Case Background
On January 19,
2021, Sumter Electric Cooperative, Inc. (SECO) and Duke Energy Florida, LLC
(DEF), collectively the joint petitioners, filed a petition seeking Commission
approval of an amendment to their Territorial Agreement (Agreement) delineating
their respective service boundaries in Sumter, Lake, Marion, Levy, and Citrus
counties. The proposed amendment is the First Amendment to the Agreement, applicable
to the petitioners’ service boundary in Lake County. The First Amendment to the
Agreement and composite maps depicting the proposed boundary modifications in
Lake County are shown in Attachment A to this recommendation.
In Order No. PSC-2020-0252-PAA-EU the
Commission approved the currently effective Agreement dated March 27, 2020.
The current Agreement includes the transfer of 546 DEF customers
(including 379 customers in a mixed-use apartment complex in Lake County) to
SECO and 49 SECO customers to DEF. The purpose of the transfers was to prevent
duplication of facilities, correct encroachments, and have one service provider
in residential developments when feasible.
In the instant petition, the joint
petitioners seek to modify the current Agreement to redefine a specific service
area boundary in Lake County, which would alleviate the need to transfer 379
DEF customers to SECO as approved by Order No. PSC-2020-0252-PAA-EU. Staff
issued a data request to the joint petitioners for which the responses were
received on February 12, 2021. The Commission has jurisdiction over this
matter pursuant to Section 366.04, Florida Statutes (F.S.).
Discussion
of Issues
Issue 1:
Should the Commission approve the proposed First Amendment
to the Territorial Agreement between SECO and DEF in Sumter, Lake, Marion,
Levy, and Citrus counties?
Recommendation:
Yes, the Commission should approve the proposed
First Amendment to the Territorial Agreement between SECO and DEF in Sumter,
Lake, Marion, Levy, and Citrus counties. The First Amendment to the Territorial
Agreement will not cause a detriment to the public interest and will enable
SECO and DEF to avoid duplication of facilities and to serve their customers in
an efficient manner. (Guffey)
Staff Analysis:
Pursuant to Section 366.04(2)(d), F.S., and Rule
25-6.0440, Florida Administrative Code (F.A.C.), the Commission has the
jurisdiction to approve territorial agreements between and among rural electric
cooperatives, municipal electric utilities, and other electric utilities.
Unless the Commission determines that the agreement will cause a detriment to
the public interest, the agreement should be approved.
Proposed First Amendment to the Territorial
Agreement
The joint petitioners are parties to the currently
effective territorial agreement approved in Order No. PSC-2020-0252-PAA-EU,
issued July 23, 2020. Per the order,
DEF would transfer 379 customers (339 residential and 40 commercial) located in
the Quarters Apartments complex to SECO. The customers have not been
transferred to SECO yet and are still being served by DEF.
The
joint petitioners explained that about the same time as the Commission Order
was issued approving the current Agreement, the commissioners of the Town of Lady
Lake unanimously approved a new development called Lady Lake Square Apartments
which is in close proximity to the Quarters Apartments. The planned Lady Lake
Square Apartments are currently within DEF’s service territory and would serve approximately
288 customers. Since the two apartment complexes are similar in size, SECO and
DEF agreed to modify the currently approved territorial boundaries to allow DEF
to continue serving the Quarters Apartments and for SECO to serve the planned Lady
Lake Square Apartments. The joint petitioners stated that this would avoid the
need to build duplicate facilities and eliminate the transfer of 379 DEF
customers in the Quarters Apartments to SECO. As contemplated in the currently
effective Agreement, the remaining customer transfers will be completed within
36 months.
The intent of the proposed First
Amendment to the current Agreement is to redefine the specific service area
boundaries in Lake County regarding the Quarters and Lady Lake Square
Apartments. Specifically, Section 2.5 Reallocation of Areas of the amended
Agreement seeks to redraw the Quarters Apartments to DEF’s service territory
and redraw the planned Lady Lakes Square Apartments to SECO’s service
territory. The terms and conditions of the currently effective Agreement will
remain unchanged. The joint petitioners state that the proposed boundary
modifications to the current Agreement will eliminate uneconomic duplication of
facilities required for SECO to acquire the customers in the Quarters
Apartments, will eliminate potential undue hardship on the existing customers
subject to transfer, is in the public interest, and will not decrease the
reliability of electric service to existing or future customers of either
party. In response to staff’s data request, the joint petitioners stated that
the 379 DEF customers will be notified by letter that they will no longer be
transferred to SECO, as ordered in Order No. PSC-2020-0252-PAA-EU.
The effective date of the First Amendment to the Agreement
would be the date on which the Commission issues its final order granting
approval of this proposed Amendment in its entirety and it is no longer subject
to judicial review.
Conclusion
The joint petitioners state that they have worked
collaboratively to structure the proposed First Amendment to their current Agreement
and that it furthers the goals of avoiding duplication of service and enables
each to achieve operational efficiency. After review of the joint petition, the
proposed First Amendment to the Territorial Agreement, and responses to staff’s
data request, staff believes the First Amendment to the Territorial Agreement
will not cause a detriment to the public interest, will eliminate any potential
uneconomic duplication of facilities and will not cause a decrease in
reliability of electric service to the present or future customers of SECO or DEF.
Therefore, staff recommends that the Commission should approve the proposed
First Amendment to the Territorial Agreement between SECO and DEF in Sumter,
Lake, Marion, Levy, and Citrus counties.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. If no protest is filed by a person whose
substantial interests are affected within 21 days of the issuance of the Order,
this docket should be closed upon the issuance of the Consummating Order. (Trierweiler)
Staff Analysis:
If no protest is filed by a person whose substantial
interests are affected within 21 days of the issuance of the Order, this docket
should be closed upon the issuance of the Consummating Order.
