Case Background
On February 20,
2019, Florida Power & Light Company (FPL or utility) filed a petition for
approval to amend its street lighting (SL-1), outdoor lighting (OL-1), and LED lighting
pilot (LT-1) tariffs. The proposed tariff revisions are designed to establish monthly
charges for lighting facilities that are not contained in FPL’s lighting
tariffs (i.e., non-standard lighting).
With FPL’s
acquisition of the City of Vero Beach (COVB) electric utility system, the
Commission granted FPL approval to charge its approved rates and charges to the
COVB customers upon the closing date of the Asset Sale and Purchase Agreement
between FPL and COVB. The Asset Sale and Purchase Agreement
closed on December 17, 2018, and FPL started billing the former COVB customers
its rates and charges.
FPL conducted an
analysis of COVB’s former tariffs and outdoor lighting and determined that 30
percent of the fixtures and poles previously served by COVB constitute
non-standard lighting. The non-standard lighting previously served by COVB is
made up of 19 fixtures types and three pole types that are not offered under
FPL’s lighting tariffs. Therefore, FPL does not have existing rates in its
tariff to apply to the former COVB non-standard lighting customers. The
remaining 70 percent of the lighting facilities in the former COVB service
territory constitute standard lighting and is billed under FPL’s tariffs.
On
February 27, 2019, FPL provided a letter waiving the 60-day file and suspend
provision on Section 366.06(3), Florida Statutes (F.S.), until the May 14, 2019
Agenda Conference. On March 1, 2019, staff issued its first data request to FPL
for which responses were received on March 11, 2019. On April 26, 2019, FPL
filed amended tariffs adding language regarding the calculation of the
maintenance charges for non-standard lighting and to clarify that for the LT-1
tariff, the proposed new special provision applies to poles only. The proposed
tariff sheets in legislative format, as amended on April 26, 2019, are shown in
Attachment A to this recommendation. The Commission has jurisdiction over this
matter pursuant to Sections 366.03, 366.04, 366.05, and 366.06, F. S.
Discussion
of Issues
Issue 1:
Should the Commission approve FPL’s proposed changes
to its SL-1, OL-1, and LT-1 tariffs as shown in Attachment A?
Recommendation:
Yes. The Commission should approve the proposed
changes to FPL’s SL-1, OL-1 and LT-1 tariffs as shown in Attachment A to this
recommendation. The proposed revisions allow FPL to bill the former COVB
customers with non-standard lighting and respond to customers’ future requests
for special fixtures or poles. The general body of ratepayers will be protected
as non-standard lighting customers will be responsible for all costs associated
with their lighting facilities. The revised tariffs should become effective on May
14, 2019. (Doherty, Guffey)
Staff Analysis:
Currently, FPL offers lighting service under its
SL-1, OL-1, and LT-1 tariffs. The SL-1 and OL-1 tariffs include specific
fixtures and poles a customer can choose from. The charges for each fixture are
comprised of three components: a fixture charge, a maintenance charge, and an
energy charge. The LT-1 tariff provides customers with Light Emitting Diode (LED)
fixture options and flexible payment methods; however, the LT-1 tariff contains
specific poles a customer can choose from.
Pole charges vary by type of pole (e.g., concrete, wood, fiberglass)
FPL proposed to add a special provision to its SL-1, OL-1,
and LT-1 tariffs to allow FPL to determine monthly charges for customers with
non-standard lighting. Pursuant to the special provision, FPL would apply a
facilities charge factor of 1.63 percent to the average installed cost of the
lighting facilities to determine the fixture or pole charge. The calculation of
the 1.63 facilities charge factor is shown in Exhibit G to the petition and
includes a return, depreciation, and property taxes. The facilities charge
factor assures recovery of the lighting facilities investment.
FPL explained that it does not know the average installed
costs of the former COVB lighting facilities as COVB did not have sufficient
records to support such calculation. To determine the average installed cost of
the former COVB non-standard lighting facilities, FPL used the current estimated
value of the facilities. While the proposed tariff revisions initially apply to
the former COVB non-standard lighting customers, FPL stated that the special
provision would apply to all customers who request a fixture or pole that is
not included in FPL’s existing tariffs. FPL stated that any requested lighting
facilities would need to meet FPL’s reliability standards.
To determine the maintenance charges for non-standard
lighting fixtures, FPL would use the approved maintenance cost for a fixture
with the same wattage. For wattages that fall between two existing wattages,
the maintenance charge will be averaged based on the two existing wattages. All
other Commission-approved street lighting energy charges and cost recovery
factors, such as fuel, will apply.
Former COVB Customer Bill Impacts and
Notification
In its response to staff’s data request, FPL stated that 83
former COVB customers are served by non-standard lighting. These customers are comprised
of one governmental customer, 81 commercial customers, and one residential
customer. Since the Asset Sale and Purchase Agreement closed on December 17,
2018, FPL has been billing these 83 former COVB lighting customers pursuant to
the proposed tariff, subject to refund or recovery of the difference pending
the outcome of this proceeding. FPL has three lighting tariffs (SL-1, OL-1, and
LT-1), while COVB had only one tariff for all lighting customers. By performing
field surveys, FPL is able to identify the appropriate FPL tariff for all former
COVB lighting customers.
With the proposed tariff revisions, an estimated 63
customers have seen their lighting bill decrease and 20 customers have seen
their bill increase. Customer monthly bill decreases range from $0.39 to
$326.61 a month, while the increases range from $1.32 to $786 a month. FPL
explained that the customer (a condominium association) who saw the $786
increase had a note in COVB’s billing file that referenced an agreement with
COVB to pay a non-tariffed rate. FPL explained that when it contacted the
customer, the customer was unaware that it was being billed less than the COVB
tariffed rate. FPL represented it is working with the customer to reduce its
lighting bill.
FPL further explained that other former COVB customers
experienced increases in their bills, because COVB charged the customers for an
incorrect fixture. FPL has corrected this error from the COVB billing and is
charging the lighting customers for the actual fixture provided. FPL stated
that all former COVB non-standard lighting customers whose lighting bill
increased by more than $8.00 were contacted by phone call or by an in person
visit. To date, the commission has not received any customer comments or
complaints regarding the requested tariff amendments.
It is incumbent on public utilities to charge only those
rates filed with and approved by the Commission, pursuant to Section 366.06,
F.S. Staff recognizes the unique circumstances surrounding FPL’s acquisition
and provision of service to the COVB customers, and that the majority of
customers affected by the proposed tariff will experience a rate decrease.
However, FPL should be cautioned to charge only those rates reflected in its
Commission-approved tariffs, and that it is authorized to change such rates
only after securing the Commission’s approval.
Conclusion
The Commission approved a similar lighting tariff for Gulf
Power Company (Gulf) in Gulf’s 2001 rate case in
response to customers requesting more fixture or pole options. More recently,
the Commission approved Tampa Electric Company’s (TECO) optional customer
specified lighting tariff to allow TECO to respond to customer requests for
special fixtures or poles in a timely and efficient manner.
Staff has reviewed FPL’s petition and supporting
documentation and believes the addition of the Special Provision to the SL-1, OL-1,
and LT-1 tariffs is reasonable and appropriate. The Commission should approve
the proposed changes to FPL’s SL-1, OL-1, and LT-1 tariffs as shown in
Attachment A to this recommendation. The proposed revisions allow FPL to bill
the former COVB customers with non-standard lighting and respond to customers’
future requests for special fixtures or poles. The general body of ratepayers
will be protected as non-standard lighting customers will be responsible for
all costs associated with their lighting facilities. The revised tariffs should
become effective on May 14, 2019.
Issue 2:
Should this docket be closed?
Recommendation:
If Issue 1 is approved and a protest is filed within
21 days of the issuance of the order, the tariff should remain in effect, with
any revenues held subject to refund, pending resolution of the protest. If no
timely protest is filed, this docket should be closed upon the issuance of a
consummating order. (Crawford)
Staff Analysis:
If Issue 1 is approved and a protest is filed within
21 days of the issuance of the order, the tariff should remain in effect, with
any revenues held subject to refund, pending resolution of the protest. If no
timely protest is filed, this docket should be closed upon the issuance of a
consummating order.
