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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) Office of the General Counsel (Dose) |
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RE: |
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AGENDA: |
10/01/24 – Regular Agenda – Tariff Suspension – Participation is 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 30, 2024, Florida City Gas (FCG or utility) filed a petition for approval
of its safety, access, and facility enhancement
(SAFE) program true-up and 2025 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 2024 SAFE factors were approved by Order No. PSC-2023-0345-TRF-GU (2023 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.[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 Order No. PSC-2023-0177-FOF-GU, 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.
On April 19, 2024 FCG filed a petition to modify its SAFE program to include replacing of span pipes, burying shallow and exposed pipeline, and replacing of obsolete pipe and related facilities. At the September 10 2024 Agenda Conference, the Commission approved FCG’s SAFE modification. The total estimated cost for the program modifications is $49.8 million over a ten year period.[6] The additional program modifications are included in this proceeding for recalculation of the SAFE surcharges.
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.).