Case Background
On
May 31, 2022, Florida City Gas (FCG or Company) filed a petition seeking the
Florida Public Service Commission’s (Commission) approval of a rate increase
and associated depreciation rates. FCG is a natural gas local distribution
company providing sales and transportation of natural gas, and is a public
utility subject to this Commission’s regulatory jurisdiction under Section
366.02, Florida Statutes (F.S.). FCG currently serves approximately 116,000
residential, commercial, and industrial natural gas customers in Miami-Dade,
Broward, St. Lucie, Indian River, Brevard, Palm Beach, Hendry, and Martin
counties.
An
administrative hearing was held on December 12-13, 2022. At the hearing, the
Commission approved the following stipulated issues: 10, 14, 16, 18, 20, 21,
30, 32, 33, 37, 43, 44, 48, 56, 63, 64, 69, 70, 72 and 73. At the March 28,
2023 Special Agenda Conference, the Commission approved an incremental increase
in operating revenues of $14,149,121. The total Company target revenues,
including other operating revenues, is $88,033,271. The staff-calculated final revenue
requirement calculations that reflect the Commission-approved increase to
operating revenues are contained in Attachment A to the recommendation.
At
the March 28, 2023 Special Agenda Conference, the Commission approved the
Company’s cost of service study in Issue 58 and the revenue increase allocation
to the rate classes in Issue 59. This recommendation addresses the issues that
were not addressed at the March 28, 2023 Special Agenda Conference: Issue 60
(customer charges), Issue 61 (distribution charges), Issue 62 (demand charges),
Issue 65 (effective date), Issue 66 (approval of tariffs), and Issue 73 (close
docket).
On
April 7, 2023, the Company filed a revised cost of service study and associated
tariffs reflecting the final Commission-approved revenue requirement. The proposed customer, distribution, and
demand charges are calculated in the revised cost of service study and shown in
the attached tariffs. The tariffs are included in Attachment B to the
recommendation. The Commission has jurisdiction over this matter pursuant to
Chapter 366, F.S., including Sections 366.06 and 366.071, F.S.
Discussion
of Issues
Issue 60:
Are FCG’s proposed Customer Charges appropriate?
Recommendation:
The proposed customer charges as provided in the
tariffs in Attachment B to the recommendation should be approved. (Hampson,
Norris)
Position of the Parties
FCG:
Yes. The appropriate customer charges are those
shown in 2023 Test Year MFRs E-2 and H-1 (1 of 2). (DuBose)
OPC:
No position.
FEA:
No position.
FIPUG:
Adopt position of OPC.
Staff Analysis:
PARTIES’
ARGUMENTS
FCG
FCG did not provide an argument. (FCG BR 87)
OPC
OPC did not provide an argument. (OPC BR 59)
FEA
FEA did not provide an argument. (FEA & FIPUG BR 29)
FIPUG
FIPUG adopted the position of OPC, but did not provide an
argument. (FEA & FIPUG BR 29)
ANALYSIS
The customer charges, in combination with the per therm
distribution charges shown in Issue 61 and the demand charges shown in Issue 62,
are designed to allow the Company to recover the total Commission-approved
revenue requirement. Further, the Commission approved the Company’s proposed
cost of service methodology in Issue 58 and the allocation of the revenue increase
to rate classes in Issue 59 at the March 28, 2023 Special Agenda Conference. The
proposed customer charges reflect the approved revenue requirements and cost of
service methodology; therefore, the proposed charges provided in the tariffs in
Attachment B to the recommendation should be approved.
Issue 61:
Are FCG’s proposed per therm Distribution Charges
appropriate?
Recommendation:
The proposed per therm distribution charges as
provided in the tariffs in Attachment B to the recommendation should be
approved. (Hampson, Norris)
Position of the Parties
FCG:
Yes. The appropriate per therm Distribution Charges
are those shown in 2023 Test Year MFRs E-2 and H-1 (1 of 2). (DuBose)
OPC:
No position.
FEA:
No position.
FIPUG:
Adopt position of OPC.
Staff Analysis:
PARTIES’
ARGUMENTS
FCG
FCG did not provide an argument. (FCG BR 87)
OPC
OPC did not provide an argument. (OPC BR 59)
FEA
FEA did not provide an argument. (FEA & FIPUG BR
29-30)
FIPUG
FIPUG adopted the position of OPC, but did not provide an
argument. (FEA & FIPUG BR 29-30)
ANALYSIS
Staff has reviewed the Company’s revised cost of service
filing and it reflects the Commission-approved total Company revenue
requirement. Further, the Commission approved the Company’s proposed cost of
service methodology in Issue 58 and the allocation of the revenue increase to
rate classes in Issue 59 at the March 28, 2023 Special Agenda Conference. The
proposed per therm distribution charges reflect the approved revenue
requirements and cost of service methodology; therefore, the proposed charges
provided in the tariffs in Attachment B to the recommendation should be approved.
Issue 62:
Are FCG’s proposed Demand Charges appropriate?
Recommendation:
The proposed demand charges as provided in the
tariffs in Attachment B to the recommendation should be approved. (Hampson,
Norris)
Position of the Parties
FCG:
Yes. The appropriate Demand Charges are those shown
in 2023 Test Year MFRs E-2 and H-1 (1 of 2). (DuBose)
OPC:
No position.
FEA:
No position.
FIPUG:
Adopt position of OPC.
Staff Analysis:
PARTIES’
ARGUMENTS
FCG
FCG did not provide an argument. (FCG BR 87)
OPC
OPC did not provide an argument. (OPC BR 59)
FEA
FEA did not provide an argument. (FEA & FIPUG BR 30)
FIPUG
FIPUG adopted the position of OPC, but did not provide an
argument. (FEA & FIPUG BR 30)
ANALYSIS
Staff has reviewed the Company’s revised cost of service
filing and it reflects the Commission-approved total Company revenue
requirement. Further, the Commission approved the Company’s proposed cost of
service methodology in Issue 58 and the allocation of the revenue increase to
rate classes in Issue 59 at the March 28, 2023 Special Agenda Conference. The
proposed demand charges reflect the approved revenue requirements and cost of
service methodology; therefore, the proposed charges provided in the tariffs in
Attachment B to the recommendation should be approved.
Issue 65:
What is the appropriate effective date for FCG’s
revised rates and charges?
Recommendation:
The rates and charges approved by the Commission
should become effective May 1, 2023. The Commission should approve the proposed
tariffs as provided in Attachment B to the recommendation. (Hampson, Norris)
Position of the Parties
FCG:
Pursuant to the statutory eight-month suspension
period in Section 366.06(3), F.S., FCG’s filing requested a February 1, 2023
effective date for new base rates. (DuBose)
OPC:
The effective date of FCG’s revised rates and
charges should allow for time for implementation promptly after the
Commission’s final order in this matter.
FEA:
No position.
FIPUG:
Adopt position of OPC.
Staff Analysis:
PARTIES’
ARGUMENTS
FCG
FCG did not provide an argument. (FCG BR 87)
OPC
OPC did not provide an argument. (OPC BR 59)
FEA
FEA did not provide an argument. (FEA & FIPUG BR 30)
FIPUG
FIPUG adopted the position of OPC, but did not provide an
argument. (FEA & FIPUG BR 30)
ANALYSIS
FCG provided a notification of the proposed rate increase
to its customers during the month of August 2022, and also posted notice of the
rate increase on its website. The notification included a comparison between
current and proposed rates, and that the rates ultimately approved by the
Commission will not exceed those identified in the notice. FCG will also
provide a direct notice to customers during May 2023, which will identify the
final, Commission-approved rates and charges. Staff has reviewed the direct
notice and believes the notice reflects the rates and charges approved by the Commission.
Staff recommends that the rates and charges approved by
the Commission should become effective May 1, 2023. The Commission should
approve the proposed tariffs as provided in Attachment B to the recommendation.
Issue 66:
Should the Commission give staff administrative
authority to approve tariffs reflecting Commission approved rates and charges?
Recommendation:
Yes, the Commission should give staff administrative
authority to approve tariffs reflecting the Commission-approved rates and
charges, as provided in Attachment B to the recommendation. (Hampson, Norris)
Position of the Parties
FCG:
Yes. The Commission should approve tariffs
reflecting the Commission’s approved rates and charges. The Commission should
direct staff to verify that the revised tariffs are consistent with the
Commission’s decision. (Dubose)
OPC:
No position.
FEA:
No position.
FIPUG:
Adopt position of OPC.
Staff Analysis:
PARTIES’
ARGUMENTS
FCG
FCG did not provide an argument. (FCG BR 87)
OPC
OPC did not provide an argument. (OPC BR 59)
FEA
FEA did not provide an argument. (FEA & FIPUG BR 30)
FIPUG
FIPUG adopted the position of OPC, but did not provide an
argument. (FEA & FIPUG BR 30)
ANALYSIS
Commission staff has reviewed the revised cost of service
study and associated tariffs, which were revised to reflect the final
Commission-approved revenue requirement. Reviewing
the documentation provided by FCG, staff believes that the revised cost of
service study and associated tariffs are in accordance with the Commission vote
from the March 28, 2023 Special Agenda Conference. The Commission should
approve the proposed tariffs as provided in Attachment B to the recommendation.
Issue 73:
Should this docket be closed?
Recommendation:
After the final order is issued, this docket should
be closed. (Harper, Sparks)
