Case Background
On July 10,
2018, Pine Harbour Waterworks, Inc. (Pine Harbour or Utility) filed an
application to amend Certificate No. 450-W, in order to expand its existing
territory to include seven current customers that are located outside of, and adjacent
to, its certificated area in Lake County. Pine Harbour provides water service
to approximately 65 customers. When Pine Harbour acquired the water system in
2016, the previous owner was serving six of the seven customers located outside
of the certificated territory. In 2017 Pine Harbour added the seventh customer located
outside of its certificated territory.
The Utility has
been under Florida Public Service Commission (Commission) jurisdiction since October
22, 1985. The Commission granted Certificate No.
450-W to Mr. Earl W. Stockwell in 1990 and this certificate was subsequently
transferred to Mr. Jim C. Branham in 1991. Upon Mr. Branham’s death on April 14,
2007, the Utility became a part of his estate. On May 11, 2007, the Circuit
Court for Lake County, Florida appointed Ms. Sandra Wesson as personal
representative of the Estate of Jim C. Branham. During the probate of Mr.
Branham’s Estate, the Court granted Ms. Wesson authority to manage and operate
the Utility. The Commission subsequently transferred the certificate to Pine
Harbour Water Utilities, LLC on October 6, 2008.
The Commission
approved the transfer of the water system and Certificate No. 450-W to Pine
Harbour Waterworks, Inc. on February 2, 2017.[4] On January 23, 2018, Pine Harbour filed an
application for staff-assisted rate case.[5] During Commission staff’s review of the
submitted application, supporting documentation, and the legal territory
description in that docket, staff discovered that the Utility is serving seven
customers outside of its certificated territory.
The Commission
has jurisdiction pursuant to Section 367.045, Florida Statutes (F.S.)
Discussion
of Issues
Issue 1:
Should Pine Harbour be required to show cause why it
should not be fined for an apparent violation of Section 367.045(2), F.S., for
serving customers outside of its Commission approved territory
Recommendation:
No. A show cause proceeding for Pine Harbour’s
potential violation of Section 367.045, F.S., should not be initiated as it
appears that the Utility unknowingly serviced of customers outside of its
certificated territory. Such conduct would not be a willful violation of
Chapter 367, F.S., or a lawful rule or order of the Commission, and thus, would
not be subject to penalties pursuant to Section 367.161, F.S. (Schrader)
Staff Analysis:
Pursuant to Section 367.045(2), F.S., a utility may
not delete or extend its service outside the area described in its certificate
of authorization until it has obtained an amended certificate of authorization
from the Commission. Section 367.161(1), F.S., authorizes the Commission to
assess a penalty of not more than $5,000 for each offense, if a utility is
found to have knowingly refused to comply with, or to have willfully violated,
any provision of Chapter 367, F.S. By serving customers outside of its
certificated territory without obtaining an amended certificate of
authorization, the Utility’s act may have been “willful” within the meaning of
Section 367.161, F.S. Willfulness is a question of fact. Fugate v. Fla. Elections Comm'n, 924 So. 2d 74, 76 (Fla. 1st DCA
2006). Utilities are charged with the knowledge of the Commission’s statutes
and rules; however a mere technical violation of a statute or rule, even when
the underlying act is intentional in nature, may not rise to the level of a
“willful” violation.
The term “willful” is not defined in Chapter 367, F.S. The
plain meaning of “willful” typically applied by Florida courts, in the absence
of a statutory definition, is that an act or omission must be “voluntarily and
intentionally performed with specific intent and bad purpose to violate or
disregard the requirements of the law.” Fugate
at 76. With this standard in mind, an important distinction can be drawn
between a water or wastewater utility intentionally providing service to
customers that are located outside of its certificated territory, but, not
knowing those customers to be so located; and a water or wastewater utility
providing service to customers it knows are outside of its service territory.
Pine Harbour asserts that its service of customers outside
of its certificated territory was unknowing,
and, given the totality of facts in this docket and Docket 20180022-WU, staff
finds this assertion to be credible. When Pine Harbour acquired the utility, 6
of the 7 homes currently being serviced outside of the certificated territory
were already being served by the previous owner. Furthermore, during staff’s
evaluation of Pine Harbour’s legal territory description in its staff-assisted
rate case, Docket No. 20180022-WU, when Commission Staff notified the Utility
that it was serving customers outside of its certificated territory, Pine
Harbour immediately filed the instant application to correct its oversight by
requesting the territory be added to its service area.
Based on the foregoing, staff recommends that the Pine
Harbour’s apparent violation of Section 367.045(2), F.S., does not rise to the
level which warrants the initiation of a show cause proceeding. Therefore, Pine
Harbour should not be required to show cause for failure to obtain an amended
certificate of authorization prior to serving outside of its certificated
territory.
Issue 2:
Should the Commission acknowledge Pine Harbour
Waterworks, Inc.’s quick-take application to amend Certificate No. 450-W to
extend its service territory in Lake County?
Recommendation:
Yes. The Commission should acknowledge Pine Harbour’s
application to extend its service territory. The rates and charges approved by
the Commission for Pine Harbour’s service area should be applied to the
customers in the new service territory. The resultant order should serve as
Pine Harbour’s amended certificate and it should be retained by the Utility.
(Salvador)
Staff Analysis:
On July 10, 2018, Pine Harbour filed an application
to amend Certificate No. 450-W in Lake County, pursuant to Rule 25-30.036,
Florida Administrative Code (F.A.C.). Pine Harbour completed the application on
September 16, 2018. The requested territory is contiguous to the Utility’s
existing service territory and is limited to the area occupied by the seven
customers currently located outside of its certificated territory. Beyond these
seven specified customers, additional customers are not being added pursuant to
this amendment.
The application complies with the governing statute,
Section 367.045(2), F.S. The Utility has provided an adequate territory
description and service territory maps as prescribed by Rule 25-30.036(2)(f)
and (h), F.A.C. The territory description is appended to this recommendation as
Attachment A. The Utility has submitted an affidavit, consistent with Section
367.045(2)(d), F.S., that it has tariffs and annual reports on file with the
Commission.
Staff recommends that the rates and charges approved by
the Commission for Pine Harbour’s service area should be applied to the
customers in the new service territory. The Utility has filed a revised tariff
sheet incorporating this additional territory into its tariff.
The Utility has satisfied all of the conditions required
by Rule 25-30.036(3) F.A.C. No protests have been filed in this docket, and the
time for doing so has expired. Therefore, the Commission should approve the request
for a quick-take amendment to extend the service territory.
Conclusion
Based on
the above information, the Commission should acknowledge Pine Harbour’s
application to extend its service territory. The rates and charges approved by
the Commission for Pine Harbour’s service area should be applied to the
customers in the new service territory. The resultant order should serve as
Pine Harbour’s amended certificate and it should be retained by the Utility.
Issue 3:
Should this docket be closed?
Recommendation:
Yes. No further action is necessary in this docket;
it should be closed upon issuance of a Final Order. (Schrader)
Staff Analysis:
No further action is necessary in this docket; it
should be closed upon issuance of a Final Order.
Pine Harbour Waterworks, Inc.
Lake County
Territory to be
added: A, B and C
Pine Harbour
Waterworks, Inc. - Water System Service Territory (A)
A Utility Service Territory located within Section 31,
Township 18 South, Range 26 East, Lake County, Florida. From the Southeast
corner of Section 31, run North 89° 39' 9.17" West, 3,217.54 feet to the
Point of Beginning "A". From said Point of Beginning run North 0° 23'
48.20" West, 347.51 feet; thence South 54° 50' 1.11" West, 590.59
feet; thence South 89° 7' 56.32" East, 485.26 feet to the Point of
Beginning "A".
Pine Harbour
Waterworks, Inc. - Water System Service Territory (B)
A Utility Service Territory located within Section 6,
Township 19 South, Range 26 East, Lake County, Florida. From the Northeast
corner of Section 6, run South 75° 12' 5.73" West, 3,883.18 feet to the
Point of Beginning "B". From said Point of Beginning run South 0° 57'
41.79" West, 136.79 feet; thence South 39° 50' 55.58" East, 32.61
feet; thence South 89° 36' 33.95" East, 63.72 feet; thence North 0° 28'
13.82" East, 138.73 feet; thence North 74° 13' 53.21" West, 86.71
feet to the Point of Beginning "B".
Pine Harbour
Waterworks, Inc. - Water System Service Territory (C)
A Utility Service Territory located within Section 6,
Township 19 South, Range 26 East, Lake County, Florida. From the Northeast
corner of Section 6, run South 68° 39' 41.22" West, 2,814.06 feet to the
Point of Beginning "C". From said Point of Beginning run South 0° 23'
25.65" West, 137.58 feet; thence South 89° 36' 34.04" East, 425 feet;
thence North 1° 9' 3.43" East, 133.63 feet; thence North 89° 4'
37.80" West, 426.79 feet to the Point of Beginning "C".
Resulting Water
Territory
A Utility Service Territory located within Section 6,
Township 19 South, Range 26 East, and Section 31, Township 18 South, Range 26
East, Lake County, Florida. From the Northeast corner of Section 6, run North
89° 44' 52" West 2,720 feet to the Point of Beginning. From said Point of
Beginning run North 89° 7' 24" West 487.87 feet; thence North 0° 23'
48" West 347.51 feet; thence South 55° 14' 42" West 640 feet; thence
South 0° 57' 42" West 1,129.22 feet; thence South 39° 50' 56" East
32.61 feet; thence South 89° 19' 46" East 63.72 feet; thence North 0° 23'
26" East 139.05 feet; thence South 89° 31' 46" East 1,050 feet;
thence South 0° 23' 26" West 137.58 feet; thence South 89° 36' 34"
East 425 feet; thence North 1° 9' 3" East 347 feet; thence North 27° 19'
14" West 541.61 feet; thence North 62° 15' 52" West 297.75 feet;
thence North 6° 29' 36" West 211.13 feet to the Point of Beginning.
FLORIDA PUBLIC SERVICE COMMISSION
Authorizes
Pine Harbour Waterworks, Inc.
Pursuant to
Certificate Number 450-W
To provide water service in Lake
County in accordance with the provisions of Chapter 367, Florida Statutes,
and the Rule, regulations, and Orders of this Commission in the territory
described by the Orders of this Commission. This authorization shall remain in
force and effect until superseded, suspended, cancelled or revoked by Order of
this Commission.
Order Number Date Issued Docket Number Filing Type
Order No. 15285 10/22/1985 850417-WU Original Certificate
Order No. 24273 03/21/1991 900525-WU Transfer of Certificate
PSC-08-0645-FOF-WU 10/06/2008 080269-WU Transfer
of Certificate
PSC-17-0043-PAA-WU 02/02/2017 160169-WU Transfer of Certificate
* * 20180134-WU Amendment
* Order Numbers and
dates to be provided at time of issuance
