 1-4.
Table 1-4
Premises Visit Charge
Calculation
|
Activity
|
Cost
|
|
Administrative Labor
($22/hr x 1/4 hr)
|
$5.50
|
|
Field Labor
($17/hr x 1/3 hr)
|
$5.67
|
|
Markup for RAFs
|
$0.53
|
|
Total
|
$11.70
|
Source:
Utility’s Cost Justification
Conclusion
Based on the aforementioned, the utility’s requested
miscellaneous service charges should be approved. The utility’s requested miscellaneous
service charges are identified in Table 1-5. 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.
Table 1-5
Miscellaneous Service
Charges
|
|
Utility Requested
|
|
Initial Connection Charge
|
$11.70
|
|
Normal Reconnection Charge
|
$20.50
|
|
Violation Reconnection Charge
(Water Only)
|
$20.50
|
|
Violation Reconnection Charge (Wastewater Only)
|
Actual Cost
|
|
Premises Visit Charge
|
$11.70
|
Source:
Utility’s Cost Justification
Issue 2:
Should Deer Creek RV Golf & Country Club, Inc.’s
request to implement a $6.50 late payment charge be approved?
Recommendation:
Yes. Deer Creek’s request to implement a $6.50 late
payment charge should be approved. Deer Creek should be required to file a
proposed customer notice 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 $6.50 late payment
charge to recover the cost of supplies and labor associated with processing
late payment notices. The utility does not currently have an approved late
payment charge. Deer Creek’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.
The utility has a total of 780 customer accounts and,
according to the utility, there are approximately 39 customers or five percent
of the customer base with delinquent bills each month. The utility indicated it
will spend approximately 9.75 hours each month or 15 minutes per account to
research, compile, and produce late notices. This is consistent with prior
Commission decisions where the Commission has allowed 10-15 minutes per account
per month for the administrative labor associated with processing delinquent
customer accounts. The
delinquent customer accounts will be processed by the administrative employee,
which results in labor cost of $5.50 ($22.00x0.25hr) per account. Additionally,
the utility requested recovery of the costs of supplies, postage, and RAFs
associated with processing delinquent accounts. The utility’s calculation for its
requested late payment charge is shown in Table 2-1.
Table 2-1
Late Payment Charge
|
Labor
|
$5.50
|
|
Supplies
|
$0.22
|
|
Postage
|
$0.49
|
|
Markup for RAFs
|
$0.29
|
|
Total
|
$6.50
|
Source: Utility’s
Cost Justification
Based on staff’s research, over the past seven years the
Commission has approved late payment charges ranging from $4.90 to $7.15.
The purpose of this charge is not only to provide an incentive for customers to
make timely payment, thereby reducing the number of delinquent accounts, but
also to place the cost burden of processing delinquent accounts solely upon
those who are cost causers.
Based on the above, staff recommends that Deer Creek’s
request to implement a $6.50 late payment charge should be approved. Deer Creek
should be required to file a proposed customer notice 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 3:
Should the investigation of meter tampering charge requested
by Deer Creek RV Golf & Country Club, Inc. be approved?
Recommendation:
Yes. Deer Creek’s request to implement a $24 investigation
of 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. (Friedrich)
Staff Analysis:
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
for all changes in piping or equipment necessary to eliminate the illegal use
and to pay an amount reasonably estimated as the deficiency in revenue
resulting from the customer’s fraudulent use before restoring service.
Deer Creek requested an investigation of meter tampering
charge of $24 which included the recovery of administrative support, field
support, and RAF costs associated with the investigation of meter tampering. Consistent
with its cost justification provided for miscellaneous service charges in Issue
1, the utility is not requesting recovery of transportation costs through its
proposed investigation of meter tampering charge because the field employee
will travel to customers via golf cart. The investigation of meter tampering
charge is appropriate only where an investigation reveals evidence of meter
tampering.[4] Staff recommends
the utility’s requested charge is appropriate and should be approved. The
utility’s requested investigation of meter tampering charge is shown in Table
3-1.
Table 3-1
Investigation of Meter
Tampering Charge
|
|
Utility Requested
|
|
Administrative
Support
|
$5.50
|
|
Field Support
|
$17.00
|
|
Markup for RAFs
|
$1.06
|
|
Total
|
$23.56
|
|
Requested Charge
|
$24.00
|
|
Source: Utility’s Cost Justification
Based on the above, Deer Creek’s request to implement a
$24 investigation of 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 4:
Should Deer Creek RV Golf & Country Club, Inc.
be authorized to collect Non-Sufficient Funds (NSF) Charges?
Recommendation:
Yes. Deer Creek should be authorized to collect NSF
charges. Staff recommends that the utility revise its tariffs to reflect the
NSF charges currently set forth in Sections 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. The utility
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 Deer
Creek 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, Deer Creek should be authorized to collect NSF charges. Staff recommends
that Deer Creek revise its tariff sheets to reflect the NSF charges currently
set forth in Sections 68.065 and 832.08(5) 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. The utility
should provide proof of the date the notice was given within 10 days of the
date of the notice.
Issue 5:
Should the requested initial customer deposits for
Deer Creek RV Golf & Country Club, Inc. be approved?
Recommendation:
Yes. The appropriate initial customer deposits are $16
for water and $44 for wastewater service for the
residential 5/8” x 3/4" meter size. The initial customer deposit for all
other residential meter sizes and all general service meter sizes should be two times the
average estimated bill. The approved customer deposits should be effective
for connections made on or after the stamped approval date on the tariff sheets
pursuant to Rule 25-30.475, F.A.C. The utility should be required to collect
the approved initial customer deposits until authorized to change them by the
Commission in a subsequent proceeding. (Friedrich)
Staff Analysis:
Rule 25-30.311, F.A.C., contains criteria for
collecting, administering, and refunding customer deposits. Rule 25-30.311(1),
F.A.C., requires that each company’s tariff shall contain its specific criteria
for determining the amount of initial deposits. Deer Creek’s current tariff does
not authorize the utility to collect initial customer deposits. Deer Creek has
requested an initial customer deposit of $16 for water and $44 for wastewater
service for the residential service 5/8” x 3/4” meter size. The utility also
requested initial customer deposits for all other meter sizes based on two
times the average estimated bill. Customer deposits are designed to minimize
the exposure of bad debt expense for the utility and, ultimately, the general
body of rate payers. In addition, collection of customer deposits is consistent
with one of the fundamental principles of rate making—ensuring that the cost of
providing service is recovered from the cost causer.
Rule 25-30.311(7), F.A.C., authorizes utilities to
collect new or additional deposits from existing customers not to exceed an amount equal to the average
actual charge for water and/or wastewater service for two billing periods for
the 12-month period immediately prior to the date of notice. The two billing
periods reflect the lag time between the customer’s usage and the utility’s
collection of the revenues associated with that usage. Commission
practice has been to set initial customer deposits equal to two months bills
based on the average consumption for
a 12-month period for each class of customers. Staff reviewed the
customer usage data provided by the utility and agree with the utility’s
determination that the average residential usage is approximately 1,904 gallons
per month for both water and wastewater service. Consequently, the average
residential monthly bill is approximately $8.03 for water and $21.85 for
wastewater service.
Based on the above, the appropriate initial customer
deposits are $16 for water and $44 for wastewater service for the residential
5/8” x 3/4" meter size. The initial customer deposit for all other
residential meter sizes and all general service meter sizes should be two times
the average estimated bill. The approved customer deposits should be effective
for connections made on or after the stamped approval date on the tariff sheets
pursuant to Rule 25-30.475, F.A.C. The utility should be required to collect
the approved initial customer deposits until authorized to change them by the
Commission in a subsequent proceeding.
Issue 6:
Should this docket be closed?
Recommendation:
If no person whose substantial interests are
affected by the proposed agency action files a protest within 21 days of the
issuance of the order, a consummating order should be issued. The docket should
remain open for staff’s verification that the revised tariff sheets and
customer notice have been filed by the utility and approved by staff. Once
these actions are complete, this docket should be closed administratively.
(Taylor)
Staff Analysis:
If no person whose substantial interests are
affected by the proposed agency action files a protest within 21 days of the
issuance of the order, a consummating order should be issued. The docket should
remain open for staff’s verification that the revised tariff sheets and
customer notice have been filed by the utility and approved by staff. Once
these actions are complete, this docket should be closed administratively.
