Case Background
On June 17, 2019, Florida Public Utilities
Company (FPUC) filed a petition for a temporary waiver of Rule 25-6.0436(4)(a),
Florida Administrative Code (F.A.C.). The rule requires all electric public
utilities to file a depreciation study at least once every four years from the
submission date of its previous study or as specified in a Commission order.
FPUC filed its last depreciation study on July 1, 2015. Therefore, pursuant to
Rule 25-6.0436(4)(a), F.A.C., FPUC’s next depreciation study was due July 1,
2019. FPUC is requesting that it be permitted to submit its study no later than
September 3, 2019. It also requests that subsequent due dates be based on the
September filing date.
Notice of FPUC’s petition was published in
the June 20, 2019, edition of the Florida Administrative Register, Vol. 45, No.
120, 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. Pursuant to Section 120.542(8), F.S., the petition is deemed approved if
the Commission does not grant or deny it by September 16, 2019.
The Commission has
jurisdiction under Sections 120.542, 350.115, 366.04, and 366.06, F.S.
Discussion
of Issues
Issue 1:
Should the Commission grant FPUC’s request for a
temporary waiver of Rule 25-6.0436(4)(a), F.A.C.?
Recommendation:
Yes. The Commission should grant FPUC’s petition and
require that it file a depreciation study no later than September 3, 2019. The
Commission should also order that FPUC’s next depreciation study will be due
within four years from the date that it files its September 2019 depreciation
study. (Cowdery, Higgins)
Staff Analysis:
FPUC is requesting that the Commission grant it a
temporary waiver of Rule 25-6.0436(4)(a), F.A.C. Pursuant to the rule, FPUC was
required to file a depreciation study by July 1, 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 statute defines a “substantial hardship” as a “demonstrated economic,
technological, legal, or other type of hardship.”
Under Rule 25-6.0436(4)(a), F.A.C., electric public
utilities are required to submit a depreciation study for Commission review at
least once every four 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 July 1, 2019,
but it asserts that preparing the study by that date would create a substantial
hardship. FPUC states that it continues to be hindered by resource constraints
due to the impact of Hurricane Michael on its Northwest Division. FPUC states
that preparing the depreciation study is a time-consuming, difficult task under
ordinary circumstances, but under current circumstances it has not been able to
finalize the figures reflecting the full impact of Hurricane Michael on the Northwest
Division’s plant.
FPUC has asked that it be permitted to submit its study on
or before September 3, 2019. FPUC has also requested that its next depreciation
study be due within four years of the extended September 2019 filing date.
FPUC states that the purpose of the underlying statutes,
Sections 350.115 and 366.06, F.S., will still be fulfilled should the
Commission grant the waiver. This is because FPUC will provide the Commission
with the required depreciation study by September 3, 2019, which is only nine
weeks after the current due date.
Staff’s Analysis and Conclusion
The Commission has 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. The
Commission also granted FPUC a temporary waiver of Rule 25-7.045, F.A.C., and
extended the time for filing FPUC’s natural gas depreciation study because of
substantial hardship caused by Hurricane Michael. Staff believes FPUC has demonstrated that it
would have been a substantial hardship for it to file a depreciation study by
July 1, 2019, given its constrained resources resulting from Hurricane Michael.
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. For this reason, staff believes that FPUC has
demonstrated that the purpose of the underlying statute will be achieved if
FPUC is granted a nine-week extension of time to submit its depreciation study.
Staff believes that FPUC’s request for a temporary rule
waiver is reasonable and recommends that FPUC should be allowed to file its
depreciation study on or before September 3, 2019. Moreover, the Commission
should order that FPUC’s next depreciation study will be due within four years
from the date that it files its September 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. (Cowdery)
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.
