Recommendation

State of Florida		Public Service Commission Capital Circle Office Center ● 2540 Shumard Oak Boulevard Tallahassee, Florida 32399-0850 -M-E-M-O-R-A-N-D-U-M-
DATE:	June 24, 2026
TO:	Office of Commission Clerk (Teitzman)
FROM:	Office of the General Counsel (Sapoznikoff) SMC Division of Accounting and Finance (Vogel) MC Division of Economics (Guffey) EJD
RE:	Docket No. 20260036-OT – Proposed amendment of Rules 25-6.109, Refunds; 25-6.0435, Interim Rate Relief; 25-7.040, Interim Rate Relief; 25-7.091, Refunds; 25-30.117, Accounting for Pension Costs; and 25-30.360, Refunds, F.A.C.
AGENDA:	07/07/26 – Regular Agenda – Rule Proposal – Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Ortega
CRITICAL DATES:			09/21/26 (Rule must be proposed by this date pursuant to Section 120.54(2)(a)2., F.S.)
RULE STATUS:			Proposal May Be Deferred
SPECIAL INSTRUCTIONS:			None

Case Background

In 2025, the Legislature amended Chapter 120, Florida Statutes, to require each agency to review all of its rules over a five-year period. This recommendation addresses the following rules that were identified in the Commission’s rule review as part of the rules needing amendment:

· Rule 25-6.0435, F.A.C. Interim Rate Relief

· Rule 25-6.109, F.A.C., Refunds

· Rule 25-7.040, F.A.C. Interim Rate Relief

· Rule 25-7.091, F.A.C. Refunds

· Rule 25-30.117, F.A.C. Accounting for Pension Costs

· Rule 25-30.360, F.A.C., Refunds

These rules pertain to accounting guidelines.

The Commission’s Notices of Development of Rulemaking were published in Volume 52, Number 57, of the Florida Administrative Register on March 24, 2026. OPC requested a workshop regarding Rule 25-30.117, F.A.C. However, OPC later submitted written comments in lieu of holding a workshop, which comments are incorporated in the draft amendments for that rule.

This recommendation addresses whether the Commission should propose the amendment of Rules 25-6.0435, 25-6.109, 25-7.040, 25-7.091, 25-30.117, and 25-30.360, F.A.C. The Commission has jurisdiction pursuant to Section 120.54, 350.127(2), 366.05(1), 366.071, and 367.121, Florida Statutes.

Discussion of Issues

Issue 1:

Should the Commission propose the amendment of Rules 25-6.0435, 25-6.109, 25-7.040, 25-7.091, 25-30.117, and 25-30.360, F.A.C.?

Recommendation:

Yes. The Commission should propose the amendment of Rules 25-6.0435, 25-6.109, 25-7.040, 25-7.091, 25-30.117, and 25-30.360, F.A.C., as set forth in Attachment A. The Commission should also certify the rules as minor violation rules. (Sapoznikoff, Hampson, Vogel, Guffey)

Staff Analysis:

The purpose of this rulemaking is to amend Rules 25-6.0435, 25-6.109, 25-7.040, 25-7.091, 25-30.117, and 25-30.360, F.A.C., to update and clarify the rules to reflect current practice and use. Staff is recommending minor amendments to all the rules to update the rule language to make them more readable. In addition, staff’s recommended amendments remove obsolete references and update the rules to reflect current, widely-accepted accounting guidelines. Staff recommends the Commission propose the amendment of these rules, as set forth in Attachment A.

The recommended amendments to Rules 25-6.0435, 25-6.109, 25-7.040, 25-7.091, and 25-30.360, F.A.C., reflect use of the AA non-financial 30-day commercial paper rate published by the Board of Governors of the Federal Reserve System, rather than the rate for high-grade, unsecured note as published in the Wall Street Journal. The Wall Street Journal has not reliably published the 30-day AA non-financial commercial paper rate since September 2011. The Board of Governors of the Federal Reserve System publishes the 30-day AA non-financial commercial paper rate every business day (if there is sufficient trading data) and is more reliable. Additionally, in Rule 25-7.040, staff recommends amending the way the equations are displayed to make them be more readable.

In Rule 23-30.117, F.A.C., staff recommends use of the Accounting Standards Codification 715 (ASC 715), rather than the Statement of Financial Accounting Standards No. 87, Employers’ Accounting for Pensions (SFAS 87). The Accounting Standards Codification (ASC) supersedes the Statement of Financial Accounting Standards as the centralized source of U.S. Generally Accepted Accounting Principles (U.S. GAAP), all updates to standards are now made to the ASC. At OPC’s request, the rule language was clarified to mention specific updates that were already part of the ASC.

Minor Violation Rule Certification

Pursuant to Section 120.695, F.S., for each rule filed for adoption, the agency head shall certify whether any part of a rule is designated as a rule the violation of which would be a minor violation. Under Section 120.695(2)(b), F.S., a violation of a rule is minor if it does not result in economic or physical harm to a person or adversely affect the public health, safety, or welfare or create a significant threat of such harm. Rules 25-6.0435, 25-6.109, 25-7.040, 25-7.091, 25-30.117, and 25-30.360, F.A.C., are all currently listed as minor violation rules, and staff recommends that all should remain listed as minor violation rules by the Commission. These rules are minor violation rules because the violation of any of them would not result in economic or physical harm to a person, cause an adverse effect on the public health, safety, or welfare, or create a significant threat of such harm. Therefore, for the purposes of filing the rules for adoption with the Department of State, staff recommends that the Commission certify the above-mentioned rules as minor violation rules.

Statement of Estimated Regulatory Costs

Section 120.54(3)(b)1., F.S., encourages agencies to prepare a Statement of Estimated Regulatory Costs (SERC) before the adoption, amendment, or repeal of any rule. A SERC was prepared for each rule in this rulemaking and they are appended as Attachment B. As required by Section 120.541(2)(a)1., F.S., the SERC analysis includes whether the rule amendments are individually likely to have an adverse impact on economic growth, private sector job creation or employment, or private sector investment in excess of $1 million in the aggregate within five years after implementation.

The SERCs conclude that the amendments of any of the rules will not likely directly or indirectly increase regulatory costs in excess of $200,000 in the aggregate in Florida within one year after implementation. Further, the SERCs conclude that the rule amendments will likely not increase regulatory costs, including any transactional costs, or have an adverse impact on business competitiveness, productivity, or innovation, in excess of $1 million in the aggregate within five years of implementation. Thus, pursuant to Section 120.541(3), F.S., none of the rules require legislative ratification.

In addition, the SERCs do not indicate that the amendment of any of the rules would have an adverse impact on small businesses, would have any implementation or enforcement costs on the Commission or any other state or local government entity, or would have any impact on small cities or small counties. The SERCs state that there will be no transactional costs likely to be incurred by individuals and entities required to comply with the requirements. None of the impact/cost criteria established in Section 120.541(2)(a), F.S., will be exceeded as a result of any of the rules. Finally, the SERCs indicate that there are no market impacts likely to result from compliance with the proposed rules.

Conclusion

Based on the foregoing, staff recommends that the Commission propose the amendment of Rules 25-6.0435, 25-6.109, 25-7.040, 25-7.091, 25-30.117, and 25-30.360, F.A.C., as set forth in Attachment A. Staff also recommends the Commission certify the rules as minor violation rules.

Issue 2:

Should this docket be closed?

Recommendation:

Yes. If no requests for hearing are made or comments from the Joint Administrative Procedures Committee (JAPC) are filed, and no proposals for lower cost regulatory alternatives are submitted pursuant to Section 120.541(1)(a), F.S., then the rules should be filed with the Department of State for adoption and the docket should be closed. (Sapoznikoff)

Staff Analysis:

If no request for hearing is made or comments from JAPC are filed, and no proposals for a lower cost regulatory alternatives are submitted pursuant to Section 120.541(1)(a), F.S., then the rules should be filed with the Department of State for adoption and the docket should be closed.

25-6.0435 Interim Rate Relief.

(1) Each electric utility petitioning for interim rate relief pursuant to Section 366.071, F.S., must ~~shall~~ file the data required by paragraph 25-6.043(1)(a), F.A.C.

(2) The requested interim increase in base rate revenues must ~~shall~~ be divided by interim test year base rate revenues to derive a percentage increase factor. The percentage increase factor must ~~shall~~ be applied uniformly to all existing base rates and charges to derive the interim base rates and charges.

(3) Interim rate relief collected is subject to refund pending final order in the permanent rate relief request. Such increase is ~~shall be~~ subject to a corporate undertaking or under bond as authorized by the Commission and any refund must ~~shall~~ be made with an interest factor determined by using the AA non-financial 30-day commercial paper rate published by the Board of Governors of the Federal Reserve System on its website ~~for high-grade, unsecured notes, sold through dealers by major corporations in multiples of $1,000, as regularly published in the Wall Street Journal~~. The annual rate as published on the first day of the current business month would be added to the rate as published on the first day of the subsequent business month and halved to obtain the simple average rate to be applied in that month. This rate of interest must ~~would~~ be applied to the refund amount for that month. The amount of interest calculated must ~~would~~ be added to the beginning balance of the following month ~~so as~~ to accomplish the compounding of the interest feature of the refund provision.

Rulemaking Authority 366.05(1) FS. Law Implemented 366.04(2)(f), 366.06, 366.071 FS. History–New 5-27-81, Formerly 25-6.435, Amended 2-12-04, _____.

25-6.109 Refunds.

(1) Applicability. With the exception of deposit refunds and refunds associated with adjustment factors, all refunds ordered by the Commission must ~~shall~~ be made in accordance with the provisions of this Rule, unless otherwise ordered by the Commission.

(2) Timing of Refunds. Refunds must be made within ninety (90) days of the Commission’s order unless a different time frame is prescribed by the Commission. Unless a stay has been requested in writing and granted by the Commission, a motion for reconsideration of an order requiring a refund will not delay the timing of the refund. In the event that a stay is granted pending reconsideration, the timing of the refund must ~~shall~~ commence from the date of the order disposing of any motion for reconsideration. This rule does not authorize any motion for reconsideration not otherwise authorized by Chapter 25-22, F.A.C.

(3) Basis of Refund. When ~~Where~~ the refund is the result of a specific rate change, including interim rate increases and the refund can be computed on a per customer basis, that will be the basis of the refund. In such cases, refunds must ~~may~~ be made by either recalculating the affected customer’s bill or by applying an appropriate refund factor to the consumption used by the customer during the refund period. However, when ~~where~~ the refund is not related to specific rate changes, such as a refund for overearnings, the refund must ~~will~~ be made to customers of record as of a date specified by the Commission. In such case, refunds must ~~shall~~ be made on the basis of consumption. Per customer refund refers to a refund to every customer receiving service during the refund period. Customer of record refund refers to a refund to every customer receiving service as of a date specified by the Commission.

(4) Interest.

(a) When ~~In the case of refunds~~ the Commission orders refunds to be made with interest, the average monthly interest rate until the refund is posted to the customer’s account must ~~shall~~ be based on the AA non-financial ~~thirty~~ 30-day ~~(30) day~~ commercial paper rate published by the Board of Governors of the Federal Reserve System on its website ~~for high grade, unsecured notes sold through dealers by major corporations in multiples of $1,000 as regularly published in the Wall Street Journal.~~

(b) This average monthly interest rate must ~~shall~~ be calculated for each month of the refund period:

1. By adding the published interest rate in effect for the last business day of the month prior to each month of the refund period and the published rate in effect for the last business day of each month of the refund period divided by twenty-four (24) to obtain the average monthly interest rate;

2. The average monthly interest rate for the month prior to distribution must ~~shall~~ be the same as the last calculated average monthly interest rate.

(c) The average monthly interest rate must ~~shall~~ be applied to the sum of the previous month’s ending balance (including monthly interest accruals) and the current month’s ending balance divided by two (2) to accomplish a compounding effect.

(d) Interest Multiplier. When the refund is computed for each customer, an interest multiplier can ~~may~~ be applied against the amount of each customer’s refund in lieu of a monthly calculation of the interest for each customer. The interest multiplier must ~~shall~~ be calculated by dividing the total amount refundable to all customers, including interest, by the total amount of the refund, excluding interest. For the purpose of calculating the interest multiplier, the utility may, upon approval by the Commission, estimate the monthly refundable amount.

(e) Commission staff will ~~shall~~ provide applicable interest rate figures and assistance in calculations under this Rule upon request of the affected utility.

(5) Method of Refund Distribution. For those customers still on the system, a credit must ~~shall~~ be made on the bill. In the event the refund is for a greater amount than the bill, the remainder of the credit must ~~shall~~ be carried forward until the refund is completed. If the customer so requests, a check for any negative balance must be sent to the customer within ten (10) days of the request. For customers entitled to a refund but no longer on the system, the company must ~~shall~~ mail a refund check to the last known billing address, except that no refund for less than $1.00 will be made to these customers.

(6) Security for Money Collected Subject to Refund. In the case of money being collected subject to refund, the money must ~~shall~~ be secured by a bond unless the Commission specifically authorizes some other type of security such as placing the money in escrow, approving a corporate undertaking, or providing a letter of credit. The company ~~Commission~~ must ~~may require the company~~ to provide a report by the 20th ~~10th~~ of each month indicating the monthly and total amount of money subject to refund as of the end of the preceding month. The report must ~~shall~~ also indicate the status of whatever security is being used to guarantee repayment of the money.

(7) Refund Reports. During the processing of the refund, monthly reports on the status of the refund must ~~shall~~ be made by the 20th ~~10th~~ of the following month. In addition, a preliminary report must ~~shall~~ be made within thirty (30) days after the date the refund is completed and again 90 days thereafter. A final report must ~~shall~~ be made after all administrative aspects of the refund are completed. The above reports must ~~shall~~ specify the following:

(a) The amount of money to be refunded and how that amount was computed;

(b) The amount of money actually refunded;

(d) The status of any unclaimed amounts.

(8) With the last report under subsection (7) of this rule, the company must ~~shall~~ suggest a method for disposing of any unclaimed amounts. The Commission will ~~shall~~ then order a method of disposing of the unclaimed funds.
Rulemaking Authority 350.127(2), 366.05(1) FS. Law Implemented 366.03, 366.04(1), (2)(f),
366.06(3), 366.07, 366.071 FS. History–New 8-18-83. Amended __________.

25-7.040 Interim Rate Relief.

(1) Each natural gas utility petitioning for interim rate relief pursuant to Section 366.071, F.S., must ~~shall~~ file the data required in paragraph 25-7.039(1)(a), F.A.C.

(2)(a) Interim rates must ~~shall~~ apply across the board based on base rate revenues for the test period less base gas revenue by rate schedule. The resulting dollar amount must ~~shall~~ be divided by base rate revenues per rate schedule to determine the percent increase applied to each rate schedule.

(b) In determining the interim increase, the following data must ~~shall~~ be provided by rate schedule: Therm sales; base rate revenue less base gas cost; base gas revenue; total base rate revenue; purchased gas adjustment revenue; total revenue. The interim increase must ~~shall~~ be shown by dollar amount and percentage by rate schedule calculated in the following manner:

1. Required Interim Revenue Relief / (Base rate revenue – base gas cost) = Percentage constant I. ~~Required Interim~~

~~Revenue Relief~~ ~~Across the board~~

~~Base rate revenue~~ ⁼ ~~percentage constant~~

~~less base gas cost~~

2. Percentage constant * (Base rate revenue – base gas cost) = Dollar increase to rate schedule ~~II.~~ ~~Percentage Constant~~ × ~~Base rate Revenue less base gas cost~~ ⁼ ~~Dollar increase to rate schedule~~

3. Dollar increase / Total base rate revenue = percent increase applied to rate schedule

~~III~~. ~~Dollar Increase~~ ~~Percent increase~~

~~Total base rate~~ ~~applied to~~

~~Revenue~~ ~~rate schedule~~

(3) Interim rate relief collected is subject to refund pending final order in the permanent rate relief request. Such increase is ~~shall be~~ subject to a corporate undertaking or under bond as authorized by the Commission and any refund must ~~shall~~ be made with an interest factor determined by using the AA non-financial 30-day commercial paper rate published by the Board of Governors of the Federal Reserve System on its website ~~for highgrade, unsecured notes, sold through dealers by major corporations in multiples of $1,000, as regularly published in the Wall Street Journal~~. The annual rate as published on the first day of the current business month must ~~would~~ be added to the rate as published on the first day of the subsequent business month and halved to obtain the simple average rate to be applied in that month. This rate of interest must ~~would~~ be applied to the refund amount for that month. The amount of interest calculated will be added to the beginning balance of the following month ~~so as~~ to accomplish the compounding of the interest feature of the refund provision.

Rulemaking Authority 366.05(1), 366.071 FS. Law Implemented 366.06(3), 366.071 FS. History–New 5-27-81, Formerly 25-7.40, Amended _____.

25-7.091 Refunds.

(3) Basis of Refund. When ~~Where~~ the refund is the result of a specific rate change, including interim rate cases and the refund can be computed on a per customer basis, that will be the basis of the refund. However, when ~~where~~ the refund is not related to specific rate changes, such as a refund for overearnings, the refund must ~~shall~~ be made to customers of record as of a date specified by the Commission. In such case, refunds must ~~shall~~ be made on the basis of consumption. Per customer refund refers to a refund to every customer receiving service during the refund period. Customer of record refund refers to a refund to every customer receiving service as of a date specified by the Commission.

(4) Interest.

(a) When ~~In the case of refunds which~~ the Commission orders refunds to be made with interest, the average monthly interest rate until the refund is posted to the customer’s account must ~~shall~~ be based on the AA non-financial ~~thirty~~ 30-day ~~(30) day~~ commercial paper rate published by the Board of Governors of the Federal Reserve System on its website ~~for high grade, unsecured notes sold through dealers by major corporations in multiples of $1,000 as regularly published in the Wall Street Journal~~.

(b) This average monthly interest rate must ~~shall~~ be calculated for each month of the refund period:

1. By adding the published interest rate in effect for the last business day of the month prior to each month the refund period and the published rate in effect for the last business day of each month of the refund period divided by twenty-four (24) to obtain the average monthly interest rate;

2. The average monthly interest rate for the month prior to distribution will ~~shall~~ be the same as the last calculated average monthly interest rate.

(c) The average monthly interest rate must be applied to the sum of the previous month’s ending balance (including monthly interest accruals) and the current month’s ending balance divided by two (2) to accomplish a compounding effect.

(e) Commission staff will ~~shall~~ provide applicable interest rate figures and assistance in calculations under this rule upon request of the affected utility.

For customers entitled to a refund but no longer on the system, the company must ~~shall~~ mail a refund check to the last known billing address except that no refund for less than $1.00 will be made to these customers.

(6) Security for Money Collected Subject to Refund. In the case of money being collected subject to refund, the money must ~~shall~~ be secured by a bond unless the Commission specifically authorizes some other type of security such as placing the money in escrow, approving a corporate undertaking, or providing a letter of credit. The company ~~Commission~~ must ~~may require the company to~~ provide a report by the 20th ~~10th~~ of each month indicating the monthly and total amount of money subject to refund as of the end of the preceding month. The report must ~~shall~~ also indicate the status of whatever security is being used to guarantee repayment of the money.

(7) Refund Reports. During the processing of the refund, monthly reports on the status of the refund must ~~shall~~ be made by the 20th ~~10th~~ of the following month. In addition, a preliminary report must ~~shall~~ be made within thirty (30) days after the date the refund is completed and again 90 days thereafter. The above reports must ~~shall~~ specify the following:

(a) The amount of money to be refunded and how that amount was computed;

(b) The amount of money actually refunded;

(d) The status of any unclaimed amounts.

Rulemaking Authority 350.127(2) FS. Law Implemented 366.06(3), 366.071(2) FS. History–New 8-18-83, Formerly 25-7.91. Amended _____.

25-30.360 Refunds.

(1) Applicability. All refunds under this chapter must ~~shall~~ be made in accordance with this rule, unless another rule in this chapter specifically sets forth the procedure for making refunds. The calculation for overbillings must ~~shall~~ be pursuant to Rule 25-30.350, F.A.C., and disbursed pursuant to this rule.

(2) Timing of Refunds. Refunds must be made within 90 days of the Commission’s order unless a different time frame is prescribed by the Commission. A timely motion for reconsideration temporarily stays the refund, pending the final order on the motion for reconsideration. In the event of a stay pending reconsideration, the timing of the refund must ~~shall~~ commence from the date of the order disposing of any motion for reconsideration. This rule does not authorize any motion for reconsideration not otherwise authorized by Chapter 25-22, F.A.C.

(3) Basis of Refund. When ~~Where~~ the refund is the result of a specific rate change, including interim rate increases, and the refund can be computed on a per customer basis, that will be the basis of the refund. However, when ~~where~~ the refund is not related to specific rate changes, such as a refund for overearnings, the refund must ~~shall~~ be made to customers of record as of a date specified by the Commission. In such case, refunds must ~~shall~~ be made on the basis of usage. Per customer refund refers to a refund to every customer receiving service during the refund period. Customer of record refund refers to a refund to every customer receiving service as of a date specified by the Commission.

(4) Interest.

(a) When ~~In the case of refunds which~~ the Commission orders refunds to be made with interest, the average monthly interest rate until refund is posted to the customer’s account must ~~shall~~ be based on the AA non-financial 30-day ~~30 day~~ commercial paper rate published by the Board of Governors of the Federal Reserve System on its website ~~for high grade, unsecured notes sold through dealers by major corporations in multiples of $1,000 as regularly published in the Wall Street Journal~~.

(b) This average monthly interest rate must ~~shall~~ be calculated for each month of the refund period:

2. The average monthly interest rate for the month prior to distribution must ~~shall~~ be the same as the last calculated average monthly interest rate.

(e) Commission staff will ~~shall~~ provide applicable interest rate figures and assistance in calculations under this rule upon request of the affected utility.

(5) Method of Refund Distribution. For those customers still on the system, a credit must be made on the bill. In the event the refund is for a greater amount than the bill, the remainder of the credit must ~~shall~~ be carried forward until the refund is completed. If the customer so requests, a check for any negative balance must be sent to the customer within 10 days of the request. For customers entitled to a refund but no longer on the system, the company must ~~shall~~ mail a refund check to the last known billing address except that no refund for less than $1.00 will be made to these customers.

(6) Security for Money Collected Subject to Refund. In the case of money being collected subject to refund, the money must be secured by a bond unless the Commission specifically authorizes some other type of security such as placing the money in escrow, approving a corporate undertaking, or providing a letter of credit. The company must ~~shall~~ provide a report by the 20th of each month indicating the monthly and total amount of money subject to refund as of the end of the preceding month. The report must ~~shall~~ also indicate the status of whatever security is being used to guarantee repayment of the money.

(7) Refund Reports. During the processing of the refund, monthly reports on the status of the refund must be made by the 20th of the following month. In addition, a preliminary report must ~~shall~~ be made within 30 days after the date the refund is completed and again 90 days thereafter. A final report must ~~shall~~ be made after all administrative aspects of the refund are completed. The above reports must specify the following:

(a) The amount of money to be refunded and how that amount was computed;

(b) The amount of money actually refunded;

(d) The status of any unclaimed amounts.

(8) Any unclaimed refunds must be treated as cash contributions-in-aid-of-construction.

Rulemaking Authority 350.127(2), 367.121 FS. Law Implemented 367.081, 367.0814, 367.082(2) FS. History–New 8-18-83, Formerly 25-10.76, 25-10.076, Amended 11-30-93, 11-25-19. Amended_________.