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State of Florida
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Public Service Commission Capital Circle Office Center ● 2540 Shumard
Oak Boulevard -M-E-M-O-R-A-N-D-U-M- |
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DATE: |
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TO: |
Office of Commission Clerk (Teitzman) |
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FROM: |
Division of Economics (P. Kelley) EJD Office of the General
Counsel (Thompson) JSC |
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RE: |
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AGENDA: |
10/03/23 – Regular Agenda – Tariff Suspension – Participation at the Commission’s discretion |
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COMMISSIONERS ASSIGNED: |
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PREHEARING OFFICER: |
Administrative |
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SPECIAL INSTRUCTIONS: |
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On August 31, 2023, Florida City Gas (FCG or utility) filed
a petition for approval of its safety, access, and facility enhancement program
(SAFE) true-up and 2024 cost recovery factors. The SAFE program was originally
approved by the Commission in Order No. PSC-15-0390-TRF-GU (2015 order) to
recover the cost of relocating on an expedited basis certain existing gas mains
and associated facilities from rear lot easements to the street front.[1] In the 2015
order, the Commission found that the relocation of mains and services to the
street front provides for more direct access to the facilities and will enhance
the level of service provided to all customers through improved safety and
reliability. The SAFE factor is a surcharge on customers' bills.
In the 2015 Order, the Commission required the utility to file an annual petition, beginning in 2016, for review and resetting of the SAFE factors to true-up any prior over-or under-recovery and to set the surcharge for the coming year. The SAFE program was originally approved as a 10-year program and was planned to finish in 2025. The current 2023 SAFE factors were approved by Order No. PSC-2022-0403-TRF-GU (2022 order).[2]
During the utility’s 2022 rate case, the Commission approved a stipulation for the expansion of the SAFE program in Order No. PSC-2023-0177-FOF-GU (Rate Case Order).[3] The parties agreed and the Commission found that the continuation of the SAFE program beyond its 2025 expiration date and the relocation of an additional approximately 150 miles of mains and services was reasonable.[4]
In the Rate Case Order, the Commission further approved a stipulation for the replacement of approximately 160 miles of “orange pipe.”[5] All parties to the rate case agreed that orange pipe is a specific plastic material that was used in the 1970s and 1980s that has been studied by the United States Department of Transportation Pipeline and Hazardous Materials Safety Administration and shown through industry research to exhibit premature failure in the form of cracking. The parties agreed and the Commission ordered that FCG should expedite the replacement of 160 miles of orange pipe through the SAFE program to address this safety risk in a timely manner.
Furthermore, in the Rate Case Order, the Commission required FCG to propose a new investment/construction schedule and term for the SAFE program in its next applicable annual SAFE filing. Subsequently, FCG now proposes in this petition to extend the SAFE program for an additional 10-year period through 2035 for the replacement of orange pipe and relocation of rear lot mains and services to the street front. The utility proposes to begin the replacement of orange pipe in 2024 and continue through 2033. FCG also proposes to begin the relocation of mains and services in 2026 and continue through 2035.
Commission staff issued one data request to FCG on
September 13, 2023, for which responses are currently pending. This is staff’s
recommendation to suspend the proposed tariffs. The Commission has jurisdiction
over the matter pursuant to Sections 366.04, 366.041, 366.05, and 366.06,
Florida Statutes (F.S.).