Case Background
Southlake Utilities, Inc. (Southlake or
utility) is a Class B utility which provides water and wastewater service to
approximately 3,371 water and 3,194 wastewater customers in Lake County. According to the utility’s 2021 annual
report, the utility’s operating revenues were $981,750 for water and $1,329,614
for wastewater. The utility’s operating expenses were $719,108 for water and
$1,224,689 for wastewater.
On June 15,
2022, Southlake filed an application to establish service availability charges
for new radio frequency meter installations. The official filing date was
established as July 15, 2022. On July 27, 2022, the utility waived the 60-day suspend
provision of Section 367(6), Florida Statutes (F.S.). Service availability
charges are cash contributions new customers or developers make to a utility
prior to connecting to the facilities; meter installation charges are a type of
service availability charge. This recommendation addresses radio frequency
meter installation charges for Southlake. The Commission has jurisdiction
pursuant to Sections 367.081, 367.091 and 367.101, F.S.
Discussion
of Issues
Issue 1:
Should Southlake’s request to revise its meter
installation charges be approved?
Recommendation:
Yes. Southlake’s request to
revise its meter installation charges should be approved. The appropriate meter installation charges should be $402.31 for the 5/8
x 3/4 inch meter, $556.49 for the 1-inch
meter, and at actual cost for all other
meter sizes. The utility should file a revised tariff sheet and a
proposed notice to reflect the Commission-approved meter installation charges.
Southlake should provide notice to property owners who have requested service
beginning 12 months prior to the establishment of this docket. The approved
charge should be effective for connections made on or after the stamped
approval date on the tariff sheet. The utility should provide proof of noticing
within 10 days of rendering the approved notice. (Bethea, Hudson)
Staff Analysis:
Pursuant
to Section 367.101, F.S., the Commission shall set just and reasonable charges
and conditions for service availability. The utility’s existing meter
installation charges were set in 1991 at $130 for the 5/8 x 3/4 inch
meter, $210 for the 1-inch meter, and at actual cost for all other meter
sizes. The
existing meters are manual read while the new meters the utility will install
are radio frequency (RF) meters. The utility indicated that, in time, the RF
meters would help lower Southlake’s meter reading labor costs and provide more
system information from meter reads.
Southlake’s proposed material and installation costs for RF meters are $402.31
for the 5/8 x 3/4 inch meter and $556.49 for the 1-inch meter. All other meter sizes are at actual cost. Pursuant to Rule
25-30.565(3)(t), Florida Administrative Code, Southlake is required to provide
a schedule showing, by meter size, the cost of meters, connecting fittings,
meter boxes or enclosures and also showing sufficient data on labor and any
other applicable costs to allow the determination of an average cost for meter
installation by type. Table 1-1 reflects the utility’s cost justification for
its requested meter installation charges.
Table
1-1
Service Availability Charges
Meter Installation Cost
|
New Meter Cost
|
|
|
5/8 x 3/4”
|
1”
|
|
Radio Frequency Meters
|
$225.77
|
$376.64
|
|
Double Meter Box
|
$46.22
|
$46.22
|
|
Meter Coupling
|
$9.29
|
$10.48
|
|
Backflow Check Valve
|
$89.88
|
$92.00
|
|
Total Material Cost
|
$371.16
|
$525.34
|
|
Labor to install (one hour)
|
$23.08
|
$23.08
|
|
Overhead (35 percent)
|
$8.08
|
$8.08
|
|
Total Meter
Installation Cost
|
$402.31
|
$556.49
|
Source: Utility’s Cost
Justification
Southlake’s proposed meter installation charges are based on the
estimated cost to install RF meters, the required backflow prevention device
for each meter size, and labor associated with the installation. The utility
provided invoices to support the material charges. The labor costs are based on
the average hourly rate of two employees. The Commission has previously
approved meter installation charges at this amount for the 5/8 x 3/4
inch meter.[2]
Staff believes the meter installation charges are reasonable and should be
approved.
At this time, the proposed meter installation charges are applicable
only to new customers who would be contributing infrastructure to the utility.
Southlake explained that it has replaced existing meters with the RF meters in
localized communities, at its own expense, in order to offset the expense of
hiring additional personnel. The utility indicates a complete change out of
existing manual read meters would be a capital project in the future.
Based on the above, Southlake’s
request to revise its meter installation charges should be approved. The appropriate meter installation charges should be $402.31 for the 5/8
x 3/4 inch meter, $556.49 for the 1-inch meter, and at actual cost for all other meter
sizes. The utility should file a revised tariff sheet and a proposed
notice to reflect the Commission-approved meter installation charges. Southlake
should provide notice to property owners who have requested service beginning
12 months prior to the establishment of this docket. The approved charge should
be effective for connections made on or after the stamped approval date on the
tariff sheet. The utility should provide proof of noticing within 10 days of
rendering the approved notice.
Issue 2:
Should this docket be closed?
Recommendation:
The docket should remain open pending staff’s
verification that the revised tariff sheet and notice have been filed by
Southlake and approved by staff. If a protest is filed within 21 days of the
issuance date of the Order, the tariff should remain in effect with the charge
held subject to refund pending resolution of the protest. If no timely protest
is filed, a consummating order should be issued and, once staff verifies that
the notice of the charge has been given to property owners, the docket should
be administratively closed. (Sandy)
Staff Analysis:
The docket should remain open pending staff’s
verification that the revised tariff sheet and notice have been filed by
Southlake and approved by staff. If a protest is filed within 21 days of the
issuance date of the Order, the tariff should remain in effect with the charge
held subject to refund pending resolution of the protest. If no timely protest
is filed, a consummating order should be issued and, once staff verifies that
the notice of the charge has been given to property owners, the docket should
be administratively closed.
