Case Background
SGI Wastewater
Services, Inc. (SGI or Utility)
is located in Franklin County, Florida. The Utility, an affiliate of U.S. Water
Services Corporation (USWSC), provides wastewater service to 34 residential
beach homes and one clubhouse in the Sunset Beach community, as well as one
bulk customer consisting of 99 condominiums in the 300 Ocean Mile community.
Wastewater services were originally established in 1999 by Sunset Beach/300
Ocean Mile Utility Cooperative (Coop), an exempt non-profit wastewater utility
pursuant to Section 367.022(7), Florida Statutes (F.S.). Water service is provided by Water
Management Services, Inc.
On February 1,
2021, the Coop contracted with USWSC to provide operations services at its
wastewater treatment plant (WWTP) due to the WWTP’s out-of-compliance status
with the Florida Department of Environmental Protection. Later that same year,
members of the Coop and both community homeowners associations mutually agreed
that the sale of the WWTP was in the best interest of the customers, which
resulted in SGI purchasing the wastewater assets on February 19, 2022, thus
requiring certification by the Commission.
On March 11, 2022, SGI filed its
application for an original wastewater certificate for an existing utility
currently charging for service pursuant to Rule 25-30.034, Florida
Administrative Code (F.A.C.). Staff found the application to be deficient and
issued a deficiency letter on April 1, 2022. The application was deemed
complete on April 11, 2022, which is considered the official filing date.
This recommendation addresses the
application for an original wastewater certificate and the appropriate rates
and charges for the Utility. The Commission has jurisdiction pursuant to
Sections 367.031 and 367.045, F.S.
Discussion
of Issues
Issue 1:
Should the application for a wastewater certificate by SGI Wastewater Services, Inc. be
approved?
Recommendation:
Yes. SGI
should be granted Certificate No. 580-S to serve the territory described in Attachment A,
effective the date of the Commission’s vote. The resultant order should serve
as SGI’s wastewater certificate and it should be retained by the Utility. SGI’s
existing rates, late payment charge, and initial customer deposits, shown on
Schedule No. 1, should remain in effect until a change is authorized by the
Commission in a subsequent proceeding. (Maloy, Thurmond, Bethea).
Staff Analysis:
On
March 11, 2022, SGI filed its application for an original wastewater
certificate in Franklin County. Upon review, staff determined the original
filing was deficient and issued a deficiency letter on April 1, 2021. The
Utility cured the deficiencies on April 11, 2022, which is considered the
official filing date for the application. The Utility’s application is in
compliance with the governing statutes, Sections 367.031 and 367.045, F.S.
Notice
On April
14, 2022,
and April 26, 2022,
SGI filed proof of compliance with the noticing provisions set forth in Rule
25-30.030, F.A.C. No entity filed a protest during the protest period and the
time for filing objections has expired.
Land
Ownership and Service Territory
SGI provided
adequate service territory and system maps and a territory description as
required by Rule 25-30.034(1)(k), F.A.C. The legal description of the service
territory is appended to this recommendation as Attachment A. The application
contains warranty deeds for the land where the wastewater treatment facilities
are located pursuant to Rule 25-30.034(1)(m), F.A.C.
Financial
and Technical Ability
Rule 25-30.034(1)(i), F.A.C.,
requires a statement showing the financial ability of the applicant to provide
service, a detailed financial statement, and a list of all entities upon which
the applicant is relying to provide funding along with those entities'
financial statements. SGI is relying fully upon shareholders equity through
paid in capital via SGI’s owner, Gary Deremer. The application contains Mr. Deremer’s
most recent financial statements. Staff believes that Mr. Deremer’s financial
statements and extensive business operations in Florida show adequate and
stable funding reserves for the Utility. Therefore, staff recommends that SGI
has demonstrated that it will have access to adequate financial resources to
operate the Utility.
Rule 25-30.034(1)(j), F.A.C.,
requires the applicant to demonstrate the technical abilities to provide
service. The application contains statements describing the technical ability
of the Utility to provide service to the proposed service area. The president
of the Utility has been in the water and wastewater utility management,
operations, and maintenance related industry for over 34 years. SGI has secured
the services of USWSC to provide contract operating services, billing, and
collection services. Mr. Deremer’s companies have operated more than 850
facilities, providing services to more than 1,000,000 customers daily. Based on
the above, SGI has demonstrated the financial and technical ability to provide
service to the existing service territory.
Continuance
of Existing Rates, Late Payment Charge, and Customer Deposits
SGI provides
wastewater service to the Sunset Beach community consisting of 34 beach homes
and one clubhouse. The Utility also provides wastewater service through a bulk
service agreement to 99 condominiums in the 300 Ocean Mile community. As of
January 31, 2022, both associations mutually agreed to establish and make
effective the existing rates. SGI has residential and general service initial
customer deposits which staff believes are reasonable. In addition, the Utility
also has miscellaneous service charges. Staff believes the $6.50 late payment
charge is reasonable. However, the remaining miscellaneous service charges do
not conform to Rule 25-30.460, F.A.C., and are discussed in Issue 2. Further,
the Utility’s service area is built out and there are no service availability
charges. Staff recommends that SGI’s existing
rates, late payment charge, and initial customer deposits shown on Schedule No.
1 should remain in effect until a change is authorized by the Commission in a
subsequent proceeding.
Conclusion
Staff recommends that it is in the public interest to
grant SGI Certificate No. 580-S to serve the territory described in Attachment
A, effective the date of the Commission’s vote. The resultant order should
serve as SGI’s wastewater certificate and it
should be retained by the Utility. SGI’s existing rates, late payment charge, and
initial customer deposits, shown on Schedule No. 1, should remain in effect
until a change is authorized by the Commission in a subsequent proceeding.
Issue 2:
Should SGI Wastewater Services, Inc.’s miscellaneous
service charges be revised to conform to amended Rule 25-30.460, F.A.C.?
Recommendation:
Yes. The miscellaneous service charges should be
revised to conform to the recent amendment to Rule 25-30.460, F.A.C. The tariff
should be revised to reflect the removal of initial connection and normal
reconnection charges. SGI should be required to file a proposed customer notice
to reflect the Commission-approved charges. The approved charges should be
effective on or after the stamped approval date on the tariff sheet pursuant to
Rule 25-30.475(1), F.A.C. In addition, the approved charges should not be
implemented until staff has approved the proposed customer notice and the
notice has been received by customers. The Utility should provide proof of the
date notice was given within 10 days of the date of the notice. SGI
should be required to charge the approved miscellaneous service charges until
authorized to change them by the Commission in a subsequent proceeding.
(Bethea)
Staff Analysis:
Effective June 24, 2021, Rule 25-30.460, F.A.C., was
amended to remove initial connection and normal reconnection charges.[3] The
definitions for initial connection charges and normal reconnection charges were
subsumed in the definition of the premises visit charge. SGI’s miscellaneous
service charges consist of initial connection and normal reconnection charges.
The normal reconnection charge is more than the premises visit charge. Since
the premises visit entails a broader range of tasks, staff believes the
premises visit should reflect the amount of the normal reconnection charge of
$57.10. Therefore, staff recommends that the initial connection and normal
reconnection charges be removed, the premises visit be revised to $57.10, and
the definition for the premises visit charge be updated to comply with amended
Rule 25-30.460, F.A.C. The Utility’s proposed and staff’s recommended
miscellaneous service charges are shown below in Tables 2-1 and 2-2.
Table
2-1
Utility Proposed Miscellaneous Service Charges
|
|
Normal
Hours
|
|
Initial Connection Charge
|
$31.10
|
|
Normal Reconnection Charge
|
$57.10
|
|
Violation Reconnection Charge
|
Actual
Cost
|
|
Premises Visit Charge
(in lieu of disconnection)
|
$31.10
|
Table 2-2
Staff Recommended Miscellaneous Service Charges
|
|
Normal
Hours
|
|
Violation Reconnection Charge
|
Actual
Cost
|
|
Premises Visit Charge
|
$57.10
|
Conclusion
Based on the above, staff recommends the miscellaneous
service charges be revised to conform to the recent amendment to Rule
25-30.460, F.A.C. The tariff should be revised to reflect the removal of
initial connection and normal reconnection charges. SGI should be required to
file a proposed customer notice to reflect the Commission-approved charges. The
approved charges should be effective on or after the stamped approval date on
the tariff sheet pursuant to Rule 25-30.475(1), F.A.C. In addition, the
approved charges should not be implemented until staff has approved the
proposed customer notice and the notice has been received by customers. The
Utility should provide proof of the date notice was given within 10 days of the
date of the notice. SGI should be required to charge the
approved miscellaneous service charges until authorized to change them by the
Commission in a subsequent proceeding.
Issue 3:
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. The docket should
remain open for staff’s verification that the revised tariff sheets and
customer notice have been filed by the Utility and approved by staff. Once
these actions are complete, this docket should be closed administratively. (Rubottom)
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. The docket should
remain open for staff’s verification that the revised tariff sheets and
customer notice have been filed by the Utility and approved by staff. Once
these actions are complete, this docket should be closed administratively.
FLORIDA PUBLIC SERVICE COMMISSION
Authorizes
SGI Wastewater
Service, Inc.
pursuant to
Certificate Number 580-S
to provide wastewater service in Franklin
County in accordance with the provisions of Chapter 367, Florida Statutes,
and the Rule, regulations, and Orders of this Commission in the territory
described by the Orders of this Commission. This authorization shall remain in
force and effect until superseded, suspended, cancelled or revoked by Order of
this Commission.
Order Number Date Issued Docket Number Filing Type
* * 20220057-SU Original Certificate
* Order Number and date to be provided at time of
issuance.
