Case Background
By Order No.
PSC-2025-0287-AS-EI (2025 Settlement Order), the Commission approved Florida
Public Utilities Company’s (FPUC or Company) Stipulation and Settlement, a
unanimous settlement which resolved all of the issues in FPUC’s 2025 rate case
(2025 Settlement). Paragraph III, Revenue Requirement,
sections a. and b. of the 2025 Settlement divided the base rate increase into
two parts: a $7.4 million increase effective March 20, 2025, to March 19, 2026,
and the final $8.4 million increase starting March 20, 2026, with a minimum
term ending in September 20, 2028.
In
addition to the base rate increase, the 2025 Settlement included an increase in
miscellaneous fees and charges of $164,495 effective March 20, 2025. Also, the deferred $1 million would be
collected over a three-year period through a one-time increase subject to an
offset of the difference between the proposed Agency Action (PAA) rates
collected from March 20, 2025, until July 2, 2025. The base rate increase
initially approved in Order No. PSC-2025-0114-PAA-EI (PAA Order) was higher than the annual increase
contained in the subsequent 2025 Settlement. A request for a hearing on the PAA
Order was filed by the parties to the rate case docket who subsequently reached
the 2025 Settlement.
Paragraph
XV, New Rates, of the 2025 Settlement provides for FPUC to file revised tariffs
reflecting the subsequent years’ revenue requirement, to be effective on March
20, 2026. Accordingly, on November 17, 2025, FPUC filed a petition seeking
approval to implement a base rate increase consistent with the 2025 Settlement to
be effective on March 20, 2026.
During
the analysis to date, staff issued its first data request to FPUC on December
1, 2025, for which the responses were received on December 15, 2025. By Order
No. PSC-2026-0020-PCO-EI, the Commission suspended the revised tariffs. The Commission has jurisdiction over this
matter pursuant to Sections 366.04, 366.05, and 366.06, Florida Statutes
(F.S.).
Discussion
of Issues
Issue 1:
Should the Commission approve FPUC's revised tariffs
to implement the base rate increase consistent with the 2025 Settlement approved
in Order No. PSC-2025-0287-AS-EI?
Recommendation:
Yes. The Commission should approve FPUC's revised
tariffs to implement the base rate increase consistent with the 2025 Settlement
approved in Order No. PSC-2025-0287-AS-EI. The revised tariffs, Sheet Nos.
7.001, 7.004, 7.006, 7.008, 7.010, 7.013, 7.014, and 7.016 are included in
Attachment A to this recommendation, and should be effective on March 20, 2026.
(Guffey)
Staff Analysis:
The 2025 Settlement Order approved a base revenue
increase of $8.4 million. The 2025 Settlement Order divided the base rate
increase into 2 parts: a $7.4 million increase effective March 20, 2025, to
March 19, 2026, and the final $8.4 million increase starting March 20, 2026
with a minimum term ending September 20, 2028.
In this petition, FPUC seeks to collect the deferred $1 million
base revenue increase and 1/3 of the difference between the PAA rates collected
from March 20, 2025, until July 2, 2025. Consistent with the 2025 Settlement,
FPUC calculated the increase in base rates to be effective March 20, 2026 as
shown in Table 1-1 below.
Table 1-1
Base Rate Increase Calculation
|
Base Rate Deferral
|
$1,000,000.00
|
|
Over Collection (3/20/2025
to 7/2/2025)
|
($624,014.03)
|
|
Net Increase to be
Collected Over 3 Years
|
$375,985.97
|
|
1/3 of the Net Increase to be Collected per Year
|
$125,328.66
|
|
Base Rate Increase from
$7.4M to $8.4M
|
$1,000,000.00
|
|
Total Base Rate Increase
|
$1,125,328.66
|
Source: FPUC Petition and Responses in Staff’s First Data
Request
The base rates contained in Attachment A will remain in
effect until the next rate proceeding. However, the 2025 Settlement provides
for a step rate increase when the acquisition and replacement of substation and
transmission assets are completed. FPUC
states that the additional amount shown in Table 1-1 was allocated consistent
with the rate design approved in the 2025 Settlement.
With the proposed tariff revisions, the base energy charge
for residential customers would increase from 2.696 cents/kWh to 2.867 cents/kWh.
Currently, a residential customer using 1,000 kWh a month pays a total of
$163.42, including gross receipts tax. With the revised tariffs, a residential
customer’s total 1,000 kWh bill would be $165.17 a month, an increase of $1.75
(including Gross Receipts Tax).
Staff notes that the petition included tariff pages 7.002,
7.003, 7.005, 7.007, 7.009, 7.011, 7.012, 7.015, and 7.017 which did not have revisions.
In response to staff’s first data request No. 7, the Company confirmed that
revisions to the above listed tariff pages are not necessary. Therefore, staff
has not included those tariff pages in Attachment A to this recommendation as
no Commission approval is needed. Attachment
A includes the revised tariffs, Sheet Nos. 7.001, 7.004, 7.006, 7.008, 7.010,
7.013, 7.014, and 7.016 which require Commission approval.
Conclusion
After review of FPUC’s petition, responses to staff’s data
request, and the 2025 Settlement, staff concludes that the Company’s proposal
is consistent with the 2025 Settlement Order. Therefore, the Commission should
approve FPUC's revised tariff Sheet Nos. 7.001, 7.004, 7.006, 7.008, 7.010,
7.013, 7.014, and 7.016 to implement the base rate increase consistent with the
2025 Settlement approved in Order No. PSC-2025-0287-AS-EI. The revised tariffs included
in Attachment A to this recommendation should be effective on March 20, 2026.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. If a
protest is filed within 21 days of the issuance of the order, 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, 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.
