Discussion
of Issues
Issue 1:
Should Cinnamon Ridge Utilities, Inc.’s application
for a grandfather water certificate in Citrus County be acknowledged?
Recommendation:
Yes. Cinnamon Ridge’s application should be
acknowledged and the Utility should be granted Certificate 695-W, effective May
28, 2024, to serve the territory described in Attachment A. The resultant order
should serve as Cinnamon Ridge’s certificate and should be retained by the
Utility. (Sanchez, Bardin, Stiller)
Staff Analysis:
Legal Standard
Under Section 367.171(2)(b), F.S., on the day a county
declares it is subject to the provisions of Chapter 367, any utility engaged in
the operation or construction of a non-exempt water or wastewater system shall
be entitled to receive a certificate for the area served by the utility. Within
90 days after the day this chapter becomes applicable to it, the utility shall
make application for a grandfather certificate. The filing requirements for a
grandfather application are set forth in Rule 25-30.035, F.A.C.
Analysis
The Utility’s application for a grandfather certificate to
provide water service in Citrus County is in compliance with Section
367.171(2)(b), F.S., and Rule 25-30.035, F.A.C. An adequate service territory
description and system maps were provided. As the Utility has its own treatment
facilities, Cinnamon Ridge filed a Quit Claim deed as proof of ownership of the
land on which the Utility’s facilities are located as required by Rule
25-30.035(11), F.A.C. A description of the Utility’s territory is contained in
Attachment A.
As stated in the case background, Cinnamon Ridge currently
provides water service to approximately 286 residential customers, with a
projected customer base of approximately 450 customers when the territory is
fully developed. The Utility does not currently have any outstanding citations,
violations, or consent orders on file with the Florida Department of
Environmental Protection.
The Utility is aware of its obligation to submit its 2026
Annual Report pursuant to Rule 25-30.110, F.A.C., and is also aware of its
obligation to pay regulatory assessment fees (RAFs) pursuant to Rule 25-30.120,
F.A.C. During the pendency of this docket, the Utility filed its 2025 Annual
Report and RAFs. In addition, the Utility is aware that it must maintain its
books and records according to the National Association of Regulatory Utility
Commissioners’ Uniform System of Accounts.
Conclusion
Based on the above, staff recommends that Cinnamon Ridge’s
application should be acknowledged and the Utility should be granted
Certificate 695-W, effective May 28, 2024, to serve the territory described in
Attachment A. The resultant order should serve as Cinnamon Ridge’s certificate
and should be retained by the Utility.
Issue 2:
What rates and charges should be approved for
Cinnamon Ridge Utilities, Inc.?
Recommendation:
Of the Utility’s rates and charges that were in
effect when Citrus County Water and Wastewater Authority (CCWWA) transferred
jurisdiction to the Commission, only the rates, late payment charge, and system
capacity charges shown on Schedule No. 1 are appropriate and should be
approved. The rates and charges shown in Schedule No. 1 should be effective for
service rendered or connections made on or after the stamped approval date on
the tariff sheets. Cinnamon Ridge should be required to charge the approved
rates and charges shown in Schedule No. 1 until authorized to change them by
the Commission in a subsequent proceeding. (Chambliss)
Staff Analysis:
CCWWA approved the
Utility’s current monthly rates by Final Order 23-07 on September 19, 2023. The
monthly water rates consist of a base facility charge and a four-tier inclining
block rate structure.
Cinnamon Ridge has an initial
customer deposit of $125, which is two and a half times the average monthly
bill. Staff is recommending in Issue 3 that the initial customer deposit be
revised to be consistent with Commission practice. Cinnamon Ridge’s water
charges consist of miscellaneous service and service availability charges. The
miscellaneous service charges were established by Final Order 18-06 on November
5, 2018. The Utility’s miscellaneous service charges are provided by a
third-party vendor. Some of the miscellaneous service charges are not consistent
with the Florida Statutes or Commission Rules. Therefore, staff recommends the
miscellaneous service charges be modified as described in Issue 4. The
Utility’s late payment charge should remain unchanged. In addition, Cinnamon
Ridge has system capacity charges and a meter installation charge. The Utility
requested an increase in its meter installation charge, which is discussed in
Issue 7.
Staff recommends that of Cinnamon Ridge’s rates and
charges that were in effect when CCWWA transferred jurisdiction to the
Commission, only the rates, late payment charge, and system capacity charges
shown on Schedule No. 1 are appropriate and should be approved. The rates and
charges shown in Schedule No. 1 should be effective for services rendered or
connections made on or after the stamped approval date on the tariff sheets.
The Utility should be required to charge the approved rates and charges shown
in Schedule No. 1 until authorized to change them by the Commission in a
subsequent proceeding.
Issue 3:
Should Cinnamon Ridge’s current initial customer
deposits be approved?
Recommendation:
No. The appropriate initial customer deposit for the
residential 5/8 inch x 3/4 inch meter size should be $90. 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. Cinnamon Ridge
should be required to collect the approved deposits until authorized to change
them by the Commission in a subsequent proceeding. (Chambliss)
Staff Analysis:
Rule 25-30.311, F.A.C., contains criteria for collecting,
administering, and refunding customer deposits. Rule 25-30.311(1), F.A.C.,
requires that each company’s tariff shall contain its specific criteria for
determining the amount of initial deposits. The Utility currently charges
initial customer deposits of $125, which is equal to two and a half times an
average monthly bill based on average consumption for the residential 5/8 inch
x 3/4 inch meter size.
Rule 25-30.311(7), F.A.C., authorizes utilities to collect
new or additional deposits from existing customers, not to exceed an amount
equal to the average actual charge for water and/or wastewater service for two
billing periods for the 12-month period immediately prior to the date of
notice. The two billing periods reflect the lag time between the customer’s
usage and the Utility’s collection of the revenues associated with that usage.
Commission practice has been to set initial customer deposits equal to two
months’ bills based on the average consumption for a 12-month period for each
class of customers. Based on the billing determinants and average residential
bills provided by the Utility, staff determined that the anticipated average
residential usage will be approximately 6,905 gallons per month for water. Consequently,
the average residential monthly bill will be approximately $45 for water
service.
Based on the above,
the appropriate initial customer deposit for the residential 5/8 inch x
3/4 inch meter size should be $90. The
initial customer deposit for all other residential meter sizes and all general
service meter sizes should be two times the average estimated bill. The
approved initial 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. Cinnamon Ridge 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 revisions to miscellaneous
service charges for Cinnamon Ridge Utilities?
Recommendation:
The appropriate revisions to miscellaneous service
charges shown on Table 4-2 should be approved. The Utility should be required
to file a proposed customer notice to reflect the Commission-approved charges.
The approved charges should be effective for service rendered or connections
made on or after the stamped approval date on the tariff sheet pursuant to Rule
25-30.475, F.A.C. In addition, the tariff sheets should be approved upon
staff’s verification that the tariffs are consistent with the Commission’s
decision and that the proposed customer notice is adequate. (Chambliss)
Staff Analysis:
Section
367.091, F.S., authorizes the Commission to establish, increase, or change a
rate or charge other than monthly rates or service availability charges.
Some of Cinnamon Ridge’s existing charges should be revised to conform to the
Florida statutes or the Commission’s rules. The Utility’s existing miscellaneous
service charges that should be revised are shown below in Table 4-1.
Table 4-1
Cinnamon Ridge’s Existing Miscellaneous Service Charges
|
|
Existing Charges
|
|
Initial
Connection Charge
|
$300.00
|
|
Normal
Reconnection Charge
|
$25.00
|
|
Violation
Reconnection
|
$100.00
|
|
Premises
Visit Charge
|
$55.00
|
|
Returned
Payment Checks
|
$40.00
|
|
Tampering
Fee
|
$200.00 Plus Actual Cost
to Repair Damage
|
Initial Connection, Normal
Reconnection Charge, Violation Reconnection Charge, and Premises Visit Charge
Pursuant to Rule 25-30.460,
F.A.C., “initial” and “reconnection” charges are obsolete and are subsumed in
the definition of the premises visit charge. Therefore, staff recommends that
the initial and reconnection charges be removed. In the past, when conforming
the charges to the rule, the Commission has made the premises visit the higher
of the initial connection, normal reconnection or premises visit charges, which
would be the initial connection charge of $300. However, the
Utility’s existing initial connection charge is higher than what the Commission
has approved in the past.
As
mentioned in Issue 3, the miscellaneous service charges are provided by a third-party
vendor. When the Utility’s miscellaneous service charges are provided by
a third-party vendor, a cost justification is typically not required. However,
in this case, staff believes it was necessary to evaluate the costs embedded in
the initial connection charge, and reached out to Cinnamon
Ridge for a cost justification of the third-party charges. Based on the
cost justification provided of the miscellaneous service charges, the initial
connection charge includes the cost of a meter and its installation. As a
result, staff believes it is appropriate to leave the premises visit charge at
$55. Staff recommends that the definition for the premises visit
charge be updated to comply with Rule 25-30.460, F.A.C.
Cinnamon Ridge is requesting that
the violation reconnection charge be revised. The Utility provided an invoice
indicating that the third-party charges $140 to remove the meter for a
delinquent account. Once the account is paid, a subcontractor reinstalls the
meter for a return charge of $70. Therefore, staff believes it is appropriate
to recommend an increase in the violation reconnection charge to $210 ($140 +
$70).
NSF Check
Charge
Cinnamon Ridge currently has a
returned check charge of $40.00. However, staff recommends that the Utility’s
returned check charges be amended to comply with Section 68.605, F.S., which sets
forth allowable charges for the collection of worthless checks, drafts, or
orders of payment. As currently set forth in Section 68.065(2), F.S., the
following NSF charges may be assessed.
1)
$25, if the face value does not exceed $50
2)
$30, if the face value exceeds $50 but does not exceed
$300
3)
$40, if the face value exceeds $300
4)
or 5 percent of the face amount of the check, whichever
is greater.
Tampering
or Prohibited Connection or Use Charge
As shown on Table 4-1, Cinnamon
Ridge has a tampering charge of $200 plus actual cost. Rule 25-30.320(2)(j),
F.A.C., provides that a Utility may refuse or discontinue service without
notice in the event of unauthorized or fraudulent use of service. Whenever
service is discontinued for fraudulent use of such service, the Utility, before
restoring service, may require the customer to make at his own expense all
changes in piping or equipment necessary to eliminate illegal use and to pay an
amount reasonably estimated as the deficiency in revenue resulting from the
customer’s fraudulent use before restoring service. Based on the above, staff
recommends that Cinnamon Ridge’s tampering charge of $200 plus actual cost be
approved solely at actual cost.
Table 4-2
Staff’s Recommended Miscellaneous Service Charges
|
|
|
|
Premises Visit
|
$55
|
|
Violation Reconnection Charge
|
$210
|
|
Tampering Charge
|
Actual Cost
|
|
NSF Check Charge
|
Pursuant to Section
68.065, F.S.
|
Conclusion
Based on the above, the appropriate revisions to
miscellaneous service charges shown on Table 4-2 should be approved. The
Utility should be required to file a proposed customer notice to reflect the
Commission-approved charges. The approved charges should be effective for
service rendered or connections made on or after the stamped approval date on the
tariff sheet pursuant to Rule 25-30.475(2), F.A.C. In addition, the tariff
sheets should be approved upon staff’s verification that the tariffs are
consistent with the Commission’s decision and that the proposed customer notice
is adequate.
Issue 5:
Should Cinnamon Ridge's current terms of payment be
revised to conform to Rule 25-30.335(6), F.A.C.?
Recommendation:
Yes. The Utility's current terms of payment should
be revised to conform to Rule 25-30.335(6), F.A.C. Cinnamon Ridge should file
revised tariff sheets to reflect the appropriate terms of payment pursuant to
Rule 25-30.335(6), F.A.C. The approved tariffs should be effective for service
rendered or connections made on or after the stamped approval date on the
tariff sheets pursuant to Rule 25-30.475, F.A.C. In addition, the tariff sheets
should be approved upon staff's verification that the tariffs are consistent
with the Commission's decision and that the proposed customer notice is
adequate. (Chambliss)
Staff Analysis:
The
Utility's current water tariff indicates that a customer residing in Florida
will become delinquent if their bill is not paid within 16 days, while a
non-Florida resident has 21 days to pay their bill before becoming delinquent.
However, Rule 25-30.335(6), F.A.C., states that a utility may not consider a
customer delinquent in paying his or her bill until the 21st day after the bill
has mailed or presented for payment.
Based on the above, staff recommends that the
Utility's current terms of payment should be revised to conform
to Rule 25-30.335(6), F.A.C. Cinnamon Ridge should file revised tariff sheets
to reflect the appropriate terms of payment pursuant to Rule 25-30.335(6),
F.A.C. The approved tariffs should be effective for service rendered or
connections made on or after the stamped approval date on the tariff sheets
pursuant to Rule 25-30.475, F.A.C. In addition, the tariff sheets should be
approved upon staff's verification that the tariffs are consistent with the
Commission's decision and that the proposed customer notice is adequate.
Issue 6:
What are the appropriate meter test deposits for
Cinnamon Ridge?
Recommendation:
Staff recommends that the appropriate meter test
deposits be revised to conform to Rule 25-30.266(2)(a), F.A.C. The Utility
should file a revised tariff sheet to reflect the appropriate meter test
deposits pursuant to Rule 25-30.335(6), F.A.C. The approved tariff should be
effective for service rendered or connections made on or after the stamped
approval date on the tariff sheets pursuant to Rule 25-30.475, F.A.C. In
addition, the tariff sheet should be approved upon staff’s verification that
the tariffs are consistent with the Commission’s decision and that the proposed
customer notice is adequate. (Chambliss)
Staff Analysis:
The Utility’s water tariff indicates meter test deposits of $65 for
5/8 inch x 3/4 inch to 1 1/2 inch meter sizes and actual costs for 2 inch meter
sizes and over. However, Cinnamon Ridge may not exceed meter test deposits
pursuant to Rule 25-30.266(2)(a), F.A.C., shown below on Table 6-1.
Table 6-1
Current Meter Test
Deposits
|
Meter Size
|
Fee
|
|
5/8” x 3/4”
|
$20.00
|
|
1 1/2”
|
$25.00
|
|
2” and over
|
Actual Cost of Test
|
Therefore, staff recommends that the appropriate meter
test deposits be revised pursuant to Rule 25-30.266(2)(a), F.A.C. The Utility
should file a revised tariff sheet to reflect the appropriate meter test
deposits pursuant to Rule 25-30.335(6), F.A.C. The approved tariff should be
effective for service rendered or connections made on or after the stamped
approval date on the tariff sheets pursuant to Rule 25-30.475, F.A.C. In
addition, the tariff sheet should be approved upon staff’s verification that
the tariffs are consistent with the Commission’s decision and that the proposed
customer notice is adequate.
Issue 7:
Should Cinnamon Ridge be authorized to increase its
meter installation charge and, if so, what is the appropriate charge?
Recommendation:
Yes. A $395 meter installation charge for the 5/8
inch x 3/4 inch meter size and actual costs for other meter sizes should be
approved. Cinnamon Ridge should file a tariff sheet and a proposed customer
notice. The Utility should provide notice to potential customers who have
requested service within 12 calendar months prior to the month the application
was filed, and up until the Order becomes final. The approved charge should be
effective for service rendered or connections made on or after the stamped
approval date on the tariff sheet. Cinnamon Ridge should provide proof of the
date notice was given within 10 days of the date of notice. (Chambliss)
Staff Analysis:
According
to Cinnamon Ridge’s water tariff, the current meter installation charge is $250
for the 5/8 inch x 3/4 inch meter size and actual costs for all other meter
sizes. As previously mentioned, the Utility’s charges are provided by a
third-party vendor. Based on information provided by the Utility, the cost to
install a new 5/8 inch x 3/4 inch meter at a residence where there is no
previous service is $395. This charge is based on the cost and labor to install
a meter.
Based on
staff’s review of the information provided by Cinnamon Ridge, staff recommends
that a $395 meter installation charge for the 5/8 inch x 3/4 meter size and
actual costs for other meter sizes be approved.
Cinnamon
Ridge should file a tariff sheet and a proposed customer notice. The Utility
should provide notice to potential customers who have requested service within
12 calendar months prior to the month the application was filed, and up until
the Order becomes final. The approved charge should be effective for service
rendered or connections made on or after the stamped approval date on the
tariff sheet. Cinnamon Ridge should provide proof of the date notice was given
within 10 days of the date of notice.
Issue 8:
Should Cinnamon Ridge be approved for a tap-in
charge and, if so, what is the appropriate charge?
Recommendation:
Yes. Staff recommends a tap-in charge of $1,075 be
approved. Cinnamon Ridge should file a tariff sheet and a proposed customer
notice. The Utility should provide notice to potential customers who have
requested service within 12 calendar months prior to the month the application
was filed, and up until the Order becomes final. The approved charge should be
effective for service rendered or connections made on or after the stamped
approval date on the tariff sheet. Cinnamon Ridge should provide proof of the
date notice was given within 10 days of the date of notice. (Chambliss)
Staff Analysis:
Currently, Cinnamon Ridge does not have an approved tap-in charge. A
tap-in charge is designed to recover the cost of the line extending from the
customer’s property to the meter. In a conversation with the Utility, it was
indicated that Cinnamon Ridge incurs a substantial amount of cost for new
connections due to the location of the lines. A significant number lines are
located behind the property. As mentioned in Issue 2, the Utility’s charges are
provided by a third-party vendor. As per staff’s request, Cinnamon Ridge
provided a proposal by Suncoast Plumbing, which indicates a breakdown of its
charges to connect a meter to a line located behind a customer’s property. The
proposal indicated that new connections involve digging up and installing a
saddle valve on the main water line behind property, installing a new meter
with curator in meter box, and performing labor with a tractor, at a total cost
of $1,470. As discussed in the Issue 6, the cost to install a meter is $395.
Therefore, removing the cost of the meter installation results in $1,075 for
the tap-in charge.
Staff recommends a tap-in charge of $1,075 be approved.
Cinnamon Ridge should file a tariff sheet and a proposed customer notice. The
Utility should provide notice to potential customers who have requested service
within 12 calendar months prior to the month the application was filed, and up
until the Order becomes final. The approved charge should be effective for service
rendered or connections made on or after the stamped approval date on the
tariff sheet. Cinnamon Ridge should provide proof of the date notice was given
within 10 days of the date of notice.
Issue 9:
Should this docket be closed?
Recommendation:
If no person with substantial interests are affected
by the proposed agency action portion of this recommendation files a protest
within 21 days of the issuance of this order, a consummating order should be
issued. The docket should remain open for staff’s verification that notice has
been provided to customers, and the revised tariff sheets have been filed by
the Utility and approved by staff. Once this action is complete, this docket
should be closed administratively if no timely protest has been filed. (Stiller)
Staff Analysis:
If no person with substantial interests are affected
by the proposed agency action portion of this recommendation files a protest
within 21 days of the issuance of this order, a consummating order should be
issued. The docket should remain open for staff’s verification that notice has
been provided to customers, and the revised tariff sheets have been filed by
the Utility and approved by staff. Once this action is complete, this docket
should be closed administratively if no timely protest has been filed.
