Case Background
On
August 22, 2024, Florida Public Utilities Company (FPUC or Company) filed its
petition for an increase in base rates, as well as minimum filing requirements
schedules (MFRs) and direct testimony of 10 witnesses. The Company is engaged in business as a
public utility providing electric service as defined in Section 366.02, Florida
Statutes (F.S.), and is subject to the jurisdiction of the Commission. FPUC
serves approximately 33,100 retail customers in its Northwest Division and
Northeast Division.
FPUC initially requested
an increase in base rates to generate an additional $12,593,450 in annual
revenues, using the Commission’s proposed agency action (PAA) process under
Section 366.06(4), F.S. The Office of Public Counsel (OPC) intervention was acknowledged
by Order PSC-2024-0408-PCO-EI.
By
Order No. PSC-2024-0441-PCO-EI, the Commission
suspended the proposed permanent rates and approved the requested interim rate
increase. The interim revenue increase was
$1,812,869 and interim rates became effective on November 1, 2024. The base
rate portion of a residential customer using 1,000 kilowatt hours (kWh) per
month increased from $40.68 (prior to interim rates) to $43.68, an increase of
$3.00.
Under
the proposed PAA rates, the base rate portion of the residential 1,000 kWh bill
would increase to $54.82 per month, an increase of $11.42 from the approved interim
rates. The total residential bill, which includes purchased power, energy
conservation, Hurricane Michael storm cost recovery, and storm protection plan
cost recovery charges, would increase from the current $146.37 to $157.79, an
increase of $11.42 (including the increase in gross receipts taxes). Staff
notes that the Hurricane Michael storm cost recovery charge ($12.80 on the
1,000 kWh residential bill), is scheduled to terminate in December 2025.
At
the March 4, 2025 Agenda Conference, the Commission voted to increase FPUC’s
revenue requirement by $9,675,171. On March 10, 2025, FPUC filed an updated
cost of service study and associated revised clean and legislative tariffs
reflecting the Commission-approved revenue requirement.
This
recommendation addresses the issues that were not addressed at the March 4,
2025 Agenda Conference: Issue 51 (customer facilities charges), Issue 52
(demand charges), Issue 53 (energy charges), Issue 61 (effective date of
revised tariffs), Issue 62 (approval of tariffs), and Issue 65 (close docket).
The
staff-calculated revenue requirement, which reflects the Commission-approved
increase to operating revenues, is contained in Attachment A to the
recommendation. The clean tariffs included in Attachment B to the
recommendation reflect charges that are consistent with the Commission-approved
revenue increase. 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 51:
What are the appropriate customer facilities
charges?
Recommendation:
The proposed customer facilities charges as provided
in the tariffs in Attachment B to the recommendation should be approved. (Guffey)
Staff Analysis:
The customer facilities charges, in combination with
the demand charges and the energy charges, are designed to allow FPUC to
recover the total Commission-approved revenue requirement. The proposed customer
facilities charges reflect the approved revenue requirement and cost of service
methodology; therefore, the proposed customer facilities charges provided in
the tariffs in Attachment B to the recommendation should be approved.
Issue 52:
What are the appropriate demand charges?
Recommendation:
The proposed demand charges as provided in the
tariffs in Attachment B to the recommendation should be approved. (Guffey)
Staff Analysis:
The demand charges, in combination with the customer
facilities charges and the energy charges, are designed to allow FPUC to
recover the total Commission-approved revenue requirement. The proposed demand
charges reflect the approved revenue requirement and cost of service
methodology; therefore, the proposed demand charges provided in the tariffs in
Attachment B to the recommendation should be approved.
Issue 53:
What are the appropriate energy charges?
Recommendation:
The proposed energy charges as provided in the
tariffs in Attachment B to the recommendation should be approved. (Guffey)
Staff Analysis:
The energy charges, in combination with the customer
facilities charges and the demand charges, are designed to allow FPUC to
recover the total Commission-approved revenue requirement. The proposed energy
charges reflect the approved revenue requirement and cost of service
methodology; therefore, the proposed energy charges provided in the tariffs in
Attachment B to the recommendation should be approved.
Issue 61:
What is the appropriate effective date for FPUC's
revised rates and charges?
Recommendation:
Staff recommends that FPUC be allowed to implement
the approved revised rates and charges as stated in Attachment B on March 20,
2025. (Brownless)
Staff Analysis:
Pursuant
to Section 366.06(4), F.S., FPUC, as of the date of the Commission vote, is
entitled to place its requested rates into effect, subject to refund, upon
notice to the Commission and upon filing the appropriate tariffs. FPUC requested $12,428,955 in base rate
revenues. At the March 4, 2025 Agenda Conference the Commission approved rate
base revenues of $9,675,171, a reduction of $2,753,784.
That being
the case, FPUC is entitled to place the PAA rates approved by this Commission into
effect, subject to refund, on the date of the Commission’s vote. This vote is
currently scheduled for March 20, 2025. Should no protest be timely filed, FPUC
should then be authorized to release the security holding rates subject to
refund upon the expiration of the protest period and issuance of a consummating
order. Should a protest be filed, the
PAA rates shall remain in effect, subject to refund, pending the resolution of
the case.
Alternatively,
FPUC may implement the PAA rates approved at the March 20, 2025 Special Agenda
upon the expiration of the PAA protest period and issuance of a consummating
order.
FPUC has
requested that the PAA rates and charges, as stated in Attachment B to this
recommendation, go into effect on March 20, 2025 the date of the Commission’s
Special Agenda vote. FPUC will provide its customers with notice of the rate
base revenue approved by the Commission at the March 4, 2025 Agenda Conference
and the proposed PAA rates and charges associated with the approved rate base
revenue increase. This notice will be posted to FPUC’s website prior to the
March 20, 2025 Special Agenda and mailed to the customers.
Issue 62:
Should the Commission approve tariffs reflecting
Commission approved rates and charges?
Recommendation:
Yes. The Commission should approve the tariffs
reflecting Commission approved rates and charges and as shown in Attachment B
to the recommendation. (Guffey)
Staff Analysis:
Staff has reviewed the tariffs, which were revised
to reflect the final Commission-approved revenue requirement. The documentation
provided by FPUC is in accordance with the Commission vote from the March 4,
2025 Agenda Conference. The Commission should approve the revised tariffs as
provided in Attachment B to the recommendation.
Issue 65:
Should this docket be closed?
Recommendation:
If a protest is filed within 21 days of the issuance
of the order, docket should remain open and the tariffs should remain in
effect, with any revenues held subject to refund, pending resolution of the
protest. If no timely protest is filed,
this docket should be closed upon the issuance of a consummating order. (Brownless)
Staff Analysis:
If a protest is filed within 21 days of the issuance
of the order, docket should remain open and the tariffs should remain in
effect, with any revenues held subject to refund, pending resolution of the
protest. If no timely protest is filed,
this docket should be closed upon the issuance of a consummating order.
