Case Background
On September 27,
2021, the City of Winter Park (Winter Park or City) and Duke Energy Florida,
LLC (DEF) filed a joint petition for approval of an amendment (First Amendment)
to their currently effective territorial agreement in Orange County. In 2005, the
City of Winter Park purchased DEF’s facilities and established a municipal
utility to provide service within the City. In 2014, the Commission approved the joint
petitioners’ currently effective territorial agreement. The proposed First Amendment to the
agreement seeks to further redefine the parties’ specific service areas in
Winter Park. The proposed First Amendment and associated maps indicating the service
area revisions are included in Attachment A to this recommendation.
During the review
process, staff issued two data requests to the joint petitioners, to which the
responses were received on October 26 and on November 9, 2021. On November 17,
2021, DEF provided an email, which has been placed in the docket file, with additional
clarifications on the process leading up to the proposed First Amendment. On November 19, 2021, staff had an
informal conference call meeting with the joint petitioners to obtain further
clarifications related to the proposed First Amendment. 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 current territorial agreement in Orange County between Winter
Park and DEF?
Recommendation:
Yes, the Commission should approve the proposed
First Amendment to the current territorial agreement in Orange County between Winter
Park and DEF. The approval of this amendment will not be a detriment to the
public interest and will enable Winter Park and DEF to redefine specific
service areas in the City of Winter Park. (Guffey, Sandy)
Staff Analysis:
Pursuant to Section 366.04(2)(d), F.S., and Rule
25-6.0440(2), 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.
The Proposed First Amendment to the Territorial
Agreement
Through this proposed First Amendment, the joint
petitioners desire to redraw certain small sections of the territorial
boundaries in Winter Park. The joint petitioners explained, that after the
separation of the City from DEF and the 2014 territorial agreement, DEF continued
to serve certain small areas within the City. The proposed First Amendment
addresses those areas still served by DEF within the City and would eliminate potential
duplicate facilities, create contiguous boundaries, and address certain parcels
that were split by the current territorial boundaries. Pursuant to Paragraph 3
of the First Amendment, 11 DEF customers (nine commercial and two residential)
will be transferred to Winter Park. Revised Exhibit F, as shown on Page 19 of
26 in Attachment A to the recommendation, clarified that of the 11 customers to
be transferred to the City, seven are existing customers and four are vacant parcels. No
customers will be transferred from the City to DEF.
During the November 19, 2021 conference call meeting with
staff, the joint petitioners stated that in an effort to have a more contiguous
boundary, and avoid duplication of service, DEF approached the City, after a
review of its service territory, regarding the transfer of certain parcels within
the City’s boundary that are currently served by DEF. The joint petitioners agreed
to transfer seven existing DEF customers and four vacant lots within DEF’s
service area to the City of Winter Park. In addition, the joint petitioners
agreed to transfer the service of the land parcel which includes the City’s wastewater
treatment plant, which has been temporarily served by DEF for many years, to
DEF as the City has no facilities nearby to economically extend service to the
wastewater treatment plant.
The proposed amendment will eliminate uneconomic
duplication of service facilities and resolve split parcels due to annexation
and create cohesive boundaries. The proposed First Amendment does not
contemplate transfer or purchase of any facilities by either utility and the
joint petitioners assert that the proposed amendment will not cause a decrease
in service reliability to their existing or future customers. The currently
effective agreement approved in 2014, shall remain effective for a term of 20
years, pursuant to Section 6.1 of the agreement and the proposed First
Amendment does not modify the term of the agreement.
The petitioners, in their response to staff’s first data
request, stated that in accordance with Rule 25-6.0440(1)(d), F.A.C., the
customers to be transferred from DEF to Winter Park pursuant to this agreement
were notified by mail and a description of the difference between DEF’s and Winter
Park’s electric rates was provided. Since
the initial notification, the rates have changed. As of October 2021, DEF’s
residential rate for 1,000 kilowatt-hours (kWh) is $132.24 and commercial rate
for 1,500 kWh is $207.60. For the same month, Winter Park residential rate for
1,000 kWh is $121.27 and commercial rate for 1,500 kWh is $202.54. The
customer notice states that DEF will apply customers’ deposits to their last
electric bill and will directly refund any surplus. With regard to the degree of acceptance by
affected customers, the petitioners, in their response to staff’s first data request,
stated that DEF has not received any comments from customers subject to the
transfer and will notify the Commission if any comments or questions are received.
The joint petitioners intend to transfer the 11 customers by end of 2022.
Conclusion
After review of the joint petition, the proposed First
Amendment to the territorial agreement, and responses to staff’s data requests,
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 Winter Park or DEF.
Therefore, staff recommends that the Commission should approve the proposed
First Amendment to the territorial agreement between Winter Park and DEF in Orange
County.
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.
(Sandy)
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.
