Case Background
On July 1, 2020,
Casa Devon Venture, LP (Casa Devon) filed an emergency petition for a variance
from or waiver of the individual electric metering requirement of Rule
25-6.049(5) and (6), Florida Administrative Code (F.A.C.), so that it can
master meter its Casa Devon apartment building. As alternative relief, Casa
Devon asks that if the Commission does not grant the variance, it should find
that Casa Devon does not need a rule variance or waiver because the Casa Devon apartment
falls within one of the individual metering requirement exceptions described in
Rule 25-6.049(5)(c) or (d), F.A.C.
Rule
25-6.049, F.A.C.
Rule
25-6.049(5), F.A.C., requires individual electric metering by the utility for
each separate occupancy unit of new commercial establishments, residential
buildings, condominiums, cooperatives, marinas, and trailer, mobile home and
recreational vehicle parks. The purpose of these provisions is to promote
energy conservation in Florida by directly linking the amount customers pay for
electricity to the amount of electricity the customer uses.
The rule states
that the individual metering requirement does not apply to certain listed
situations, including:
(c) For
electricity used in specialized-use housing accommodations such as hospitals,
nursing homes, living facilities located on the same premises as, and operated
in conjunction with, a nursing home or other health care facility providing at
least the same level and types of services as a nursing home, convalescent
homes, facilities certificated under chapter 651, F.S., college dormitories,
convents, sorority houses, fraternity houses, and similar facilities; and
(d) For
lodging establishments such as hotels, motels, and similar facilities which are
rented, leased, or otherwise provided to guests by an operator providing
overnight occupancy as defined in paragraph (8)(b).
In addition,
individual metering is not required for condominiums that meet certain criteria
set out in sections (5)(g) and (6) of the rule. These exceptions are based on
the concept that the individual metering requirement no longer achieves the
Florida Energy Efficiency and Conservation Act’s purpose when a customer, such
as a condominium or nursing home owner, rents the unit or charges for the room
on a short-term basis for a flat per-night or per-week fee. In those cases, the
customer cannot control how much electricity is used in the unit or room.
The individual
metering requirement in Rule 25-6.049(5), F.A.C., is based on the Commission’s
authority under Sections 366.05(1) and 366.06(1), Florida Statutes (F.S.),
to prescribe rate classifications and service rules for investor-owned electric
utilities. The rule also implements the conservation policies in the Florida
Energy Efficiency and Conservation Act. Section 366.81, F.S., of that act
states the Legislature’s finding that it is critical to utilize the most
efficient and cost-effective conservation systems in order to protect the
health, prosperity, and general welfare of Florida and its citizens. The
statute states that since solutions to Florida’s energy problems are complex,
the Legislature intends that the use of solar energy should be encouraged.
Section 366.81, F.S., further states that the Legislature finds and declares
that the statute should be liberally construed in order to meet the complex
problems of reducing and controlling the growth rates of electric consumption,
increasing the overall efficiency and cost-effectiveness of electricity, and
conserving expensive resources.
Casa Devon’s Petition
Casa Devon states that it is the owner and developer of
the Casa Devon apartment building, an existing 210-unit apartment in Miami that
provides low-income, affordable housing to senior citizens through the Federal
Department of Housing and Urban Development (HUD). Casa Devon seeks a variance
or waiver from the individual electric metering requirement of Rule 25-6.049,
F.A.C., so that it can convert its apartment building from individually metered
apartments to being master metered. Casa Devon requests that the variance or
waiver be permanent with the condition that Casa Devon continue to operate as a
specialized-use HUD housing facility with a solar energy system achieving
energy conservation through reduced electricity purchases from the utility.
Casa Devon states that it has a Housing Assistance Payment
contract with HUD that sets rental rates such that tenants pay thirty percent
of their gross income toward rent and the remainder is paid for by HUD or a
Public Housing Agency through subsidies or vouchers. According to Casa Devon,
under the current arrangement, rent amount includes a utility allowance for
water, wastewater, and electricity that varies by individual unit owner, but
that Casa Devon estimates to average about $58 per unit. The petition shows
that the Casa Devon apartment tenants are currently individually metered by
Florida Power & Light Company (FPL).
Casa Devon states that on January 1, 2020, the Housing
Assistance Payment contract was renewed by HUD for a new twenty-year term with
an agreement to automatically renew for an addition 16 years, guaranteeing
affordable housing at the facility until December 31, 2055. In addition to other renovation conditions,
the contract renewal requires that:
The Owner [Casa Devon] will also convert the Project
[Casa Devon apartment building] to be master metered, which will result in
tenants no longer paying for electricity. After completing the master meter
conversion, the Owner will then add a solar panel system that will offset
approximately 75% of the total electrical load.
Petition, Exhibit A.
Casa Devon states that it agreed to this arrangement,
whereby it covers the cost of electricity, because of the benefits of
installing the planned solar energy system. Casa Devon will get a Solar
Investment Tax Credit for installing the solar energy system, through which it
expects to receive a tax deduction of more than $300,000. Further, the solar
energy system is predicted to offset 65 to 75 percent of the total annual
electrical load to the Casa Devon apartment building. Casa Devon states that
this arrangement gives the residents a significant benefit of not having to pay
electric bills. Casa Devon alleges that it is required by HUD to finish the
construction, installation, and approval of permitting of the solar energy
system by December 31, 2020.
As an alternative request, if the Commission does not
grant its request for variance or waiver, Casa Devon asks the Commission to
find that it should be allowed to master meter the apartment building under
either the “specialized-use housing” exception of paragraph (c) of Rule
25-6.049(5) or because it is similar to a hotel or hotel-condominium and
therefore falls under the Rule 25-6.049(5)(d) exception. Casa Devon argues that
the apartment building should be considered a specialized-use exception because
it is not an ordinary housing arrangement, but is a specialized arrangement
provided through the Federal government to provide housing for fixed-income or
low-income senior citizens who will not be paying for electricity usage. Casa
Devon argues that the load characteristics and usage patterns of the Casa Devon
apartments will be more similar to other specialized-use housing or hotels than
those of typical residential customers because the residents will not be paying
for utilities.
Florida Power & Light Company’s Comments
On July 27, 2020, FPL filed comments regarding Casa
Devon’s petition. FPL states that Casa Devon’s “purported need” for a waiver
and “professed economic hardship” were caused by Casa Devon’s own action
because it entered into the HUD agreement to master meter and install a solar
energy system without first consulting the Commission’s rules. FPL states that
if the Commission were to grant the waiver, it would establish a factual
predicate for others to ignore Commission rules, engage in a prohibited
activity, and then ask the Commission for relief.
FPL believes that, instead of master metering and
installing its planned solar energy system, Casa Devon could allow its 210
residents the option to either individually net meter using solar through the
use of micro-inverters or string inverters, or keep their current individually
metered service with FPL. In addition, FPL states that there is no way to
determine whether all 210 residents have agreed to terminate their service with
FPL, or whether FPL could safely deliver electricity to the apartment building
if master metering is permitted.
With regard to Casa Devon’s alternative request for relief,
FPL argues that the Casa Devon apartment building does not qualify for master
metering as specialized-use housing or housing similar to a hotel or
hotel-condominium under Rule 25-6.049(5)(c) or (d), F.A.C. FPL argues that the
Casa Devon apartment residents are permanent occupants and therefore the
rationale for allowing master metering for overnight or temporary occupancy is
simply not present.
Procedural Matters
Under Section 120.542, F.S., and Uniform Rule of Procedure
Rule 28-104.005(1), F.A.C., an agency must give notice of receipt of a petition
for emergency variance or waiver on its website within 5 days of receipt. On
July 1, 2020, the Commission published notice of receipt of the emergency
petition on its website. Notice of the emergency petition was also published in
the July 2, 2020 edition of the Florida Administrative Register (FAR), Vol. 45,
No. 80, as required by Section 120.542(3), F.S., and Uniform Rule of Procedure
Rule 28-104.005(1), F.A.C. Rule 28-104.005(1), F.A.C., provides that interested
persons may submit comments within 5 days after publication of the notice in
the FAR. Even though FPL filed its
comments after this 5-day period, there was sufficient time for staff to review
the comments and address them in this recommendation. In addition, this item is
noticed that interested persons may participate at the Agenda Conference.
Pursuant to Rule 28-104.005(2), F.A.C., a petition for
emergency variance or waiver must be granted or denied, or the request must be
determined not to be an emergency, within 30 days of its receipt by the agency,
or it is deemed approved, unless the time limit is waived by the petitioner. Casa
Devon waived the 30-day deadline until the August 18, 2020 Commission
Conference. Thus, the petition will be deemed approved if the Commission does
not grant or deny the petition or determine that it is not an emergency by
August 18, 2020.
This recommendation addresses
whether the Commission should grant the emergency petition for variance or waiver
by Casa Devon. The Commission has jurisdiction under Sections 120.542, 366.04,
366.05, and 366.81, F.S.
Discussion
of Issues
Issue 1:
Should the Commission grant the petition for
emergency variance from or waiver of Rule 25-6.049(5), Measuring Customer
Service, F.A.C., by Casa Devon Venture, LP?
Recommendation:
Yes, Casa Devon’s petition for emergency variance
from or waiver of Rule 25-6.049(5), F.A.C., should be granted subject to the
condition that Casa Devon install the solar energy system in the apartment
building substantially as described in the petition and the system remains in
operation and achieves energy conservation through reduced electricity
purchases from the utility. If these
conditions are not met, the variance or waiver should cease to be effective. Casa
Devon should be put on notice that if the variance or waiver ceases to be
effective, it will be responsible for the cost of converting the Casa Devon
apartment building from master metering to individual metering pursuant to Rule
25-6.049(7), F.A.C. (Cowdery, Coston, Guffey, Hampson, Hinton, Vogel)
Staff Analysis:
Casa Devon is asking the
Commission for an emergency variance from or waiver of Rule 25-6.049(5) and (6),
F.A.C., so that it can convert the Casa Devon apartment building from
individual metering to master metering. If the Commission does not grant it a
variance or waiver from the rule, Casa Devon requests as alternative relief
that the Commission find that the Casa Devon apartment building falls under an
exception to individual metering under Rule 25-6.049(5)(c) and (d), F.A.C. Casa
Devon asks the Commission to consider its petition on an emergency basis.
Legal Standard for Rule Variances and Waivers
Section 120.542(1), F.S., states that the purpose of a rule
variance or waiver is to
provide relief to persons subject to regulation in cases where strict
application of rule requirements can lead to unreasonable, unfair, and
unintended results in particular circumstances. Section 120.542(2), F.S., sets
forth a two-prong test for granting variances or waivers to rules. If the
petitioner satisfies both prongs of the test, the agency must grant the
variance or waiver.
First, the petitioner must show that “application of [the]
rule would create a substantial hardship or would violate principles of
fairness.” A “substantial hardship” is a “demonstrated economic, technological,
legal, or other type of hardship.” Principles of fairness are violated when “the
literal application of a rule affects a particular person in a manner
significantly different from the way it affects other similarly situated
persons who are subject to the rule.” Second, the petitioner must demonstrate
that it will achieve the purpose of the underlying statutes by other means.
Each petitioner for rule variance or waiver has the burden
of proving its entitlement to a variance or waiver under its particular
circumstances. Thus, the Commission’s determination as to whether a petitioner
should be granted a variance or waiver is based on whether the legal test has
been met under the specific circumstances of each petitioner.
Section
120.542(2), F.S., authorizes the filing of emergency petitions for rule
variances and waivers. In order to be
considered on an emergency basis, Uniform
Rule of Procedure Rule 28-104.004(2), F.A.C., requires a petition for emergency
variance or waiver to identify:
(a) The specific facts that make the
situation an emergency; and
(b) The specific facts to show that the
petitioner will suffer an immediate adverse effect unless the variance or
waiver is issued more expeditiously than the time frames provided in Section
120.542, F.S.
The time
frame for processing an emergency petition for variance requires that the
agency publish notice of the petition in the FAR within 5 days of filing,
compared to 15 days for a non-emergency petition. For an emergency petition, an
agency must grant, deny, or find that a petition is not an emergency within 30
days of the petition’s filing, unless the 30 days is waived by the petitioner.
In contrast, a non-emergency petition must be granted or denied within 90 days
after receipt of the original petition, the last item of timely requested
additional information, or the petitioner’s written request to finish
processing the petition.
Request to Consider the Petition on an Emergency
Basis
Casa Devon states that in May 2020, FPL advised Casa Devon
that it would not permit master metering of the apartment building. Casa Devon
states that since that time, the apartment renovation project has been on hold
because Casa Devon cannot move forward with master metering the apartment or
installing the solar energy system. Casa Devon is requesting that its petition
be considered on an emergency basis because rehabilitation and renovation to the
Casa Devon apartments must be completed by December 31, 2020 under HUD
requirements, and those renovations cannot be completed without the variance or
waiver of the individual metering requirement. Casa Devon states that if its
petition is heard on an emergency basis, Casa Devon and the solar subcontractor
believe that the two-month delay caused by Casa Devon’s inability to master
meter can be made up and the project finished on time. However, Casa Devon
states that it does not believe there will be enough time to complete the installation
of the solar energy system by December 31, 2020, if its petition is not heard
on an emergency basis.
Staff believes that Casa Devon has demonstrated that an
emergency situation exists. The petition alleges that rehabilitation and
renovation to Casa Devon apartments must be completed by December 31, 2020
under HUD requirements and that there will not be enough time to complete the
installation of the solar energy system by that date if the petition is not
heard on an emergency basis. The Commission has recognized that a contract
deadline can be a factor forming the basis for considering a petition for
waiver on an emergency basis. E.g. In re Petition for emergency
temporary waiver by BellSouth Telecommunications, Inc., Docket No. 20040659-TL,
Order No. PSC-04-0793-PAA-TL, issued August 12, 2004 (granting emergency
consideration of a rule waiver petition where an upcoming contract termination
date and potential work stoppage would impact BellSouth’s ability to comply
with certain Commission rules).
Casa Devon states that it would suffer an immediate
adverse effect if the petition is not heard expeditiously because by failing to
meet the December 31, 2020 completion date, it would be in default of its
agreement with HUD, causing HUD to potentially terminate the contract or seek
other relief such as rescinding or reducing its monthly rental payments to the
property. Further, Casa Devon alleges that it would also fail to meet the
energy savings requirements it agreed to in order to receive the tax incentives,
which could result in a financial loss of in excess of $200,000. Casa Devon
states that failure to finish the project by December 31, 2020, would also
impact senior citizens in Miami-Dade County who need the 210 affordable
housing-units that the Casa Devon apartments provide. Staff agrees that these
facts demonstrate that Casa Devon will suffer an immediate adverse effect
unless the variance or waiver is issued expeditiously.
Based on the specific facts provided, staff recommends that
the Commission consider the petition for rule variance or waiver on an
emergency basis. Staff notes that even if Casa Devon had not requested
emergency treatment of its petition, staff would have brought this petition to
the August 18, 2020 Commission Conference.
The petition contains the information required by Rule 28-104.002, F.A.C., and
staff did not need any additional written information to complete its review. Further, given the nature of the apartment
building at issue, low income housing for senior citizens in Miami that Casa
Devon is restoring and renovating to include an extensive solar energy system,
staff believes it is in the public interest to consider the petition in a
timely manner.
The Purpose of the Underlying Statutes
Casa Devon states that the purpose of the underlying
statutes implementing Rule 25-6.049, F.A.C., is to give the conditions under
which individual metering and master metering must be used to ensure fair and
reasonable rates/charges and energy conservation. Casa Devon states that it
believes the underlying purpose of this law, promotion of energy conservation,
will be achieved through its requested variance or waiver because master
metering the apartment building and installation of the solar photovoltaic
system will offset 65 to 75 percent of the apartment building’s total annual
electric load, therefore reducing electricity purchases from the utility.
Casa Devon further states that “[without] master metering,
Casa Devon cannot install the solar energy system and would not be able to
offer the fair and reasonable rates it is offering to these residents - $0 for
utilities.” FPL disagrees with this statement, arguing that Casa Devon could
install solar panels without master metering, possibly using micro-inverters or
string inverters, to allow each of the 210 residents to make their own choice
to net meter, or to keep their current service with FPL through their existing
individual meter.
FPL’s suggested alternative does not show that Casa
Devon’s petition does not meet the purposes of the rule’s underlying statutes. Instead,
FPL’s argument seems to take issue with whether the installation of solar is
technically feasible without master metering. But whether or not the
installation of solar is technically feasible without master metering is not relevant
to deciding whether Casa Devon’s proposed master metering project meets the
purpose of the underlying statutes. Further, the HUD project is dependent
on master metering, the primary energy source of which is solar, which is
dependent on receiving the Solar Investment Tax Credit for the solar energy
system installation. The Solar
Investment Tax Credit and estimated energy cost savings are the basis for Casa
Devon’s agreement to pay all the apartment building’s electric utility costs, instead
of apartment renters paying for their individually metered electricity. In the
absence of master metering, it appears that Casa Devon would not be able to
economically undertake the restoration project as designed or economically
offer solar energy.
Casa Devon has demonstrated that it will achieve the
conservation purpose of the Florida Energy Efficiency and Conservation Act by
means other than the individual metering requirement of Rule 25-6.049(5),
F.A.C. Under Section 366.81, F.S., of the Florida Energy Efficiency and
Conservation Act, the Legislature finds that it is critical to utilize the most
efficient and cost-effective conservation systems in order to protect the
health, prosperity, and general welfare of Florida and its citizens. The
statute states that the Legislature intends that the use of solar energy should
be encouraged and that the statute should be liberally construed in order to
meet the complex problems of reducing and controlling the growth rates of
electric consumption, increasing the overall efficiency and cost-effectiveness
of electricity, and conserving expensive resources. Staff believes the
underlying purpose of the Florida Energy Efficiency and Conservation Act will
be achieved through master metering because installation of the solar
photovoltaic array is projected to offset 65 to 75 percent of the apartment
building’s load resulting in lower electricity purchases from the utility.
Substantial Hardship
Casa Devon alleges that it will incur a substantial
hardship if Rule 25-6.049, F.A.C., is applied to require individual metering
because that would cause Casa Devon to violate its agreement with HUD, in which
Casa Devon agreed to pay for the apartment building’s electricity through
master metering. Casa Devon states that the inability to master meter will
constitute a default under the Housing Assistance Payment contract that would
cause HUD to potentially terminate the contract or seek other relief such as
rescinding or reducing its monthly rental payments to the apartment building.
Additionally, Casa Devon states that the decision to pay
for the apartment building’s electricity was predicated on Casa Devon’s ability
to master meter the project so that it could install a solar energy system that
would offset 65 to 75 percent of the total electrical load. Casa Devon states
that, by installing the solar energy system, it would receive a Solar
Investment Tax Credit which would offset the cost of it paying for the
residents’ electricity. Casa Devon states that if the apartment building is
required to keep the existing individual metering, the solar energy system
planned to be installed – for which engineering fees have been paid and panels
already procured – will not offset the tenant electrical loads. Casa Devon
alleges that the solar energy system cannot be installed without master
metering because the planned size of the solar energy system is necessary to
achieve the 65 to 75 percent reduction in electric load.
If master metering is not allowed, Casa Devon states that
it will need to develop a new solar energy approach to include individual
systems for each apartment’s meter to ensure that the peak monthly generation
of each system does not exceed the consumption of its corresponding meter. Casa
Devon alleges that this would also require additional costs for electrical
cable management, smaller inverters to be installed at the individual meters,
and a multitude of other considerations and components that will offset any
cost savings realized through the system. Casa Devon alleges that if it were to
operate the solar energy system on individual meters, there would be decreased
energy conservation and increased operation reporting requirements. Casa Devon
alleges that individual metering would result in a loss of roughly 60 to 70
percent of the planned energy load reduction because the only financially
viable solar energy system to use with individual metering would offset only
the electricity load in common areas instead of the entire apartment building.
Casa Devon states that individual metering would result in
the loss of the Solar Investment Tax Credit that was a huge factor in
incentivizing investors to fund the comprehensive rehabilitation of the Casa
Devon apartment building. Casa Devon states that if this much smaller solar
energy system were installed, the tax credit deduction would be reduced to
around $24,000, which would be completely nullified by the significant
financial commitments Casa Devon has made for the restoration and
rehabilitation of the Casa Devon apartment building. Additionally, there would
be a negative financial impact on the current operating budget projections that
currently assume a 65 to 75 percent load reduction.
FPL states that Casa Devon’s
alleged economic hardship was caused by its own actions of entering into the
HUD agreement without first consulting the Commission’s rules to determine
whether it could master meter. FPL states that if the Commission were to grant
the waiver, it would establish a factual predicate for others to ignore
Commission rules, engage in a prohibited activity, and then ask the Commission
for relief. FPL states that the Florida Supreme
Court addressed this very situation in affirming the Commission’s denial of a
rule waiver in Panda Energy International v. Jacobs, 813 So. 2d 46 (Fla.
2002).
The Commission proceeding giving
rise to the Panda Energy appeal was a need determination case. On
the day after the prehearing conference, Panda filed a petition to intervene in
the proceeding. After being granted intervention, and two days before the
hearing, Panda filed a motion for a continuance of the hearing. As part of its
motion, Panda addressed Rule 25-22.080, F.A.C., which requires that the hearing
be conducted within 90 days of the filing of the need petition. Panda argued
that because Rule 25-22.080, F.A.C., was a procedural rule, the Commission
could waive its requirements for good cause.
Florida Power Corporation (FPC) filed
a Response in Opposition to Panda’s Motion for Continuance. As part of FPC’s response, it argued that granting
the continuance would violate Rule 25-22.080, F.A.C., and that the requirements
of Rule 25-22.080, F.A.C., could be waived only through a variance procedure of
Section 120.542, F.S., and Rule 28-104.002, F.A.C., which, it stated, Panda did
not address in its motion.
The motion for continuance was
heard by the Commission at the beginning of the need determination
hearing. The Commission denied Panda’s
motion for continuance on the ground that Panda did not show good cause for a
continuance as required by Rule 28-106.210, F.A.C.
In denying Panda’s motion for
continuance, the Commission did not address FPC’s argument about the need for a
Rule 25-22.080, F.S., rule waiver under Section 120.542, F.S.
On appeal, the Court held that
the Commission did not abuse its discretion in denying Panda’s motion for
continuance. In addition, the Court stated that in order to obtain a
continuance, Panda would need a waiver from the Commission’s rule implementing
the statutory deadlines for need proceedings.
The Court found that because the limited amount of time for preparing
for hearing was a direct result of Panda’s decision to delay intervening, Panda
did not demonstrate either a substantial hardship or a violation of principles
of fairness. Panda Energy, 813 So. 2d at 51.
Staff disagrees with FPL’s statement that “the Supreme
Court addressed this very situation in affirming the Commission’s denial of a
rule waiver” in Panda Energy. As explained above, the Florida Supreme
Court in Panda Energy affirmed the Commission’s denial of Panda’s motion
for continuance on the basis that Panda had not shown good cause as required by
Rule 28-106.210, F.A.C. The Court’s additional finding that Panda did not meet
the requirements of a rule waiver was based on the fact that Panda chose to
delay intervening in the case, which was why Panda had a limited amount of time
to prepare for the hearing. The fact pattern in Panda Energy concerning
a motion for continuance of a hearing is very different from Casa Devon’s facts
showing substantial hardship if a rule variance is not granted to allow master
metering.
Staff also disagrees with FPL’s statement that if the
Commission were to grant the waiver, it would establish a factual predicate for
others to ignore Commission rules, engage in a prohibited activity, and then
ask the Commission for relief. To begin with, there is no indication that Casa
Devon engaged in any prohibited activity. Further, as explained above,
petitions for rule waivers are decided based upon whether a petitioner meets
the statutory requirements of Section 120.542, F.S. If Casa Devon demonstrates
that application of the individual metering requirement of Rule 25-6.049(5),
F.A.C., would create a demonstrated economic, technological, legal, or other
type of hardship and that it will achieve the purpose of the underlying
statutes by other means, then a waiver or variance must be granted. See
Section 120.542(2), F.S. Each petitioner for rule variance or waiver has the
burden of proving its entitlement to a variance or waiver under its particular
circumstances.
Further, FPL appears to conflate
Casa Devon’s request that the Commission consider the petition on an emergency
basis with Casa Devon’s showing of substantial hardship to obtain a rule waiver
or variance. The determination of substantial hardship in this case is
not based upon the emergency nature of the filing or when the filing of the
petition occurred. It does not matter whether Casa Devon filed a petition
for waiver or variance before it entered into the HUD contract or afterwards.
What matters is whether the facts presented by Casa Devon meet the requirements
for a rule waiver or variance, including a showing of substantial hardship or
violation of principles of fairness and that the underlying purpose of the
statutes will be met.
In addition to its other
comments, FPL states that based upon the materials filed with the Commission,
along with information provided by Casa Devon to FPL during the past few
months, FPL cannot say with any degree of certainty that the apartment building
can be master metered, noting that FPL has not received any electrical
engineering plans and that the local building official would need to sign off
on the delivery system beyond FPL’s point of delivery. These issues are not relevant to the
Commission’s decision as to whether the petition meets the statutory
requirements for a rule waiver, that is, whether Casa Devon has shown that
application of the rule would create a substantial hardship or would violate
principles of fairness and that the purpose of the underlying statutes will be
achieved by other means.
Staff believes that Casa Devon has demonstrated that it
will incur substantial hardship if it is not granted a variance from or waiver
of the individual metering requirement of Rule 25-6.049(5), F.A.C. If Casa Devon is not granted a variance and is
not allowed to master meter its apartment building, it will not be feasible to
install the solar energy system it has contracted for, the estimated 65 to 75
percent load reduction will not occur, and it will not qualify for the Solar
Investment Tax Credit that was intended to offset Casa Devon’s agreement to
cover the cost of tenant utilities through master metering. This argument for substantial hardship would
have been essentially the same if the petition for variance had been filed
before Casa Devon entered into the HUD contract. In addition, under the
facts of this case, the inability to master meter will constitute a default
under the Housing Assistance Payment contract, which requires master metering
and the installation of a solar panel system that will offset approximately 75%
of the total electrical load, that would cause HUD to potentially terminate the
contract or seek other relief such as rescinding or reducing its monthly rental
payments to the property.
Conclusion
Staff recommends that Casa Devon’s petition for emergency
variance from or waiver of Rule 25-6.049(5), F.A.C., should be granted subject
to the condition that Casa Devon install the solar energy system in the
apartment building substantially as described in the petition and the system
remains in operation and achieves energy conservation through reduced electricity
purchases from the utility. If these conditions are not met, the variance or
waiver should cease to be effective. Casa Devon should be put on notice that if
the variance or waiver ceases to be effective, it will be responsible for the
cost of converting the Casa Devon apartment building from master metering to
individual metering pursuant to Rule 25-6.049(7), F.A.C.
However, by granting the rule waiver, it does not mean
that FPL is required to master meter the Casa Devon apartment building if it is
not technically feasible and safe to do so.
It is up to Casa Devon and FPL to work together to determine the
technical feasibility of master metering the apartment building based upon
electrical engineering plans and other relevant information.
Casa Devon also requested a variance of or waiver from Subsection
(6) of Rule 25-6.049, F.A.C. However, Subsection
(6) applies only to master-metered condominiums, so it does not apply to Casa
Devon’s apartment building.
Further, Casa Devon requested, alternatively, that if the
Commission does not grant a variance or waiver from the individual metering
requirement, it should interpret the exemptions from individual metering in
paragraphs (c) and (d) of Rule 25-6.049(5), F.A.C., as applying to Casa Devon’s
apartment building so that it can master meter.
If the Commission grants Casa Devon’s petition for variance/waiver, this
request for alternative relief is moot and should not be considered. Moreover, Casa
Devon’s alternative request for the Commission to give its opinion as to the
applicability of the provisions of Rule 25-6.049(5)(c) and (d), F.A.C., to Casa
Devon’s particular set of circumstances is, in effect, a request for a
declaratory statement. See
Section 120.565, F.S. Casa Devon’s petition for variance or waiver did not
request a declaratory statement and does not meet the Rule 25-105.002, F.A.C.,
filing requirements for a petition for declaratory statement. For this
additional reason, the Commission should not consider Casa Devon’s alternative
relief request.
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.
