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State of Florida
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Public Service Commission Capital Circle Office Center ● 2540 Shumard
Oak Boulevard -M-E-M-O-R-A-N-D-U-M- |
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DATE: |
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TO: |
Office of Commission Clerk (Teitzman) |
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FROM: |
Office of the General Counsel (Farooqi) |
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RE: |
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AGENDA: |
10/06/26 – Regular Agenda – Tariff Suspension – Participation is at the Commission’s Discretion |
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COMMISSIONERS ASSIGNED: |
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PREHEARING OFFICER: |
Administrative |
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SPECIAL INSTRUCTIONS: |
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On September 1, 2026, Peoples Gas System, Inc. (Peoples) filed a petition for approval of the 2025 true-up, projected 2026 true-up, and the 2027 revenue requirement and surcharges associated with the cast iron/bare steel (CI/BSR) pipe replacement rider. Additionally, Peoples is requesting to extend the rider from January 1, 2028 to December 31, 2031. The rider was originally approved by Order No. PSC-12-0476-TRF-GU (2012 Order) to recover the cost of accelerating the replacement of cast iron and bare steel pipes through a surcharge on customers’ bills.[1] As established by the 2012 Order, Peoples would roll replaced infrastructure into rate base during a rate case, and the CI/BSR surcharge would be “reset to zero.”[2] The surcharge is set to terminate when all applicable CI/BSR pipes have been replaced and included in rate base. Since the 2012 Order was issued, investments have been rolled into rate base at the end of every rate case.
By Order No. PSC-17-0066-AS-GU, the Commission approved a comprehensive settlement agreement (2017 Agreement) between Peoples and the Office of Public Counsel.[3] The 2017 Agreement, in part, added problematic plastic pipe (PPP) installed in the company's distribution system to eligible replacements under the rider beginning in 2017 and continuing through December 31, 2027. PPP was manufactured before 1983 and has significant safety concerns. In certain areas, the PPP is interspersed with, or connected to, the cast iron/bare steel pipe that is being replaced under the rider. As provided for in the 2017 Agreement, PPP replacements are included in the calculation of the 2027 rider surcharges.
Peoples’ last rate case was in 2025 and it settled with a stipulation and settlement agreement (2025 Agreement), which was approved by Order No. PSC-2025-0413-S-GU.[4] Pursuant to paragraph 3(a) of the 2025 Agreement, $6,733,295 of CI/BSR revenues were transferred into base rates. Additionally, pursuant to paragraph 5(b) of the 2025 Agreement, Peoples is prohibited from seeking recovery through the CI/BSR of PPP costs associated with the Tampa Downtown project or any other PPP costs included for recovery in the 2025 rate case filing.
As part of its petition in the instant docket, Peoples is requesting Commission approval of the final true-up amount for the calendar year of 2025 of $473,480 over-recovery (including interest). Additionally, Peoples is requesting an estimated end of period total true-up for 2026 of an over-recovery of $2,013,859, and projected capital expenditures for replacement during 2027 of $75,992,318. Peoples is requesting approval of revised CI/BS replacement rider surcharges that would go into effect January 1, 2027. Peoples’ current surcharges were approved by Order No. PSC-2025-0451-TRF-GU.[5]
This is staff’s recommendation to suspend the proposed tariffs. The Commission has jurisdiction over this matter pursuant to Sections 366.04, 366.05, and 366.06, Florida Statutes (F.S.).