Case Background
FIMC Hideaway, Inc. (FIMC or Utility) is a
Class C utility which was granted water and wastewater certificates in 1984 to
serve the Hideaway development when Levy County turned jurisdiction over to the
Florida Public Service Commission (Commission) in 1983.[1] The Hideaway systems were transferred to
Florida Investors Mortgage Corporation (FIMC) Hideaway, Inc. in 1992 following
its foreclosure on the Utility.[2] Subsequently, a transfer of majority
organizational control was approved in 2005 when the Utility stock was acquired
by the current owners.[3] In 2009, the Commission approved the
transfer of the Springside water and wastewater systems from Par Utilities,
Inc. to FIMC Hideaway, Inc.[4] The Hideaway and Springside water and
wastewater systems were interconnected in April 2013.
On June 22, 2017, FIMC filed an application
for a staff-assisted rate case (SARC). Pursuant to Order No. PSC-2018-0389-PAA-WS, the Commission approved rates and
charges for FIMC. Order No. PSC-2018-0389-PAA-WS, additionally ordered:
[T]he overall quality of service provided
by FIMC Hideaway, Inc. shall be considered marginal until the utility can
sufficiently demonstrate that it meets the Department of Environmental
Protection’s [DEP] secondary water standards. The [U]tility shall file the
results of its next primary and secondary water standards tests with this
Commission in this docket by November 1, 2018. If the results are unfavorable,
our staff will bring this item to this Commission by March 1, 2019, for further
action.
By email, on October 8, 2018, FIMC provided
to staff the results of its most recent DEP primary and secondary water tests. By
letter dated November 6, 2018, Commission staff notified the Utility that this
item would be brought to the Commission for consideration at the February 5,
2019 Commission Conference. This recommendation addresses the test
results provided by FIMC and staff’s recommendation as to further action. The
Commission has jurisdiction pursuant to Sections 367.011, 367.081, 367.0812,
367.0814, and 367.091, Florida Statutes (F.S.).
Discussion
of Issues
Issue 1:
What further action should be taken considering
FIMC’s failure to meet DEP secondary water quality standards?
Recommendation:
Staff recommends that the Commission direct FIMC to
create an estimate of costs and benefits of a plausible solution to reduce sulfates
and total dissolved solids to a level that is within acceptable DEP standards.
Staff additionally recommends that the Commission direct FIMC to meet with its
customers to discuss the estimated costs and benefits of and the time necessary
for implementing a plausible solution to reduce sulfates and total dissolved
solids to a level that is within acceptable DEP standards. The Utility should
report the results of such meeting(s) to the Commission by August 6, 2019.
After analyzing FIMC’s report, staff will bring this item before the Commission
for further action, if needed. (Lewis)
Staff Analysis:
Pursuant to Section
367.081(2)(a)1., F.S., in water and wastewater rate cases, the Commission shall
consider the quality of service provided by a utility. Additionally, Section
367.0812(2), F.S., states:
(2)(a) In
determining the quality of water service, the commission shall consider a
finding by the Department of Environmental Protection as to whether the utility
has failed to provide water service that meets the secondary water quality
standards of the department.
(b) The utility
shall create an estimate of the costs and benefits of a plausible solution to
each issue identified by the commission.
(c) The utility
shall meet with its customers within a time prescribed by the commission to
discuss the estimated costs and benefits of and time necessary for implementing
a plausible solution for each quality of water service issue identified, and
the utility shall report the results of such meetings to the commission.
(d) The utility
shall inform the commission, if:
1. The customers and
the utility agree on a solution for each quality of water service issue
identified, of each agreed-on solution and the cost of each solution; or
2. The customers and
the utility prefer a different solution to at least one of the quality of water
service issues identified, of the preferred solutions by each and the cost of
each solution.
By Order No.
PSC-2018-0389-PAA-WS, the Commission determined the Utility’s quality of
service to be marginal based in part on the Utility not meeting DEP secondary
standards for sulfates and total dissolved solids. The Commission additionally
ordered the Utility to file updated test results by November 1, 2018. On
October 8, 2018, FIMC timely provided its test results to Commission staff. The
test results indicated the water service provided by the Utility continues to
exceed DEP standards for sulfates and total dissolved solids. The reading for
sulfates was 426 mg/L (milligrams per Liter) which exceeds the 250 mg/L maximum
containment level (MCL) 250 mg/L. The reading for total dissolved solids was
992 mg/L which exceeds the 500 mg/L MCL standard.
Given the unfavorable test results and the requirements of
Section 367.0812(2), F.S., staff recommends that the Commission direct FIMC to
create an estimate of costs and benefits of a plausible solution to reduce
sulfates and total dissolved solids to a level that is within acceptable DEP
standards. Staff notes that in 1992, the Commission found the following:
According to DER [predecessor
of the Department of Environmental Protection], the utility has three options
available to it which may secure compliance with the requirements. It may
pursue the use of another water source, either an existing surface or ground
water supply, or it may install additional means of treating the water.
However, the only recommended treatment for sulfate is reverse osmosis, and, in
this instance, reverse osmosis will be cost prohibitive for this utility. In
addition, because of the plant's location, it is questionable that the utility
could meet the industrial waste standards required for the backwash discharge.
Lastly, the utility can procure land and permits to construct a well field
outside the area where the gypsum deposits are located. The DER engineer
suggests that the utility determine the cost of drilling a new well field
outside of the subdivision. The DER engineer also suggested that Hideaway work
with the Springside at Manatee, Ltd., and Fowlers Bluff utilities to locate a
better source of water since all three are experiencing the same types of
problems in the same general location.
Staff recommends that the Commission direct FIMC to meet
with its customers after an estimate of costs and benefits to reduce sulfates
and total dissolved solids is created. In its meeting(s) with customers, the
Utility should discuss the estimated costs and benefits of and time necessary
for implementing a plausible solution to reduce sulfates and total dissolved
solids to a level that is within acceptable DEP standards. The Utility should
report the results of such customer meeting(s) to the Commission by August 6,
2019. After analyzing FIMC’s report, staff will bring this item before the
Commission for further action, if needed. If the Utility encounters any
unforeseen events that will impede its ability to timely meet the recommended
schedule, the Utility should immediately notify this Commission in writing.
Issue 2:
Should this docket be closed?
Recommendation:
No. 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 to allow the Utility to provide the appropriate reporting
information and the allow staff to bring this item back to the Commission for
further action, if needed. (Duval)
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
to allow the Utility to provide the appropriate reporting information and the
allow staff to bring this item back to the Commission for further action, if
needed.
