Discussion
of Issues
Issue 1:
Is the proposed transaction expected to result in
improvements in the overall quality of service provided to Placid Lakes’
customers pursuant to Section 367.0811(9)(a), F.S.?
Recommendation:
Yes, the proposed transaction should result in
improvements in the overall quality of service provided to Placid Lakes’
customers through improved system operations and the provision of safe,
adequate, and reliable service. (Ramirez-Abundez)
Position of the Parties
SWS:
Yes.
OPC:
No. Sunshine Water Services (“Sunshine”) has not
demonstrated that the proposed acquisition will produce measurable improvements
in the quality of service provided to Placid Lakes’ customers.
Staff Analysis:
Section 367.0811(9)(a), F.S., requires the
Commission to consider if the acquisition will result in improvements in the
overall quality of service for the customers of the system being acquired when
considering if a rate base value petition serves the public interest. A
utility’s overall quality of service is determined by evaluating the quality of
its product (water) and its attempt to address customer satisfaction (water and
wastewater), pursuant to Rule 25-30.433(1), F.A.C.
A review of Placid Lakes’ historical chemical analyses for
2021 through 2024 in its annual Consumer Confidence Reports (CCR) submitted to
the Florida Department of Environmental Protection (DEP) indicated that Placid
Lakes’ water system has remained in compliance with the DEP’s primary and
secondary standards in all years except for 2021. At the time the exhibit was
provided, Placid Lakes’ 2025 CCR was still under DEP review. (EXH 16, BSP 2767;
EXH 20, BSP 2769-2784) Primary standards protect public health while secondary
standards regulate contaminants that may impact the taste, odor, and color of
drinking water. Placid Lakes’ overall regulatory compliance is discussed in
detail in Issue 2.
Because SWS has not yet acquired the Placid Lakes systems,
customer complaint data was not available. As such, staff reviewed the customer
correspondence received during the course of this docket in response to the
notice regarding the acquisition transaction provided to SWS’s and Placid
Lakes’ customers. As of September 16, 2026, 14 customers have submitted written
comments in the docket. Of these customers, two are SWS customers who expressed
concerns regarding the transaction, and 12 are Placid Lakes customers who
conveyed the need for additional communication from SWS regarding the
acquisition transaction, and/or expressed opposition to the acquisition
transaction. For reference, Placid Lakes serves approximately 2,250 customers
and SWS serves 35,000 customers. (TR 135-136) At the hearing, SWS witness
Twomey testified that SWS intends to meet with Placid Lakes’ customers if the
acquisition transaction is approved to provide transparency regarding the
transaction and address any questions and concerns. (TR 175-176)
Regarding improvements in the quality of service provided
to Placid Lakes’ customers witness Twomey testified that benefits include: 1)
SWS’s technical expertise and operating practices that would strengthen the
monitoring, treatment optimization, and water quality control practices; 2)
SWS’s greater access to capital to complete Placid Lakes’ infrastructure
improvements and meet water quality standards; 3) lower material and supply
costs; 4) access to SWS’s Florida-based customer service and billing
operations, with dedicated employees, a 24/7 call center, and an online
customer portal; 5) enhanced information technology and cybersecurity support;
and 6) access to SWS’s emergency and disaster response capabilities. (TR
150-153; TR 179-182; MPN A23) In addition, SWS witness Magro identified ten
capital improvement plan (CIP) projects for Placid Lakes’ water system, and
nine CIP projects for Placid Lakes’ wastewater system in his engineering
assessment. (TR 47) These projects are discussed in Issue 2. SWS witness Twomey
indicated that SWS intends to begin construction of these projects prior to its
next rate proceeding if the acquisition transaction and transfer are approved
by the Commission. (TR 176-178) Witness Twomey asserted that these projects are
required over the next several years to maintain an appropriate level of
service to Placid Lakes’ customers. He further stated that completion of these
projects would benefit the systems’ customers through improved service and
system reliability and help prepare the system for any potential storms or
electrical outages. (TR 171-173; SWS BR 4-5)
OPC did not file testimony in this proceeding; however, in
its brief, OPC argued that it does not believe SWS demonstrated that the
acquisition transaction will produce measurable improvements in the quality of
service provided to Placid Lakes’ customers. OPC asserted that the engineering
assessment did not include an evaluation of the water distribution and
wastewater collection systems. Furthermore, OPC argued that SWS's
representation that service will improve, given its recent
Commission-documented quality of service issues, and the absence of performance
metrics or enforceable commitments, does not establish that approving the
proposed transaction will improve quality of service for Placid Lakes'
customers. (OPC BR 2-4)
Staff disagrees with OPC. Although the engineering
assessment did not include an evaluation of Placid Lakes’ water distribution
and wastewater collection systems, SWS indicated that it conducted its own
review of available records for these systems and discussed the condition and
operating procedures with Placid Lakes. This review considered water volumes,
age of meters, and general pipe materials for Placid Lakes’ water distribution
system, and wet weather flow, materials of construction, age, and general pipe
materials for Placid Lakes’ wastewater collection system. SWS determined that a
more invasive analysis, such as hydraulic modeling, was not warranted due to
the size of the water distribution and wastewater collection systems and
therefore did not include this analysis in the Scope of Services for the
engineering assessment. (EXH 9, BSP 292) Additionally, the record identifies
specific improvements that would be made to Placid Lakes’ systems that would
benefit customers following the proposed acquisition, including infrastructure
improvements, enhanced technical and operational support, expanded customer
service and billing capabilities, enhanced information technology and
cybersecurity support, and access to SWS’s emergency and disaster response
capabilities. SWS also identified specific CIP projects that it intends to
begin prior to its next proceeding if the transaction is approved. (TR 150-153;
TR 176-178) While the improvements identified by SWS cannot be quantified at
this time, the Commission has the authority to evaluate the Utility’s
improvements in subsequent proceedings, and staff believes the record
demonstrates that these improvements would benefit Placid Lakes’ customers
following the proposed acquisition transaction.
Based on the above, staff believes that the proposed
transaction should improve the overall quality of service provided to Placid
Lakes’ customers. The improvements identified by SWS are aimed at system
reliability and operations, regulatory compliance, responsiveness, and overall
customer experience, and would be extended to the Placid Lakes’ customers
following acquisition, as some of these improvements are already implemented by
SWS company wide. Further, SWS has committed to engage with Placid Lakes’
customers to provide transparency regarding the transaction and address any
questions and concerns. For these reasons, staff recommends that Placid Lakes’
customers will benefit from improvements in quality of service following the
transaction.
Conclusion
The proposed transaction should result in improvements in
the overall quality of service provided to Placid Lakes’ customers through
improved system operations and the provision of safe, adequate, and reliable
service.
Issue 2:
Is the
proposed transaction expected to result in improvements in regulatory
compliance for the Placid Lakes’ systems pursuant to Section 367.0811(9)(b),
F.S.?
Recommendation:
Yes, the
proposed transaction should result in improvements in regulatory compliance for
the Placid Lakes systems following completion of SWS’s proposed improvement
projects. (Ramirez-Abundez)
Position
of the Parties
SWS:
Yes.
OPC:
No. Sunshine has not established that
the increase in rate base and rates will materially improve regulatory
compliance.
Staff
Analysis:
Section 367.0811(9)(b), F.S., requires the Commission to
consider if the acquisition will result in improvements in regulatory
compliance for the system being acquired when considering if an alternative
rate base value petition serves the public interest. Pursuant to Rule
25-30.433(2), F.A.C., in determining a utility’s regulatory compliance, the
Commission considers whether the infrastructure and operating conditions of the
plant and facilities are in compliance with Rule 25-30.225, F.A.C., which
requires each water and wastewater utility to maintain and operate its plant
and facilities by employing qualified operators in accordance with the rules of
the DEP.
Pursuant to Rules
25-30.0372(3)(b)1. and 2., F.A.C., SWS submitted copies of the most recent DEP
and/or county health department sanitary survey, compliance inspection report,
and primary and secondary standards drinking water report. Copies of all
correspondence with the DEP, county health department, and water management
district, including consent orders and warning letters, and Placid Lakes’
responses to the same, for the past five years were provided by SWS. Staff’s
analysis in this issue considers this compliance information, as well as the
Commission’s determination regarding Placid Lakes’ water system compliance in
its last rate case. Any improvements identified in the 3-year plan to address
any deficiencies indicated in the engineering assessment required by Sections
367.0811(4)(b), and (5)(c) and (d), F.S., and any additional projects
identified by SWS that may improve compliance with environmental regulations
were also considered. The discussion regarding proposed projects by SWS is not
intended to prejudge the prudence or appropriateness for cost recovery of those
items.
A summary of
Placid Lakes’ water system compliance history is provided below.
1.
December 30, 2019 – In Placid Lakes’ last rate case,
the Commission determined that the quality of service for Placid Lakes’ water
system[8] was satisfactory and that its water quality
was in compliance with DEP standards. However, the order discussed a DEP
Consent Order dated November 19, 2018, which was issued due to disinfection
byproduct (DBP) exceedances for the water system. To address this issue, a new
hydrogen peroxide treatment system was installed.[9]
The hydrogen peroxide treatment system addressed the DBP exceedances, and the
Consent Order was closed on July 6, 2020. (EXH 4, MPN C4-491)
2.
January 2024 through May 2025 – The engineering report
included an evaluation of Placid Lakes’ monthly flow data for its water system,
which showed that the total groundwater withdrawals were within the Southwest
Florida Water Management District’s (SWFWMD) total Consumptive Use Permit (CUP)
limits, but the average day and peak month withdrawal limits for the individual
well allocations were exceeded on multiple occasions. The individual well
allocations identified in the SWFWMD CUP are for four wells; however, one well
has yet to be constructed. To address the individual well allocation
exceedances, the engineering report indicated that a new well, Well No. 4,
should be constructed (Project No. 5 in the water project listing). (EXH 4, MPN C4-490-C4-491; MPN C4-494)
3.
April 25, 2024 – The DEP issued a Compliance Assistance
Offer Letter resulting from the March 28, 2024, Sanitary Survey Inspection. (EXH
4, MPN C4-604-C4-615)
a.
Missing tank inspection reports for ground storage and
hydro-pneumatic tanks.
b.
Bio growth in aerator ground storage #1 and #2, and pad
of well #1 cracked.
c.
Well #2 raw sampling taps were threaded.
d.
Wells #1 and #2 raw water taps were not pointed
downward.
e.
Operator was not recording in and out times during site
visits.
4.
July 15, 2024 – The DEP issued a Return to Compliance
Letter as Placid Lakes’ water system was determined to be in compliance
following provision of the requested information regarding the April 25, 2024,
Compliance Assistance Offer Letter (No. 3). (EXH 4, MPN C4-616)
5.
January 27, 2026 – The DEP issued a warning letter due
to a nitrate exceedance from a drinking water sample collected on August 6,
2025. (EXH 20, BSP 2792-2805)
6.
July 27, 2026 – SWS indicated that Placid Lakes
represents that its water system is in compliance with the DEP. (EXH 12, BSP
2824)
A summary of Placid Lakes’ wastewater system compliance
history is provided below.
1.
January 17, 2024 – The DEP issued a Compliance
Assistance Offer resulting from the December 18, 2023 Compliance Evaluation Inspection.
(EXH 4, MPN C4-493, MPN C4-621-C4-647)
a.
Absence of a daily logbook for the facility.
b.
Incorrect percent capacity calculations on the
discharge monitoring reports (DMRs).
c.
Late submittal of DMRs.
2.
April 23, 2024 – The DEP issued a Return to Compliance
Letter as Placid Lakes' wastewater system was determined to be in compliance
following provision of the requested information regarding the January 17, 2024
Compliance Assistance Offer Letter (No. 1). (EXH 4, MPN C4-648)
3.
May 30, 2025 – The DEP issued a warning letter
regarding its office file inspection conducted on May 15, 2025, which indicated
that Placid Lakes' wastewater system was significantly out of compliance (EXH
4, MPN C4-493, MPN C4-650-C4-673)
a.
Failure to submit a permit renewal application by
February 3, 2024.
b.
Operating with an expired permit.
4.
September 15, 2025 – The DEP issued a final permit,
which included Administrative Order No. AO-014350-008-SD (DEP AO) requiring
Placid Lakes’ wastewater system to meet the new effluent limits of 6 milligrams
per liter (mg/l) for total nitrogen and 3 mg/l for total phosphorous.[10] The
existing facility is not designed to meet the new effluent limits. As such, the
engineering report indicated that new treatment tanks, mixers, pumps,
electrical upgrades, and groundwater monitoring wells will need to be installed
(Project Nos. 7, 8, and 9 in the wastewater project listing), and increased
facility staffing will be required to address the DEP AO action items, which
are due by February 29, 2028.[11] (EXH 4,
MPN C4-484, MPN C4-494, MPN C4-504; TR 49)
5.
July 27, 2026 – SWS indicated that Placid Lakes
represents that its wastewater system is in compliance with the DEP. (EXH 12,
BSP 2824)
As discussed in Issue 1, SWS witness Magro’s engineering
report included an evaluation of Placid Lakes’ water and wastewater system
assets. The engineering report identified 19 CIP projects (ten water and nine
wastewater), with an estimated cost of $2,130,000. (EXH 4, MPN C4-503-C4-504)
In addition, SWS witness DeStefano identified an additional project for the
water system, the Advanced Metering Infrastructure (AMI) project. According to
the witness, this project is necessary because the current non-automated meters
require replacement to integrate with SWS's system-wide AMI implementation,
which was approved in its last rate case, and achieve the associated benefits.
(EXH 9, BSP 283-286) Witness DeStefano testified that the total estimated cost
for all projects is $2.38 million.[12]
(EXH 4, MPN C4-503-C4-504; EXH 8, MPN E10; EXH 12, BSP 2823; TR 22; TR 26; TR
30)
Below are the CIP projects identified for the water system
in SWS witness Magro’s engineering report, as well as the additional AMI
project identified by SWS. Project Nos. 1 through 5 are expected to be
completed by the end of 2027, and Project Nos. 6 through 11 are expected to be
completed by the end of 2028. The estimated total cost for these projects is
$1,203,575, if the transaction and transfer are approved. (EXH 4, MPN C4-503-C4-504)
1.
AMI Meters Replacements – Replace approximately
750 non-automated meters with AMI meters. The estimated total project cost is
$393,575.
2.
Well No. 1 Pump Rehabilitation – Remove and
rehabilitate existing vertical turbine pump and motor at Well No. 1, including
disconnection, inspection, reinstallation, and testing. The estimated total
project cost is $25,000.
3.
Well No. 2 Emergency Generator Installation –
Furnish and install a new standby generator at Well No. 2, including an
automatic transfer switch (ATS), concrete pad, wiring, conduit, and all electrical
tie-ins. The estimated total project cost is $75,000.
4.
Well No. 3 Emergency Generator Installation –
Furnish and install a new standby generator at Well No. 3, including an ATS,
concrete pad, conduit, wiring, grounding, and integration into the existing
system. The estimated total project cost is $75,000.
5.
New Well No. 4 – Drill a new 10 inch well,
install a new pump, instrumentation, SCADA, and a new raw water main. The
estimated total project cost is $500,000.[13]
6.
Water Treatment Plant Site Vault Safety Improvements
– Fabricate and install aluminum or galvanized steel safety covers over three
existing pipe vaults; the project includes minor site work, framing, and
anchoring. The estimated total project cost is $20,000.
7.
High Service Pump (HSP) Building Grating Replacement
– Rehabilitate the existing grating above influent and effluent piping in the
HSP building. The estimated total project cost is $15,000.
8.
Compressor Replacement – Remove and dispose of
two existing Ingersoll-Rand air compressors located outdoors and furnish and
install new replacement compressors. The estimated total project cost is
$10,000.
9.
14-inch Asbestos Cement Pipe Replacement –
Excavate, remove, and replace approximately 80 linear feet of 14-inch asbestos
cement effluent water main with new Ductile Iron Pipe. The estimated total
project cost is $60,000.
10. Chlorine
System Reliability Upgrade – Install a back-up chlorine storage tank and
metering pump to provide permanent back-up disinfection facilities. The
estimated total project cost is $20,000. (EXH 12, BSP 2822)
11. Chain
Link Repair – Install approximately 80 linear feet of damaged chain link
fence. The estimated total project cost is $10,000.
SWS witness Magro testified that the ten CIP projects
identified for the water system include seven deferred maintenance projects
(Project Nos. 2 and 6-11), two reliability projects (Project Nos. 3 and 4), and
one notable project (Project No. 5). Witness Magro indicated that Project No.
5, the New Well No. 4 project, is notable due to Placid Lakes’ individual
groundwater well withdrawal allocation exceedances as previously discussed. SWS
asserted that the fourth well should resolve the well withdrawal exceedances.
(EXH 4, MPN C4-494; TR 47-48; TR 171-172)
Below are CIP projects identified for the wastewater
system in witness Magro’s engineering report. Project Nos. 1 through 5 are
expected to be completed by the end of 2027, and Project Nos. 6 through 9 are
expected to be completed by the end of 2028. The estimated total cost for these
projects is $920,000, if the transaction and transfer are approved. (EXH 4, MPN
C4-504)
1.
Lift Station No. 1 Full Replacement (Golf) –
Abandon existing Lift Station No. 1 and construct a new lift station, including
a wet well, valve vault, pumps, controls, electrical service, and site work.
The estimated total project cost is $300,000.
2.
Lift Station No. 2 Discharge Piping Rehabilitation
– Remove and replace corroded discharge piping, valves, and fittings within the
wet well vault of Lift Station No. 2; the project includes bypass pumping and
restoration. The estimated total project cost is $40,000.
3.
Open Tank Grating Safety – Fabricate and install
new aluminum grating covers over four open process tanks to improve safety and
prevent fall hazards; the project includes brackets and hardware. The estimated
total project cost is $10,000.
4.
Blower System Installation – Furnish and install
a new blower unit and a back-up blower at the wastewater treatment facility
(WWTF), including structural supports, mounting, conduit, and control wiring.
The estimated total project cost is $30,000.
5.
Generator Installation WWTF – Furnish and
install a new standby generator at the WWTF; the project includes an ATS,
electrical panel upgrades, concrete pad, and all connections. The estimated
total project cost is $75,000.
6.
New Bar Screen – Furnish and install a new
influent bar screen. The estimated total project cost is $15,000.
7.
DEP Required Plan – Prepare a power outage
contingency plan and a collections system action plan. The estimated total
project cost is $10,000.
8.
Nutrient Removal Upgrades Basin Management Action
Plan (BMAP) Compliance – Install a new treatment tank and nitrogen recycle
pump, in-tank mixer, alum injection system, metering pump, auto-dialer, and
electrical/control systems to comply with the new nitrogen and phosphorous
effluent limits. The estimated total project cost is $400,000.
9.
Monitoring Well Installation – Furnish and install
groundwater monitoring wells in accordance with the permit requirements; the
project includes drilling, casing, wellhead protection, and documentation. The
estimated total project cost is $40,000. (EXH 4, MPN C4-504)
SWS witness Magro noted that the nine wastewater CIP
projects include seven deferred maintenance projects (Project Nos. 2-7 and 9),
and two notable CIP projects (Project Nos. 1 and 8). Witness Magro indicated
that Project No. 1, the Lift Station No. 1 Full Replacement (Golf) project, is considered
of primary importance due to the age and condition of the existing lift
station, safety risks, and the need to comply with recommended wastewater pump
station standards. Witness Magro stated that Project No. 8, the Nutrient
Removal Upgrades BMAP Compliance project, is the second-most notable CIP
project as it is required to comply with the new BMAP effluent limits per the
AO in the new DEP permit. (EXH 4, MPN C4-494; TR 48-49)
SWS stated that the Utility’s access to capital, enhanced
information-technology and cybersecurity support, and emergency and disaster
response capabilities will benefit Placid Lakes’ customers and support
regulatory compliance. SWS also asserted that its experience as an established
operator of multiple utility systems across several counties is evidence of its
capabilities to maintain regulatory compliance and address non-compliance
issues as they arise. (TR 141, 151-152, 156-157; SWS BR 9)
OPC did not file testimony in this proceeding; however,
based on its brief, OPC does not believe that SWS has established that the
increase in rate base and rates will materially improve regulatory compliance.
Furthermore, OPC states that the Commission's decision on the acquisition
transaction does not improve new regulatory compliance due to regulatory
compliance being needed and independent from the value the Commission assigns.
(OPC BR 4-5)
Staff disagrees with OPC. The record demonstrates that the
proposed infrastructure, equipment, and operational changes should improve
Placid Lakes’ ability to meet applicable regulatory requirements. Section
367.0811(9)(b), F.S., requires consideration of whether the acquisition
transaction is expected to result in improvements in regulatory compliance. The
record demonstrates that SWS has identified specific existing regulatory
requirements and operational issues, as well as proposed projects to address
those issues.
Specifically, the proposed construction of Well No. 4 for
Placid Lakes’ water system is intended to address the individual well withdrawal
allocation exceedances identified in the SWFWMD CUP. In addition, the proposed
Nutrient Removal Upgrades and Monitoring Well Installation projects for Placid
Lakes’ wastewater system are directly related to the new DEP permit
requirements and AO regarding the new effluent limits and groundwater
monitoring requirements. SWS has also indicated that it has the staffing
necessary to meet the increased staffing requirements identified in SWS witness
Magro’s engineering report to address the DEP AO action items. (TR 23-24)
Therefore, these projects directly address identified regulatory requirements
and are expected to improve Placid Lakes’ ability to comply with those
requirements.
The remaining proposed CIP projects for the Placid Lakes
systems, including projects addressing equipment rehabilitation, standby
generation, disinfection system reliability, and other infrastructure
deficiencies, are intended to improve the reliability and operation of the
systems. While not every project is needed to address a specific existing
violation, these improvements should reduce the likelihood of equipment
failures and operational deficiencies that could affect the systems’ ability to
maintain regulatory compliance.
Based on the above, staff believes that SWS’s planned
projects should provide meaningful improvements in reliability, safety, and
system operations for the Placid Lakes water and wastewater systems, which
should contribute to continued regulatory compliance. The record also
demonstrates that SWS has access to the funding, staffing, operational, and
infrastructure resources needed to address existing deficiencies and meet the
systems’ regulatory requirements. Therefore, staff believes that the
transaction should result in improvements in regulatory compliance following
completion of SWS’s proposed improvement projects.
Conclusion
The proposed transaction should result in improvements in
regulatory compliance for the Placid Lakes systems following completion of
SWS’s proposed improvement projects.
Issue 3:
What reasonable performance goals, if any, should
the Commission set, pursuant to Section 367.0811(10), F.S.?
Recommendation:
None. Based upon staff’s evaluation of the Utility’s
petition in Issues 1, 2, 4, and 7 through 11, staff does not believe any
performance goals are necessary at this time. Should future circumstances
demonstrate otherwise, the Commission has the authority to evaluate the
Utility’s performance in subsequent proceedings. (Ramirez-Abundez)
Position of the Parties
SWS:
None.
OPC:
To the extent the Commission increases the rate base
through the addition of purely intangible costs over the objection of the
customers, it should set a framework to develop a cost-benefit analysis of
ratepayer impacts to standardize the review of future acquisitions.
Staff Analysis:
Section 367.0811(10), F.S., states that the
Commission may set reasonable performance goals based on the standards
specified in Section 367.0811(9), F.S., and review utility performance
regarding these standards in a rate proceeding.
SWS did not provide testimony regarding this issue, and
OPC did not file testimony in this proceeding. However, in its brief, SWS
recommended that no performance goals are necessary, but stated that the record
established that the specific projects in the CIPs, with SWS’s operational and
regulatory experience, provide measurable commitments that render additional
performance goals under Section 367.0811(10), F.S., unnecessary. In its brief,
OPC recommended that the Commission set a framework to develop a cost-benefit
analysis of ratepayer impacts to standardize the review of future acquisitions.
Furthermore, OPC argued that the framework should require the Utility to
identify measurable service, compliance, and cost-efficiency targets tied to
approval of the acquisition transaction, and to report periodically on whether
targets have been met. (SWS BR 9-10; OPC BR 5-6)
While OPC recommended that a framework to develop a
ratepayer cost-benefit analysis be set, staff agrees with SWS and recommends
that no performance goals be established pursuant to Section 367.0811(10),
F.S., at this time. SWS has not yet acquired the Placid Lakes’ water and
wastewater systems, and the record does not provide information for specific
performance goals to establish future performance goals. Staff also agrees with
SWS that the specific projects identified in the CIPs and SWS’s operational and
regulatory experience provide a basis for evaluating the Utility’s performance
in a future proceeding without establishing formal performance goals at this
time. Additionally, staff evaluated SWS’s petition pursuant to the
considerations included in Section 367.0811(9), F.S., which are addressed in
Issues 1 through 2, 4, and 7 through 11 of staff’s recommendation.
Specifically, improvements in quality of service and compliance with regulatory
requirements are discussed in Issues 1 and 2, respectively. Rate stability or
reductions and cost efficiencies are addressed in Issues 4 and 7, respectively.
Demonstration of whether the proposed purchase was made as part of an
arms-length transaction, and economies of scale generation are discussed in
Issues 8 and 9, respectively. Finally, demonstration that the acquiring utility
has greater access to capital than the utility being acquired, and a comparison
of the acquiring utility's net book value to the proposed rate base value of
the utility being acquired are discussed in Issues 10 and 11, respectively.
Based on above, staff believes that establishing formal
performance goals is unnecessary at this time because the considerations of
Section 367.0811(9), F.S., are addressed throughout this recommendation, and
the specific projects identified in the CIPs provide a basis for evaluating the
Utility’s performance in a future proceeding. Should future circumstances
demonstrate otherwise, the Commission has the authority to evaluate the
Utility’s performance in subsequent proceedings.
Conclusion
Staff does not believe any performance goals under Section
367.0811(10), F.S., are necessary at this time.
Issue 4:
Is the proposed transaction under Section 367.0811(9)(c),
F.S., expected to result in rate reductions or rate stability over a long-term
period?
Recommendation:
Yes. The proposed transaction under Section
367.0811(9)(c), F.S., is expected to result in rate stability over a long-term
period. (Bruce)
Position of the Parties
SWS:
Yes.
OPC:
No. When considered as an isolated transaction and
on a stand-alone basis, it is clear that customers’ rates will increase if the
petition is approved. Without knowing all of Sunshine’s system and capital
expenditure plans, long term rate stability is speculative given a single
transaction. There is no evidence that, as a result of this transaction, rate
reductions or rate stability will ever occur for Placid Lakes or Sunshine
customers over a long-term period.
Staff Analysis:
Pursuant to Section 367.0811(9)(c), in evaluating a
rate base value petition, the Commission must consider whether the transaction
will result in rate reductions or rate stability over a long-term period. SWS witness
Twomey stated that the proposed acquisition and ultimate consolidation with
SWS’s other systems will result in a rate reduction and rate stability for the
customers of Placid Lakes over a long-term period. (TR 157, SWS BR 6) However,
witness Twomey indicated that Placid Lakes’ existing rates will not result in
an immediate rate change. (TR 158) Witness Twomey asserted that post
consolidation, the customers’ average residential water and wastewater bills
would decline. (TR 158)
In its brief, OPC asserted that the approval of the rate
base value petition, acquisition of Placid Lakes, and consolidation with SWS is
expected to increase Placid Lakes’ rate base. (OPC BR 6) OPC indicated if the
consolidation does not take place, the Placid Lakes customers would carry the
burden of a higher premium in the rate base. OPC further stated that without
knowing all of SWS’s system and capital expenditure plans, long term rate
stability is speculative. (OPC BR 6) Furthermore, OPC highlighted known
engineering deficiencies that “customers will almost certainly pay for in a
future rate case.” (OPC BR 3) OPC argued that the Commission should not treat
rate stability as a benefit of the transaction unless it is tied to a definite,
enforceable timeline. (OPC BR 7)
SWS witness DeStefano’s analysis presents calculations of
stand-alone revenue increases for Placid Lakes if it is not acquired by SWS,
based on a 2027 test year, which result in higher percentage increases of 13.14
percent for water and 257.57 percent for wastewater. (TR 27; SWS BR 6) If the
transaction and consolidation are successful, witness DeStefano’s analysis
indicates an overall percentage price increase of 6.48 percent for water and
7.93 percent for wastewater. (TR 23). Since SWS’s rates are consolidated, staff
believes it is reasonable to expect that Placid Lakes would be incorporated
into SWS’s consolidated rate structure upon completion of a future rate
proceeding. Placid Lakes’ customers would not be expected to experience the
substantially higher stand-alone increases identified in witness DeStefano’s
analysis. Rather, the evidence demonstrates that customers would experience
substantially lower increases under the consolidated rate structure than they
would if Placid Lakes remained a stand-alone utility. Although the proposed
transaction does not result in an immediate rate reduction, staff believes the
lower increases associated with consolidation support the finding of more
reasonable future rates for Placid Lakes customers. Staff believes that the
proposed transaction is reasonably likely to result in rate stability over a
long-term period and no evidence to the contrary has been presented.
Conclusion
Based on the above, the proposed transaction under Section
367.0811(9)(c), F.S., is expected to result in rate stability over a long-term
period.
Issue 5:
What is the projected rate impact of the proposed
transaction under Section 367.0811(5)(e), F.S., over the next five years?
Recommendation:
The projected rate impact of the proposed
transaction under Section 367.081(5)(e) F.S., over the next five years is a
decrease to the monthly residential bill for a 5/8-inch x 3/4-inch meter from
$31.72 to $28.42 for water and $139.50 to $88.44 for wastewater. (Bruce)
Position of the Parties
SWS:
While SWS anticipates continuing with annual index
rate adjustments as Placid Lakes has in recent years, the inclusion of Placid
Lakes in SWS’s next rate case (estimated to be effective in 2029) is expected
to result in an overall rate decrease for both water and sewer customers of
Placid Lakes relative to current rates.
OPC:
To the extent the Commission increases the rate base
through the addition of purely intangible costs over the objection of the
customers, and although Sunshine Witness De[S]tefano’s Exhibit No 3; MPN C1-17,
these projected rate impacts rely on CPVRR inputs that are inconsistent with
Placid Lakes’ and Sunshine’s 2025 Annual Reports. These projections present an
unacceptably rosy view of the future.
Staff Analysis:
Pursuant to Section 367.0811(5)(e), F.S., the
petition filed under this section must contain a 5-year projected rate impact
on the customers of the utility being acquired, including but not limited to,
any cost efficiencies expected to result from the acquisition and the use of
this section instead of the cost method pursuant to Section 367.081, F.S., to
establish rate base. SWS witness DeStefano contends that SWS prepared
projections showing Placid Lakes’ anticipated tariff rates following
acquisition and inclusion in its anticipated SWS’s 2027 test year rate case,
estimated to take effect in 2029. SWS projects an overall rate decrease for
Placid Lakes water and wastewater customers relative to Placid Lakes current
rates. (TR 21-22, 29; SWS BR 6)
Witness DeStefano indicated that the rate calculations
include the proposed $5,750,000 rate base and recommended $2.38 million in
capital improvements. Witness DeStefano stated that the 5-year projected rate
impact incorporates operational efficiencies resulting from SWS’s anticipated
use of three operating personnel and its existing management and administrative
teams. These efficiencies are expected to eliminate certain incremental
salaries and benefits costs, estimated to be $139,951 annually, beginning upon
acquisition. (TR 23-24, SWS BR 7) Witness DeStefano’s analysis demonstrates
that Placid Lakes’ rates will go up if capital improvements are considered on a
stand-alone basis as indicated in the engineering assessment. (TR 22-23)
In its brief, SWS asserted that it would continue charging
Placid Lakes’ existing rates in effect at the time of closing and, on a going
forward basis, continue filing annual index filings for the next several years
before consolidating Placid Lakes with SWS. (SWS BR 6, TR 148) The average
consumption for water is 3,555 gallons per month. With consolidation, a
residential water bill, based on a 5/8-inch meter size will reduce from the current
charge of $31.72 to $28.42 a month in 2029. The average consumption for
wastewater is 4,592 gallons. A residential wastewater bill will reduce from the
current charge of $139.50 a month to $88.44 a month in 2029. (SWS BR 7)
In its brief, OPC asserted that despite SWS’s projection
that rates will eventually stabilize, the acquisition will not necessarily
produce savings. (OPC BR 7) OPC cited inconsistencies between actual numbers
reported in both SWS and Placid Lakes’ 2025 Annual Reports, and the numbers
used to calculate witness DeStefano’s 5-year impact analysis. (OPC BR 8) OPC
argued that the most significant discrepancy concerns Placid Lakes’ O&M
expense, where in witness DeStefano, in the 5-year impact analysis, used
O&M expense of $583,948, while Placid Lakes reported $1,688,841 in its 2025
Annual Report. OPC further acknowledged concerns about the reliability of the 5-year
rate analysis, stating that because the inputs used to calculate it “materially
diverge” from the annual reports, the Commission cannot accept the projected
benefits and rate impacts at face value. (OPC BR 9) OPC also referenced Rule
25-30.110 (2), F.A.C., stating that it requires information furnished to the
Commission for ratemaking purposes to be consistent with, and reconcilable to, Placid
Lakes’ annual reports. (OPC BR 9)
OPC’s comparison of the financial input used in SWS’s
5-year rate impact analysis to the 2025 Annual Reports is mislaid. The analysis
was prepared using the most recent financial information available at the time,
the 2024 Annual Reports of SWS and Placid Lakes. SWS filed its petition in
February 2026, at a time when the 2025 Annual Report was not yet due. As a
result, the use of the 2024 Annual Report was reasonable and appropriate for
preparing the analysis. In addition, OPC’s comparison relies on an incorrect
O&M expense for Placid Lakes. Placid Lakes’ 2025 Annual Report reports
O&M expense of $790,017, not the $1,688,841 cited by OPC. (EXH 22, BSP
E1406; OPC BR 8) SWS used the 2024 Annual Report O&M expense of
$710,052. It was reduced in year one to
$583,948 to recognize the cost efficiencies realized upon the acquisition. (EXH
3, BSP C1-14) Therefore, OPC’s calculation of the alleged discrepancy is based
on an inaccurate figure and does not provide a reliable basis for questioning
the analysis.
Conclusion
Based on the above, the projected rate impact of the
proposed transaction under Section 367.081(5)(e) F.S., over the next five years
is a decrease to the monthly residential bill for a 5/8-inch x 3/4-inch meter
from $31.72 to $28.42 for water and $139.50 to $88.44 for wastewater.
Issue 6:
If the transaction under Section 367.0811(5)(h),
F.S., is approved, should the Commission institute a rate stabilization plan
for Placid Lakes Utilities, Inc.?
Recommendation:
Staff recommends that if the proposed transaction
under Section 367.0811(5)(h), F.S., is approved, the Commission should not
institute a rate stabilization plan for Placid Lakes. (Bruce)
Position of the Parties
SWS:
No.
OPC:
To the extent the Commission increases the rate base
through the addition of purely intangible costs over the objection of the
customers, the Commission should only institute a rate stabilization plan if
the transaction satisfies the minimum statutory public interest factors.
Staff Analysis:
Section
367.0811(5)(h), F.S., provides that a rate stabilization plan must be filed if
the acquisition would result in a significant individual increase in rates
during the 5-year period following acquisition. Rule 25-30.0372(3)(f), F.A.C.,
provides that a “significant individual increase” means a rate increase during
any twelve consecutive months of the 5-year projected rate impact period that
is in excess of 15 percent over the current rates of the utility system being
acquired.
SWS witness
Twomey testified that consistent with Rule 25-30.0372(3)(f), F.A.C., SWS is not
proposing a rate stabilization plan because the transaction will not result in
a significant individual increase that will result in an excess of 15 percent
over Placid Lakes current rates or in the rates charged to Placid Lakes during
the 5-year period. (TR 149; SWS BR 7) In its brief, SWS asserted that the
Utility anticipates the acquisition and consolidation of Placid Lakes into
SWS’s existing revenue requirements would mitigate significant individual
increases over the estimated 2026-2030 period. (SWS BR 7)
In its
brief, OPC stated that the Utility should be required to institute a rate
stabilization plan if the transaction satisfies the minimum statutory public
interest factors. (OPC BR 9) OPC further explained that the rate stabilization
plan should be coupled with performance requirements including completion of
capital projects, demonstration of operating efficiencies, and periodic
reporting concerning whether projected savings have materialized. (OPC BR 9)
Based on the 5-year projected impact, a rate stabilization plan is not
warranted.
Staff believes that the record evidence demonstrates there
will not be a rate increase during any twelve consecutive months of the 5-year
projected rate impact period that is in excess of 15 percent over the current
Placid Lakes rates. Therefore, staff recommends that if the proposed
transaction under Section 367.0811(5)(h), F.S., is approved, the Commission
should not institute a rate stabilization plan for Placid Lakes.
Conclusion
Staff
recommends that if the proposed transaction under Section 367.0811(5)(h), F.S.,
is approved, the Commission should not institute a rate stabilization plan for
Placid Lakes.
Issue 7:
Is the proposed transaction under Section 367.0811(9)(d),
F.S., expected to provide cost efficiencies?
Recommendation:
Yes. Staff recommends that the proposed acquisition
of Placid Lakes is expected to provide cost efficiencies. (Cohn)
Position of the Parties
SWS:
Yes
OPC:
No. The Utility has merely identified generalized
efficiencies associated with centralized management and administrative
consolidation, but it has not demonstrated that these efficiencies are
quantifiable, verifiable, or sufficient to offset the increased costs.
Staff Analysis:
Pursuant to Section
367.0811(9)(d), F.S., in considering a rate base value petition pursuant to
this section, the Commission must consider whether the proposed acquisition
provides cost efficiencies in serving the public interest and pursuant to the
goals of this section of the statute.
SWS is a wholly owned subsidiary
of Nexus Regulated Utilities, LLC (Nexus), which is an indirectly owned
subsidiary of Nexus Water Group, Inc. SWS is a Class A water and wastewater
utility providing potable water and wastewater services to more than 35,000 and
30,000 customers, respectively, across 10 Florida counties. (TR 135) As a
result of its size and operational structure, SWS is positioned to achieve cost
efficiencies via economies of scale through the sharing of administrative functions,
operational personnel, technical expertise, and other resources across multiple
systems and spreading fixed costs across a larger customer base. (TR 152-153)
These arrangements may improve operational efficiency, reduce duplicative
costs, and help moderate future increases in the cost of providing service.
In response to OPC’s third
request for production of documents, the Utility provided Placid Lakes’ 2021
through 2025 Annual Reports. According to Placid Lakes’ 2025 Annual Report, the
most recent year of operation, the water system reported an operations and
maintenance (O&M) expense of $790,017 (EXH 22, BSP E1435), which is 8.8
percent higher than its projected O&M expense for that year. (EXH 3, BSP C1-16)
The average water O&M expense for the 5-year period from 2021 through 2025
is $698,088, reflecting an average annual increase of 6.0 percent. Placid
Lakes’ wastewater system is currently unregulated by the Commission. SWS separately
filed an application for the transfer of Placid Lakes’ wastewater assets and
for amendment of Certificate No. 347-S, which would add the wastewater system
to the Utility’s Commission-regulated wastewater service territory.
According to the Utility’s
Cumulative Present Value of the Revenue Requirement (CPVRR), SWS projects an
average O&M expense of $610,580 for water, and $37,847 for wastewater
during the first five years following the proposed acquisition. (EXH 3, BSP
C1-14-C1-15) Table 7-1 summarizes Placid Lakes’ projected O&M expenses with
acquisition by SWS and as a standalone system without acquisition.
Table 7-1
Placid Lakes’ Projected
O&M Expenses With and Without Acquisition
|
|
Year 0 (2024)
|
Year 1 (Projected)
|
Year 2 (Projected)
|
Year 3 (Projected)
|
Year 4 (Projected)
|
Year 5 (Projected)
|
5-year Projected Average
|
|
Without Acquisition (Standalone)
|
|
Water
|
$710,052
|
$725,886
|
$742,073
|
$758,622
|
$775,539
|
$792,833
|
$758,991
|
|
Wastewater
|
$36,516
|
$37,330
|
$38,163
|
$39,014
|
$39,884
|
$40,773
|
$39,033
|
|
With Acquisition
|
|
Water
|
$710,052
|
$583,948
|
$596,970
|
$610,283
|
$623,892
|
$637,805
|
$610,580
|
|
Wastewater
|
$36,516
|
$36,196
|
$37,003
|
$37,828
|
$38,672
|
$39,534
|
$37,847
|
Source: EXH 3, C1-14-C1-16.
SWS projects that O&M expense
will decrease by 17.8 percent for water and 0.9 percent for wastewater in Year
1 of operation, compared to Placid Lakes’ 2024 O&M expenses. The Utility
assumed a 2.2 percent annual increase in O&M expenses for each subsequent
year. (EXH 11, BSP E58) Over the 5-year horizon, SWS projects O&M expenses
that are 19.6 percent lower for water and 3.0 percent lower for wastewater
compared to the O&M expenses projected for Placid Lakes as a standalone
system. (EXH 8, BSP E15)
Regarding whether the acquisition
of Placid Lakes is expected to provide cost efficiencies, OPC stated the
Utility has merely identified generalized efficiencies associated with
centralized management and administrative consolidation, but it has not demonstrated
that these efficiencies are quantifiable, verifiable, or sufficient to offset
the increased costs. (OPC BR 10-11) However, staff disagrees with OPC’s stance
and believes the Utility has provided evidence of anticipated cost efficiencies
resulting from the proposed acquisition. In response to staff’s first set of
interrogatories, SWS explained that cost efficiencies are expected to result
from consolidating personnel supporting the Placid Lakes system. (EXH 8, BSP E19)
Specifically, the Utility anticipates using three operating personnel, with an
estimated total cost of $292,593, as well as existing SWS management and
administrative teams to support the operations of the Placid Lakes system. (EXH
8, BSP E14; EXH 11, BSP E59; TR 23-24; TR 37-38) After accounting for the
estimated costs associated with the three operating personnel, SWS removed
$432,544 in labor and benefits expenses reported in Placid Lakes’ 2024 Annual
Report, resulting in estimated operational savings of $139,951. (EXH 8, BSP
E14; EXH 11, BSP E62-E66)
Based on SWS’s operational
structure, the anticipated reduction in O&M expenses, and Placid Lakes’
actual 2025 water O&M expense exceeding the projected O&M expense as a
standalone system, staff recommends that the proposed acquisition of Placid
Lakes is expected to provide cost efficiencies.
Conclusion
Staff recommends that the
proposed acquisition of Placid Lakes is expected to provide cost efficiencies.
Issue 8:
Is the proposed transaction under Section 367.0811(9)(f),
F.S., expected to generate economies of scale?
Recommendation:
Yes. The proposed transaction under Section
367.0811(9)(f), F.S., is expected to generate economies of scale. (Bruce)
Position of the Parties
SWS:
Yes.
OPC:
No. The evidence does not establish meaningful
economies of scale benefiting customers. Larger utilities may realize a lower
cost per unit to serve, however those savings will not be directly passed
through to customers or exceed the increased revenue requirement, instead it
will likely increase utility profits.
Staff Analysis:
Pursuant to Section 367.0811(9)(f), F.S., in
evaluating a rate base value petition, the Commission must consider the
economies of scale to be generated by the transaction. SWS contended that the
transaction is expected to generate economies of scale. (TR 151; SWS BR 8) SWS
witness Twomey asserted that consolidating Placid Lakes with SWS will promote
economies of scale by spreading fixed costs across a larger customer base. (TR
152-153; SWS BR 8) Witness Twomey further contended that consolidating Placid
Lakes with SWS will reduce customer capital and operating costs. (TR 153; SWS
BR 8) In its brief, SWS asserted that the reduction of capital and operating
costs along with access to financial, operational, and technical expertise that
a utility of Placid Lakes size would not have been able to achieve on its own.
(SWS BR 8)
SWS witness DeStefano contended that the transaction will
provide economies of scale from a cost recovery perspective that would not
otherwise be available to Placid Lakes. (TR 28) To support its position, SWS
asserted that consolidating Placid Lakes with SWS would eliminate the need for
stand-alone management, capital planning, support services, and operational
leadership roles or positions. (SWS BR 8; TR 37-38) Witness DeStefano stated
that consolidation will provide savings for Placid Lakes by allowing SWS to use
its existing administrative and management team. (TR 37-38) Witness DeStefano
further indicated that these costs are existing SWS costs and will not be
incremental costs for Placid Lakes. (TR 38; EXH 11, BSP E-56; SWS BR 8)
In its brief, OPC disagreed with SWS, stating that the
evidence does not establish meaningful economies of scale benefiting customers,
and that the savings realized by SWS will increase utility profits rather than
being passed down to customers. (OPC BR 11) OPC stated that SWS’s claims of
savings in emergency response, cybersecurity, centralized resources, and access
to a large organization “do not justify a reduction in Placid Lakes’ operating
costs or establish a measurable economic benefit attributable to this
acquisition.” (OPC BR 11)
Staff disagrees with OPC’s assertions and believes that
the benefits indicated by the Utility’s witnesses, including the sharing of
existing management, administrative, and operational resources and the
spreading of costs across a large customer base, present opportunities for the
Utility to be operationally efficient and promote economies of scale with the
statute. Therefore, staff recommends that the Utility’s proposed transaction
under Section 367.0811(9)(f), F.S., will be expected to generate economies of
scale.
Conclusion
The proposed transaction under Section 367.0811(9)(f),
F.S., is expected to generate economies of scale.
Issue 9:
Has Sunshine Water Services Company demonstrated
that the purchase of Placid Lakes Utilities, Inc. is being made as part of an
arms-length transaction under Section 367.0811(9)(e), F.S.?
Recommendation:
The Asset
Purchase Agreement between SWS and Placid Lakes constitutes an arms-length
transaction because it involved two independent unrelated corporate entities
with no shared ownership or affiliation. (D’Sa)
Position of the Parties
SWS:
Yes.
OPC:
No. The existence of a purchase agreement does not
establish that the agreed purchase price represents an objective measure of
value appropriate for ratemaking purposes.
Staff Analysis:
SWS argued that the proposed transaction was
negotiated at arm’s length between two unaffiliated parties. (SWS BR 9; EXH 8,
BSP E20) SWS
witness Twomey asserted that the transaction for the Placid Lakes systems
satisfies the statutory requirements of an arms-length transaction and outlined
the public interest benefits, including improved service, regulatory
compliance, and economies of scale. Witness Twomey testified that SWS is an
indirect subsidiary of Nexus Water Group, Inc. and that Placid Lakes is an
entirely separate corporate entity with no prior affiliation. (TR 135-138; TR
150-151) SWS argued that each party entered negotiations voluntarily, was
represented by its own counsel, and acted in their own self-interest.
(SWS BR 9; TR 150)
In its brief, OPC argued an arm’s-length purchase price
does not necessarily reflect the utility’s appropriate ratemaking value. Buyers
may pay premiums for factors such as future earnings, strategic advantages,
financing, tax benefits, or anticipated efficiencies—benefits that may accrue
to the buyer rather than customers. Therefore, the Commission should not
automatically add the purchase price premium to rate base. OPC contended that the
key distinction is that what a buyer is willing to pay is not necessarily what
customers should be required to pay through rates. (OPC BR 12)
Upon review of the testimony and exhibits, staff believes
that the Utility has filed the required documentation under Section
367.0811(9)(e), F.S., including, amongst other items, the Agreement for
Purchase and Sale of Water and Wastewater System Assets of the acquired
utility. As indicated above, the transaction involves two distinct corporate
entities - SWS and Placid Lakes - with no documented shared board members or
parent company. Therefore, staff believes the acquisition is an arms-length
transaction as required by Section 367.0811(9)(e), F.S. (EXH 2, BSP C5-747-C5-781)
Conclusion
Staff recommends
the Asset Purchase Agreement between SWS and Placid Lakes constitutes an
arms-length transaction because it involved two independent unrelated corporate
entities with no shared ownership or affiliation.
Issue 10:
Has Sunshine Water Services Company demonstrated
that it has a greater access to capital than Placid Lakes Utilities, Inc. under
Section 367.0811(9)(h), F.S.?
Recommendation:
Yes. SWS has
demonstrated that it has greater access to capital than Placid Lakes under Section
367.0811(9)(h), F.S. (Souchik)
Position of the Parties
SWS:
Yes.
OPC:
Sunshine has generally demonstrated greater
financial resources than Placid Lakes. However, greater access to capital alone
does not establish that the acquisition is in the public interest or justify
adoption of a higher rate base.
Staff Analysis:
Section 367.0811(9)(h), F.S., requires the
Commission to consider whether the acquiring utility possesses greater access
to capital than the utility being acquired. The record demonstrates that SWS
possesses greater access to capital than Placid Lakes through its larger
financial resources, diversified financing mechanisms, and affiliation with a
large utility holding company, Nexus.
SWS argued the proposed acquisition is expected to create
greater access to capital. (SWS BR 9; TR 150) Consistent with that
representation, SWS witness Twomey testified that SWS has access to multiple
sources of capital, including collateralized notes, private placement
offerings, and bank credit agreements as a subsidiary of Nexus. (TR 150) SWS
asserted that Nexus is also credit rated by Standard & Poor’s (specific
rating was filed as confidential by SWS), which facilitates a wide range of
debt financing options at reasonable rates, including a revolving debt
arrangement that provides ready access to funds for operations or capital
investment as needed. (SWS BR 10; EXH 8, BSP E21; EXH 10, BSP E54) The credit
rating is considered private, not publicly available, and represents a
complimentary credit assessment. SWS asserted Placid Lakes, as a stand-alone
utility, historically relied on significantly more limited financing sources,
including developer-provided equity and traditional bank loans. (TR 150)
Witness Twomey testified that SWS’s access to capital
through both SWS, and its parent company, Nexus, will allow the Utility to
engage in capital improvements identified in SWS’s Capital Improvement Plan.
(TR 153) Further, Nexus is a subsidiary of Southwest Water Company, Inc. that
has a $700 million revolving credit facility through its equity investors. (EXH
10, BSP E54) The Utility explained the revolving credit facility is similar to
the revolving credit agreements historically available to SWS through its
parent companies and has been part of its capital structure for ratemaking.
(EXH 10, BSP E54) The revolver makes funds available to SWS for short-term
funding needs without requiring debt issuances or equity infusions, providing
flexibility and reliability in fund availability to maintain proper service for
customers. To SWS’s knowledge, Placid Lakes has no such credit line available.
(EXH 10, BSP E54) Additionally, SWS asserted that it utilizes a balanced
capital structure targeting a 50 percent equity ratio, compared to Placid
Lakes’ Commission approved 58.99 percent equity ratio, which effectively could
lower the overall cost of capital. (SWS BR 9; EXH 8, BSP E21)
OPC did not provide any testimony in the record; however,
in its brief it argued:
Company witness Dante DeStefano, offered in part to
address the “access to capital” factor, could not confirm that Commission
approval of the requested rate base would create a new lending relationship,
guarantee a loan, reduce Sunshine’s borrowing costs, or otherwise concretely
improve the Company’s access to capital. Tr. 31-36. Repeated questioning on
this point drew only speculation: “I would have to ask our lenders. I am not
sure how of this would impact that,” and, when asked whether a higher rate base
would improve Sunshine’s credit rating, “I wouldn’t know that. I am not a
treasury expert.” Tr. 32-36. Mr. DeStefano likewise could not confirm that
Commission approval would increase the Company’s cash on hand or its equity
capital. Tr. 36. A statutory factor cannot be satisfied by an assertion that
the Company’s own witness is unable to substantiate when tested.
(OPC BR 13)
Staff is not persuaded by OPC’s arguments due to a lack of
evidence supporting its claims. Further, staff believes OPC’s arguments above
are contrary to its position on this issue.
Based on the record, staff believes the proposed
acquisition provides SWS with access to greater financial resources to support
long-term infrastructure sustainability. Collectively, the evidence described
above demonstrates that SWS possesses greater financing flexibility and access
to capital than Placid Lakes.
Conclusion
SWS demonstrated it possesses greater access to capital
than Placid Lakes, as contemplated by Section 367.0811(9)(h), F.S. Unlike
Placid Lakes, SWS benefits from diversified debt and equity financing
mechanisms, a significantly larger asset base, and the financial support of a
large utility holding company. Therefore, staff recommends the Commission find
that SWS has provided sufficient evidence demonstrating that it possesses
greater access to capital than Placid Lakes and satisfies the requirement of
Section 367.0811(9)(h), F.S.
Issue 11:
What is SWS’s NBV compared to the proposed rate base
value of Placid Lakes Utilities, Inc. under Section 367.0811(9)(g), F.S.?
Recommendation:
SWS’s net book value (NBV) as of December 31, 2024,
is approximately $195,393,737. The proposed rate base value of Placid Lakes is
$5,750,000, which represents approximately 2.9 percent of SWS’s NBV. (Lenberg)
Position of the Parties
SWS:
As of December 31, 2024, $195,393,737, compared to
the proposed $5,750,000 value for Placid Lakes.
OPC:
Placid Lakes’ netbook [sic] value is
approximately $816,405. Sunshine’s proposed rate base value for the Placid
lakes system is $5,750,000. An approximate $4.9 million increase in rate base
substantially exceeds Placid Lakes’ current netbook value.
Staff Analysis:
Section 367.0811(9)(g), F.S., requires the
Commission, in considering a rate base value petition, to consider the NBV of
the acquiring utility relative to the proposed rate base value of the acquired
utility.
SWS witness Twomey testified that its NBV as of December
31, 2024, is approximately $195,393,737. (TR 136) SWS’s proposed rate base
value for Placid Lakes is $5,750,000. (TR 137-138) The proposed rate base value
therefore represents approximately 2.9 percent of SWS’s NBV. (TR 149-150)
In its briefs, SWS and OPC relied on different
comparisons. SWS argued that the proposed rate base value is only 2.9 percent
of SWS’s NBV and, therefore, the Placid Lakes system can be consolidated with
minimal impact on SWS’s existing customers while benefiting Placid Lakes’ customers.
(SWS BR 10) OPC does not dispute the relative NBV calculation of 2.9 percent, however,
it asserted that the proposed $5,750,000 rate base value is approximately 674
percent of Placid Lakes’ depreciated NBV and argued that customers would bear
the resulting premium through rates.
(OPC BR 13-14)
Section 367.0811(9)(g), F.S., directs the Commission to
compare the acquiring utility’s NBV with the proposed rate base value of the
acquired utility. Thus, the relevant comparison under this factor is SWS’s
$195,393,737 NBV to the proposed $5,750,000 rate base value, or approximately
2.9 percent. OPC’s asserted 674 percent comparison relates the proposed rate
base value to Placid Lakes’ NBV and addresses the proposed premium, not the
comparison specified by this statutory factor. Staff also notes that the
relative size of the acquisition does not, by itself, demonstrate the rate
impact on SWS's existing customers or the benefits to Placid Lakes’ customers.
Based on the record, staff finds that SWS’s proposed
$5,750,000 rate base value for Placid Lakes represents approximately 2.9
percent of SWS’s $195,393,737 NBV. Accordingly, staff recommends that the
Commission find that SWS’s NBV relative to the proposed rate base value of Placid
Lakes is as stated above.
Conclusion
SWS’s NBV as of December 31, 2024, is approximately
$195,393,737. The proposed rate base value of Placid Lakes is $5,750,000, which
represents approximately 2.9 percent of SWS’s NBV.
Issue 12:
What is the appropriate alternative rate base value
if the proposed transaction is found to be in the public interest?
Recommendation:
If the Commission finds the proposed acquisition of
Placid Lakes by SWS to be in the public interest, the appropriate rate base
value under Section 367.0811, F.S., is $5,750,000. (Lenberg, Higgins)
Position of the Parties
SWS:
$5,750,000, not including estimated Organization
costs.
OPC:
The Commission may, in the public interest, grant
the petition in whole or in part or with modifications, or may deny the
petition under Section 367.0811(6)(b). Any Commission decision should establish
a rate base supported by competent and substantial evidence.
Staff Analysis:
Section 367.0811, F.S., provides an alternative
procedure for establishing the rate base value of an acquired utility system.
Under Section 367.0811(3)(b), F.S., the rate base value established by the
Commission may not exceed the lesser of (1) the negotiated purchase price or
(2) the average of the three appraisals conducted under subsection (4). Section
367.0811(6)(b), F.S., further authorizes the Commission, in the public
interest, to grant the petition in whole or in part, with modifications, or to
deny it. Thus, the lesser-of calculation establishes the maximum approvable
value; the Commission must determine the appropriate value based on the
competent and substantial evidence in the record.
SWS witness Twomey testified that the Utility requested an
alternative rate base value of $5,750,000 for Placid Lakes. (TR 142-143) This
amount is the negotiated purchase price as set forth in the Asset Purchase
Agreement (APA). (TR 142-144; EXH 2, BSP C5-747-C5-781) The purchase price of
$5,750,000 is less than the average of the three independent appraisals of fair
market value, or $6,506,633. Thus, the purchase price is the lesser of the two
values and shall be used as the proposed alternative rate base value pursuant
to Section 367.0811, F.S., and Rule 25-30.0372, F.A.C. (TR 138-144)
SWS retained three licensed appraisers selected by the
Commission from its approved list to value the Placid Lakes water and
wastewater systems. Each appraiser considered the cost, market, and income
approaches to value in conformity with the Uniform Standards of Professional
Appraisal Practice (USPAP). (TR 85-86; TR 102; TR 109)
In developing the appraisals, each appraiser relied, in
part, on the Water and Wastewater Treatment Facilities Assessment Report
(Engineering Assessment) prepared by SWS witness Magro of Aclus Engineering,
LLC (Aclus). (EXH 4) The Engineering Assessment was based on a May 27, 2025,
site visit and reviews of available documentation, sampling results, reports,
and regulatory permits. (TR 43-44) The Engineering Assessment evaluated the
existing water and wastewater facilities, including installed equipment, system
capacities, treatment processes, general facility condition, and regulatory
compliance, and developed an opinion of probable replacement cost and a 3-year
CIP. (TR 44) The assessment concluded that the observed water and wastewater
facilities were fully operational and generally in good condition while
exhibiting normal wear. The Engineering Assessment estimated the depreciated
replacement cost of the combined water and wastewater facilities at
approximately $11.5 million. (TR 47) The assessment also identified
approximately $2.13 million in capital improvements anticipated over the
following three years to address known deficiencies, rehabilitation needs, and
regulatory compliance improvements. (TR 47) The Engineering Assessment did not
include a comprehensive physical condition assessment of the water distribution
or wastewater collection systems and did not include flow, pressure, leakage,
hydrant, or closed-circuit television testing. (TR 57-58) The significance of
these limitations is addressed below.
The three generally recognized approaches used to value
the system in this proceeding are the cost, market, and income approaches. (TR
70-71; TR 91-92; TR 108-109) Under the cost approach, value is estimated based
on the current cost of replacing or reproducing a utility’s assets, with
appropriate consideration given to depreciation and other forms of
obsolescence. The market approach develops an indication of value by reference
to sales or other market transactions involving comparable utility systems,
with adjustments made as appropriate for differences between the systems. The
income approach estimates value based on the economic benefits expected to be
generated by operating the utility, generally through the capitalization or
discounting of anticipated future income or cash flows. Each appraiser weighted
the valuations produced by each approach based on the relevance of each
approach and the availability and reliability of supporting data.
Appraisals of Fair Market Value
Appraiser and SWS witness Festa, with Marshall &
Stevens Incorporated, determined a fair market value of $7,365,900 as of June 30,
2025. (TR 94) Under the cost approach, witness Festa relied primarily on
replacement-cost information developed by Aclus, independently tested that
information for reasonableness, and adjusted depreciation for physical
condition, functional obsolescence, and remaining useful life. He also used the
Engineering Assessment to adjust the remaining lives of certain assets. The
cost approach produced an indicated value of $10,841,200. (EXH 6, BSP C2-33-C2-36;
EXH 6, BSP C2-45) Under the income approach, witness Festa discounted projected
cash flows using an 11.5 percent weighted average cost of capital (WACC),
producing an indicated value of $2,153,000. (EXH 6, BSP C2-36-C2-40) He
considered publicly traded water utilities and comparable transactions under
the market approach but assigned that approach no weight because the available
information was insufficient to produce a reliable indication of value. (EXH 6,
BSP C2-40-C2-44) Witness Festa assigned 60 percent weight to the cost approach
and 40 percent to the income approach, resulting in his $7,365,900 conclusion.
(EXH 6, BSP C2-45)
Appraiser and SWS witness
Wright, of NewGen Strategies and Solutions, LLC, determined a fair market value
of $5,744,000 for the Placid Lakes system as of June 12, 2025. (EXH 7, BSP C6-815)
Witness Wright considered the cost, sales comparison, i.e., market, and income
approaches. Under the cost approach, witness Wright developed an original cost
less accumulated depreciation (OCLD) valuation of $4,743,000 and a reproduction
cost new less accumulated depreciation (RCNLD) valuation of $13,786,000,
relying on replacement-cost information from the Engineering Assessment and
applying depreciation to account for the age and physical deterioration of the
assets. (EXH 7, BSP C6-808-C6-810) Under the sales comparison approach, witness
Wright reviewed transactions involving other water and wastewater utilities and
developed valuations of approximately $5,004,000 based on sales price to OCLD
and $6,062,000 based on sales price per customer. (EXH 7, BSP C6-810-C6-811)
However, witness Wright also did not rely on the market approach because of the
limited availability of complete comparable transaction data and the difficulty
of adjusting utility transactions for differences in location, system characteristics,
growth prospects, and other factors affecting value. (EXH 7, BSP C6-814) Under
the income approach, witness Wright performed a discounted cash flow analysis
over a 10-year period, incorporating anticipated asset retirements and
replacements identified in part through the Engineering Assessment, and
discounted projected cash flows using a 9.5 percent weighted average cost of
capital. (EXH 7, BSP C6-811-C6-813) The income approach produced an indicated
value of $5,744,000. (EXH 7, BSP C6-813) After considering the relative
strengths and weaknesses of the three approaches, witness Wright concluded that
the income approach best represented fair market value because it reflected the
prospective cash flows available to a hypothetical purchaser. He therefore
concluded a final fair market value of $5,744,000 (EXH 7, BSP C6-814-C6-815)
Appraiser and SWS witness Ling, of Raftelis Financial
Consultants, arrived at a fair market value of $6,000,000 to $7,000,000 for the
Placid Lakes systems. (EXH 5, C3-310) Witness Ling considered all three
valuation approaches, using the RCNLD method under the cost approach, a
capitalization of cash flow method under the income approach, and the guideline
public company method under the market approach. (EXH 5, C3-347-C3-363) Under
the cost approach, witness Ling developed an indicated value of $6,540,000
after adjustments that included a $559,000 allowance for deficiencies and
deferred maintenance identified in part through the Engineering Assessment,
external depreciation, and an allowance for going-concern value. (EXH 5, C3-347-C3-353)
The income approach capitalized approximately $315,000 of normalized annual
cash flow at a 6.5 percent capitalization rate and produced an indicated value
of $5,120,000, while the guideline public company method produced an indicated
value of $7,470,000. (EXH 5, C3-353-C3-360) After applying applicable control
and marketability adjustments, the respective valuations were approximately
$5,890,000 under the cost approach, $4,610,000 under the income approach, and
$8,730,000 under the market approach. Those three indications average
$6,410,000. (EXH 5, C3-367) Witness Ling did not assign mathematical weights to
the three approaches, concluding that no single method provided a more precise
indication of value, and instead reconciled the results using professional
judgment to arrive at its final fair market value of $6,000,000 to $7,000,000.
(EXH 5, C3-367-C3-369)
Using witness Festa’s $7,365,900 conclusion, witness
Wright’s $5,744,000 conclusion, and the $6,410,000 average of witness Ling’s
three adjusted value indications, the average of the three appraisal values is
$6,506,633. (TR 144; EXH 5, C3-367; EXH 6, BSP C2-45; EXH 7, BSP C6-815)
Because the $5,750,000 negotiated purchase price is less than this average, it
establishes the statutory maximum that may be approved.
In addition to the $5,750,000 purchase price, witness
DeStefano testified that SWS proposes to include approximately $392,669 in
estimated fees, transaction and closing costs, and appraisal costs in rate
base, consistent with Section 367.0811(3)(b), F.S., which specifically
authorizes inclusion of reasonable transaction and closing costs incurred by
the acquiring utility. (TR 29-30) The proposed journal entries to record the
acquisition are attached as Exhibit DD-1, Document No. 2. (EXH 3, BSP C1-19)
Pursuant to Section 367.0811(3)(b), F.S., the proposed rate base value has not
been adjusted to reflect contributions-in-aid-of-construction or used and
useful determinations. (TR 143)
Witness DeStefano prepared a 5-year Rate Impact Analysis
comparing the customer rate impact of the FMV rate base versus the traditional
cost method. (EXH 3, BSP C1-17) Witness Twomey projected that Placid Lakes
customer rates will decrease over the following 5-year period, or when Placid
Lakes’ rates are consolidated with SWS’s in a future rate case. Average water
bills are projected to decline from $31.72 per month to $28.42 per month and
wastewater bills from $139.50 per month to $88.44 per month (at average usage
levels) by 2029. (TR 148-149) SWS demonstrated that Placid Lakes customers
would face higher rates on a stand-alone basis. (TR 148-149; EXH 3, BSP
C1-14-C1-18)
In its post-hearing brief, SWS contended that the
requested $5,750,000 rate base satisfies Section 367.0811, F.S., because it is
the purchase price and is less than the $6,506,633 average of the three
appraisals. (SWS BR 10-11) SWS further relied on the random selection and
licensure of the appraisers, its testimony that the appraisals complied with
USPAP, and the absence of any adjustment for CIAC or used and useful
considerations. (SWS BR 10-11) OPC argued that limitations in the engineering
assessment and assumptions used in the valuation approaches materially
overstate the appraised values and asks the Commission to require a corrected
engineering assessment and revised appraisals. (OPC BR 14)
Staff agrees with OPC that the Commission is not required
to accept an appraisal merely because the appraiser was properly selected and
licensed or because the appraisal states that it complies with USPAP. Section
367.0811(6)(b), F.S., permits the Commission to grant the petition in whole or
in part, with modifications, or to deny it. Therefore, the testimony elicited
through cross-examination and the admitted exhibits must be weighed along with
the appraisers’ opinions. However, OPC did not sponsor a competing appraisal,
corrected engineering assessment, or quantified adjustment to any appraised
value. The absence of a competing expert opinion is not dispositive, but it
limits the record from which staff could determine that a particular criticism
reduces the average appraisal below the purchase price.
Regarding the engineering
assessment, witness Magro acknowledged that his was a cursory, rather than
comprehensive, review and that he did not conduct flow, pressure, leakage,
hydrant, or closed-circuit television testing. (TR 53; TR 57-59) The report
also excluded an assessment of the physical condition of the distribution and
collection systems. (EXH 4, BSP C4-480) These limitations are relevant when
evaluating the resulting indications of value that rely on the assessment.
Nevertheless, Section 367.0811(4), F.S., does not prescribe the particular
field tests that must be performed. Further, witness Magro testified that the
engineering assessment performed is consistent with engineering assessments
commonly performed in acquisitions such as the Placid Lakes proposal. (TR 63)
Witness Magro testified that he was able to observe and review everything he
desired and was provided sufficient time to perform the scope he was asked to
perform. (TR 64) The Hartman report is an appraisal that was performed on
behalf of SWS independent of this FMV proceeding and is confidential. (EXH 13)
Witness Magro testified that he used the prior Hartman report only for pipe
length, age, and material information that was not otherwise available, and
that the prior valuation did not influence his engineering conclusions. (TR
54-56) Witness Twomey also testified that the prior confidential appraisal was
not provided to the three testifying appraisers. (TR 182) Thus, the record does
not establish OPC’s asserted circularity or that a prior valuation
predetermined the three appraisal conclusions.
OPC also challenged assumptions
underlying the three appraisals. Regarding witness Festa, OPC cited the
unexplained reference to a zero-percent state tax rate, the use of a team
member to prepare the income analysis, and the sensitivity of that analysis to
the selected 11.5 percent discount rate. (OPC BR 16) Witness Festa testified
that a one-percentage-point discount rate increase would reduce the
income-approach enterprise value by approximately $1.9 million, while a
one-percentage-point discount rate decrease would increase it by approximately
$2.4 million. The income indication, however, received 40 percent weight, and
the record does not quantify the effect of correcting the challenged inputs on
his final $7,365,900 conclusion. The omission of Commission depreciation rates
does not, standing alone, invalidate the appraisal because it is not a
cost-of-service depreciation study. (TR 97-102; EXH 6) Witness Ling explained
that OPC’s cited 1.1 percent historical consumption growth rate was not
comparable to her 2 percent long-term growth assumption. She also clarified
that the challenged discount-rate table was a general analytical framework and
did not contain the inputs used to determine her 8.5 percent discount rate. (TR
79-86; EXH 5) Witness Wright explained that his 9.5 percent WACC and
hypothetical capital structure reflected market-participant assumptions and
that he did not rely on the sales-comparison approach because complete
comparable-transaction data were unavailable. His $5,744,000 conclusion was the
lowest of the three and was $6,000 below the purchase price. (TR 114-129; EXH
7) Accordingly, OPC’s criticisms affect the weight afforded the appraisal
evidence, but the record does not quantify an adjustment to any final appraisal
conclusion.
Staff has also reviewed the
numerical comparisons in OPC’s brief. (OPC BR 19) The first comparison placed witness
Wright’s market-participant discounted cash flow inputs beside SWS’s 5-year
regulatory rate-impact inputs. (OPC BR 19) The two analyses serve different
purposes and use different data and assumptions. The differences included WACC,
O&M, depreciation, and tax amounts and do not indicate any errors or establish
that either analysis is unreliable. Staff understands that both sets of data
are projections and provided by two separate parties.
Staff could not replicate OPC’s
second comparison from the cited 2025 Placid Lakes Annual Report. (OPC BR 19;
EXH 22) In its 2025 Annual Report, Placid Lakes lists $790,017 of operating
expenses, $145,289 of depreciation expense, $48,098 of CIAC amortization,
$104,480 of taxes other than income, and a 6.38 percent total weighted cost of
capital. (EXH 22, BSP E1435) The $583,948 O&M amount cited by OPC instead
appears in SWS’s rate-impact analysis and cumulative present value of the
revenue requirements, not the 2025 Annual Report. Consequently, staff does not recommend
that OPC’s numerical comparisons demonstrate a defect in the appraisals. (EXH
3, BSP C1-14; EXH 7, BSP C6-834; EXH 22, BSP E1435-E1439)
In sum, OPC identified limitations and sensitivities that
warrant consideration in weighing the appraisal evidence. After considering
those criticisms, staff believes SWS met its burden to support the requested
alternative rate base value. Each appraisal was prepared by a licensed
appraiser selected from the Commission’s approved list, considered the
generally recognized valuation approaches, and was supported by testimony and
admitted exhibits. The three appraisal values average $6,506,633, which exceeds
the $5,750,000 negotiated purchase price. The purchase price therefore
establishes the statutory ceiling. Although OPC’s criticisms may affect the
weight afforded portions of the appraisal evidence, the record does not provide
a reliable basis to calculate a lower alternative rate base value. Accordingly,
staff recommends that the Commission establish the alternative rate base value
for Placid Lakes at $5,750,000.
Conclusion
Based on the above, staff recommends that if the
Commission finds the proposed transaction to be in the public interest, the
appropriate rate base value for Placid Lakes, established under Section
367.0811, F.S., is $5,750,000.
Issue 13:
Is the proposed transaction by Sunshine Water
Services Company under Section 367.0811(9), F.S., in the public interest?
Recommendation:
Yes. SWS has presented evidence demonstrating that
all of the criteria listed in Section 367.0811(9), F.S, have been addressed and
found to advance the purpose of the statute with minimum impact on SWS’s
existing customers. (Brownless, M. Thompson)
Position of the Parties
SWS:
Yes.
OPC:
No. The proposed fair market value acquisition has
not been shown to be in the public interest. The evidence does not establish
that the transaction will provide sufficient, measurable benefits to customers
to justify the increased rate base and resulting rate impacts.
Staff Analysis:
Section 367.0811(6)(a), F.S., states that when
considering a rate base value petition pursuant to this section, “the
commission may, in the public interest, grant the petition, in whole or in
part, or with modifications, or may deny the petition.” Chapter 367 does not
define public interest. However, the Florida Supreme Court has stated that the
public interest standard “is a fact-dependent inquiry generally focused upon –
but not limited to – the commission’s historical and statutory role.”[17] In this
instance, the Commission’s statutory role is to “promote consolidation efforts
with water and wastewater utility systems in order to encourage economies of
scale, better access to capital, improvement in utility infrastructure, and
improvement in the quality of service overall,” Section 367.0811(1), F.S.
In its evaluation of the public interest, Section
367.0811(9), F.S., lists eight items that must be considered to determine if
the proposed transaction is in the public interest: quality of service;
compliance with regulatory requirements; rate reductions or rate stability;
cost efficiencies; arms-length transaction; economies of scale; acquiring
utility’s net book value and proposed rate base value of utility being
acquired; and acquiring utility’s greater access to capital. Each of these
items has been reviewed by staff and is discussed in Issues 1, 2, 4, 7, 8, 9,
10, and 11.
Staff has recommended in its analyses that there should be
improvements in the overall quality of service and regulatory compliance, a
reduction in rates once consolidation with SWS is completed, cost efficiencies,
economies of scale, and greater access to capital once Placid Lakes is
purchased by the Utility. The Placid Lakes water and wastewater systems have
been well-maintained but are 40-year-old systems that will require substantial
upgrades in the near future as detailed by witness Magro. SWS has demonstrated
that it has the financial means and technical expertise to operate Placid
Lakes. The proposed transaction is an arms-length transaction since Placid
Lakes and SWS are two independent, unrelated corporate entities with no shared
ownership or affiliation. Finally, the proposed rate base value of $5,750,000
is less than the average of the three appraisals testified to by witnesses
Festa, Wright and Ling. While OPC raised several criticisms of the data and
techniques used by the appraisers, the record does not contain a corrected
appraisal or quantified adjustments supporting a reduction in the $5,750,000
purchase price. In sum, SWS has presented persuasive evidence demonstrating
that all of the items listed in Section 367.0811(9), F.S, have been addressed
and found to advance the purpose of the statute with minimum impact on the utility’s
existing customers.
Conclusion
Based on the above, staff recommends that the proposed
transaction by SWS be found to be in the public interest.
Issue 14:
Should this docket be closed?
Recommendation:
No. This docket should be closed upon the expiration
of the time for filing an appeal. (M. Thompson, Brownless)
Position of the Parties
SWS: Yes.
OPC: No. This docket should be closed
upon the expiration of the time for filing an appeal.
Staff Analysis:
This docket should be closed upon the expiration of
the time for filing an appeal.
