Commission Conference Agenda

1 Docket No. 20230020-EI – Petition for limited proceeding for recovery of incremental storm restoration costs related to Hurricanes Elsa, Eta, Isaias, Ian, Nicole, and Tropical Storm Fred, by Duke Energy Florida, LLC.
Docket No. 20230116-EI – Petition for limited proceeding for recovery of incremental storm restoration costs related to Hurricane Idalia, by Duke Energy Florida, LLC.

Critical Date(s):		None
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Graham (20230020-EI) Passidomo (20230116-EI)
Staff:	AFD: Gatlin, Norris, Vogel ECO: Draper GCL: Brownless

(Post-hearing Decision - Participation is limited to Commissioners and Staff. Vote required on Issues 16 and 17 only.)

Issue 1:

Should the incremental cost and capitalization approach (ICAA) found in Rule 25-6.0143, F.A.C., be used to determine the reasonable and prudent amounts to be included in the restoration costs?

Approved Type 2 Stipulation:

The ICCA approach in Rule 25-6.0143, F.A.C. and the terms of the 2019 Irma Settlement Agreement approved by Order No. PSC-2019-0232-AS-EI should be used to determine the reasonable and prudent amounts included in the restoration costs.

Issue 2:

Have the terms of DEF's 2019 Settlement Agreement, approved by Order No. PSC-2019-0232-AS-EI, issued June 13, 2019, been complied with? If not, why not?

Approved Type 2 Stipulation:

Yes.

Issue 3:

What is the reasonable and prudent amount of regular payroll expense to be included in Total Storm Related Restoration Costs?

Approved Type 2 Stipulation:

Below is the reasonable and prudent regular payroll expense for each storm.

Table 3-1

Regular Payroll Expense

Storm	Amount
Nicole	$1,370,120
Ian	$4,674,377
Fred	$167,704
Elsa	$492,800
Isaias	$66,191
Eta	$347,959

The reasonable and prudent amount of regular payroll expense to be included in Total Storm Related Restoration Costs is $7,119,151.

Issue 4:

What is the reasonable and prudent amount of overtime payroll expense to be included in Total Storm Related Restoration Costs?

Approved Type 2 Stipulation:

Below is the reasonable and prudent overtime payroll expense for each storm.

Table 4-1

Overtime Payroll Expense

Storm	Amount
Nicole	$3,377,663
Ian	$9,965,271
Fred	$258,537
Elsa	$807,888
Isaias	$366,526
Eta	$962,313

The reasonable and prudent amount of overtime payroll expense to be included in Total Storm Related Restoration Costs is $15,738,198.

Issue 5:

What is the reasonable and prudent amount of contractor costs, including vegetation and line clearing, to be included in Total Storm Related Restoration Costs?

Approved Type 2 Stipulation:

Below are the reasonable and prudent contractor costs for each storm.

Table 5-1

Contractor Costs

Storm	Amount
Nicole	$29,149,136
Ian	$267,394,755
Fred	$108,304
Elsa	$8,257,533
Isaias	$279,861
Eta	$13,084,650

The reasonable and prudent amount of contractor costs, including vegetation and line clearing, to be included in Total Storm Related Restoration Costs is $318,274,239.

Issue 6:

What is the reasonable and prudent amount of vehicle and fuel expense to be included in Total Storm Related Restoration Costs?

Approved Type 2 Stipulation:

Below is the reasonable and prudent vehicle and fuel expense for each storm.

Table 6-1

Vehicle and Fuel Expense

Storm	Amount
Nicole	$1,526,358
Ian	$9,397,616
Fred	$40,969
Elsa	$426,169
Isaias	$37,817
Eta	$747,426

The reasonable and prudent amount of vehicle and fuel expense to be included in Total Storm Related Restoration Costs is $12,176,355.

Issue 7:

What is the reasonable and prudent amount of employee expenses to be included in Total Storm Related Restoration Costs?

Approved type 2 Stipulation:

Below are the reasonable and prudent employee expenses for each storm.

Table 7-1

Employee Expenses

Storm	Amount
Nicole	$3,453,759
Ian	$16,510,677
Fred	$24,606
Elsa	$836,059
Isaias	$16,232
Eta	$800,782

The reasonable and prudent amount of employee expenses to be included in Total Storm Related Restoration Costs is $21,642,115.

Issue 8:

What is the reasonable and prudent amount of materials and supplies expense to be included in Total Storm Related Restoration Costs?

Approved Type 2 Stipulation:

Below is the reasonable and prudent materials and supplies expense for each storm.

Table 8-1

Materials and Supplies Expense

Storm	Amount
Nicole	$3,245,543
Ian	$18,603,008
Fred	$34,668
Elsa	$1,002,905
Isaias	$37,432
Eta	$1,003,640

The reasonable and prudent amount of materials and supplies expense to be included in Total Storm Related Restoration Costs is $23,927,196.

Issue 9:

What is the reasonable and prudent amount of logistics costs to be included in Total Storm Related Restoration Costs?

Approved Type 2 Stipulation:

Below are the reasonable and prudent logistics costs for each storm.

Table 9-1

Logistics Costs

Storm	Amount
Nicole	$4,917,493
Ian	$44,649,681
Fred	$59,127
Elsa	$3,403,957
Isaias	$12,301
Eta	$2,768,223

The reasonable and prudent amount of logistics costs to be included in Total Storm Related Restoration Costs is $55,810,782.

Issue 10:

What is the reasonable and prudent amount of other costs to be included in Total Storm Related Restoration Costs?

Approved Type 2 Stipulation:

Below are the reasonable and prudent other costs for each storm. These amounts include labor burdens/incentives, overhead allocations, external audit, insurance deductible and Irma settlement implementation costs.

Table 10-1

Other Costs

Storm	Amount
Nicole	$1,470,546
Ian	$10,083,533
Fred	$192,958
Elsa	$914,981
Isaias	$225,532
Eta	$1,357,418

The reasonable and prudent amount of other costs to be included in Total Storm Related Restoration Costs is $14,244,968.

Issue 11:

What is the reasonable and prudent total amount of costs to be included in Total Storm Related Restoration Costs?

Approved Type 2 Stipulation:

Below are the reasonable and prudent Total Storm Related Restoration Costs for each storm.

Table 11-1

Total Storm Related Restoration Costs

Storm	Amount
Nicole	$48,510,617
Ian	$381,278,918
Fred	$886,874
Elsa	$16,142,291
Isaias	$1,041,892
Eta	$21,072,410

The reasonable and prudent total amount of costs to be included in Total Storm Related Restoration Costs is $468,933,002.

Issue 12:

What is the reasonable and prudent amount of storm-related costs that should be capitalized?

Approved Type 2 Stipulation:

Below are the reasonable and prudent storm-related costs that should be capitalized.

Table 12-1

Capitalized Costs

Storm	Amount
Nicole	$3,992,784
Ian	$13,714,654
Fred	$31,017
Elsa	$171,265
Isaias	$0
Eta	$395,117

The reasonable and prudent amount of storm-related costs that should be capitalized is $18,304,837.

Issue 13:

What is the reasonable and prudent amount of storm-related costs that should be ICCA non-incremental O&M adjustment?

Approved Type 2 Stipulation:

Below are the reasonable and prudent storm-related costs that should be ICCA non-incremental O&M adjustment.

Table 13-1

ICCA Non-Incremental O&M Adjustment

Storm	Amount
Nicole	$1,274,876
Ian	$4,096,655
Fred	$690,427
Elsa	$688,770
Isaias	$760,300
Eta	$376,694

The reasonable and prudent amount of storm-related costs that should be ICCA non-incremental O&M adjustments is $7,887,722.

Issue 14:

What is the reasonable and prudent total amount of retail Recoverable Storm Costs?

Approved Type 2 Stipulation:

Below are the reasonable and prudent Recoverable Storm Costs including any true-up to prior storm recovery and estimated interest on the unamortized reserve deficiency balance, subject to true-up as stated in Issue 16.

Table 14-1

Retail Recoverable Storm Costs

Storm	Amount
Nicole	$42,928,330 retail
Ian	$359,576,056 retail
Fred	$155,094 retail
Elsa	$14,608,576 retail
Isaias	$258,952 retail
Eta	$20,160,165 retail
Previous Partial Recovery of Storm Costs	$10,976,144

The prudent and reasonable retail Total Recoverable Storm Costs plus estimated interest of $4,669,608 is $431,380,637.

Issue 15:

What is the appropriate accounting treatment associated with any storm costs found to have been imprudently incurred?

Approved Type 2 Stipulation:

Imprudently incurred storm costs should not be charged to the storm reserve or recovered through a storm restoration charge on customer bills. No storm restoration costs were imprudently incurred; therefore, no such adjustment is necessary.

Issue 16:

Should any cost recovery in this docket be recovered from demand-metered customers through the demand charge?

Recommendation:

No. Staff recommends that the recovery of storm restoration costs from demand-metered customers through an energy charge is more appropriate than through a demand charge because the costs recovered through a storm restoration surcharge are highly variable and are largely associated with non-recurring contractor costs. Therefore, staff recommends that no change be made to the collection of DEF’s storm restoration surcharge and that it continue to be collected from demand-metered customers on an energy ($/kWh) basis.

Issue 17:

If applicable, how should any under-recovery or over-recovery be handled?

Recommendation:

In order to avoid mismatching the method used to collect storm restoration costs with that used to refund those costs, and consistent with our recommendation on Issue 16, staff recommends that DEF be required to use the fuel energy charge to either refund or collect true-up storm restoration costs.

Issue 18:

What additional storm restoration process improvements, if any, should DEF follow in future storms?

Approved Type 2 Stipulation:

DEF has fully implemented the Process Improvements approved in Order No. PSC-2019-0232-AS-EI. As part of DEF’s process of continuous improvements, to the extent practicable without hindering safe and efficient storm restoration, DEF has agreed to work to implement the additional process refinements included in Attachment A of staff’s memorandum dated July 25, 2024.

Issue 19:

Should this docket be closed?

Approved Type 2 Stipulation:

No. This docket should remain open so that DEF can file supplemental schedules that compare the final storm recovery amount approved by the Commission to actual revenues from the storm restoration charge and calculate the resulting excess or shortfall for recovery.

4**PAA Docket No. 20240023-WS – Application for certificates to provide water and wastewater service and approval of initial rates and charges in Lake County, by North Lake County Water & Sewer Company LLC.

Critical Date(s):		08/06/24 (Statutory deadline for original certificate pursuant to Section 367.031, Florida Statutes, waived by applicant until 08/06/24)
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Graham
Staff:	ENG: Ramirez-Abundez, Ramos, Watts AFD: Norris, Sewards ECO: Bethea, Bruce GCL: Sandy, J. Crawford

(Proposed Agency Action except for Issue 1.)

Issue 1:

Should the application for water and wastewater certificates by North Lake be approved?

Recommendation:

Yes. North Lake should be granted Certificate Nos. 683-W and 583-S to serve the territory described in Attachment A of staff’s memorandum dated July 25, 2024, effective the date of the Commission’s vote. The resultant order should serve as North Lake’s water and wastewater certificates and it should be retained by the Utility.

Issue 2:

What are the appropriate water and wastewater rates and return on investment for North Lake?

Recommendation:

Staff’s recommended water and wastewater rates, shown on Schedule Nos. 4-A and 4-B of staff’s memorandum dated July 25, 2024, are reasonable and should be approved. The overall cost of capital should be set at 8.42 percent. A return on equity (ROE) of 8.66 percent with a range of plus or minus 100 basis points should also be approved. The approved rates should be effective for services rendered as of the stamped approval date on the tariff sheets pursuant to Rule 25-30.475, F.A.C. The Utility should be required to charge the approved rates until authorized to change them by the Commission in a subsequent proceeding.

Issue 3:

Should North Lake’s requested initial customer deposits be approved?

Recommendation:

No. The appropriate initial customer deposits are $178 for water and $160 for wastewater service for the residential 5/8″ x 3/4″ meter size. The initial customer deposits for all other residential meter sizes and all general service meter sizes should be two times the average estimated bill. The approved customer deposits should be effective for service rendered on or after the stamped approval date on the tariff pursuant to Rule 25-30.475, F.A.C. The Utility should be required to collect the approved deposits until authorized to change them by the Commission in a subsequent proceeding.

Issue 4:

What are the appropriate service availability charges for North Lake?

Recommendation:

The appropriate service availability charges are the Utility’s requested plant capacity charge of $2,000 per ERC for the water system and $3,000 per ERC for the wastewater system. The recommended plant capacity charges should be based on 300 gallons per day (gpd) for water and 250 gpd for wastewater. The approved charges should be effective for connections made on or after the stamped approval date on the tariff pursuant to Rule 25-30.475, F.A.C. The Utility should be required to charge the approved charges until authorized to change them by the Commission in a subsequent proceeding.

Issue 5:

Should the temporary meter deposit requested by North Lake be approved?

Recommendation:

Yes. The Utility’s requested temporary meter deposit for general service customers at actual cost pursuant to Rules 25-30.315 and 25-30.345, F.A.C., is reasonable and should be approved. The approved temporary meter deposit should be effective for service rendered on or after the stamped approval date on the tariff sheet pursuant to Rule 25-30.475, F.A.C. North Lake should be required to collect the approved deposit, which covers the anticipated costs of installing and removing facilities and materials for temporary service, until authorized to change it by the Commission in a subsequent proceeding.

Issue 6:

Should North Lake’s request to implement a backflow prevention assembly testing charge be approved?

Recommendation:

Yes. The Utility’s requested backflow prevention assembly testing charge for general service customers at actual cost should be approved. The approved charge should be effective for service rendered or connections made on or after the stamped approval date on the tariff pursuant to Rule 25-30.475, F.A.C. North Lake should be required to charge the approved charge until authorized to change it by the Commission in a subsequent proceeding.

Issue 7:

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 have been filed by the utility and approved by staff. Once these actions are complete, this docket should be closed administratively.

Critical Date(s):		08/06/24 (60-day provision of Section 366.071(2), F.S., waived by Company until 08/06/24)
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Fay
Staff:	AFD: Vogel, McGowan, Ferrer ECO: Hampson, Hudson GCL: Dose, Farooqi

Critical Date(s):		08/27/24 (60-Day Suspension Date)
Commissioners Assigned:			All Commissioners
Prehearing Officer:			Fay
Staff:	AFD: Sewards, Thurmond GCL: Sandy