Case Background
On December 26,
2018, Florida Public Utilities Company (FPUC) filed a petition to temporarily waive
Rule 25-7.045(4)(a), Florida Administrative Code (F.A.C.). The rule requires natural gas distribution
utilities to file a depreciation study at least once every five years. FPUC’s
next study was due January 14, 2019. FPUC is requesting that it be permitted to
submit its study no later than March 4, 2019. It also requests that subsequent
due dates be based on the March filing date.
Notice of FPUC’s
petition was published in the January 4, 2019, edition of the Florida
Administrative Register, Vol. 45, No. 3, as required by Section 120.542(6),
Florida Statutes (F.S.). No one commented on the petition within the 14-day
comment period provided by Rule 28-104.003, F.A.C. In accordance with section
120.542(8), F.S., the petition is deemed approved if the Commission does not
approve or deny it by March 26, 2019.
The Commission
has jurisdiction under Sections 120.542, 350.115, 366.04, .05, and .06, F.S.
Discussion
of Issues
Issue 1:
Should the Commission grant
FPUC’s request for a temporary waiver from Rule 25-7.045(4)(a), F.A.C.?
Recommendation:
Yes. The Commission should grant FPUC’s petition and
require that FPUC file its depreciation study no later than March 4, 2019. The
Commission should also order that FPUC’s next depreciation study will be due
within five years from the date that it files its March 2019 depreciation study.
(King, DiPietro)
Staff Analysis:
FPUC is requesting that the Commission grant it a
temporary waiver of Rule 25-7.045(4)(a), F.A.C. Pursuant to the rule, FPUC was
required to file a depreciation study by January 14, 2019.
Legal Standard for Rule Waivers
Pursuant to Section 120.542(2), F.S., the Commission is
required to grant waivers and variances from its rules “when the person subject
to the rule demonstrates that the purpose of the underlying statute will be or
has been achieved by other means by the person and when application of a rule
would create a substantial hardship or would violate principles of fairness.” The
section defines a “substantial hardship” as a “demonstrated economic,
technological, legal, or other type of hardship.”
Under Rule 25-7.045(4)(a), F.A.C., natural gas distribution
utilities are required to submit a depreciation study for Commission review at
least once every five years. The rule implements several statutes. Section
350.115, F.S., allows the Commission to “approve or establish adequate, fair,
and reasonable depreciation rates and charges.” Section 366.06(1), F.S.,
requires the Commission to “investigate and determine the actual legitimate
costs of the property of each utility company, . . . less accrued depreciation.”
To accomplish these tasks, the Commission is permitted under Section
366.04(2)(f), F.S., to “prescribe and require the filing of periodic reports
and other data as may be reasonably available.”
FPUC’s Petition
FPUC’s current depreciation study was due on January 14,
2019, but it claims that preparing the study would create a substantial
hardship. FPUC states that it was severely affected by Hurricane Michael, which
wreaked havoc in several counties it serves in the Florida panhandle. FPUC argues
that due to the effects of Hurricane Michael, its “plant accounting [personnel]
have been faced with an unusually increased workload, some of which is outside
the scope of their typical tasks.” FPUC claims that preparing the depreciation
study is a “time-consuming, difficult task” under ordinary circumstances, but marshalling
its already strained resources to complete the study before the recently passed
deadline under current circumstances would have resulted in an undue hardship.
FPUC also argues that the purpose of the underlying
statutes will still be fulfilled should the Commission grant the waiver. FPUC
will still furnish the Commission with the required data, albeit slightly
delayed.
FPUC has asked that it be permitted to submit its study on
or before March 4, 2019. FPUC has also requested that its next depreciation study
be due within five years of the extended March 2019 filing date.
Conclusion
The Commission has previously determined that staffing
limitations can create substantial hardships in the timely filing of
depreciation studies. The
Commission has also recently granted FPUC a waiver from the rule requiring it
to send out monthly billing statements under Rule 25-6.100(1), F.A.C., based on
the effects of Hurricane Michael. Staff
believes a staffing limitation caused by Hurricane Michael constitutes a
substantial hardship under the statute.
Section 366.04(2)(f), F.S., allows the Commission to
require a utility to periodically file depreciation studies in order to
facilitate the Commission’s duty under Sections 350.115 and 366.06(1), F.S., to
determine accurate depreciation costs for the utility. The short delay will not
affect the Commission’s ability to establish adequate, fair, and reasonable depreciation
rates and charges. FPUC has not submitted any customer rate requests to the
Commission on or since January 14, 2019, nor has it submitted a test year notification
letter under Rule 25-7.140, F.A.C. For these reasons, the purpose of the
statute will still be achieved if FPUC is granted a seven-week extension to
submit its study.
Staff believes that FPUC’s request to file its study on or
before March 4, 2019, is reasonable and that FPUC should be granted a temporary
rule waiver until this date. Moreover, the Commission should order that FPUC’s
next depreciation study will be due within five years from the date that it
files its March 2019 depreciation study.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. 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 and this docket
should be closed.
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 and this docket
should be closed. (King)
