Discussion
of Issues
Issue 1:
Should the Commission grant Harbor Waterworks’
Petition for Declaratory Statement?
Recommendation:
The
Commission should grant the Petition to the extent that it addresses the very
narrowly framed question posed in staff’s analysis and declare that Order Nos.
23039 and 23039-A, which established service availability charges for Harbor
Waterworks, apply to the utility’s irrigation connections. The Commission
should state that the declaratory statement is controlling only as to the facts
described in Harbor Waterworks’ Petition and would not apply to different,
alternative facts. (Page)
Staff Analysis:
The
Commission should grant the Petition and declare that the service availability
charges established in Order Nos. 23039 and 23039-A, apply to Harbor
Waterworks’ irrigation connections. Below is staff’s analysis.
Law Governing Petitions for Declaratory
Statement
Section 120.565, F.S., sets forth the necessary elements
of a petition for declaratory statement.
This section provides:
(1)
Any substantially affected person may seek a declaratory statement
regarding an agency’s opinion as to the applicability of a statutory provision,
or of any rule or order of the agency, as it applies to the petitioner’s particular
set of circumstances.
(2)
The petition seeking a declaratory statement shall state with
particularity the petitioner’s set of circumstances and shall specify the
statutory provision, rule or order that the petitioner believes may apply to
the set of circumstances.
Rule 28-105.001, FA.C., states the purpose of a
declaratory statement:
A declaratory statement is a means for resolving a
controversy or answering questions or doubts concerning the applicability of
statutory provisions, rules, or orders over which the agency has
authority. A petition for declaratory
statement may be used to resolve questions or doubts as to how the statutes,
rules, or orders may apply to the petitioner’s particular circumstances. A declaratory statement is not the appropriate
means for determining the conduct of another person.
Rule 28-105.002(5), F.A.C., requires that a petition for
declaratory statement include a description of how the statutes, rules or
orders may substantially affect the petitioner in the petitioner’s particular
set of circumstances. A party seeking a declaratory statement must not only
show that it is in doubt as to the existence of some right or status, but also
that there is a bona fide, actual, present, and practical need for the
declaration. State Department of
Environmental Protection v. Garcia, 99 So. 2d 539, 544-45 (Fla. 3d DCA 2011). A declaratory statement is intended to enable
members of the public to definitely resolve ambiguities of law in the planning
of their future affairs and to enable the public to obtain definitive binding
advice as to the applicability of agency law to a particular set of facts. Department
of Business and Professional Regulation, Div. of Pari-Mutual Wagering v.
Investment Corp. of Palm Beach, 747 So.
2d 374, 382 (Fla. 1999).
Harbor Waterworks’ Petition for Declaratory
Statement
Harbor
Waterworks’ particular circumstances and facts
Harbor Waterworks’ water service availability charges,
including the plant capacity charge, main extension charge, meter installation fee,
and tap fee, were established by the Commission in Order No. 23039, Docket No.
890554-WU, issued June 6, 1990, In
re: Application of Lake Griffin Utilities, Inc. for Water
Certificate in Lake County. Order No. 23039 was amended by Order No.
23039-A, issued June 11, 1990, to include allowance for funds prudently
invested (AFPI) charges that were inadvertently omitted from the prior order. The
water service availability charges for Harbor Waterworks have not been revised by
the Commission since that time.
According to Order Nos. 23039 and 23039-A and Harbor
Waterworks’ approved tariffs, the water service availability charges for both
Main Extension Charges and Plant Capacity Charges are based upon one equivalent
residential connection set at 350 gallons per day (GPD). This equates to
approximately 10,500 gallons per month (350 GPD x 30 days).
As stated in the Petition, based on historical actual
water usage for the 12 month period October 2016 through September 2017, the
average residential water usage for Harbor Waterworks is 38,751 gallons per
month for all existing customers. The
average irrigation only usage for the existing homes in Phase 6 for the same 12
month period was approximately 44,000 gallons a month. The utility asserts that this does not
include the potable water used inside the homes, which goes through a separate
meter. Harbor Waterworks contends that these irrigation connections are placing
additional capacity demands upon the existing water system.
Harbor Waterworks states that due to excessive water consumption,
it received a letter of non-compliance with its St. Johns River Water
Management-issued consumptive use permit. Also, Harbor Waterworks states that it
is in the process of obtaining additional land to install a back-up well to
meet the current demand on the water system in case one of the existing wells
becomes inoperable. Harbor Waterworks
asserts that without the additional back-up well, it would be unable to meet
the current demand in the event one of the existing wells cannot operate.
The Development has been and is presently building and
selling homes in the Phase 6 area of the Harbor Hills subdivision. There are approximately 53 residential homes currently
being served by Harbor Waterworks in Phase 6.
The Development previously installed separate irrigation lines in Phase
6 that are interconnected into Harbor Waterworks potable water mains in the
subdivision. The water provided via the irrigation main lines is finished
potable water from Harbor Waterworks’ water treatment system and distribution
mains.
Harbor Waterworks states that it recently bought the separate
irrigation lines installed by the Development that are presently used to
provide irrigation water service to its customers in Phase 6. According to the Petition, prior to its
purchase of the separate irrigation lines from the Development, Harbor
Waterworks was only collecting a meter installation charge for the new homes in
Phase 6.
After Harbor Waterworks bought the separate irrigation
lines, the Development requested a statement of charges from Harbor
Waterworks. On October 25, 2017, the
utility provided an invoice of charges to the Development that indicated the
service availability charges for new construction homes in Phase 6. The utility attached the invoice to its
Petition. The charges for the potable
water connection and the separate irrigation water lines were identified. The Petition states that the Development has
contested the separate charges for the irrigation service.
Statutes,
Rules, and Commission Orders Applicable to Harbor Waterworks’ Facts
In its Petition, Harbor Waterworks states that its
declaratory statement is sought on the following statutes, rules, and orders:
Section 367.091(4), F.S., which states in part that:
A utility may only impose and collect those rates and
charges approved by the Commission for the particular class of service
involved. A change in any rate schedule
may not be made without commission approval.
Section 367.101(1), F.S., addresses service availability
charges and states:
The Commission shall set just and reasonable charges
and conditions for service availability.
The Commission by rule may set standards for and levels of service-availability
charges and service-availability conditions.
Such charges shall be just and reasonable.
Rule 25-30.515(8), F.A.C., defines an Equivalent
Residential Connection as:
(a) 350 gallons per day;
(b) The number of gallons a utility
demonstrates is the average daily flow for a single residential unit; or
(c) The number of gallons which has
been approved by the Department of Environmental Protection for a single
residential unit.
Commission Order No. 23039, issued June 6, 1990, in Docket
No. 890554-WU, In re: Application of Lake Griffin Utilities, Inc. for Water Certificate in Lake County, which
set the service availability charges for Harbor Waterworks.
Commission Order No. 23039-A, issued June 11, 1990, in
Docket No. 890554-WU, In re: Application of Lake Griffin Utilities, Inc. for Water Certificate in Lake County, which
amended Order No. 23039 to include the AFPI charges for Harbor Waterworks that
were inadvertently omitted from Order No. 23039.
Declaratory Statement requested by Harbor Waterworks
In
paragraph 24 of its Petition, Harbor Waterworks requests that the Commission
issue a declaratory statement confirming that at a minimum the second
irrigation connection to homes in Phase 6 are subject to the FPSC approved
service availability charges including:
a.
Plant Capacity Charge,
b.
Main Extension Charge,
c.
Service Installation Charge,
d.
Meter Installation Fee, and
e.
AFPI charge.
Intervenors: The Development and The Association
The Development and the Association
have intervened in this proceeding. They assert that the Petition is the
incorrect procedural mechanism for the relief requested by the utility and that
the utility should not be allowed to use this procedure as an “end around” of the
application process for new charges and rates.
The Intervenors allege that the
Petition seeks permission to impose and collect charges that are not contained
in Order Nos. 23039 and 23039-A. They assert that to the extent Harbor
Waterworks wants to collect charges not contained in the Orders and the
utility’s tariffs, Harbor Waterworks should apply for approval of new charges
and rates. They assert that the charges contained in the invoice attached to
the Petition effectively double the connection charges that were previously being
imposed and collected.
They state that the separate
charges for irrigation connections that Harbor Waterworks seeks to impose and
collect are not permitted under applicable rules and are not warranted. They
contend that while there may be separate lines for irrigation service, the
irrigation lines are interconnected into the potable water mains in the
subdivision: “Given that there is only one connection to the utility’s main,
there should only be one connection charge imposed.”
The Intervenors further state
that the utility has not provided any evidence demonstrating how the additional
charges for irrigation actually relate to the cost incurred by the utility.
They opine that “such evidence also would be important considering that the
most recent annual report for Harbor Waterworks appears to show a rate of
return for water services in excess of 24%.”
Staff Analysis on Harbor Waterworks’
Petition
Harbor
Waterworks’ has met pleading requirements to issue declaratory statement
The
Development and the Association raise the issue of whether a declaratory
statement is the proper procedural mechanism for the resolution of the question
raised by Harbor Waterworks. The purpose of a declaratory statement is to
address the applicability of statutory provisions, orders, or rules of the
agency in particular circumstances. See
Chiles v. Department of State, Division
of Elections, 711 So. 2d 151, 154 (Fla. 1st DCA 1998). One of the purposes
of a declaratory statement is to help avoid costly administrative
litigation. Id. at 151; Citizens of the
State of Florida v. Florida Public Service
Commission and Utilities, Inc., 164 So. 3d 58, 62 (Fla. 1st DCA 2015).
According to Harbor Waterworks’
Petition, the Development requested service availability letters with the
appropriate service availability charges for new construction of homes in Phase
6. Harbor Waterworks’ Petition further
states that the Development has contested the separate charges for the irrigation
service.
In point of fact, Harbor
Waterworks has assessed the fee; however, it has not collected the fee because
the Development called into question the assessment. Rule 28-105.001, F.A.C., provides that a
declaratory statement is a means for resolving a controversy or answering questions
or doubts concerning the applicability of statutory provisions, rules or orders
over which an agency has authority.
Harbor Waterworks has set forth in its Petition that it has a question
concerning the applicability of Order Nos. 23039 and 23039-A to its particular
facts and circumstances. Further, in the
absence or denial of a declaratory statement, staff believes that this
situation may likely result in administrative litigation and that a declaratory
statement may help avoid costly litigation.
See Chiles 711 S. 2d at 151; Citizens of the State of Florida, 164
So. 3d at 62.
The Intervenors assert in their
response to the Petition that Harbor Waterworks seeks permission to impose and
collect charges that are not contained in Order Nos. 23039 and 23039-A and
point to the invoice attached to the Petition as evidence thereof. However, the question Harbor Waterworks is
asking the Commission to address may be framed very narrowly as whether the
service availability charges established in Order Nos. 23039 and 23039-A apply
to irrigation connections. As a result,
staff does not believe that the Petition, as framed, is an “end around” of the application process
for new charges and rates.
Declaratory
Statement that should be issued
Staff
recommends that the Commission declare that based on the facts set forth in
Harbor Waterworks’ Petition, the service availability charges established in Order
Nos. 23039 and 23039-A apply to the utility’s irrigation connections. Order No.
23039 states that the service availability charges established in the order apply
to connections made on or after the stamped approval date on the tariff sheets.
The Order does not distinguish between water connections and irrigation
connections.
Service
availability charges are designed to reimburse the utility for a portion of the
cost of its facilities based on the customers’ potential demand on the system. See Rule 25-30.530(3)(c)2., F.A.C.
(stating that the costs to be charged to a particular customer shall be
determined according to the hydraulic demand of the customer) and Rule
25-30.515(12), F.A.C. (stating that the main extension charge is determined on
a hydraulic share basis). As the water provided via the irrigation connections
is finished potable water from Harbor Waterworks’ water treatment system and
distribution mains, all water demand, including irrigation service, place a
demand on Harbor Waterworks’ potable water system. The service availability
charges established by Order Nos. 23039 and 23039-A were designed to reimburse
the utility for a portion of its investment in the facilities used to provide water
service, including irrigation service.
The rationale
as to why the Commission establishes service availability charges and why service
availability charges would apply to irrigation connections is illustrated by
the facts set forth in Harbor Waterworks’ Petition. The utility alleges in its
Petition that the irrigation connections are placing additional capacity
demands upon the existing water system. The demand a customer places on the
water system should be the basis for determining the appropriate service
availability charges. See id.
The
Development and the Association assert that Harbor Waterworks is using the
declaratory statement procedure in lieu of an application for new charges and
rates. Staff disagrees. Harbor Waterworks has always had the ability under
Order Nos. 23039 and 23039-A and its tariff to charge for additional demand any
customer, including irrigation customers, may place on the system.
Rule
28-105.001, F.A.C., states that a declaratory statement is not the appropriate
means for determining the conduct of another person. Staff agrees with the Intervenors that a
declaratory statement proceeding is not the proper vehicle to change
Commission-approved service availability charges. To the extent Harbor
Waterworks’ Petition may be construed as a request to increase the utility’s
service availability charges in Order Nos. 23039 and 23039-A and the utility’s tariffs, the Petition should be
denied. To the extent Harbor Waterworks may be requesting the Commission to
confirm that the charges in the invoice attached to its Petition are correct or
that the Development or the Association must pay the service availability
charges assessed in the invoice, the Petition should also be denied.
Conclusion
For the
reasons set forth above, staff recommends that the Commission should grant the
Petition to the extent that it addresses the very narrowly framed question
posed in staff’s analysis and declare that Order Nos. 23039 and 23039-A, which
established service availability charges for Harbor Waterworks, apply to the
utility’s irrigation connections. The Commission should state that the
declaratory statement is controlling only as to the facts described in Harbor
Waterworks’ Petition and would not apply to different, alternative facts.
Issue 2:
Should this docket be closed?
Recommendation:
Yes, if the Commission votes to either grant or deny
the Petition for Declaratory Statement, the docket should be closed.
Staff Analysis:
Whether the Commission
grants or denies the petition, a final order will be issued. Upon issuance of
the final order, the docket should be closed.
