Case Background
Sun Communities
Finance, LLC, d/b/a Water Oak Utility (Water Oak or Utility) is a Class B water
and wastewater utility located in Lake County. The Utility provides service to
approximately 1,145 residential customers and 11 commercial customers. The
Utility was granted Water Certificate No. 454-W and Wastewater Certificate No.
388-S in October 1986.
On December 3,
2019, staff was notified of Water Oak’s intent to cease operation of its own
wastewater treatment plant and begin reselling wastewater service from the Town
of Lady Lake (Lady Lake) at a rate which does not exceed the actual purchase
price. As such, the Utility is requesting that its wastewater system be exempt
from the Commission’s jurisdiction pursuant to Section 367.022(8), Florida
Statutes (F.S.), and cancellation of its wastewater certificate. The Utility’s water
system will continue to be operated as a regulated utility.
The Commission
has jurisdiction pursuant to Section 367.022, F.S.
Discussion
of Issues
Issue 1:
Should the Commission cancel Water Oak Utility’s Certificate
No. 388-S?
Recommendation:
Yes. Water Oak Utility is operating its wastewater
system as a reseller exempt from the Commission’s jurisdiction pursuant to
Section 367.022(8), F.S. Therefore, the Commission should cancel Certificate
No. 388-S effective the date the consummating order is issued. Regulatory
assessment fees (RAFs) for 2020, the 2019 Annual Report, and billing data are
due to the Commission within 30 days of the Commission vote. The water system
will continue to be operated as a regulated utility. (Doehling, Johnson)
Staff Analysis:
On December 3, 2019, staff was notified that the
Utility was seeking exemption pursuant to Section 367.022(8), F.S. This
exemption applies to any person who resells water or wastewater service at a
rate or charge which does not exceed the actual purchase price of the water or wastewater.
On April 15, 2019, Water Oak entered into an agreement
with Lady Lake which will receive and treat all wastewater from the Utility.
Water Oak will resell wastewater service at a rate or charge which does not
exceed the actual purchase price of the bulk wastewater service. The Utility will be splitting each bulk
wastewater service bill among the customers based upon their water usage, with
no “add on” charges being assessed. On December 23, 2019, the connection to
Lady Lake was made and as of January 20, 2020, the Utility has ceased operation
of its wastewater treatment plant.
Water Oak has paid its 2019 RAFs and has notified its
customers that it is seeking exemption from the Commission’s jurisdiction.
Water Oak has agreed to pay RAFs for 2020 and file its 2019 Annual Report. In
addition, the Utility has agreed to provide billing data which demonstrates
that customers are not being charged at a rate that exceeds the actual purchase
price of the wastewater service.
Based on the above, staff recommends that the Commission
cancel Certificate No. 388-S effective the date the consummating order is
issued. RAFs for 2020, the 2019 Annual Report, and billing data are due to the
Commission within 30 days of the Commission vote.
The water system will continue to be operated as a regulated utility.
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 this order, a consummating order should be issued. The docket
should remain open until Water Oak has paid its 2020 RAFs, submitted its 2019
Annual Report, and provided staff billing data demonstrating customers are not
being charged at a rate that exceeds the actual purchase price of the
wastewater service. Once these actions are complete, this docket should be
closed administratively. (Simmons)
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 this order, a consummating order should be issued. The docket
should remain open until Water Oak has paid its 2020 RAFs, submitted its 2019
Annual Report, and provided staff billing data demonstrating customers are not
being charged at a rate that exceeds the actual purchase price of the
wastewater service. Once these actions are complete, this docket should be closed
administratively.
