Case Background
Ni Florida, Inc. (Ni Florida or utility) is a Class A
utility serving only water customers in Lee County and only wastewater
customers in Pasco County. This filing is for its wastewater system. The
utility provides wastewater service to approximately 2,820 customers. For its
wastewater, Ni Florida is a reseller and purchases wastewater treatment from
Pasco County. According to its 2021 Annual Report, the utility reported wastewater
operating revenues of $2,401,726 and wastewater operating expenses of
$2,155,625.
Pursuant to Section 367.091(5), Florida Statutes (F.S.), on
August 24, 2022, Ni Florida filed an application for new classes of service for
bulk wastewater service. Along with the application, the utility filed Second Revised
Sheet No. 11, Original Sheet No. 12.3, and Original Sheet No. 12.4. Ni Florida
has entered into agreements to provide bulk wastewater service to Shadow Wood
West and Shadow Wood Village (entities), which are in its certificated service
territory. Both entities are exempt from Commission regulation pursuant to
Section 367.022(5), F.S., because they provide service only to tenants on their
properties. Ni Florida has indicated that there is a sense of urgency to
connect the entities. For Shadow Wood Village, specifically, its wastewater
treatment facilities are nearing capacity and will be unable to accommodate
additional homes on the system. Although Shadow Wood West is not at capacity,
it is being included for administrative efficiency because it is contiguous and
a similar development as Shadow Wood Village.
This
recommendation addresses Ni Florida’s proposed tariff sheets to provide bulk
wastewater service. The Commission has jurisdiction pursuant to Section
367.091, F.S.
Discussion
of Issues
Issue 1:
Should Ni Florida’s proposed tariffs containing the
bulk service wastewater rates for Shadow Wood Village and Shadow Wood West be
approved?
Recommendation:
Yes, the utility’s proposed tariffs containing the
bulk service wastewater rates should be approved. As shown in Attachment 1, Ni
Florida’s Second Revised Sheet No. 11, Original Sheet
No. 12.3, and Original Sheet No. 12.4 should be approved as filed. The
utility should file a proposed customer notice for the two bulk service
customers to reflect the Commission-approved rates. The approved rates should
be effective for service rendered on or after the stamped approval date of the
tariffs pursuant to Rule 25-30.475(1), Florida Administrative Code (F.A.C.),
provided that the notice of the tariff has been received by the two bulk
service customers impacted. The utility should provide proof of the date notice
was given within 10 days of the date of the notice. The utility’s request for a
generic bulk service tariff should be denied. (Hudson)
Staff Analysis:
As discussed in the case background, Ni Florida
entered into bulk service agreements to provide bulk wastewater service to
Shadow Wood Village and Shadow Wood West. The utility has ample excess capacity
to meet the immediate requirements of the entities. The connection of the
entities will not cause an interruption of wastewater service to existing
customers.
Ni Florida has an existing tariff for bulk wastewater
service to manufactured homes. In Order No. PSC-16-0525-PAA-WS, the bulk
wastewater service rate was determined by multiplying the number of manufactured
homes behind the meter times .8 to determine the number equivalent residential
connections (ERCs). For the
entities, Ni Florida proposed rates that are consistent with the methodology
established in its last rate case for manufactured homes’ bulk wastewater
service rates. Shadow Wood Village has 215 manufactured homes behind the meter resulting
in 172 ERCs while Shadow Wood West has 45 manufactured homes resulting in 36
ERCs. The bulk wastewater service rate for each entity consists of a base
facility charge (BFC) based on the respective ERCs times the utility’s existing
BFC of $26.29 for the 5/8” x 3/4” meter size and the existing bulk service
gallonage charge ($9.27). As a result, staff believes the proposed rates are
reasonable.
The proposed bulk service wastewater rates will provide Ni
Florida with additional revenues of $147,245. With these additional revenues,
the utility is still earning within its authorized range of return. The
entities are not fully built out. Thus, although the tariff will define the
number of ERCs at the time of the filing of the instant application, at all times
the utility should be billing based on the number of ERCs behind the meter as with
the methodology prescribed above. At such time Ni Florida comes in for a rate
proceeding, the tariff will be updated to reflect the most current ERCs. If new
connections are added and additional revenues are collected, staff’s annual
report surveillance will allow monitoring of the utility’s earning levels for
potential overearnings.
In addition, Ni Florida indicated that it has additional
territory that could be subject to similar residential developments. As a
result, the utility in its petition asked the Commission to consider a generic
bulk service tariff for administrative efficiency and reduction in regulatory
lag. Ni Florida did not file an actual generic bulk service tariff with its
petition. If granted, in its filing Ni Florida committed to filing a separate
filing if a unique situation arises. With any new similarly planned
development, the utility may furnish the new class of service and charge just,
reasonable, and compensatory rates and file with the Commission within 10 days after
the service is furnished pursuant to Section 367.091(5), F.S., which minimizes
any regulatory lag concern by the utility. Staff believes the Commission’s
authority to review bulk service agreements and evaluate the impact bulk
customers have on the utility’s earnings at the onset of service should be
preserved. Therefore, at this time, staff does not believe a generic bulk
service tariff is appropriate, and this request should be denied.
Conclusion
The utility’s proposed tariffs containing the bulk service
wastewater rates should be approved. As shown in Attachment 1, Ni Florida’s
Second Revised Sheet No. 11, Original Sheet No. 12.3,
and Original Sheet No. 12.4 should be approved as filed. The utility
should file a proposed customer notice for the two bulk service customers to
reflect the Commission-approved rates. The approved rates should be effective
for service rendered on or after the stamped approval date of the tariffs
pursuant to Rule 25-30.475(1), F.A.C., provided that the notice of the tariff
has been received by the two bulk service customers impacted. The utility
should provide proof of the date notice was given within 10 days of the date of
the notice. The utility’s request for a generic bulk service tariff should be
denied.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. If Issue 1 is approved, the tariff sheets
should become effective on or after the stamped approval date on the tariff
sheets pursuant to Rule 25-30.475, F.A.C. If a protest is filed within 21 days
of the issuance of the Order, the tariff should remain in effect with the
revenues held subject to refund pending resolution of the protest, and the
docket should remain open. If no timely protest is filed, the docket should be
closed upon the issuance of a Consummating Order. (Rivera-Pacheco)
Staff Analysis:
If Issue 1 is approved, the tariff sheets should
become effective on or after the stamped approval date on the tariff sheets
pursuant to Rule 25-30.475, F.A.C. If a protest is filed within 21 days of the
issuance date of the Order, the tariff should remain in effect with revenues
subject to refund pending resolution of the protest, and the docket should
remain open. If no timely protest is filed, the docket should be closed upon
the issuance of a Consummating Order.
