Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following facts relevant to the four issues presented for determination are found: WORKING CAPITAL In calculating debt and equity costs for the petitioner, it is appropriate to use the parent company's capital structure. Here, forty percent (40 percent) of the parent's capital structure is equity and sixty percent (60 percent) is debt. In order to support its operating and/or construction activities, the petitioner receives advances from its parent company, Utilities, Inc., a Delaware corporation, or from its subsidiary, Water Service Corporation. The petitioner has treated these advances as part of its equity structure since there is a cost to these funds to petitioner, in substance if not in form. If these funds do have a specific, identifiable cost in the test year ending December 31, 1979, such as interest, they are properly includable as part of petitioner's equity structure. Pursuant to an Agreement between petitioner and its parent, the monetary advances by petitioner's parent company or its subsidiary to support petitioner's operating and/or construction activities will bear interest at the end of each calendar quarter at the rate of prime plus one quarter of one percent per annum on the average advances outstanding during the quarter. (Petitioner's Exhibit 10). This is a known and identifiable cost, and therefore the position taken by the petitioner regarding working capital allowance is correct. The proper amount attributable as "working capital allowance" is $54,699 for the water rate base and $28,179 for the sewer rate base for the test year ending December 31, 1979. UNCOLLECTIBLE REVENUES For the years 1977, 1978, 1979 and 1980, the petitioner's bad debt expense averaged 1.2 percent of its total revenues. (Petitioner's Exhibit 9). The petitioner proposes a pro forma bad debt expense contending that the number of people who do not pay their bills remains essentially constant and that as rates increase, the dollars increase in relationship to the rates. In other words, petitioner proposes that the annual expense for uncollectible accounts should be increased by the same percentage that the test year dollars uncollected from customers who did not pay their bills relates to the amount of dollars which would be collected under the increased rate. The respondent's witness felt there had been no proof of the direct relationship between the increase in uncollectible accounts. In designing rates for the future, the amount of the customer's consumption of utility services during the test year are employed on the assumption that past consumption will represent future consumption. ACCUMULATED DEPRECIATION The petitioner has requested an adjustment in its depreciation rate from 2.0 to 2.86 percent, based on all facilities other than general plant. The respondent has concurred with this requested increase to 2.86 percent, but would apply that depreciation rate to the beginning of the 1979 test year, thereby treating the difference as a deduction in rate base. If the adjusted rate is applied to the expense side, it must also be applied to the investment side, according to respondent's accounting analyst. The petitioner feels that the depreciation expense should be treated as a reduction in rate base only to the extent that it has been allowed in previous rates and collected from the customers. The increased expense will not be collected until the year 1981. The effect of charging the increased depreciation back to the 1979 test year would mean a $9,732 reduction in the water rate base and an $8,540 reduction in the sewer rate base. RATE OF RETURN The petitioner and the respondent agree that petitioner's capital structure is composed of forty percent equity and sixty percent debt capital, and that the cost of debt is 9.63 percent, for a weighted cost of 5.78 percent. The petitioner feels that the appropriate return to be placed on equity capital is 19.63 percent, for a weighted cost of 7.89 percent and an overall 13.63 percent return on rate base. The respondent would place the cost rate for equity at 16 percent, for a weighted cost of 6.40 percent and an overall 12.18 percent return on rate base. The petitioner utilized three methods of calculation to arrive at its proposed rate of return on equity capital, and then averaged the three results. One such method was to create a hypothetical Ba rating and then add a risk factor of 4 percent, resulting in a cost of equity of 20.7 percent. A second method, utilizing a combination of dividend yield on listed water companies and a growth factor, resulted in a cost of equity capital of 18.72 percent. The third approach involved the addition of the 4 percent risk factor of equity over debt to the average yield outstanding for various water companies, resulting in a return of 18.4 percent, Considering an attrition allowance on equity capital of 1.2 percent, a 14.7 percent overall rate of return would be within the bounds of a reasonable rate of return. Utilizing a comparable earnings analysis of nonregulated and regulated utilities, including electric, gas and telephone as well as water and sewer utilities, and taking dividend yield rates and adding growth rates, respondent's financial analyst computed the reasonable range of the cost of equity for the Florida water and sewer industry to be between 14.25 and 16.25 percent. With the equity ratio being 40 percent, respondent's witness recommended a 16 percent return on equity, with permission to fluctuate plus or minus one percent. PUBLIC TESTIMONY Members of the public who testified at the hearing were concerned with increased charges for water and sewer service since many of them were on fixed and limited incomes. While one witness complained of mosquito larvae in a dish of water left over a weekend for a dog, other witnesses opined that they had received good service from the petitioner.
Conclusions In consideration of the above and the entire record, we make the following findings of fact and conclusions of law: Utilities, Inc. of Florida is a public utility subject to the jurisdiction of this Commission. The value of the Utility's rate base devoted to public service on which it is entitled to earn a fair return is $589,663 for its water division and $427,422 for its sewer division. The Company's adjusted net operating income for the test year was $18,847 and $24,405 for its water and sewer divisions, respectively. A range of 15 percent to 17 percent constitutes a fair and reasonable return on equity for Utilities, Inc. of Florida with rates to be set at the mid- point of 16 percent which gives an overall rate of return of 12.18 percent. The rates collected on an interim basis pursuant to Order Nos. 9446 and 9559 were lawful, just and reasonable and the revenues received thereunder should be retained by the Company. That the revised rates, as authorized herein constitute just, reasonable compensatory and not unfairly discriminatory rates within the meaning of Chapter 367, Florida Statutes. The use of a base facility charge rate structure eliminates discrimination against seasonal customers and encourages conservation and is appropriate for use in this docket. NOW, THEREFORE, IN CONSIDERATION THEREOF, it is ORDERED by the Florida Public Service Commission that each and every finding of fact and conclusion of law as expressed herein is approved. It is further ORDERED that Utilities, Inc. of Florida is hereby authorized to file rate schedules consistent herewith designed to generate gross annual revenues of $350,316 for the water system and $206,865 for the sewer system, which represent increases over the test year revenues of $85,007 and $41,335, respectively. It is further ORDERED that Utilities, Inc. of Florida will make refunds to its water customers consistent with the discussion in the body of this order. It is further ORDERED that the rates approved as a result of this Order shall be effective for consumption after the date of this order, but no bills will be rendered thereunder until after the filing and approval of revised tariff pages appropriate with this Order. It is further ORDERED that the Company include in each bill during the first billing cycle during which this increase is effective a bill stuffer explaining the nature of the increase, average level of increase, a summary of the tariff changes, and the reasons therefor. Said bill stuffer shall be submitted to the Commission's Water and Sewer Department for approval prior to implementation. By Order of the Florida Public Service Commission this 9th day of June , 1981. (SEAL) HDB Steve Tribble COMMISSION CLERK
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the petitioner's application for a rate increase be granted as requested except for adjustments made for uncollectible debts or accounts. Respectfully submitted and entered this 5th day of March, 1981. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of March, 1981. COPIES FURNISHED: R.M.C. Rose Myers, Kaplan, Levinson, Kevin and Richards Suite 103 1020 East Lafayette Street Tallahassee, Florida 32301 Harry D. Boswell Staff Counsel Florida Public Service Commission 101 East Gaines Street Tallahassee, Florida 32301 Steve Tribble, Clerk Public Service Commission 101 East Gaines Street Tallahassee, Florida 32301 ================================================================= AGENCY FINAL ORDER ================================================================= BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION In re: Application of UTILITIES, DOAH CASE NO. 80-1893 INC. OF FLORIDA for an increase DOCKET NO. 800395-WS(CR) in water and sewer rates in ORDER NO. 10049 Seminole and Orange Counties, ISSUED: 6-9-81 Florida. / The following Commissioners participated in the disposition of this matter: JOSEPH P. CRESSE, Chairman GERALD L. GUNTER JOHN R. MARKS, III KATIE NICHOLS Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on January 20, 1981, in Maitland, Florida. The Hearing Officer's Recommended Order was entered on March 5, 1981, and oral argument was held on May 11, 1981, on exceptions filed by the Commission staff. We now enter our order.
The Issue There are two issues in these cases: (1) whether Tampa Bay Desal, LLC ("TBD") provided reasonable assurances that its permit application to discharge wastewater from a proposed seawater desalination plant, National Pollutant Discharge Elimination System ("NPDES") Permit Application No. FL0186813- 001-IWIS, meets all applicable state permitting standards for industrial wastewater facilities; and (2) whether Tampa Electric Company, Inc. (TEC) provided reasonable assurances that its proposed modification to an existing industrial wastewater facility permit, NPDES Permit Modification No. FL0000817-003-IWIS, meets all applicable state permitting standards.
Findings Of Fact Parties other than SOBAC Poseidon Resources, LLC wholly owns TBD as one of Poseidon Resources' subsidiaries. Poseidon Resources formed TBD, the successor to S&W Water, LLC, as a special purpose project company to properly staff and finance the desalination project. TBW entered into a 30-year purchase agreement with TBD (then known as S & W Water, LLC) in 1999 to build, own and operate the desalination facility. Poseidon Resources operates as a privately-held company and all stockholders are major corporations. Poseidon Resources opened for business in 1995 and has over $300 million in water processing assets under management. DEP is an agency of the State of Florida. The United States Environmental Protection Agency ("EPA") delegated its NPDES permitting program to the State of Florida and is run by DEP. TEC is an investor-owned electric utility serving Hillsborough, Polk, Pasco, and Pinellas Counties. TEC owns and operates the Big Bend generating station, an electric plant consisting of four coal-fired steam units having a combined capacity of approximately 1800 megawatts. SWFWMD is a water management district in the State of Florida. SWFWMD reviews and acts upon water use permit applications and protects and manages the water and water- related resources within its boundaries. TBW and all of its Member Governments are within the geographical and legal jurisdiction of SWFWMD. Pasco County is a political subdivision of the State of Florida, a member government of TBW, and is located within the jurisdiction of SWFWMD. Pasco County is a major source of the groundwater used by TBW. TBW is a regional public water supply authority. TBW is the sole and exclusive wholesale supplier of potable water for all its member governments of TBW, which are Hillsborough County, Pasco County, Pinellas County, the City of New Port Richey, the City of St. Petersburg, and the City of Tampa. TBW serves approximately 2 million customers. SOBAC SOBAC was incorporated as a Florida not-for-profit corporation in February 2000. The stated mission of SOBAC is to protect the environmental quality of the bays, canals, and waterways of the Tampa Bay area, and to ensure drinking water for SOBAC members in the Tampa Bay area. SOBAC was formed by a group of people residing primarily in the area of Apollo Beach. Apollo Beach is a waterfront residential community that was created by dredge and fill of wetlands, estuary, and bay bottom bordering the "Big Bend" area of Tampa Bay, where the community terminates in a "hammerhead" of fill over what was once a seagrass bed. Across the North Apollo Beach "Embayment," formed by the "hammerhead," is the discharge canal of TEC's Big Bend power plant. A corrugated metal barrier partially separates the embayment from the discharge canal. This discharge canal also will receive TBD's discharge after re-mixing with TEC's discharge. SOBAC initially was formed out of concern for the environment in the Big Bend area of Tampa Bay. However, there is no requirement that SOBAC members live in the Apollo Beach area, or even in the vicinity of Tampa Bay, and SOBAC's geographic area of concern has broadened somewhat beyond the Apollo Beach area. In order to become a member of SOBAC, one need only sign a card. Prospective members are asked to donate $5 on signing up. Most members donate $5 or more. However, the donation is not mandatory. There is no requirement that members attend any meetings, or participate in any SOBAC activities. Section 3.1 of SOBAC's Constitution and Corporate By-Laws makes "active" membership contingent on payment of "the prescribed [annual] dues." Section 3.2 of SOBAC's Constitution and Corporate By- Laws requires SOBAC to establish annual dues, but no annual dues have been paid because no annual dues structure has ever been established. As a result, no annual dues have been "prescribed," and "active" membership does not require payment of annual dues. SOBAC claims to have approximately 1,000 members. These include all those who have ever become members. Approximately 700 live in the Appollo Beach area; approximately 50-75 of these members form the "core" of active members. Approximately 50-100 members live outside the Tampa Bay area; some of these outsiders probably are among the approximately 100 who are members by virtue of SOBAC's reciprocity agreement with another association called "Friends of the River." SOBAC has never surveyed its membership to determine how its members actually use Tampa Bay. However, the evidence was sufficient to prove that a substantial number of its members, especially among those who reside in the Apollo Beach area, enjoy use of the waters and wetlands of the Big Bend area for recreational activities such as boating and fishing. For that reason, if the activities to be permitted by DEP in these proceedings were to cause environmental damage, a substantial number of SOBAC's members would be affected substantially and more than most residents of distant reaches of the Tampa Bay area. Background of Desalination Project In 1998, the predecessor agency to TBW (the West Coast Regional Water Supply Authority), the six Member Governments and SWFWMD entered into an agreement specifically addressing impacts to natural systems through the development of new, non- groundwater sources, and the reduction of permitted groundwater withdrawal capacity from TBW's eleven existing wellfields from the then permitted capacity of 192 million gallons per day (mgd) to 121 mgd by December 31, 2002 (the "Partnership Agreement"). Pursuant to the Partnership Agreement, the existing water use permits for TBW's 11 specified wellfields were consolidated into a single permit under which TBW is the sole permittee. Prior to execution of the Partnership Agreement, the existing permits for these 11 wellfields allowed for cumulative withdrawals totaling approximately 192 mgd. Upon execution of the Partnership Agreement, the consolidated permit immediately reduced allowed withdrawals to no more than 158 mgd and required that wellfield pumping from the 11 wellfields be further reduced to no more than 121 mgd by December 31, 2002, and then to no more than 90 mgd by December 31, 2007. These withdrawal reductions are necessary to reduce the adverse environmental impacts caused by excessive withdrawals from the 11 wellfields, the majority of which are located in Pasco County. In order to replace the reduction of groundwater withdrawals, TBW adopted a Master Water Plan that provides for the development of specified new, alternative sources of potable water. The seawater desalination facility ("Desal Facility") is one of the cornerstone components of the Master Water Plan. This Facility will furnish 25 mgd of new water resources for the Tampa Bay area and must be in service by December 31, 2002, in order to meet the potable water needs of the residents of the Tampa Bay area. In exchange for the groundwater withdrawal reductions, SWFWMD agreed to contribute up to $183 million towards the development of new water sources that are diverse, reliable and cost-effective. SWFWMD has agreed to co-fund up to 90 percent of the capital cost of the Desal Facility. To comply with the terms and conditions of water use permits it has received from SWFWMD for other water withdrawals in the region, TBW must increase the water sources from which it withdraws water for distribution to its Member Governments in a timely manner. The Desal Facility is the essential means by which these permitting requirements can be met. For the past two years, the Tampa Bay area has been experiencing historic low rainfall and drought conditions. The Desal Facility is supported not only by TBW and its Member Governments, but also by SWFWMD since it is a drought-proof source of supply which has the greatest ability of any new water supply source to allow TBW to meet its members' potable water supply needs while also reducing pumpage from the existing 11 wellfields. In addition to its being a drought-proof source of potable water supply, the Facility will also provide diversity and reliability for TBW's sources of supply, and is a source that is easily expandable to provide additional potable supply that may be necessary in the future. Prior to deciding to proceed with a desalination project, TBW conducted four separate studies to look at the potential individual and cumulative impacts of a desalination facility on Tampa Bay and the surrounding areas, and in particular to evaluate the changes in baywide salinity due to the desalination discharge alone and in combination with the river withdrawals occasioned by other projects. Commencing in 1997, TBW conducted a procurement process that culminated in the award in July 1999 of a contract to S & W Water, LLC, now known as Tampa Bay Desal, LLC, to design, build, own, operate, and eventually transfer to TBW a seawater desalination plant to provide potable water to Hillsborough, Pinellas, and Pasco Counties and to the Cities of Tampa and St. Petersburg for 30 years. TBD's Desal Facility is co-located with the Big Bend Power Station owned and operated by TEC on the northeast side of Hillsborough Bay, in Hillsborough County, Florida. By discharging the concentrate from the Desal Facility to the power plant cooling water prior to its discharge to the power plant discharge canal, environmental impacts from the concentrate are minimized, and disturbance of the discharge canal is avoided. The costs avoided by utilizing the existing intake and outflow from the TEC power plant are reflected in the lower cost of the water to Tampa Bay Water, and ultimately its Member Governments. TBW is contractually bound to TBD to purchase all of the potable water that is produced by the Desal Facility for distribution to its Member Governments and to purchase the entire Facility in the future. With the exception of the NPDES permit at issue, TBD has obtained all of the over 20 other permits which are required for the construction and operation of the desalination facility. TBD has already invested approximately $20 million in this project. The total estimated capital cost of the desalination facility is $110 million. TBD has obtained financing of $42 million and expects to acquire permanent financing in the month of October 2001. SWFWMD agreed to subsidize up to 90 percent of the capital cost of the desalination facility payable to TBW over the term of agreement with TBD. TBD is contractually bound to TBW to complete and fully operate the desalination facility by December 2002. TBD Desalination Process Overview of Process In the instant case, desalination is performed through reverse osmosis ("RO"), a mechanical process wherein pretreated water under very high pressure is pressed against a very fine membrane such that only pure water can pass through it. The vast majority of salt molecules and other substance are eliminated from the water. The RO process is not heat or chemical driven. No additional heat load is being added as a result of the desalination discharge, and the desalination plant will actually result in a reduced heat load to the bay. The desalination facility will withdraw approximately 44.5 mgd of raw water from Units 3 and 4 of TEC's Big Bend cooling water system, produce approximately 25 mgd of product water for transmission to the regional water supply system, and discharge approximately 19.5 mgd of clarified backwash and concentrate water equally into each of the power plant cooling water tunnels for dilution and release into the discharge canal. During abnormal power plant operations including times when Units 3 or 4 are not in operation and during the summer months when the normal supply water intake temperature exceeds the operating temperature range of the RO membranes, a portion of the source water will be withdrawn from an auxiliary supply water system. The auxiliary supply water system consists of a supply pump and pipeline that withdraws water from a location downstream of the fine-mesh screens for Units 3 and 4. The total combined bay withdrawal flow for the power plant and the desalination facility cannot exceed 1.40 billion gallons per day ("bgd"). This limitation ensures that entrainment does not exceed the levels previously permitted for the site, and a new entrainment study pursuant to Section 316(b) of the Clean Water Act is not required. Pretreatment Process The desalination intake water is pretreated in a two- stage gravity filtration process with chemical additives. During pretreatment, ferric sulfates will be added to the desalination intake water to coagulate and capture suspended solids, organic material, and metals that exist in the raw water supply. In this first stage of the pretreatment process, the intake water runs through an aerated course sand filter. Aeration enhances the coagulative process and assists in the capture of organics, suspended solids, and metals. Aeration also occurs in stage two, which uses a fine sand filter pretreatment process. The backwash water from stage two recirculates to the stage one treatment process. The pretreated waters exits through a five micron cartridge filtration prior to entering the RO process. The aerated pretreatment filter backwash water from the pretreatment stage one pretreatment will be sent to a discharge sump for initial settling and then to a clarifier and filter press to remove excess water. Approximately 14 wet tons a day which includes organics, suspended solids, and metals that are removed through the coagulative process and captured from the gravity filters are removed off-site to a landfill. The desal concentrate and clarified backwash water will be combined in a discharge sump or wet well prior to entering into a discharge line manifolded to equally distribute the concentrate discharge into all of the available cooling water outflow tunnels or conduits of the power plant discharge. Reverse Osmosis Membrane Treatment The RO desalination process consists of a two-stage pass of the pretreated water through the reverse osmosis membranes. The RO pumps will force the water through the RO membranes at pressures ranging from 600 to 1000 pounds per square inch (psi). As a result of the RO process, approximately 25 mgd of purified water, also known as permeate, will be produced for delivery to TBW. TBD anticipates cleaning its membranes twice per year, perhaps less, due to the high level of pretreatment. Periodic cleaning removes silt and scale from the membrane surface. Dilute solutions of citric acid, sodium hydroxide, sulfuric acid, sodium tripolyphosphate, or sodium dodecyclbenzene compromise the constituents of various cleaning solutions, with the actual cleaning solution used dependent upon the actual performance of the system once it is placed in operation. Once the cleaning cycle is complete, the spent cleaning solution will be purged from the feed tank, membrane vessels, and piping and diverted into a scavenger tank for off- site disposal. Clean product water (permeate) will be fed to the feed tank and pumped into the RO membrane vessels. This process will continue until the pH of the purge water meets the Class III marine water quality criteria. The membranes will be rinsed with brine concentrate and permeate, and the rinse water will be directed to the wet well for discharge, with the concentrate into the TEC cooling water stream. TBD determined the chemical characterization of the membrane cleaning solution discharge. Cleaning solutions are not discharged in detectable concentrations. As further assurance, the permit requires toxicity testing immediately after membrane cleaning. Dilution of Discharge Water Co-locating the desalination facility with TEC's Big Bend power station allows the desalination concentrate to be diluted with TEC's cooling water prior to discharge into Tampa Bay. The point of injection of the desalination discharge will be located approximately 72 feet upstream of the point of discharge to the discharge canal to ensure complete mixing of the desalination concentrate with TEC's cooling water. This provides reasonable assurance that the desalination discharge will be completely mixed within the cooling water conduits. If all four TEC units are in operation and TBD is producing 25 mgd of finished water, the approximate dilution ratio of the desalination concentrate with TEC cooling water is 70:1. Historical TEC data indicates that a dilution ration of greater than 20:1 will occur more than 99.6 percent of the time, and a dilution ration of greater than 28:1 will occur more than 95 percent of the time. The dilution limitations in the proposed permit are more stringent than those required in Rule 62-302.530(18). The permitted dilution ratio complies with Rule 62- 660.400(2)(d) because it takes into account the nature, volume, and frequency of the proposed discharge, including any possible synergistic effects with other pollutants which may be present in the receiving water body. Comparisons of the Antigua, Key West, and Cyprus facilities are not applicable because those desalination facilities lack the initial dilution that will exist at TEC's Big Bend site. The proposed permit requires a 20:1 minimum dilution ratio at any given time, which may occur for no more than 384 hours per calendar year, and with the further limitation that the discharge at the 20:1 minimum dilution ratio shall not exceed 384 hours in any given 60-day period. At all other times, a minimum dilution ratio of 28:1 must be maintained. To ensure proper dilution and system operation, computer instrumentation in the desal facility will interface with TEC to continuously monitor the operations of TEC's four cooling tower condenser units. If any of the pumps shut down, an alarm will sound at the desalination facility and the computer system will automatically shut down the concentrate discharge to that specific condenser unit discharge tunnel. Further, the desalination plant will employ approximately 12 employees, with a minimum of two employees on duty at all times. TEC Permit Modification Big Bend power station has four coal-fired steam electric generating units. The power station is cooled by water that is taken in from Tampa Bay through two intake structures which are located along TEC's intake canal. One intake structure feeds cooling water to electrical power units 1 and 2 and the other feeds units 3 and 4. After flowing through the condensers, the cooling flows are combined into four separate discharge tunnels which outfall into TEC's discharge canal. The intake structure for Units 3 and 4 is equipped with fine-mesh screens and an organismal collection and return system that has been approved for use by DEP. The purpose of TEC's permit modification is to alter the internal piping in the facility to accommodate the desalination plant at the Big Bend site. TEC's permit modification allows for placement of an intake pipe from TEC's cooling water pipes to the desalination plant and a return pipe downstream from the intake pipe for the return of the desalination concentrate to TEC's cooling water discharge tunnels prior to outfall in the discharge canal. TEC's permit modification also allows for the placement of an auxiliary intake line by TBD to take additional water from behind the intake of units 3 and 4 up to TEC's maximum permitted limit of 1.4 billion gallons a day. The TEC proposed permit is conditioned to require TEC to maintain the structural integrity of both the steel sheet pile wall on the discharge canal and the breakwater barrier North of the discharge canal. TEC's permit modification does not request any changes to the operations of the Big Bend Generating Station. SOBAC Issues and Concerns SOBAC raised numerous issues and concerns in its petitions in these cases and in the Pre-Hearing Stipulation. However, some issues were elimination by rulings adverse to SOBAC during prehearing proceedings and final hearing. Based on the evidence SOBAC sought to elicit at final hearing and issues raised in its Proposed Recommended Order, other, earlier SOBAC issues and concerns appear to have been dropped. Remaining are essentially the following: increased salinity due to TBD discharge; alleged decreased dissolved oxygen (DO) from higher salinity; impacts of higher salinity and alleged decreased DO on marine plants and animals; alleged release of metals from sediments due to higher salinity and alleged lower DO, and effects on marine plants and animals; alleged monitoring deficiencies; alleged failure to utilize available technologies to lower salinity and raise DO; alleged deficient financial assurances; and various alleged resulting DEP rule violations. Description of Tampa Bay: Physical Properties The portion of Tampa Bay and Hillsborough Bay near the Big Bend facility is classified a Class III water body. Tampa Bay is a naturally drowned river valley, meaning that a deep channel exists as a result of natural forces. However, the channel has been deepened to 45 feet or greater to allow large ships to navigate the bay. This deepening of the channel increases the water flow of the head of the bay with the open gulf waters and allows this residual circulation to move more new water from the open Gulf of Mexico up into the bay. Ordinarily, circulation moves salt water up Tampa Bay and spreads it out onto the flanks of the bay where it then mixes with the freshwater. To complete this circulation, the water then flows back out towards the mouth of the bay, primarily along its flanks and shallower parts in the upper part of the water column. The water in Tampa Bay tends to flow faster in its deeper parts, both coming in and going out, and relatively slower in the shallow areas. The majority of flow of freshwater inflow occurs at the bay's flanks as can be seen very clearly in the salinity distributions. Mixing and Stratification Since the development of Tampa Bay from the 1880 condition to the 1972 and 1985 conditions, there is more mixing and exchange of water. Due to shoreline fills for development, such as Apollo Beach, there is less water that now comes in the bay than in the predevelopment condition. Tampa Bay is a fairly well mixed system from top to bottom. This is because the action of the tides basically acts like a big mix master. The bay is fairly shallow, less than four meters in depth on average. The tidal velocities can be as strong as two knots or about a meter per second. When the strong velocity pushes through shallow water, there is extensive overturning, where the bottom water is churned to the top and gets mixed very efficiently. That is very well seen in the observations during dry periods. Over 100 points in Tampa Bay were measured for temperature and salinity top, middle and bottom, and showed that they were very uniform throughout the bay. During periods of large volumes of freshwater input into Tampa Bay, freshwater is pumping into the bay faster than the tidal mixing can mix it from top to bottom. Therefore, in parts of Tampa Bay significant stratification is seen during many times in the wet season. During those times when rainfall is not as prevalent, tidal mixing once again dominates and the bay returns to a more well mixed system. The average tidal fluctuation for Tampa Bay is a range of two to three feet. Salinity As the tide in Tampa Bay comes in, it brings saltier water from the mouth of the bay toward the head of the bay, causing salinities to rise. As the tide recedes, bringing out fresher water from farther up the bay, salinities decrease. Over an individual tidal cycle, particularly during the wet season, a four or five part per thousand ("ppt") change in salinity will occur between a rising tide and a falling tide. During the dry season, tidal flushing is not as significant to salinity levels because not much difference exists in salinity from the head of the bay to the mouth of the bay. Even during the dry season, there is a one to two ppt change over a six to twelve-hour period in any given day. During the dry periods in 1990, salinities elevated up to about 33 ppt, with very little stratification. During the rainy periods, in June and July, salinities dropped rather drastically. In some areas, salinity dropped as low as to 20 to 22 ppt. However, in spite of these drastic seasonal differences, significant variation in salinity occurs as a result of tidal exchange. The Big Bend area is split by the dividing line between Hillsborough Bay and what has been classified Middle Tampa Bay. The salinity for Hillsborough Bay from 1974 through June 2001 at the surface ranges from 0.4 ppt to 38.2 ppt. The middle portion of the same water column contained a range from 2.5 ppt to 39.2 ppt, and the bottom portion showed a range from 3.9 ppt to 37.2 ppt. The average salinities during this time frame were as follows: top 24.2 ppt, middle 24.3 ppt and bottom 25.3 ppt. In the portion of Tampa Bay called Middle Tampa Bay, the surface level salinity ranged from 6.8 ppt to 38.2 ppt. At middle depth, salinities ranged from 7.4 ppt to 38.8 ppt. The bottom level salinities ranged from 11.9 ppt to 39.6 ppt. This is a large range of salinities. Tampa Bay near the Big Bend Area In the area near the Big Bend facility, the Mote Marine Laboratory survey data reflects that the salinity during May and June 2000 reached 33.4 ppt. Further, Mote Marine Laboratory data showed that the North Apollo Embayment area salinities were well mixed vertically throughout the system. The total volume of water exchanged into the North Apollo Embayment and associated canals during a mean tide is approximately 35 percent of the total volume of all water contained in that area. This tidal exchange occurs twice per day. The double diffusion process does not create high salinity in the bottom of the water column in the North Apollo Embayment. The double diffusion process, without any external influence, would lead to both surface and bottom layers of the water column reaching salinity equilibrium. Further, the turbulent mixing that occurs due to tidal processes and wind- induced mixing dominates over the double diffusion process. The Mote Marine Laboratory study conducted between May and early June 2000 did not detect any significant salinity stratification in the area near the Big Bend facility. Vertical stratification of salinity does occur but typically only during the periods of significant freshwater inflow and not in extreme drought or dry conditions. None of the Mote Marine Laboratory data detected any pockets of high salinity water or significant density stratification in the North Apollo Embayment. Estuarine Characteristics Tampa Bay is an estuary. Estuaries are semi-enclosed bodies of saltwater that receive freshwater runoff from drainage or riverine inflow, which measurably dilutes the salinity levels in the estuary. As a result, salinity levels in estuaries typically are highly variable, ranging from 0 ppt where rivers flow into estuaries, to as high as 40 ppt under conditions of low freshwater input or at estuarine mouths where they connect to the sea. There are naturally occurring dissolved oxygen levels below 4.0 mg/l in parts of Tampa Bay, including at Hillsborough County Environmental Protection Commission ("EPC") monitoring stations 9, 80, and 81, which are the closest stations to the proposed discharge. Dissolved oxygen in the bay decreases at night because photosynthesis ceases and respiration exceeds production. Other environmental parameters are also highly variable in estuaries. Therefore, the organisms that inhabit estuaries have adapted to tolerate these highly variable conditions. Estuarine organisms have adaptive means for tolerating changing salinity levels, either by conforming their internal salinity levels to the ambient salinity levels, or by actively regulating their internal salinity levels by intake or excretion of salt. Organisms that are adapted to tolerate a wide range of salinities within the estuary are termed euryhaline organisms. Essentially all of the common organisms in estuaries, including the Tampa Bay estuary, are euryhaline organisms, and therefore are capable of tolerating and living in a wide range of salinities and salinity changes that occur due to tidal, meteorological, and other natural forces in the estuarine environment. Extensive baseline biological studies performed on Tampa Bay reveal that the most common species in the Tampa Bay estuary tolerate salinity levels ranging from 5 ppt to 40 ppt. Seagrasses Five species of seagrass inhabit Tampa Bay. Seagrasses are photosynthetic underwater flowering plants that are typically limited in occurrence and distribution by the water clarity. This limits the depth at which seagrasses can grow. In Tampa Bay, seagrasses are limited to the fringes of the Bay, and are largely limited to depths of approximately three feet, although they can live in depths of up to six feet in clearer parts of the Bay. Seagrasses are very sensitive to increases in nutrients, like nitrogen and phosphorus. These nutrients encourage algae growth, resulting in competitive stress in seagrasses. Due to poor water quality caused by sewage discharge, dredging and filling, and other activities in the Bay, seagrass distribution in Tampa Bay decreased from an historic coverage of approximately 80,000 acres in 1950 to approximately 20,000 acres by 1982. Improvements in water quality, largely due to sewage treatment improvements, have allowed seagrasses to naturally recolonize to approximately 27,000 acres coverage, as of 1994. Wave energy affects seagrass distribution. Seagrasses cannot colonize and survive in areas subject to significant wave energy. For example, the portion of Tampa Bay dredged and filled to create the Apollo Beach "hammerhead" area was once comprised of a broad shallow-water shelf that diminished wave energy, allowing dense seagrass flats to cover the shelf area. Destruction of the broad shallow-water shelf with fill to create the Apollo Beach hammerhead has converted the area to a high wave energy system that is unsuitable for seagrass colonization and growth. Consequently, the only seagrasses inhabiting the Big Bend area are found approximately one kilometer north of the Big Bend power plant, in an area known as "The Kitchen," and approximately one kilometer south of the Apollo Beach hammerhead area. Additionally, there are ephemeral patches of seagrass inhabiting some limited areas of the North Apollo Embayment. Seagrasses are adapted to tolerate a wide range of salinities. They have specialized cells that enable them to deal with salt stress and with broad ranges of and fluctuations in salinity. These adaptations enable them to survive and thrive in estuarine environments. Of the seagrass species that live in Tampa Bay, one species, Ruppia maritima (widgeon grass), occurs in salinity ranges from zero to 40 ppt. Manatee grass, Syringodium filiforme, is most productive in salinities between 5 ppt and 45 ppt. The other three species, Halodule wrightii (shoal grass), Halophila engelmannii (star grass), and Thalassia testudinum (turtle grass), tolerate salinity ranges from approximately 5 ppt to 60 ppt. Seagrasses better tolerate higher salinity levels than lower salinity levels. Lower salinity levels are usually indicative of increased stream and land freshwater runoff, which usually is accompanied by increased turbidity and lower water clarity. Four of the five seagrass species that inhabit Tampa Bay typically reproduce asexually by producing rhizomes, rather than by flowering and producing seeds. It is not completely clear why seagrasses in Tampa Bay reproduce asexually rather than by flowering and seed production. However, recent research indicates that climatic temperature is the controlling factor for flower and seed production. In South Florida, where the climate is warmer, seagrasses reproduce by flowering and seed production. In Tampa Bay, the lower winter temperatures appear to be the limiting factor with respect to successful flower and seed production in seagrasses. Recent studies by the University of South Florida ("USF") marine laboratory indicate that naturally occurring fungal diseases may also limit successful flowering and seed production in seagrasses in Tampa Bay. Since most seagrass species that live in Tampa Bay tolerate and thrive in salinities of up to 60 ppt, the higher salinity levels in the estuary do not appear to adversely affect the ability of seagrasses to reproduce. In fact, the lower salinity levels, below 5 ppt, stress seagrasses and are more likely to adversely affect reproduction than do higher salinity levels. Mangroves Three major species of mangrove inhabit the Tampa Bay area: the red mangrove, black mangrove, and white mangrove. Mangroves inhabit the intertidal area, so they are subjected to daily tidal flooding and drying. Consequently, they must tolerate a wide range of variability in salinity levels and in water availability. Most mangroves tolerate soil salinity levels up to 60 ppt, close to twice the salinity of Tampa Bay. Mangrove mortality due to salinity does not occur until soil levels approach and exceed 70 ppt salinity. Mangroves are also adaptable to, and inhabit, freshwater environments. Phytoplankton and Zooplankton Plankton are life stages or forms of larger organisms, or organisms that have no ability for major locomotion, so they spend their entire life spans floating and drifting with the currents. Plankton are extremely productive in that they reproduce in very large numbers within very short life spans. Holoplankton are planktonic organisms that spend their entire lives in planktonic form. Examples include diatoms, which are a type of phytoplankton, and copepods, which are a type of zooplankton. Meroplankton are "temporary" plankton that drift with the currents in juvenile or larval stages, then either settle out of the water column and metamorphose into an attached form (such as barnacles) or metamorphose into mobile life forms (such as crabs, shrimp, and fish species). Phytoplankton are planktonic plant species and life forms. Zooplankton are planktonic animal species and life forms. Zooplankton feed on phytoplankton. There are approximately 300 species of phytoplankton, and numerous species and forms of zooplankton, found in Tampa Bay. Most phytoplanktonic and zooplanktonic species inhabiting Tampa Bay are euryhaline species capable of tolerating the wide range of salinity levels and abrupt salinity changes that occur naturally in the estuarine system. Most phytoplanktonic and zooplanktonic species and life forms in Tampa Bay tolerate salinity levels ranging from zero to 40 ppt. They appear to be more tolerant of the higher end than the lower end of this salinity range. Manatee The manatee is the only endangered or threatened species identified by the Florida Natural Areas Inventory as inhabiting the area where the desalination plant is proposed to be located. Manatees congregate at the Big Bend Power Station during colder months because they are attracted to the power plant's warmer water discharge. Manatees are considered to be estuarine species, but they have very broad salinity tolerance ranges. They migrate into and out of freshwater springs, through estuaries, into the Gulf of Mexico, and down to the Ten Thousand Islands, where hypersaline conditions frequently exist. Manatees routinely expose themselves to and tolerate salinities ranging from zero to more than 40 ppt. Fish The fish populations in Tampa Bay are comprised of a large number of marine euryhaline species. Due to their ability to osmoregulate their internal salinity levels, these fish species can inhabit salinity ranges from 5 ppt to as high as 40 ppt. Extremely extensive monitoring and sampling programs are currently being conducted in Tampa Bay and specifically in the vicinity of the Big Bend Power Station. The Hillsborough County EPC, SWFWMD, TBW, the United States Geological Survey ("USGS"), the Florida Marine Research Institute, USF, and Mote Marine Laboratory conduct separate biological monitoring programs that sample and monitor numerous biological parameters, including invertebrate infaunal and epifaunal species composition, abundance, and distribution; zooplankton and phytoplankton species composition, abundance, and distribution; emergent and submerged vegetation species composition, abundance, and distribution; and fish species composition, abundance, and distribution. These monitoring programs, which collect and analyze biological data from many areas in the Tampa Bay estuarine system, extensively monitor numerous biological parameters in the Big Bend area. Testing and Modeling Pilot Plant Although DEP's rules do not require the use of a pilot plant to demonstrate reasonable assurances, TBD installed a desalination pilot plant at the Big Bend site in November 1999. The pilot plant matched the hydraulics and configuration of the full-scale facility on a 1/1000 scale. The pilot plant used water from the Big Bend power plant discharge as its source water. The purpose of the pilot plant was to confirm design requirements for the desalination facility and to provide samples of intake water, filtered water, pretreated water, concentrate, and finished water to use for chemical characterization and analysis. Using a pilot plant is superior to using data from engineering projections or data from a different desalination facility because the pilot plant provides data specific to the Big Bend site. Data from the pilot plant were used to establish various effluent and other limits in the permit. Chemical Characterization Intake water, filtered water, pretreated water, concentrate, and finished water from the pilot plant were analyzed for over 350 parameters chosen by DEP to determine chemical characterizations and water quality. The pilot plant operation provides extensive chemical characterization of intake and discharge water composition and mass loading. This information was key in providing accurate information on the chemical composition and mass loading of the desalination discharge concentrate. With this accurate information on the components in the discharge water, DEP was provided more than sufficient reasonable assurance on the potential effect of the chemical components of the discharge. TBD tested the pilot plant discharge water for copper, nickel, other heavy metals, and those chemical constituents specified on the DEP chemical characterization form. The chemical characterization tested for concentrations of constituents based on a 12.8 to 1 dilution ratio, and even at that dilution ratio, did not exceed any of the state water quality parameters. However, to provide additional assurance that there will not be an exceedance of state water quality standards, the permit requires a minimum 20 to 1 dilution ratio. Dissolved Oxygen Saturation Testing Temperature and salinity affect the saturation point of dissolved oxygen ("DO") which is lowest when temperature and salinity are highest. DO saturation charts, which are typically used to determine DO saturation points, are not applicable because those charts do not contain the saturation point of DO at a temperature of 109 degrees Fahrenheit and a salinity of 79 ppt, which represents the worst case conditions for the proposed desalination facility. Bench-scale testing was performed on the undiluted desalination discharge from the pilot plant by heating discharge concentrate samples to 109 degrees Fahrenheit and aerating the samples until the DO stabilized and reached saturation point. The pilot plant bench-scale testing determined that the saturation point of DO in the worst case desalination concentrate using a temperature of 109 degrees Fahrenheit and salinity of 79 ppt was 5.7 mg/l. Toxicity Testing TBD conducted acute toxicity testing using a worst case scenario assuming a diluted effluent of one part desalination concentrate to 12.8 parts of power plant cooling water. Acute toxicity testing evidenced no mortalities, showing that the proposed discharge will not be a source of acute toxicity. TBD conducted chronic toxicity testing on raw concentrate from the pilot plant using a worst case scenario diluted effluent of one part desalination concentrate to 12.8 parts of power plant cooling water. The No Observed Effect Concentration (NOEC) for raw concentrate was determined to be 100 percent and the NOEC for diluted effluent was determined to be greater than 100 percent. The evidence did not explain these concepts, but it was clear from the tests that the proposed discharge will not be a source of chronic toxicity. TBD conducted its acute and chronic toxicity testing using protocols reviewed and approved by DEP. TBD's toxicity testing was also consistent with accepted EPA standards. Assessment of Potential Environmental Impacts TBD prepared an Assessment of Potential Environmental Impacts and Appendices ("Assessment") to analyze the potential biological impacts of the desalination plant discharge into the Tampa Bay estuary. The Assessment examined numerous physical parameters to determine the baseline environmental conditions in the portion of Tampa Bay proximate to the proposed desalination plant site. Among the physical parameters examined in determining the baseline environmental conditions were: salinity; sediment size and composition; metal content in sediments; and numerous water quality parameters such as transparency, biochemical oxygen demand, pesticides, dissolved metals, and pH. Consistency with SWIM Plan As part of the permitting process, TBD was required to demonstrate consistency of the proposed desalination discharge with the SWFWMD's Surface Water Improvement and Management (SWIM) plan, pursuant to Rule 62-4.242. TBD submitted an extensive SWIM consistency analysis, which is sufficient to meet the consistency requirement. Water Quality Based Effluent Limitation Level II Study TBD performed a Water Quality Based Effluent Limitation (WQBEL) Level II study pursuant to Rule Chapter 62- 650 for the purpose of determining the effect of the desalination plant discharge on salinity levels in the vicinity of the desalination plant discharge. TBD had the Danish Hydrologic Institute ("DHI") use the data collected through the WQBEL Level II study in its near-field model of the Big Bend area. See Findings 105-117, infra. DEP also used the data and the DHI model results to establish the salinity and chloride effluent limitations in the permit. The USF Far-Field Model The far-field model was prepared utilizing the Princeton model code. The Princeton model is well recognized and is generally accepted in the scientific community. The goals of the TBD far-field model performed through USF by Dr. Luther and his team were to evaluate the change in bay-wide salinity due to the desalination plant discharge, both alone and in combination with changes in salinity due to enhanced surface water system withdrawals under new consumptive water use permits issued to TBW by SWFWMD to provide other, additional sources of needed potable water supply. The primary goal was to provide DEP with the best science possible of the potential real effects of this desalination discharge into Tampa Bay. The modeling system of Tampa Bay utilized in this analysis was developed beginning in 1989. Dr. Luther and his team have continued to make refinements to the model over the last 12 years. Dr. Luther took the modeling system he had developed over the years for Tampa Bay and did three primary model scenarios. The baseline case reproduced the observed conditions during the 1990 and 1991 years--a very dry period in 1990 and a fairly wet period for 1991--as accurately as possible with all the boundary conditions estimated from observations. This was to capture an entire range of conditions in Tampa Bay. The baseline was then compared with validation data and other observations to ensure it was approximating reality. The second simulated scenario included the same effects as the baseline with the added effect of the desalination intake and discharge at the Big Bend facility. The third case approximated cumulative effects from the TBW enhanced surface water system river withdrawals according to the proposed permit withdrawal schedules. For each test case, it was assumed that only two of the four cooling units at the TEC Big Bend plant were in operation for an entire two-year period, a worst-case scenario expected to occur less than four percent of the time in any given year. The model included data on water levels, temperature, and salinity throughout Tampa Bay. In addition, it takes into account wind blowing across the surface of Tampa Bay, rainfall, freshwater inflow from rivers, and other surface water and groundwater sources. The model was calibrated and validated against actual data to verify simulation of reality as closely as possible. The model was calibrated and validated utilizing Hillsborough County EPC and Tampa Oceanographic Project ("TOP") salinity data. Physical Oceanographic Real Time System ("PORTS") and TOP data on current flow velocity and water levels were utilized to calibrate and validate water levels and current. The acoustic doppler current profilers used in the model study are able to measure the speed at which the water is traveling and the direction at various levels above the bottom within the water column. The TBD far-field model very accurately reproduces the observed tidal residual velocities observed with the acoustic doppler current profilers. The far-field model reflects any stratification that would occur during the model simulations. The far-field model simulates recirculation that occurs between the discharge and intake water. Recirculation is small due to the model's use of the actual bathymetry of Tampa Bay. There are significant shoals and other features that separate the water from the discharge and the intake canal that preclude significant recirculation most of the time. After submitting the far-field model report to DEP, further study was performed on the far-field model that calculated residence time for Tampa Bay. One study dealt with "residence" or "flushing" time. The concept of "residence time" is not well-defined; put another way, there are many different accepted ways of defining it. It may be defined in a simplified manner as the time it takes a patch of dye to flush out of the bay. However, for purposes of the studies performed on the far-field model, theoretical "particles" in model grids were tracked, and "residence time" was defined as the time it would take for the number of particles initially in a grid cell to decrease to 34 percent of the initial number. Using this approach and definition, residence time in the vicinity of the Big Bend facility on the south side where the discharge canal is located was less than 30 days. Immediately offshore of the area of the discharge, the residence time reduced to less than 15 days. The study indicated that the area of the Big Bend facility has a relatively low residence time. In the model's baseline run (for the desalination plant impacts only), maximum differences in salinity occurred during the month of April 1991. Throughout the two-year time period, the maximum concentration of salinities did not increase from this point, and in fact decreased. The maximum average value for salinity difference is 1.3 ppt at the grid cell located directly at the mouth of the TEC Big Bend discharge canal. More than two grid boxes away in any direction and the value falls to less than 0.5 ppt increase in salinity. The maximum salinity of any given day for the far- field model was in the range of 2.1 to 2.2 ppt, which compares favorably with the DHI near-field model which showed an increase of 2.5 ppt. The salinity changes caused by the cumulative effects scenario are smaller than the natural variability during the wetter months in Hillsborough Bay in cells immediately adjacent to the concentrate discharge. Increases in salinity will occur in the vicinity of the discharge canal but will be very localized and small relative to the natural variability in salinity observed in Tampa Bay. At a distance of more than a few hundred meters from the mouth of the discharge canal, it would be difficult (if not impossible) to determine statistically that there would be any increase in salinity from the desalination concentrate discharge. Over the two years modeled, there is no trend of increasing salinity. No long-term accumulation of salt is evidenced within the model. Further, no physical mechanism exists within the real world that would allow for such a long- term accumulation of salinity in Tampa Bay. Dr. Blumberg's independent work verified the conclusions in the far-field model constructed by USF. Dr. Blumberg's estimated flushing times are consistent with those found in the far-field model. DHI Near-Field Model The TBD near-field model was prepared by DHI. DHI prepared a three-dimensional near-field model to describe the potential salinity impacts from the discharge of the proposed desalination plant. The DHI model is a state-of-the-art model whose physics are well documented. By model standards, the DHI near-field model is a high resolution model. The DHI model essentially "nests" within TBD's far-field model. The near-field area includes those areas that would be directly influenced by the combined power and desalination discharges, the North Apollo Embayment and the residential canal system adjacent to the discharge canal. The near-field model was designed to determine whether or not the desalination plant would cause continuous increases in salinity and to predict any increase in salinity in the North Apollo Embayment and the associated canal system. In addition, DHI evaluated the potential for saline recirculation between the discharge and the intake via short circuiting due to overtopping of the existing break water. In order to construct the near-field model, existing data on bathymetry, wind sources, meteorology and other parameters were examined and analyzed. In addition, the information from an intensive data collection effort by Mote Marine Laboratories on current velocities, temperatures, and salinities was incorporated into the model. TBD conducted bathymetric surveys in the residential canal areas, the North Apollo Embayment, and the area between the discharge canal and the intake canal. The model has a vertical structure of six grids and reflects vertical stratification that would occur in the system being modeled. The vertical grids in the model can detect a thermal plume one meter in depth (the size of the thermal plume from TEC's discharge). Information about the TEC thermal plume was incorporated into the model and utilized to calibrate the model's predictive capabilities. The model took into account interactions between the temperature plume and the salinity plume. The model predictions matched the measured temperature plume created by the TEC discharges quite well. The near-field model conservatively assumed a scenario in which only the two TEC units with the smallest total through-flow of 691.2 million gallons a day cooling water were active. DHI then assumed production of a maximum 29 mgd in product water. A salinity level of 32.3 ppt at the intake was utilized in the simulation. The model assumed a conservative wind condition which results in less mixing and dispersion of the plume. Further, wind direction tended to be from the southwest or west during the simulation, which tends to push the plume against the TEC break water which tends to reinforce recirculation. SOBAC witness Dr. Parsons agreed that these simulations for April and May 2000 constituted extreme conditions. DHI ran its model for a total time period of six weeks. The "warm up" for the simulation took place from April 15 to May 7, followed by the "calibration" simulation from May 8 to May 22. An additional validation sequence was run from May 25 to June 8. The production run was defined as the three weeks from May 8 to May 29, 2000. The intensity of the calculations performed in the near-field model due to its high spacial resolution and numeric restrictions make it computationally demanding. The calibration runs took approximately a week to 10 days to run on a state-of-the-art computer. From a computational standpoint, it is not practical to run the near-field model for a two-year time period. The model shows good agreement between its water levels and current velocity to observed data. The model reflects the recirculation of the discharge water that would occur in the system. The maximum salinity for the extreme case scenario in the near-field model is an increase in salinity of 2.5 ppt. With three condensers running, under the modeling scenario comparing the base condition to the desal discharge, there is a maximum difference of only 2.0 ppt. Further, there is no indication of any continuous build up of salinity in the near- field area due to the desalination plant discharge. DHI performed many sensitivity runs on the model, including one which examined rainfall conditions. The results of a two-inch rainfall analysis show that rainfall profoundly freshens the water in the near-field area. Since the modeling was done in a time period of extreme drought, with no freshwater inputs, the ambient or background salinity trended up over the time frame of May through June. As with any estuary, if freshwater inflow is removed, the estuary will get saltier until freshening occurs. Even with the model simulation period extended an additional 10 days beyond that reflected in TBD Ex. 1-O, the model results did not show any increase of salinity differences caused by the desal facility above 2.5 ppt. Based on data from field collections, the operation of the desal plant under worst case conditions did not exceed the assimilative capacity of the near-field environment. A 10 percent salinity change (3.23 ppt) was not reached in any grid cell. The Blumberg Study The "Environmental Impact Assessment for a Seawater Desalination Facility Proposed for Co-Location with the Tampa Electric Company Big Bend Power Generation Facility Located on Tampa Bay, Florida" authored by Norman Blake and Alan F. Blumberg ("Blumberg Study") is a hydrodynamic model study combined with an analysis of potential biological effects. The Blumberg Study was performed at the request of and presented to the Board of County Commissioners of Hillsborough County, Florida. Dr. Blumberg's model used 1998 and 1999 as its baseline, which consisted of an extremely wet year followed by an extremely dry year. The model assumed a scenario of two cooling units in operation pumping 656 mgd of discharge flow. The results of the Blumberg Study are very similar to the results of TBD's far-field model. In addition, the model ran for a 9-year period without any sign of ongoing build-up of salinity. After the two-year model run, the second year ran for an additional 7 simulated years for total model simulation period of 9 years. The Blumberg Study found salinity only increased by 1.4 ppt in the North Apollo Beach Embayment. In fact, the Blumberg Study showed no salinity build-up after the second year of the 7-year portion of the model simulation. The Blumberg Study found that the flushing time for the area near the Big Bend facility ranges from 4 to 10 days. The Blumberg Study applied a formula to predict potential DO saturation level changes. The analysis concluded a small change to DO saturation assuming full saturation on average of 7 mg/l. The Blumberg Study predicted that the desalination discharge would not lower actual DO levels below 5 mg/l. The Blumberg Study concluded that the marine ecology will not be affected by the desalination facility operation. Older Two-Dimensional Models of Tampa Bay Significant strides have been made in hydrodynamic modeling over the last 10 years, with the standard changing from two-dimensional models to three-dimensional models. Three-dimensional models provide more complete results than two-dimensional models. In the late 1970's through the late 1980's, modeling was constrained by the computing limitations of the time and could not examine the difference in water layers in a bay and potentials for currents going in different directions or speeds in different layers of the bay, as now done by state-of-the-art three-dimensional models. A two-dimensional model cannot accurately represent the tidal residual circulation in an estuary such as Tampa Bay, because it omits some of the critical physical forces that drive this type of flow. As the acoustic doppler current profiler showed, water flows in the top of the water column in one direction and flows in the bottom of the water column in a different direction. A two-dimensional model would average these flows over the entire vertical water column. In doing so, it would show much slower residual flow (and, therefore, longer residence time and a longer time to flush the system). SOBAC offered the testimony of Dr. Carl Goodwin, a civil engineer with the USGS. Dr. Goodwin provided testimony on two-dimensional model studies he did for the USGS in the late 1980's to assess the effects of dredging the shipping channel in Tampa Bay. Dr. Goodwin's studies, contained in SOBAC Exs. 69 and 70, suggested the existence of "gyres" in Tampa Bay. But no "gyres" have been observed, and it now appears that these gyres actually do not exist but are two- dimensional modeling artifacts, as shown by state-of-the-art three-dimensional modeling of Tampa Bay. In an earlier version of Dr. Luther's Tampa Bay model, an experiment was performed running the model in a vertically average mode to mimic the two-dimensional model. In this mode, the model was able to reproduce the "gyres" that Dr. Goodwin observed in his two- dimensional model. When the physical equations that related to pressure forces (baroclines) were reactivated in the three- dimensional model, the "gyres" disappeared. In addition, this experiment showed that the two- dimensional model simulation showed residence times an order of magnitude longer as compared to the full three-dimensional simulation. This means that residence time would be 10 times longer in the two-dimensional model than in the three- dimensional model, which takes into account baroclinic forces. Subsequent to the publication of his modeling studies (SOBAC Exs. 69 and 70), Dr. Goodwin found that it would take approximately 110 days for water to travel from the mouth of the Hillsborough Bay to the mouth of Tampa Bay in 1985. This calculation by Dr. Goodwin was not subjected to peer review or the USGS process. However, dividing the 110-day time period with correction factor of 10 discussed above, Dr. Goodwin's corrected estimate would predict an 11-day period for transport of water from Hillsborough Bay to the mouth of Tampa Bay--similar to the Blumberg Study and far-field model results. Opinions of Other SOBAC Experts Besides Dr. Goodwin, SOBAC also elicited some general opinions regarding the combined thermal and salinity plume from Dr. Mike Champ, called as an expert in the areas of environmental biology and chemistry, and from Dr. Wayne Isphording, called as an expert in sedimentology and geochemistry. In part, Dr. Champ based his opinion on a misunderstanding that Tampa Bay is not well-mixed or well- circulated at the location of the Big Bend power plant. In this respect, Dr. Champ's testimony was contrary to all the evidence. Even the "gyres" suggested by Dr. Goodwin's two- dimensional model studies would suggest a great deal of mixing in Middle Tampa Bay in the vicinity of the Big Bend plant. To the extent that the opinions of Dr. Champ and Dr. Isphording differed from the modeling results, they are rejected as being far less persuasive than the expert opinions of the modelers called by TBD, who spent far more time and effort studying the issue. Compliance with Dissolved Oxygen Standard Oxygen is a gas which can dissolve in water to some degree. There are two measurements of DO in water: saturation point and actual level. The saturation point of DO in water equates to the maximum amount of DO that water will hold. The actual level of DO is a measurement of the oxygen in the water. Since the saturation point is the maximum amount of DO that water will hold in equilibrium, the actual level of DO in water is typically equal to or lower than the saturation point. Desalination will affect the saturation point of DO to the extent that it increases salinity. Increased salinity decreases the saturation point of DO because it lowers the potential for water to hold oxygen. But desalination would not affect the actual level of DO in the water if the saturation point remains above the actual level of DO in the water. TBD determined that in the worst case scenario using undiluted desalination discharge, the lowest possible saturation point of DO would be 5.7 mg/l. If the actual level of DO is above 5.7 mg/l, desalination may lower that actual level of DO to 5.7 mg/l. If the actual level of DO is below 5.7 mg/l, desalination will not lower the DO. Since TBD will aerate the water in the pretreatment process, if the actual level of DO is below 5.7 mg/l, the actual level of DO in the discharge water will be increased. The permit DEP proposes to issue to TBD requires that DO at the point of discharge from the RO plant meet the following: that instantaneous DO readings not depress the intake DO when intake DO is at or below 4.0 mg/l, and that they be greater than or equal to 4.0 mg/l when intake DO is greater than 4.0 mg/l; that 24-hour average readings not depress the 24-hour average intake DO when the 24-hour average intake DO is at or below 5.0 mg/l, and that they be greater than or equal to 5.0 mg/l when the 24-hour average intake DO is greater than 5.0 mg/l. The evidentiary basis for SOBAC's argument that the proposed permit's DO limitation allowed violations of state water quality standards was the testimony of Dr. Champ. But it was evident from his testimony that Dr. Champ was not even aware of the effluent limitations until they were pointed out to him at final hearing. Nonetheless, and although Dr. Champ barely had time to read the DO limitations, Dr. Champ immediately opined that the proposed DO limitations virtually invited water quality violations. He dismissed the permit language out-of-hand as being "loosey-goosey," "fuzzy-wuzzy," and "weasel-like." Actually, there is no conflict between the proposed permit's DO limitations and the water quality standards and water quality criteria in DEP's rules. Other witnesses, particularly Tim Parker of DEP, properly compared the language in the permit with DEP's rules containing water quality standards and water quality criteria. Mr. Parker pointed out that the rules must be read in harmony with each other. Rule 62-302.530(31) contains DO water quality criteria and requires that the "actual DO shall not average less than 5.0 in a 24 hour period and shall never be less than 4.0." Rule 62-302.300(15), a water quality standard, states: Pollution which causes or contributes to new violations of water quality standards or to continuation of existing violations is harmful to the waters of this State and shall not be allowed. Waters having a water quality below the criteria established for them shall be protected and enhanced. However, the Department shall not strive to abate natural conditions. Mr. Parker testified that the "natural conditions" referred to in Rule 62-302.300(15) are those found in the intake water to the desalination facility. TBD will not violate either the water quality criteria or the water quality standard for DO. If the actual level of DO in the intake water is less than 5.0 mg/l, TBD will not decrease the actual level of DO in the water below 5.0 mg/l because the actual level of DO is below the worst case saturation point of 5.7 mg/l. The water quality standard in Rule 62-302.300(15) does not prohibit discharges having DO levels below 4.0 mg/l when that discharge does not cause or contribute to existing DO violations. TBD will not cause or contribute to existing DO violations because if the level of DO in the intake water which is the natural condition is less than 4.0 mg/l, TBD will not decrease the actual level of DO in the water. To the contrary, the desalination process will increase the actual level of DO whenever it is below 5.0 mg/l. TBD has provided reasonable assurance that the proposed desalination discharge will not violate the DO water quality standards and criteria in Rules 62-302.530(31) and 62- 302.300(15) because the desalination process will not decrease the actual level of DO below 5.0 mg/l. SOBAC argued that DO levels will drop between intake and discharge as a result of desalination. Some of this argument was based on the testimony of Dr. Mike Champ, one of SOBAC's expert witnesses. But Dr. Champ's testimony on this point (and several others) is rejected as being far less persuasive than the testimony of the expert witnesses for TBD and the other parties. See Finding 196, infra. SOBAC's argument apparently also was based on a fundamental misapprehension of the results of the Blumberg Study, which SOBAC cited as additional support for its argument that desalination will decrease DO at the discharge point. The Blumberg Study only spoke to desalination's effect on DO saturation concentrations, not to its effect on actual DO levels. (In addition, contrary to SOBAC's assertions, the Blumberg Study did not model DO saturation concentrations but only inferred them.) pH The pilot plant measured and analyzed the potential for pH changes in the desalination process and demonstrated that the desalination process reduced pH by no more than a tenth of a pH unit. pH ranges in natural seawater from top to bottom change over one full pH unit; a tenth of a pH unit change would be well within the natural variation of the system. TBD has provided reasonable assurances that the proposed desalination discharge will not violate Rule 62- 302.530(52)(c), which requires that pH shall not vary more than one unit above or below natural background of coastal waters, provided that the pH is not lowered to less than 6.5 units or raised above 8.5 units. Limitations for pH in the permit ensure compliance with Rule 62-302.530(52)(c) at the point of discharge to waters of the state. Temperature Nothing in the desalination process adds heat to the discharged water. To the contrary, the desalination process may dissipate heat due to the interface of the intake water with the air surface in the pretreatment process. Further, the effect of removing 25 mgd of heated cooling water as desal product water reduces the heat load coming out of the TEC plant cooling water discharge by that same 25 mgd. Temperature readings taken as part of the pilot plant study confirm a slight decrease in temperature across the desalination process. Metals The pretreatment process employed by TBD will result in a reduction in metals in the treated water. Ferric sulfate is added to the intake water upstream of the sand filters in the pretreatment process to precipitate metals into solid material which can be captured by the sand filters. Adding ferric sulfate in the pretreatment process results in a net reduction in the total mass load of metals in the discharge water. Initial calculations in the permit application that 104 pounds of ferric sulfate were being discharged in the desalination concentrate were based on using 20 mg/l of ferric sulfate and a conservative estimate of 95 percent settling of solids, with 5 percent of the ferric sulfate being discharged in the desalination concentrate. Further testing through the pilot plant revealed that coagulation optimizes at 9 to 14 mg/l of ferric sulfate with 97.5 percent of the solids settling, resulting in only 2.5 percent (52 pounds) of the ferric sulfate being discharged per day. The desal facility discharge of iron is minute in comparison to naturally occurring metals within the surface water flowing into Tampa Bay from the Hillsborough and Alafia Rivers. Increases in iron due to ferric sulfate addition are predicted to result in a diluted discharge in which the iron level is still below Class III marine surface water limitation of 0.30 mg/l. Even SOBAC witness Dr. Isphording confirmed that there are no concerns caused by metals that TBD is adding during the process. Discharge Effect on Metal Absorption/Desorption Dr. Isphording limited his concerns to the reaction of higher salinity, DO, and redox to the sediments already contained within the area beyond the discharge point. Dr. Isphording admits that he cannot quantify what the potential release of heavy metals would be due to these factors. Absorption of metals occurs when an organic or clay particle attracts to its surface a metal. Biota do not obtain metals if the metal is held in sand or silt size particles. Biota, be they plant or animal, in most cases obtain the metals they receive from tiny particles that are suspended in the water called microparticulate material. Microparticulate material is generally referred to as colloidal phase. Typically, this phase is on the order of a tenth of a micron in size. Biota obtain metals only if they are present at clay- size particles. Only 10 percent of the quantity of metals that are theoretically available to the biota in a given environment is actually absorbed in tissues. Salinity Has Little Effect on Metals Salinity does not exert a controlling influence on absorption/desorption reactions except at very low salinities. If the salinity is zero, which is essentially a pure freshwater environment, and the salinity level then rises 3 ppt, there would be profound changes in the metal loads, for example, where rivers meet estuaries or seawater. When salinity levels in the water are on the order of 25 ppt, small salinity perturbations such as 2.5 ppt will have a very small effect on absorption/desorption reactions. In fact, the influence can be either positive or negative, but in general they are going to be quite small. Potential releases or gains of metal from salinity changes of 2.5 ppt, at the area of the discharge canal, would be difficult to predict, and it is uncertain whether the change would be positive or negative. pH Will Have Virtually No Effect on Metals Although SOBAC witness Dr. Isphording knew of no change to pH caused by the desalination process, he testified to the alleged effect of lowered pH on the metal in the sediments and water column. Only large pH differences can have a significant influence on absorption or desorption of metals. Any effect on absorption from a decrease in pH on the order of a tenth of a pH unit will be hidden within the natural variations of the estuarine system. See Finding 140, supra. Effect of Lower Oxygen Levels on Metals Redox is basically an oxidation-reduction phenomenon. In order for the low levels of oxygen to have a reducing effect resulting in a release of metals from sediments, virtually all of the oxygen would have to be removed from the water. Basically, the environment would have to reach anoxic conditions. Even then, some metals such as copper would remain within the sediments. In an oxygen-buffered system, redox perturbations will not significantly or measurably mobilize metals. Sediments can be oxidizing in the upper part and then generally become more reducing at depth. The area near the desal discharge does not have organic-rich deep sediment. Proposed Discharge Effect on Bioavailability of Metals The proposed desalination plant's discharge will not increase the bioavailability on metals above that of natural variations and any changes would be hard to discern or measure. Nor will there be any appreciable accumulation of metals in sediments in the receiving water resulting from the proposed desalination discharge. DEP has not established any sediment quality standard and monitoring of sediments is not a NPDES requirement. The desalination plant does not result in violations of Class III marine surface water criteria and standards. No Synergistic Effects Caused by Discharge There are no synergistic effects from the proposed discharge wherein the combination of two elements such as temperature and salinity together would create a new effect. Instead, pH, redox, salinity, and temperature may have small, immeasurable effects that may offset each other. No Adverse Impacts to Biota Comprehensive species lists of phytoplankton, zooplankton, benthic macroinvertebrates, fish, aquatic flora (including seagrasses and mangrove species), and threatened or endangered species inhabiting the area were prepared based on extensive review of applicable scientific literature on Tampa Bay. The salinity tolerance ranges of these species were determined through extensive review of information on salinity ranges associated with species capture, laboratory studies, review of studies addressing species types and salinity tolerances in hypersaline estuaries, and species salinity tolerances determined for other desalination projects. When background salinity is above 10 ppt, changes in salinity of a few ppt have no effect on most organisms. Lower salinities are more detrimental than high salinities to most marine organisms, as long as the upper limit does not exceed a value of approximately 40 ppt salinity. Most planktonic species and life forms can tolerate salinities of up to 40 ppt. Mangrove and seagrass species living in the area can tolerate salinity levels as high as 60 ppt. Benthic macroinvertebrates in the area routinely experience, tolerate and survive in salinity levels ranging from approximately 6 ppt to over 39 ppt under natural environmental conditions. Fish species in the area routinely experience and tolerate salinity levels as high as 39 to 40 ppt under natural environmental conditions. Estuaries serve as fish nurseries because fish species lay their eggs in estuaries, and the larval and juvenile life stages live and mature in estuaries. Due to extreme range of conditions that naturally occur in estuaries, fish reproductive strategies have adapted to enable fish eggs and larval and juvenile life stages to tolerate the wide range of natural conditions, including ranges in salinity levels, that are endemic to estuaries. Egg, larval, and juvenile fish stages may be better able to tolerate extreme range of salinities than adults life stages. A 2.5 ppt increase in salinity and the permitted maximum increase of 10 percent above the intake chloride level is within the range of tolerance and variability that seagrasses, mangrove species, benthic macroinvertebrates, biota, fishes, manatees, zooplanktonic and phytoplanktonic species, and other organisms and life forms living in Tampa Bay routinely encounter and tolerate in the natural environment. A 2.5 ppt increase in salinity with the maximum permitted salinity discharge limit of 35.8 ppt of salinity and the permitted maximum increase of 10 percent above the intake chloride level will not adversely affect the survival or propagation of seagrasses, mangroves, benthic macroinvertebrates, biota, zooplankton, phytoplankton, fish, fish eggs, or juvenile life stages of fish species, or other organisms or life forms in Tampa Bay, and specifically the portion of Tampa Bay in the vicinity of the desalination plant discharge. The Shannon-Weiner Index, which is a biological integrity index codified at Rule 62-302.530(11), requires that the index for benthic macroinvertebrates not be reduced to less than 75 percent of established background levels. Since there will be no adverse impacts to benthic macroinvertebrates due to the desalination discharge and since the level of salinity increases anticipated will tend to benefit benthic macroinvertebrates population, TBD has met the criterion in Rule 62-302.530(11). The Mote Marine Laboratory data showed that Tampa Bay experienced a 2.0 ppt change in salinity over the course of one month. No fish kill or observable die-offs of species were observed or reported from this natural occurrence of elevated salinity. The desalination discharge will (1) not adversely affect the conservation of fish and wildlife, including endangered species, or their habitats, (2) not adversely affect fishing or water-based recreational values or marine productivity in the vicinity of the proposed discharge, (3) not violate any Class III marine water quality standards, and (4) maintain water quality for the propagation or wildlife, fish, and other aquatic life. The desalination discharge meets the antidegradation standards and policy set forth in Rules 62-4.242 and 62- 302.300. Discharge Disposal Options Analyzed As part of the permitting process, TBD demonstrated that the use of land application of the discharge, other discharge locations, or reuse of the discharge was not economically and technologically reasonable, pursuant to Rule 62-4.242. TBD submitted a sufficient analysis of these options as part of its Antidegradation Analysis. (TBD Ex. 1G; TBD Ex. 200, Fact Sheet, p. 16). Further Protection in the Permit The permit review of the desalination permit application is one of the most thorough ever conducted by DEP. The proposed permit has conditions which create and provide a wide margin of environmental protection. The permit sets effluent limitations of various constituents which are reasonably expected to be in the desal facility discharge and provides for monitoring programs to ensure compliance with those effluent limitations. The monitoring requirements of the proposed permit exceed the monitoring requirement imposed on other facilities in the Tampa Bay area. Effluent Limitations DEP established effluent limitations using the Class III marine state water quality standards, data provided from the pilot plant regarding the chemical characterization, the modeling conducted by DHI and the University of South Florida, and the water quality data collection by Mote Marine Laboratory in connection with the establishment of the WQBEL. The effluent limitations contained in the permit are consistent with DEP rules. The proposed permit restricts TBD to the lesser of either the chloride limit of 10 percent above intake or the salinity limit of 35.8 ppt. There is no state water quality standard for salinity. The permit limit for chlorides complies with Rule 62- 302.530(18). The permit's additional requirement of a minimum dilution ratio has the effect of limiting chlorides to 7 percent above intake for 384 hours per year and 5 percent above intake for the remainder of the year and thus provides extraordinary assurance that the state water quality standard for chlorides will be met. Dr. Champ was SOBAC's primary witness in support of its argument that the proposed permit allows a discharge with excessive salinity. But it was apparent from his testimony that Dr. Champ misinterpreted the permit limitations for salinity. See Finding 196, infra. Dr. Champ conceded that the chloride limit of 10 percent above intake was appropriate but focused on the 35.8 ppt maximum, as if it overrode the chloride limitation. As found, the opposite is true. TBD will be limited to 10 percent above intake for chlorides even if the result is salinity far less than the daily maximum of 35.8 ppt. Dr. Champ also had concerns about comparing the discharge to intake chloride levels as not being representative of "normal background." He argued (as does SOBAC) for comparing discharge to chloride levels somewhere else in Middle Tampa Bay, nearby but far enough away to insure no influence from the discharge. But the modeling evidence provided reasonable assurance that there will not be a great deal of recirculation of discharge to intake and that the recirculation expected will not cause salinity to build-up continuously over time. The modeling evidence is accepted as far more persuasive than Dr. Champ's testimony. See Finding 196, infra. The only metals for which effluent limitations were established in the permit are copper, nickel, and iron because these were the only metals determined to be close to the state water quality standard levels by the pilot plant studies. The actual levels of such metals in the desalination discharge will be less than those in the pilot plant testing because the dilution ratio (12.8 to 1) used in the pilot testing is much higher than the minimum dilution ratio required by the permit (20 to 1). The permit effluent limitations for copper, nickel, and iron are based on, and comply with, DEP Rules 62- 302.500(2)(d) and 62-302.530(24), (39) and (45). The permit effluent limitations for Gross Alpha are based on and comply with the requirements in Rule 62- 302.530(58). Biological treatment of the desalination plant discharge concentrate is not required because it consists of seawater. Monitoring for Effluent Limitations DEP is able to separately determine TEC's compliance with its permit from TBD's compliance with the effluent limitations in the proposed desalination permit because of how the facility is designed and the monitoring is constructed. Monitoring requirements in the proposed permit were determined with reference to the probability of desal facility discharge exceeding specific water quality standards. DEP rules do not require monitoring for each and every constituent detected above background concentrations, only those which would probably exceed state water quality standards. The permit requires monitoring of effluent limitations at the intake to and discharge from the desalination facility and the calculation of the diluted effluent levels in the co-mingled discharge water. In order to calculate the effluent components in the diluted discharge water, continuous monitoring is performed on the TEC cooling water discharge rate of flow. Parameters of DO, conductivity, salinity, chlorides, copper, iron, nickel, radium, gross alpha, and effluent toxicity are measured at both intake and discharge pursuant to proposed permit. Monitoring of Intake Monitoring of the intake will be located, after interception off TEC Units 3 and 4, prior to entering the desalination plant. Using a sampling location of the intake to the desalination facility prior to filtering or chemical addition for background samples is consistent with the definition of "background" in DEP Rule 62-302.200(3). EPC Stations 11, 80, 81, 13, and 14 are not proper locations for background samples because salinity varies with tides and depth and those stations are too distant from the actual intake point. EPC station 9 is not a good location because it is closer to the discharge than the permit sample point. Monitoring of Discharge Monitoring of the discharge will take place in the wet well prior to discharge into TEC's cooling water discharge tunnels. This monitoring location is in compliance with Rule 62-620.620(2)(i) which provides for monitoring of effluent limitations in internal waste streams. Monitoring of the desal facility discharge concentrate in each of the four cooling water discharge tunnels is impractical due to the high volume of dilution and addition of four potential discharge locations. Once the desal facility concentrate is diluted by the TEC cooling water discharge, it is much more difficult to obtain accurate water quality testing for constituents at such minute levels. Monitoring of the Combined Discharge Concentrations Calculations determine the mixing ratios of the desalination concentrate with TEC's cooling water. Using the flow data from TEC, the calculations will accurately determine the water quality of the co-mingled discharge water. Compliance with Permit Effluent Limitations The proposed permit requires TBD to monitor constituents for which there are effluent limitations on either a daily, weekly or monthly basis, depending on the constituent. The frequency of monitoring for each constituent is based on comparing the expected levels of the constituent to the water quality standard and analyzing the probability of the desal facility discharge exceeding that standard. The monitoring provides additional assurances beyond the pilot plant studies, testing and modeling that no water quality standard will be violated. Continuous monitoring is not necessary to successfully monitor discharges. Monthly measurements are sufficient to determine compliance even for a daily permit level because the chemical characterization studies provide reasonable assurances that the desalination concentrate will not exceed the effluent limitations. Monthly monitoring provides further checks and balances to assure that the desalination discharge is in conformance with the effluent limitations and DEP rules. The EPA only requires that monitoring occur at least once a year. Conductivity provides a direct correlation to salinity and chlorides. Measuring conductivity provides salinity and chloride levels by basis of calculations and is typically used as a surrogate for monitoring chloride and salinity continuously. Salinity and chloride cannot themselves be measured continuously because they are measured by lab tests. The permit requires conductivity to be monitored continuously, not because DEP believed the desalination discharge would be near the chloride limitation, but rather to be extremely conservative. The permit conditions treat an exceedance of salinity or chlorides based on conductivity readings to be a violation of the permit effluent limitations for salinity and chlorides. TBD provided reasonable assurance to DEP that the proposed desalination discharge would not violate the DO water quality standards and criteria in Rules 62-302.530(31) and 62- 302.300(15). The permit condition requiring monitoring of DO provides verification that desal facility discharge will meet the DO water quality standards. Even SOBAC's witness Dr. Champ admitted that a continuous measurement for DO is not as valuable as random weekly samples. External Monitoring Programs The proposed permit requires TBD to develop and submit to DEP a Biological Monitoring Program to monitor seagrasses, benthic macroninvertebrates and fish populations to be consistent with existing Tampa Bay monitoring programs. This program will provide an effective means of monitoring the potential impacts of the desalination discharge. The proposed permit also requires TBD to implement a Water Quality Monitoring Program for three monitoring stations located proximal to the intake, the discharge and the North Apollo Beach Embayment which will monitor conductivity, salinity, DO and temperature continuously. These monitoring programs will provide additional ambient data to DEP. If the data indicate an exceedance or reasonable potential for an exceedance of water quality standards, DEP may reopen the permit in accordance with the reopener clause contained in the permit. These monitoring programs go beyond the requirements in DEP rules. Additionally, DEP does independent monitoring of NPDES discharges without notice and on a purposely unpredictable basis. Proof of Financial Responsibility Rule 62-620.301(6) addresses when DEP may require a permit applicant to submit proof of financial responsibility to guarantee compliance with Chapter 403, Florida Statutes. TBD's compliance history was taken into consideration during the permitting process. Adequate financial assurance were provided in the permit application. (TBD Ex. 1I). Further, the permit conditions added by the settlement agreement (TBD Ex. 470) provide for additional financial assurance beyond those that can be required by the NPDES program and DEP rules. Additional Comment on SOBAC's Evidence As already indicated, SOBAC elicited the testimony of several expert witnesses at final hearing to support its contentions. But none of SOBAC's experts spent a great deal of time studying TBD's desal project, especially compared to witnesses for the other parties. Mostly, SOBAC experts expressed general scientific principles that were not directly tied to specifics of the desal project or were very general expressions of concern. Often, SOBAC's experts were not familiar with all the efforts of experts offered by the other parties to address those very concerns. Except for Dr. Champ, no SOBAC expert opined that the proposed permits would result in violations of DEP statutes and rules. Some SOBAC experts expressed opinions that only would be relevant if there were insufficient assurances in proposed permits that DEP statutes and rules would not be violated. Statistical evidence presented was not particularly relevant. Dr. Goodwin As previously mentioned, Dr. Carl Goodwin was willing to provide testimony on work he did for the USGS, but he gave no expert opinions on the permits which are the subject of these proceedings. As also previously discussed, his two- dimensional model studies were constrained by computational limitations. Even so, his studies indicated that flushing in Tampa Bay was becoming more rapid in recent years. In addition, even if the "gyres" suggested by his two-dimensional studies actually existed, they would tend to promote mixing in Tampa Bay in area of the Big Bend power plant. Dr. Champ Dr. Champ's first opinion was that 35.8 ppt is too high a salinity limit and would result in "oceanic" conditions. He attempted to compare this result to results of diversion of substantial amounts of freshwater inputs to the Black Sea for agricultural purposes--a totally different situation not suitable for comparison to Tampa Bay. Initially, Dr. Champ suggested a limitation of a 10 percent increase above "background" or "ambient" conditions; it was apparent that initially Dr. Champ was not cognizant of the 10 percent over intake chloride limitation in the proposed permit. When he was made aware of the chloride limit, he misinterpreted the two limits, saying that TBD would not be limited to the lower of the two. When it was suggested that he might have misinterpreted the two salinity limits, Dr. Champ testified that chlorides should be compared to a "natural" or "environmental" control site somewhere nearby but outside the influence of the combined TEC/TBD discharge; he said it was a "farce" to compare chlorides to a control site "inside the plant." In so doing, he seemed not to recognize the purpose of the comparison made in the proposed permit--to isolate and identify the impacts of TBD's desal process. In addition, dismissing without much consideration the contrary results of extensive and sophisticated modeling, Dr. Champ opined off- handedly that DO would decrease due to higher salinity that would recirculate and build-up over time. In part, Dr. Champ based this opinion on his misunderstanding that Tampa Bay is not well-mixed or well-circulated at the location of the Big Bend power plant. This was contrary to all the evidence; even if the "gyres" predicted by Dr. Goodwin's two-dimensional model existed, they would suggest a great deal of mixing in Middle Tampa Bay in the vicinity of the Big Bend plant. Dr. Champ next misinterpreted the DO limits in the proposed permit. See Finding 133, supra. Dr. Champ then predicted a decrease in species diversity as a result of higher salinity and lower DO. (To the contrary, salinity increases in the amounts predicted by the far greater weight of the evidence probably would result in somewhat of an increase in species diversity.) Ultimately, Dr. Champ testified that consequences to marine organisms would be dire, even if salinity increased only by 2.5 ppt, because a "salinity barrier" would form across Middle Tampa Bay in contrast to more gradual natural changes in salinity. The far greater weight of the evidence was to the contrary. Dr. Champ made several suggestions to avoid the calamitous results he predicted: require use of a cooling tower to reduce the temperature of the combined TEC/TBD discharge; collect the desal brine concentrate and barge it to the Gulf of Mexico; require intake and discharge pipes extending into the shipping channel in Middle Tampa Bay. But Dr. Champ did not study or give a great deal of thought to implementation of these suggestions. Besides, the other parties proved that these measures were not needed for reasonable assurances. In an attempt to buttress his opinion testimony, Dr. Champ also testified (along with SOBAC's President, B.J. Lower) that the TEC intake canal is virtually devoid of life and that biodiversity in the discharge canal is very low. This testimony was conclusively refuted by the rebuttal testimony of Charles Courtney, who made a site visit after SOBAC's testimony and described in detail a significant number of healthy species in the intake canal, including oyster communities, xanthid crabs, porcellanid crabs, snook, anemones, bivalves, polychaete, and mangroves with seedlings. Of the one and one- half pounds of oysters that Mr. Courtney sampled, he estimated that approximately fifty percent of those oysters were living, which represents a very healthy community. Mr. Courtney further noted that some of the crabs were carrying eggs, which indicates an active life cycle for those species. As to the TEC permit modification, Dr. Champ testified that it was “in-house stuff” which would not affect the environment outside the TEC plant. No other SOBAC witness addressed the TEC permit modification. Dr. Isphording SOBAC called Dr. Wayne Isphording as an expert in sedimentology and geochemistry. Dr. Isphording expressed no concern that the desal process would add metals to Tampa Bay. Essentially, he gave opinion testimony concerning general principles of sedimentology and geochemistry. He testified that heavy metals bound in sediments are released naturally with increases in salinity, but that salinity levels would have to be extreme to result in the release of abnormal quantities of such metals. He admitted that he had performed no studies of sediments in Tampa Bay and declined to offer specific opinions that metals in fact would be released as a result of predicted salinity increases. Dr. Isphording admitted that he knew of no condition in the proposed Desal Facility permit which would cause or allow a violation of state water quality standards. He was aware of no statute or rule requiring more monitoring and testing than is required in the proposed permit. Dr. Parsons SOBAC offered the testimony of Dr. Arthur Rost Parsons, an assistant professor of oceanography at the Naval Postgraduate School, in an attempt to raise questions regarding the near-field and far-field modeling which were provided by TBD to DEP during the course of the permitting process. However, not only had Dr. Parsons not done any modeling in Tampa Bay himself, he was not provided numerous reports and clarifications relating to the studies he was called to critique. He only reviewed an interim report dated November 1, 2000, regarding the near-field model. Dr. Parsons testified that the DHI model used for the near-field study was an excellent shallow water model. He found nothing scientifically wrong with it and testified that the "physics and the model itself is . . . well–documented." Dr. Parsons also did not contradict the results of the DHI model. Instead, he noted that the modeling task was difficult and complex, he described some of the model's limitations, and he testified to things that could have been done to increase his confidence in the model results. One of Dr. Parson's suggestions was to run the model longer. But the evidence was that, due to the model's complexity and high computational demands, it would have been extremely expensive to run the model for longer periods of time. Another of Dr. Parson's suggestions was to use salinity data would be to use the information that the model itself generated with regard to salinity distributions instead of a homogeneous set of salinity data. Dr. Parsons was concerned that use of homogeneous salinity data would not reflect the effect of "double diffusion" of heat and salinity, which would result in sinking of the combined heat. But engineer Andrew Driscoll testified in rebuttal that the effects of "double diffusion" would cease once equilibrium was reached and would not result in a hypersaline plum sinking to the bottom. In addition, he testified that turbulent mixing from tide and wind would dominate over the effect of "double diffusion" at the molecular level so as to thoroughly mix the water, especially in the shallow North Apollo Beach Embayment. Dr. Parsons also suggested that the model be run for rainy season conditions to see if the effects of vertical stratification would increase. But even if vertical stratification increased as a result of rain, salinity also would be expected to decrease. The scenario modeled was "worst case." Dr. Parsons also suggested the use of a range of temperatures for the combined heat/salinity plume instead of an average temperature. However, he conceded that it was not inappropriate to use average temperature. Instead, he would have liked to have seen the model run for a range of temperatures to see if the model was sensitive to temperature differences so as to increase his confidence in the results. Dr. Parson's testimony focused on the near-field model. His only comment on the far-field model was that he thought it should have used the out-puts from the near-field model (as the near-field used the outputs). Scott Herber SOBAC offered no direct testimony on the impact of the Desal Facility discharge on seagrasses in Tampa Bay. The testimony of Steve Herber, a doctoral student at the Florida Institute of Technology, related to the vulnerability of seagrasses, in general, to changes in salinity. However, Mr. Herber had no specific knowledge of the seagrasses present in Tampa Bay and had not performed or reviewed any scientific studies upon which his opinion could be based. He reached no conclusions about the specific permits at issue in this proceeding, nor about the effect of the Desal Facility on seagrasses in Tampa Bay. In contrast to Mr. Herber, the testimony of TBD's expert, Robin Lewis, and SWFWMD's expert, Dr. David Tomasko, provided detailed information about the seagrasses located in Tampa Bay. Both have studied seagrasses in Tampa Bay for many years and have been involved in mapping seagrass distribution in a variety of bays and estuaries along the west coast of Florida. Dr. Tomasko criticized witnesses for SOBAC who attempted to draw conclusions about Tampa Bay based on studies of other bays and estuaries because each bay has unique characteristics that cannot be extrapolated from studies of other bays. Dr. Tomasko and Lewis testified that seagrasses in Tampa Bay are becoming more abundant, that dissolved oxygen levels are increasing, and that water clarity in Tampa Bay is also improving. Dr. Mishra Dr. Satya Mishra was called by SOBAC as an expert in statistics. He is not an expert in the discrete field of environmental statistics. He has never been involved in the development of a biological monitoring program and could not provide an opinion regarding what would be an adequate sample size for this permit. He essentially expressed the general opinions that for purposes of predictive statistical analysis: random sampling is preferred; statistical reliability increases with the number of samples; and 95 percent reliability is acceptable. Dr. Mishra performed no statistical analysis in this case and could not conclude that the sampling provided in the proposed permit would not be random. Ron Chandler Ron Chandler, a marketing representative for Yellow Springs Instrument Corporation (YSI), simply testified for SOBAC regarding the availability of certain types of continuous monitoring devices. He did not offer any opinions regarding whether or not reasonable assurance required continuous monitoring of any specific parameter or any monitoring different from or in addition to what is proposed in TBD's proposed permit. John Yoho SOBAC called John Yoho as a financial and insurance expert to criticize the terms of an agreement by TBD, TBW, and DEP to settle Hillsborough County's request for an administrative hearing (DOAH Case No. 01-1950). This agreement is contained in TBD Ex. 470. But Yoho admitted that he had no knowledge regarding what is required to obtain an NPDES permit in terms of financial assurances. He also indicated that none of his testimony should be understood as relating in any way to financial assurances required for such a permit to be issued. Alleged Improper Purpose The evidence did not prove that SOBAC participated in DOAH Case No. 01-2720 for an improper purpose--i.e., primarily to harass or to cause unnecessary delay or for frivolous purpose or to needlessly increase the cost of licensing or securing the approval of TEC's permit modification applications. To the contrary, the evidence was that SOBAC participated in this proceeding in an attempt to raise justifiable issues arising from the peculiarities of the relationship of TEC's permit modification application to TBD's permit application. Although SOBAC suffered adverse legal rulings that prevented it from pursuing many of the issues it sought to have adjudicated on TEC's permit modification application, it continued to pursue issues as to the TBD permit application which, if successful, could require action to be taken on property controlled by TEC and, arguably, could require further modification of TEC's permit.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department of Environmental Protection enter a final order: (1) issuing the proposed permit number FL0186813-001-IWIS, as set forth in TBD Ex. 203 with the addition of the two permit conditions specified in TBD Ex. 470; (2) issuing proposed permit modification number FL0000817-003-IWIS, as set forth in TBD Ex. 225; and (3) denying TEC's request for attorney's fees and costs from SOBAC under Section 120.595(1). Jurisdiction is reserved to enter an order on TBD's Motion for Sanctions filed on August 13, 2001, regarding SOBAC expert Ralph Huddleston. DONE AND ENTERED this 17th day of October, 2001, in Tallahassee, Leon County, Florida. __________________________________ J. LAWRENCE JOHNSTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of October, 2001. COPIES FURNISHED: W. Douglas Beason, Esquire Department of Environmental Protection 3900 Commonwealth Boulevard The Douglas Building, Mail Station 35 Tallahassee, Florida 32399-3000 William S. Bilenky, Esquire Southwest Florida Water Management District 2379 Broad Street Brooksville, Florida 34604 Ralf G. Brookes, Esquire Morgan & Hendrick 1217 East Cape Coral Parkway Suite 107 Cape Coral, Florida 33904-9604 Donald D. Conn, General Counsel Tampa Bay Water 2535 Landmark Drive, Suite 211 Clearwater, Florida 33761-3930 Lawrence N. Curtin, Esquire Holland & Knight, LLP 315 South Calhoun Street, Suite 600 Post Office Box 810 Tallahassee, Florida 32302-0810 Douglas P. Manson, Esquire Carey, O'Malley, Whitaker & Manson, P.A. 712 South Oregon Avenue Tampa, Florida 33606-2543 E. A. Seth Mills, Jr., Esquire Fowler, White, Gillen, Boggs, Villareal & Banker, P.A. 501 East Kennedy Boulevard, Suite 1700 Post Office Box 1438 Tampa, Florida 33601-1438 Joseph D. Richards, Esquire Pasco County Attorney's Office 7530 Little Road, Suite 340 New Port Richey, Florida 34654-5598 Cathy M. Sellers, Esquire Moyle, Flanigan, Katz, Raymond & Sheehan, P.A. 118 North Gadsden Street Tallahassee, Florida 32301-1508 Linda Loomis Shelley, Esquire Fowler, White, Gillen, Boggs, Villareal & Banker, P.A. Post Office Box 11240 Tallahassee, Florida 32302 Kathy C. Carter, Agency Clerk Office of General Counsel Department of Environmental Protection 3900 Commonwealth Boulevard, Mail Station 35 Tallahassee, Florida 32399-3000 Teri L. Donaldson, General Counsel Department of Environmental Protection 3900 Commonwealth Boulevard, Mail Station 35 Tallahassee, Florida 32399-3000 David B. Struhs, Secretary Department of Environmental Protection 3900 Commonwealth Boulevard The Douglas Building Tallahassee, Florida 32399-3000
Findings Of Fact Quality of Service There were no customers of the utility present at the public hearing, except for the Department of the Navy. As a result, there is no public testimony in the record relating to the quality of the water and sewer service provided by the utility. However, a representative of the Department of Environmental Regulation and an engineer from the Public Service Commission agree that the utility's water treatment meets all relevant quality standards, and its sewage treatment is within acceptable limits. Nevertheless, there exist problems of infiltration into the company's sewage lines which have resulted in variations in its level of treatment efficiency. The Department of the Navy acknowledges that some of these infiltration problems originate at the Navy housing facility, and the Navy asserts that corrective measures will be undertaken. In the meantime, the Navy contends that the sewage flows from its housing facility have been underestimated, resulting in an overstatement of revenue to the utility. However, there is insufficient specific evidence in the record to support a finding of fact resolving this issue. Since the variations in the utility's sewage treatment efficiency are within acceptable levels, the Company's wastewater treatment is found to be satisfactory. Rate Base By its exhibits, the utility has alleged its adjusted rate base to be $59,401 for water and $87,134 for sewer. Public Service Commission adjustments reduce and correctly state the water rate base to be $19,356 and the sewer rate base to be $65,552. The utility contests the removal of $16,530 from sewer rate base as a contribution in aid of construction (CIAC). This amount is the difference between the $155,000 paid by the Duval County School Board to a partnership consisting of the utility's partners and others, and the $138,170 recorded on the books of the utility. It contends the $16,330 represents a contractor's profit to one of the former partners of utility, but this amount is properly recordable as CIAC and should be removed from rate base. Other adjustments are either not contested, or make no material difference in the utility's revenue requirements, and should be accepted. The accompanying schedules 1 and 3 detail the rate base for both water and sewer with appropriate explanations for the adjustments. Cost of Capital Representatives from the utility and from the Public Service Commission presented evidence on the issue of cost of capital. The major area of disagreement relates to the company's capital structure. The Commission contends that the utility is 100 percent debt, while the utility asserts the capital structure to be 52.97 percent equity and 47.03 percent debt. The Commission's contention is based on the annual reports filed by the utility wherein a deficit is reported in the equity account. The utility, however, has made several adjustments to the investment shown in the annual reports which it alleges increase equity from a deficit of $39,804 to a positive amount of $92,727. The first adjustment made by the utility is in the amount of $22,700 to make the amount of investment equal to rate base, in accordance with principles of double entry bookkeeping. However, because revenue requirements of public utilities are based on used and useful plant in service rather than on total assets, it is not uncommon for the rate base to be different in amount from the total capitalization. Thus, this adjustment is unnecessary and improper. The utility's second adjustment increases the amount of investment by $39,464 as the Unrecovered Cost of Abandonment of Utility Plant. The plant to which this adjustment refers was abandoned, and because of the hazards presented by the abandoned structure, it was disassembled and scrapped. The unrecovered costs were written off for tax purposes, but were not written off for regulatory purposes. This amount should be treated as any other loss, and the adjustment to increase investment should be disallowed. When a utility has recovered the cost of a loss due to abandonment through a write off against income, the placement of the amount of the investment in the capital account results in accounting twice for the loss. The third adjustment involves an amount of $57,067 representing loans procured by the utility's partners from a financial institution. Although these loans were made directly to the partners, the proceeds were used by the utility and the company services the debt. The utility contends that these funds are equity, and it has increased the investment account by the amount thereof. However, the intent of the parties to the transaction was that the funds borrowed by the partners were loaned to the utility, not invested in it. Accordingly, the utility's adjustment is improper; the amount of the loan should be considered as debt in the utility's capital structure; and it should be allowed to earn the embedded cost of this debt, but not an equity return on the amount thereof. In summary, since this utility's equity account has a deficit balance, the appropriate capital structure is 100 percent debt. The cost of this debt is its embedded cost, estimated to be 11.75 percent overall, and the weighted cost is 10.21 percent, as shown in the following table. CAPITAL STRUCTURE COMPONENT PERCENT OF AMOUNT CAPITAL COST RATE WEIGHTED COST Mortgage Note $36,593 20.9 8.00 2.312 Loans Outstanding 48,162 38.0 9.69 3.681 Proposed Note 41,870 33.1 12.76 (est) 4.220 TOTAL $126,625 100.0 10.213 perc. These "Amounts" are the non-current portion of the debt. Operating Statements The accompanying schedules 2 and 4 detail the operating statements for both water and sewer, with appropriate adjustments. The utility contests the Commission's disallowance of depreciation on its proforma plant acquisition. However, the plant has not yet been constructed. Thus, although the proforma plant adjustments have been agreed to, depreciation expense thereon cannot be allowed. The utility further challenges a Commission adjustment disallowing depreciation expense on contributed assets. This adjustment is proper and should be allowed. The utility also contends that it should be allowed income taxes, asserting that an unincorporated proprietorship is entitled to the same income tax expense as a corporation, and that the related income taxes do not have to be paid, merely accrued. However, the purpose of the income tax accounts in the NARUC Uniform System of Accounts is to allow entities which pay income accounts in which to record them. There is no provision in the uniform system for recordation of a nonexistent expense. Since the utility admits that the partnership has paid no income taxes, the disallowance is proper. Finally, the utility contests what it claims is disallowance by the Commission of all its proposed amortization of abandoned plant. However, the exhibits reflect that the Commission increased the amount of amortization expense from $2,790 to $3,284 for water, and from $3,016 to $6,468 for sewer, to allow for amortization of the abandoned plant. Revenue requirements The application of a 10.21 percent rate of return to the adjusted rate base for both water and sewer requires that the utility receive gross annual revenues of $33,752 for water and $81,432 for sewer. These revenues represent increases of $9,381 and $23,446 for water and for sewer, respectively. See Schedules 2 and 4 attached). Rate structure The utility provides water service to an average of 67 residential customers, 12 general service customers and 11 multi-dwelling customers (Average 346 Units). It provides sewer service to an average of 26 residential customers, 12 general service customers and 4 multi-dwelling customers (Average 645 Units). The present residential water rates are structured to provide for a minimum quarterly charge, which includes a minimum number of gallons, and a one- step excess rate over that minimum. The proposed rates follow the same basic structure. The present general service water rates are structured in the same manner, except that the rates for this classification are approximately 25 percent higher than residential. The proposed rates follow the same basic structure. The present multi-dwelling water rates are structured in compliance with the provisions of the old Rule 25-10.75, Florida Administrative Code, which provided that the rate for master metered multiple dwelling structures should be 66 2/3 percent of the minimum residential rate, with an equal minimum gallonage allowance included within the unit minimum charge. The total number of gallons to be included within the minimum gallonage allowance was determined by the number of units served, with excess gallons over the cumulative allowance to be billed at the excess residential rate. The proposed races follow the same basic structure for determining the minimum gallonage allowance and excess gallonage over the minimum allowance. The proposed minimum charge per unit has been structured approximately 25 percent higher than the proposed minimum unit charge for residential service. The proposed excess rate has been structured at the same level as general service, which is approximately 25 percent higher than the residential service rate. Any rate structure that requires a customer to pay for a minimum number of gallons, whether those gallons are used or not, is discriminatory. Over 27 percent of this utility's basic residential customers did not use as much as the minimum gallonage allowance during the test year. The average number of gallons consumed in the gallon brackets below the minimum allowance bracket was 3,197 gallons per customer per quarter. A rate structure that requires the general service customers to pay a higher rate than the other classifications of service is also discriminatory. Since the Cost of Service to Multiple Dwelling Structures Rule 25- 10.75, Florida Administrative Code, was repealed by Commission Order No. 7590, issued January 18, 1977 in Docket No. 760744-Rule, it has been the practice of the Public Service Commission to structure this type customer in the general service classification, and to structure water rates under the Base Facility Charge form of rate design. The basic concept of this type rate design is to determine a base charge whose foundation is based on the associated costs of providing service to each type customer. The charge covers associated costs such as transmission and distribution facility maintenance expenses, depreciation, property taxes, property insurance, an allocated portion of customer accounts expenses, etc. The amount of the charge is determined by an equivalent residential connection formula using the standard meter size as the base. There are not any gallons included within the frame of the Base Facility Charge. The second structure is to determine the appropriate charge for the water delivered to the customer. This charge would cover related costs such as pumping expenses; treatment expenses, an allocated portion of customer accounts expenses, etc. The primary reasoning supporting this type structure is that each customer pays a prorata share of the related facility costs necessary to provide service, and thereafter the customer pays for only the actual number of gallons consumed under the gallonage charge. The present residential sewer rates are structured in the manner of a quarterly flat-rate charge for all residential customers. The proposed rates are structured with a minimum charge, which includes a minimum number of gallons and an excess rate above that minimum. The present general service sewer rates are structured so that a percentage factor is applied to the water bill to determine the sewer charge. The rates for this classification are structured approximately 25 percent higher than residential. The proposed rates are structured with a minimum charge, which includes a minimum number of gallons and an excess rate above the minimum. The proposed rates are structured approximately 25 percent higher than residential. The present multi-dwelling sewer rates are structured in compliance with the provisions of the old Rule 25- 10.75, Florida Administrative Code, which provided that the rate for sewer service to multiple dwelling units should be 66 2/3 percent of the basic charge for sewer service to single residential units. The proposed rates are structured with a minimum charge for each unit, which includes a minimum number of gallons, and an excess rate over the minimum. The minimum charge per unit and the excess rate are structured approximately 25 percent higher than residential. Since the repeal of Rule 25-10.75, Florida Administrative Code, it has been the practice of the Public Service Commission to structure this type customer in the general service classification of customers, and to structure sewer rates under the Base Facility Charge form of rate design. This should be implemented by the utility for both water rates and sewer rates. The utility has been misapplying its schedule of rates for the commercial sewer classification of service. The schedule calls for 250 percent of the water bill with a minimum charge of $0.15 monthly ($24.45 quarterly). However, the utility has been billing its commercial sewer customers 250 percent of the water bill plus the minimum charge. This amounted to an overcharge to this customer classification of approximately $1190 during the test period. The utility should be required to make the appropriate refund to each commercial sewer customer, and the amount of this overcharge has been removed from test year revenues on the attached schedule 4. The utility is collecting a meter installation charge of $200, and a charge of $246 for each connection to the sewer system, without any apparent tariff authority. Further, the charges made for customer reconnect after disconnection for nonpayment are not adequate to cover the associated costs of this service. An investigation docket should be opened to consider the appropriateness of the meter installation charge, and to receive evidence of actual costs of service restoration. Finally, insufficient facts were presented to support a finding relative to the validity of the utility's sewer service contract with the Navy or the compatibility of the charges for sewer service to the Navy with the utility's tariff. These issues should be revisited during the course of the investigation docket. However, the utility's practice of requiring customer deposits when service is billed in advance should be discontinued.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application of Buccaneer Service Company, 1665 Selva Marina Drive, Atlantic Beach, Florida 32233, be granted in part, and that the utility be authorized to receive gross annual water revenue of $33,752, and gross annual sewer revenue of $81,423, by rates to be approved by the Public Service Commission. It is further RECOMMENDED that the utility be required to adopt a Base Facility charge form of rate design for both water and sewer rates, and to make appropriate changes in its tariff. It is further RECOMMENDED that the utility be required to refund to each commercial sewer customer a prorata portion of the total amount of overcharges collected since the beginning of the test year. It is further RECOMMENDED that an investigation docket be opened for the purpose of making further inquiry into the appropriateness of the utility's meter installation charge, to receive evidence of actual costs of service restoration, and to determine the validity of the utility's contract for sewer service with the Navy and the appropriate rate to be charged for this service. And it is further RECOMMENDED that the utility be required to discontinue the practice of collecting customer deposits for service which is billed in advance. THIS RECOMMENDED ORDER entered on this 6th day of August, 1980. WILLIAM B. THOMAS, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675
Findings Of Fact Petitioner sat for the Civil/Sanitary Engineer Examination on April 15, 1988. He received a failing grade with an original score of 41 raw points. Since that time, he has been awarded an additional 3 raw points and has a score of 44 raw points. A passing grade is 48 raw points and is, therefore, 4 raw points from passage. Petitioner contests the score given him on three of the problems on the examination. They are problems 120, 122, and 421. He did not have the test booklet he used at the examination available to him at the hearing. Though he recognizes that the grader who assessed his scores was not allowed to look at his test booklet during the scoring process, many of his calculations for problems 120 and 122 were made in it. Problem 120 requires the examinee to compute 6 stations and the coordinates of the 6 points of the two involved curves on a railroad spur line. Petitioner computed the six points to what he considers an acceptable tolerance and had also started to compute the coordinates as required by Requirement (b). His solution page for Requirement (a) of this problem reflects only the six points, of which 5 are marked incorrectly, and bears the grader comment, "show computations." The second page, relating to Requirement (b), on which the first 3 calculations are marked as incorrect, reflects only cursory calculations and bears the grader comment, "Incomplete." Petitioner was awarded a score of "4" for his solution to problem 120. According to the National Council of Engineering Examiners Standard Scoring Plan Outline, the guideline relating to "4", "BORDERLINE UNQUALIFIED", reads: Applicant has failed to demonstrate adequate knowledge in one or more categories. For example, approach may be correct but the solution is unreasonable. Significant constraints may have been overlooked. Solution is unacceptable but marginally so. The scorer's remarks concerning Petitioner's solution state: A solution which fails to demonstrate an adequate understanding of horizontal curve geometry as a result of logic errors, math errors, and failure to complete several parts. According to Petitioner, he used the Civil Engineering Reference Manual in his calculations. He also contends that Requirement (a) is far more important to the problem than is Requirement (b). Once the former is achieved, it is easy to achieve the latter. Admittedly, Petitioner did not complete Requirement (b) and, therefore, does not expect credit for it. However, he contends that having completed Requirement (a) correctly, he should have been awarded more than 40% credit. Petitioner also contends that the use of the term, "Not To Scale" in the test problem was deliberately deceptive which was not necessary to test engineers at this level of achievement. In this case, Petitioner contends the lack of availability of the examination test booklet in which he did many of his calculations hinders him in demonstrating the correctness of his solution. These computations, he contends, would show his computations in Requirement (a) were "close enough" to be graded correctly and without these computations, the scorer would not know if he did them or merely copied the answers. He would not, also, have any way of knowing if Petitioner has knowledge of horizontal curve geometry. Mr. Lippert, a licensed registered engineer testifying on behalf of Petitioner, believed that the answers to the problems to be more important than the computations. In a practical application he may be correct. However, in the instant case Petitioner is a candidate for certification as a Professional Engineer and was being examined on his qualifications for that status. In such a situation, it is not at all unreasonable to expect the candidate to demonstrate his method of arriving at his solution to demonstrate his understanding of the concept sufficiently to indicate his answer was neither copied nor a fluke. Since the candidate is seeking a higher degree of recognition, a requirement that he demonstrate a higher degree of professional skill is not unreasonable. Under the fact situation demonstrated here, the award of a "4" as a grade for Petitioner's solution to this problem is appropriate. In Problem 122, the candidate was required to use and show equations for his calculations of (a), the average maximum and minimum sanitary wastewater flows expected, in gallons per day, for the total complex in issue; (b), the theoretical full flow capacity and velocity with no surcharge; and (c), depth and velocity of flow for the estimated maximum flow rate. The candidate was instructed to conclude, if possible, that the sewer is not overloaded. The problem deals with a troublesome wastewater disposal system for a retirement community of 490 units with a population of 1,475. Here, Petitioner was awarded an a score of "8" and feels he should have received more. As to (a), Petitioner cited in his answer the reference manual he was using, a manual used by many engineers and one accepted in the profession, yet the grader apparently felt that the use of only the title was insufficient. He wanted the author's name, publisher, date of publication, and other salient information. Petitioner felt this was unnecessary in light of the well known status of the book. In (b), the problem calls for 10" UCP pipe. All pipe, depending upon the material from which constructed, has a different diameter. Petitioner's solution was marked at least partially incorrect because he assumed the interior diameter of the pipe as .83' when the problem stated the interior diameter was 10". Petitioner contends that even with that unnecessary calculation based on an incorrect assumption, his solution of 2.295 feet/second velocity was sufficiently close to the grader's solution of 2.35 feet/second to be marked correct. Similarly, Petitioner contends his velocity in (c) was within a "tolerable" margin and that his conclusions is "OK". While the grader considered his method in this section as "OK", he marked the calculation almost entirely wrong. This may be related to the formula used by Petitioner in (b) which, he admits, is wrong. He contends he must have brought the wrong number over from his calculations which he accomplished in his test booklet. This booklet is not now available, but, in any case, would not have been seen by the scorer. Petitioner also claims that the gallons per capita per day figure of 100 is the standard "everyone uses" to calculate problems involving sewage. Here, because he was taking an examination, he used a figure of 112.5 gallons per day, a compromise between 100 and 125, which he took from the reference manual without citing page number from which taken. Consequently, he contends the grader's comment that his figure is too high is in error but even if it was too high, he ran the calculations correctly and should be given full credit. It is his position that in a case like this, error on this high side, which would give greater capacity, is better than being short. Being correct would be even better, and Petitioner's solutions was not correct. In the scoring plan outline for this problem, an "8" is described as: QUALIFIED; All categories satisfied, errors attributable to misread tables or calculating devices. Errors would be corrected by routine checking, Results reasonable though not correct. and a "9" is described as: QUALIFIED: All categories satisfied, correct solutions but excessively conservative in choice of working values; or presentation lacking in completeness of equations, diagrams, orderly steps in solution, etc. The scorer's comments were: CQ. Fundamentals are correct. Solutions are basically correct and complete but contain math, unit, or tolerance errors making answers unacceptable; or the record is different, or in combination. Here, Petitioner contends that his ultimate solution, only .05 feet/second off in velocity is so close that the error is insignificant. It is close but the difference between an "8" and a "9" lies in the correctness of the ultimate solutions. "Close" is not "correct" and Petitioner's errors are not attributable to misread equations or devices but to his own improper assumptions. Because his calculations were done in a test booklet which is not now available it cannot be determined where the error originates which caused (c) to be marked as it was. Under the circumstances shown here, the score of "8" awarded is not inappropriate. Problem 421 calls for the candidate to find the required volume in cubic feet of on site storage so that post development flows on the parcel of land in question do not exceed the pre-development flows to the existing stream for the 25 year frequency rainfall. Petitioner determined the pre and post development numbers correctly but did the retention area in the old fashioned way resulting in his solution equating to 1/2 of the correct solution. The grader indicated that Petitioner's "procedures [sic] [were] in error here." Petitioner has a one page solution to the problem and got credit for his answer of "4.22" to the first stage of the problem as well as his answer to the second part. He admits, however, that his third step was wrong and that threw the problem answer off. He contends, however, that he was undergraded when awarded a "4" and while he admits to not deserving a "6", feels he should have received a "5". Grades for this problem were awarded on a 2-4-6-8-10 point scale. A "5" was not an authorized score. The scoring plan for this problem describes a "4" as: BORDERLINE UNQUALIFIED; Applicant has failed to demonstrate adequate knowledge in one or more categories. For example, approach may be correct but the solution is unreasonable. Significant constraints may have been overlooked. Solution is unacceptable but marginally so. A grade of "6" is described as: MINIMALLY QUALIFIED: All categories satisfied at a minimally adequate level. Here the scorer indicated: Pre and post calculation OK. An attempt at detention calculation made but no significant progress toward conclusion. Fails to demonstrate knowledge necessary to calculate detention as existing. Detention calculations fail to demonstrate knowledge of hydrograph [sic] nature of storage calculations. Only one data point obtained. The comments of the grader on the Petitioner's answer sheet clearly indicate that the answer given was incorrect and that the Petitioner failed to demonstrate adequate knowledge of the procedures in issue. Since there is no provision made to award any grade between "4" and "6", and since Petitioner's answer clearly, and by his own admission, does not qualify for a "6", the awarded score of "4" is appropriate. Based on the above, it is found that Petitioner has failed to demonstrate that the scores given him on the problems in issue were incorrect, unsupported, or inappropriate.
Recommendation Based on the foregoing Findings of Fact and conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered affirming the score awarded to Petitioner on questions 120, 122, and 421, respectively, of the Civil/Sanitary Engineer Examination administered to him on April 15, 1988. RECOMMENDED this 4th day of April, 1989 at Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of April, 1989. COPIES FURNISHED: Leonard A. Smally Longboat Key, Incorporated 501 Bay Isles Road Longboat Key, Florida 33548 H. Reynolds Sampson, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Allen R. Smith, Jr. Executive Director Board of Professional Engineers 130 North Monroe Street Tallahassee, Florida 32399-0750
Findings Of Fact South of the intersection of Blue Angel Parkway and Gulf Beach Highway in southwest Escambia County lies the wooded, 69-acre tract, designated "Site F," onto which ECUA proposes to dispose up to three million gallons of wastewater a day. Petitioner Westerman operates a marina nearby. The individual intervenors own houses in the vicinity as, apparently, do other members of the intervening association. A state agency with wide ranging environmental responsibilities, DER permits construction of wastewater treatment facilities in conformity with its rules. Sewage disposal is one of several utility services ECUA provides residents of Escambia County. A Trip to the Beach Under orders from DER and the Environmental Protection Agency (EPA) to cease discharging directly into Bayou Chico ("a very impacted body of water ... [with] very difficult problems" T. 101), ECUA proposes to build a pumping facility and install enough 24-inch pipe to enable it to send effluent from its wastewater treatment plant in Warrington to Site F, for "rapid rate" land application. Upgraded since DER and EPA forbade direct discharges into Bayou Chico, the Warrington plant now employs advanced treatment techniques to remove most phosphorous and nitrogen from its effluent. Nevertheless, in order to mollify regulators, ECUA has plans to ship the effluent through some seven miles of pipe to Site F. In the opinion of its executive director, ECUA is "an easy target . . . . Whether it's practical or fair is really not the question." Id. He feels, "cost is not a factor" (T. 102) that the regulatory authorities have taken into account. Sandy Soils Site F straddles a coastal ridge, vegetated dunes that separate Garcon Swamp from Big Lagoon. Elevations vary from 29 feet above mean sea level at the crest of the ridge to nine feet above mean sea level in the swale that traverses the property. Highly permeable surficial sand extends to depths ranging between 20 and 35 feet below grade. Under the surficial sand, a layer of silty sand, extending down 55 to 60 feet, overlies another layer of very clean sand, much denser than the surficial sand. At depths of 90 to 110 feet, a clay aquiclude undergirds these sandy strata. Using field and laboratory test results, experts put the average hydraulic conductivity of the surficial sands at 35 feet per day, of the silty middle sand layer at 10 to 15 feet per day, and of the clean but dense sands on top of the clay at 5 to 10 feet per day. In addition to laboratory results, two pump tests support these conclusions. Results of two other pump tests indicating hydraulic conductivity of 4.7 and 5.0 feet per day were dismissed as unreliable. Sand caving in compromised at least one of these tests. As far as the record reveals, no bench-scale or pilot-scale hydraulic testing took place. According to DER's Mr. Reinning, there was "more soil testing on this site than [he had] seen on any other permit event." T.II. 217. Although the soils on the site are "relatively uniform," (T.II. 212) no layer of sand is perfectly uniform. Mr. Jacobs, one of ECUA's consultants, testified that a boring on one of the proposed pond sites revealed a one-foot layer of sand and organics with a vertical hydraulic conductivity of one foot per day. T.I. 245. Perhaps Mr. Jacobs was referring to boring B-2, which, according to the log, reflects a two-foot interval of peat and decaying wood, at a depth of slightly more than 13 feet. ECUA's Exhibit 2. No other boring gave evidence of this layer. The nearest bore hole to B-2 was more than 200 feet away. Expert testimony that the borings did not indicate an "extensive pocket," and gave no reason to fear a "per(c)hed water table," (T.II. 214) was not controverted. Construction Plans ECUA proposes to construct 16 percolation ponds or cells on Site F. Seven pairs of cells would be terraced on a north-south axis, with an eighth, noncontiguous pair at an angle in the southwestern portion of the property. Cell bottoms, at elevations ranging between 16 and 27 feet above mean sea level, would have a surface area aggregating some 23 acres (1,027,900 square feet.) ECUA would erect a perimeter fence and install warning signs. Except for valves, "no mechanical equipment [would be) involved in the disposal site," T.123, nor are "bright lights," id. planned. Water flowing into percolation ponds does not create an aerosol. Odors are not foreseen. Encircling each infiltration basin, berms three to three and a half feet higher than the cell bottoms would contain effluent and deflect sheet flow. Except for rain falling directly into the cells, stormwater would not reach the percolation cells. Chances that effluent augmented by rainfall would overflow the berms are remote. A 100-year, 24-hour return storm would not interrupt operation of the facility. No percolation pond site lies within the 100-year flood plain. No percolation basin is to be located within 500 feet of a potable water supply well or class I or class II surface water; or closer than 100 feet to the boundary of the property. Situated within some 20 acres of wetlands, a brackish pond lies about 1,000 feet from the nearest cell planned, between Site F and Big Lagoon into which the pond opens. At the nearest point, Big Lagoon itself comes within 1200 feet of a planned percolation cell. A swale or slough bridged by Blue Angel Parkway runs southwesterly north and west of the main phalanx of percolation ponds ECUA proposes, then turns a corner and runs southeasterly, separating the two cells proposed for the southwest portion of the property from the others. The nearest percolation pond is to be built about 100 feet from wetlands associated with the swale. Loading Rates ECUA plans to direct wastewater into half the cells one week and the remainder the next, alternating like the squares on a chessboard. The exact cycle is not a condition of the construction permit, however, and computer modelers assumed loading cycles consisting of two two-day periods. As applied to the total bottom area of percolation cells, the average daily loading rate for three million gallons a day (mgd) would amount to 2.91 gallons per square foot. Because half the ponds would be resting at any given time, ponds receiving effluent would experience inflow at an average rate of 5.82 gallons per square foot. In deciding the length of the loading cycle, as "the soil gets lower in permeability you have to really stretch your time for loading out, because it takes the water much longer to get out of the loading area." T.I. 188. But, with respect to the long-term capacity of the system, "the period of loading and resting . . . really doesn't significantly affect . . . how the site is expected to perform." T.II. 222. In the absence of bench-scale or pilot-scale tests heretofore, the applicant "intend[s] to load test this site, because just for the various concerns, because it is a big site." T.I. 189. Groundwater Effects Class G-II groundwater under the site now flows generally southerly toward the brackish pond and Big Lagoon. An expert put the rate of flow under the site at .22 feet per day, but concluded that the rate increased to approximately a half foot a day between Site F and Big Lagoon. As far as is known, groundwater under the sites proposed for the infiltration ponds rises no closer to the surface than six to nine feet, even under wet conditions, although the evidence by no means conclusively established that it would never rise higher. Some groundwater emerges in the swale during wet periods, and flows in the swale as far as the brackish pond, to which other groundwater makes regular, direct contribution. At the edge of the lagoon, further out in the lagoon and possibly in the Gulf of Mexico, still other groundwater comes up as springs. At least initially, the sandy soils would accept effluent readily. Until and unless actual experience showed that the facility could handle the three mgd for which it is designed, the plan is to dispose of no more than 2.5 million gallons of effluent a day. Before equilibrium is attained, ongoing disposal of effluent would gradually raise the level of groundwater under the site, inducing, on the preexisting, sloping surface of ambient groundwater, a mound, on which 16 smaller mounds (corresponding to the loading nozzles discharging wastewater into the percolation ponds) would superimpose themselves, half swelling, like so many goose eggs, half subsiding, at any given time. Adding effluent should not materially alter the ultimate direction of flow. For the most part, even groundwater flowing in other directions off the mounds induced under the site would eventually turn south toward the lagoon. But a steeper gradient should speed up the flow. Percolating effluent would increase the volume not only of seepage into the swale but also of subterranean flow reaching both the brackish pond and the lagoon. Increased seepage upslope from the slough would flow down into the swale, along the stream bed, and into the brackish pond. Monitoring As modified at hearing, ECUA's monitoring plan contemplates eight wells and four surface water monitoring points from which water samples would be periodically taken for analysis, to determine levels of nitrogen, phosphorous and other chemical and biological constituents of concern. Once the facility began operating, no well would yield "background" samples uninfluenced by the effluent. T. I. 221. The wells are all to be located on ECUA property and, therefore, close enough to the percolation ponds to receive ground water flows radiating from the mounds adding the effluent would induce. Final Destination Effluent emerging in seepage, perhaps as much as 75 percent of the total (T. III. 47), could reach Big Lagoon, by way of the swale and the brackish pond, soon after regaining the surface of the land. Wetland vegetation would filter such flows, already diluted underground and sometimes by stormwater runoff, on their way to the lagoon. Effluent that mixed with groundwater traveling to Big Lagoon underground would not show up in the lagoon for months or years. But when it arrived, much diluted and after such attenuation of pollutants as the largely inorganic soils afforded, it would also contribute to subtle changes in the waters of Big Lagoon. Virtually all effluent would ultimately end up in Big Lagoon. T.I. 234; T.III.45. Two channels connect Big Lagoon to Pensacola Bay to the east, and a single, more constricted channel connects it to Perdido Bay to the west. Tides influence the circulation of the Class III water within Big Lagoon, variously calculated to amount to some ten or eleven billion gallons of clean salt water. Through Pensacola Bay and Perdido Bay, Big Lagoon communicates with the Gulf of Mexico. As the tide rises, water from the adjacent bays enters the long and narrow reaches of Big Lagoon, at either end. As the tide ebbs, water in the lagoon (including a significant portion of bay water introduced by the preceding tide) flows out either end. ECUA's expert's claim that tides flush the lagoon in less than nine days did not take this back-and-forth movement into account, or look specifically at the four-billion gallon basin into which the brackish pond overflows. Big Lagoon lies south of the mainland and north of Perdido Key, one of the barrier islands paralleling the coast. These islands and waters north of them, extending as far as the southern boundary of the intracoastal waterway, comprise the Gulf Islands National Seashore. By rule, the waters of Big Lagoon south of the intracoastal waterway have been designated Outstanding Florida Waters. Two to three hundred yards wide, the intracoastal lies not far offshore the mainland. Water Quality Analysis of a single ground water sample revealed nutrient levels, but neither the applicant nor DER developed any data specific to Big Lagoon about nutrient levels there. Chemical analyses done on four samples of lagoon water (at petitioner's expense) revealed no nitrate nitrogen above detection levels in any of the samples, and no ammonia nitrogen above detection levels in three of the four samples, but disclosed 0.08 parts per million in the fourth. Three of the four samples contained 0.02 parts phosphorous per million, while the fourth had phosphorous in a concentration of 0.03 parts per million. Tests with water taken from Big Lagoon showed that the addition of both nitrogen and phosphorous compounds (but not the addition of one without the other) coincided with algal growth in one of four sets of samples, each set including a control in which such growth did not occur. In other samples of lagoon water into which algae were introduced, the addition of nitrogen, either alone or in combination with phosphorous, seemed to cause blue-green algae to predominate, instead of the dominant, indigenous pennate diatoms. In these experiments, ammonia chloride was added to produce nitrogen concentrations of 17.5 grams per liter, six times greater than would be allowed in the effluent, as much as 17 times greater than the concentration petitioner's expert predicted for wastewater reaching the lagoon, and two orders of magnitude above ambient levels. The experimenter also added sodium phosphate dibasic heptahydrate to create phosphorous concentrations of four grams per liter, which is also two orders of magnitude above levels naturally occurring in Big Lagoon. Special permit conditions limit (on an annual average) total nitrogen in effluent sent to Site F to 75 pounds per day, and phosphorous to one milligram per liter, which would amount to 25 pounds in three million gallons, the maximum daily flow. Permit conditions also prescribe limits for acidity and alkalinity (pH must be greater than 6.0 and less than 8.5), suspended solids, and biochemical oxygen demand. Basic dis- infection is required. Assuming ECUA disposed of three mgd at Site F, up to 25 pounds of phosphorous could be added to the estuary daily, on average, or more than a ton of phosphorous quarterly, if steady state were attained. Although three times as much nitrogen might occur in the effluent, oxidation and reduction would cause some nitrogen to enter the atmosphere as a gas instead of remaining dissolved until it reached the estuary. Not only organic components of the soil but also organic matter arriving in the effluent and accumulating on pond bottoms would contribute to denitrification. Salinity in the brackish pond would decline. A DER employee, Mr. Swartz, testified that placing three mgd of effluent in the planned percolation ponds "would not result in degradation of the surface water," (T. II. 127) citing "our experience here in Florida." Id. Whatever may be said as regards the brackish pond, no evidence gave substantial reason to question the accuracy of this opinion as it relates to waters south of the intracoastal waterway.
Recommendation It is, accordingly, RECOMMENDED: That DER deny the application, without prejudice to the filing of another after successful bench-scale or pilot-scale hydraulic testing and after ECUA has made arrangements for a ground water monitoring well from which samples unlikely to be affected by the effluent may be drawn. DONE and ENTERED this 2nd day of February, 1990, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of February, 1990. APPENDIX Petitioner's proposed findings of fact Nos. 1 through 8, 13, 14, 16 and 18 have been adopted, in substance, insofar as material. Most of petitioner's proposed finding of fact No. 15 accurately recites testimony adduced, but Shuba testified that algal growth has been stimulated by nutrient concentrations comparable to those Dohms said would occur in water entering Big Lagoon, not in concentrations likely to exist once this wastewater-bearing contribution mixed with other water in the lagoon. Petitioner presented information about nutrient levels in lagoon water at hearing. Computer modeling suggested break out, which has been considered. Petitioner's proposed findings of fact Nos. 17 and 19 accurately recite the testimony. DER's proposed findings of fact Nos. 1, 2, 3, 4, 5, 10, 11, 12, 13, 15, 16, 17, 18, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 42 and 43 have been adopted, in substance, insofar as material. With respect to DER's proposed finding of fact No. 6, the rate of flow increases south of the proposed pond sites. With respect to DER's proposed findings of fact Nos. 7 and 8, seasonal high ground water elevations were not shown conclusively. With respect to DER's proposed finding of fact No. 9, the aquiclude lies 90 to 110 feet below the surface. With respect to DER's proposed finding of fact No. 14, the rule requires a five-day rest. With respect to DER's proposed findings of fact Nos. 33, 34 and 35, the current rules do require mounding analysis, and there seemed to be a consensus that ground water enhanced by effluent would seep to the surface downslope from the ponds. With respect to DER's proposed findings of fact Nos. 36 and 37 and 44, free form agency action is technically immaterial. With respect to DER's proposed findings of fact Nos. 38, 39, 40 and 41, effluent would have mixed with groundwater before reaching Big Lagoon, but increased levels of nitrogen and phosphorous could be detected, as a result. ECUA's proposed findings of fact Nos. 1, 3, 4, 5, 6, 8, 10, 11, 12, 15, 16, 17, 20, 23, 24, 25, 26, 27, 28, 36, 37 and 38 have been adopted, in substance, insofar as material. With respect to ECUA's proposed findings of fact Nos. 2, 13, 21 and 32, the evidence showed that it was not unlikely that effluent, after percolating through pond bottoms and mixing with groundwater, would seep to the surface down slope. With respect to ECUA's proposed finding of fact No. 7, proposed cell bottom elevations fall in this range. With respect to ECUA's proposed finding of fact No. 9, the evidence did not establish that the high water table will always be nine feet below the pond bottoms. With the induced mound, ECUA's proposed finding of fact puts it at one to two feet. With respect to ECUA's proposed finding of fact No. 14, the tidal range is too high and the calculation ignores the back and forth movement of waters at either end of the lagoon. With respect to ECUA's proposed findings of fact Nos. 18 and 19, the current standard pertains total nitrogen. With respect to ECUA's proposed finding of fact No. 22, freeboard will vary with rainfall and effluent levels. ECUA's proposed findings of fact Nos. 29, 30, 31 and 34 relate to subordinate matters. With respect to ECUA's proposed finding of fact No. 33, more than one analysis was done. With respect to ECUA's proposed finding of fact No. 35, the applicant has given reasonable assurance. COPIES FURNISHED: Robert W. Kievit, Esquire Lester M. Westerman 10451 Gulf Beach Highway Pensacola, FL 32507 James Mullins 11001 Gulf Beach Highway Pensacola, FL 32507 Susan Guttman 11315 Sea Glade Drive Pensacola, FL 32507 Cindy L. Bartin, Esquire 15 West Main Street Pensacola, FL 32501 Joseph W. Landers, Esquire 310 West College Avenue Tallahassee, FL 32302 Stephen K. Hall, Esquire Asst. General Council Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, FL 32301 =================================================================
The Issue Whether Respondent, John J. D'Hondt, as a licensed operator, should be disciplined for violations of Florida Administrative Code Rule 62-602.650(2), (4) and (4)(f).
Findings Of Fact Based upon the testimony and evidence received at the hearing, the following facts were established by clear and convincing evidence: Petitioner is the State agency vested with the responsibility of regulating Florida's air and water resources, administering Chapter 403, Florida Statutes (2006), and the rules promulgated in Florida Administrative Code Rule Chapter 62. Petitioner has the statutory authority to establish qualifications; examine and license drinking water and domestic wastewater treatment plant operators and to place an operator on probation; and issue, deny, revoke, or suspend an operator's license pursuant to its rules. Respondent is the owner, supplier of water, and licensed operator of the Double D Mobile Home Ranch's drinking water and domestic wastewater treatment plants located in Volusia County, Florida. He holds Certified Operator Drinking Water License No. 0000542 and Certified Operator Wastewater License No. 0006032. The Volusia County Health Department is a county health department that has been approved by Petitioner pursuant to Subsection 403.862(1)(c), Florida Statutes (2006), to enforce Chapter 403, Florida Statutes (2006), and the rules promulgated for the State's drinking water program for Volusia County. As a result of not having received Respondent's September 2004 MOR, by letter dated October 20, 2004, the Volusia County Health Department notified Respondent that MORs were to be submitted to the Volusia County Health Department by the tenth of the month following the month of operation. The November 2004 MOR was to have been submitted to the Volusia County Health Department by December 10, 2004. Respondent signed and dated the November 2004 MOR on December 12, 2004; it was received by the Volusia County Health Department on December 27, 2004. The December 2004 MOR was to have been submitted to the Volusia County Health Department by January 10, 2005. On February 4, 2005, Respondent was sent a late reporting violation letter stating that the December 2004 MOR had not been received. This letter again reminded Respondent that MORs were to be submitted within ten days after the month of operation. The December 2004 MOR was received on February 11, 2005. The April 2005 MOR was to have been submitted by May 10, 2005. Respondent signed and dated the April 2005 MOR on May 17, 2005. It was received on May 27, 2005. The September 2005 MOR was to have been submitted by October 10, 2005. It was received on October 18, 2005. The November 2005 MOR was to have been submitted by December 10, 2005. It was signed and dated December 14, 2005, and received on December 19, 2005. Respondent did not timely submit MORs for the months of November 2004, December 2004, April 2005, September 2005, and November 2005. In 2004, the Volusia County Health Department inspected the Double D Mobile Home Ranch's drinking water treatment plant and found that Respondent maintained a combined logbook for the drinking water and domestic wastewater treatment plants. Respondent was informed that he was required to keep a separate operation and maintenance logbook for each of the drinking water and domestic wastewater treatment plants. On August 10, 2004, Petitioner inspected the Double D Mobile Home Ranch's domestic wastewater treatment plant and found that there was a combined logbook for the drinking water and domestic wastewater treatment plants. Respondent was again informed that he was required to keep separate logbooks for each plant. A non-compliance letter dated October 12, 2004, and a copy of the August 10, 2004, inspection report were sent to Respondent informing him that he needed to separate his operation and maintenance logbook. In 2005, the Volusia County Health Department inspected the Double D Mobile Home Ranch's drinking water treatment plant and found that Respondent still maintained a combined logbook for the drinking water and domestic wastewater treatment plants. During the inspection, Respondent was again informed that he was required to keep a separate operation and maintenance logbook for the drinking water and domestic wastewater treatment plants. On June 15, 2005, Petitioner inspected the Double D Mobile Home Ranch's domestic wastewater treatment plant and again found that Respondent was keeping a combined logbook for the drinking water and domestic wastewater treatment plants. During this inspection, Respondent was again informed that he was required to keep separate logbooks. A non-compliance letter and a copy of the June 15, 2005, inspection report were sent to Respondent again informing him that he was required to maintain separate logbooks for the drinking water and domestic wastewater treatment plants. On February 13, 2006, the Volusia County Health Department inspected the Double D Mobile Home Ranch's drinking water treatment plant and found that Respondent still maintained a combined operation and maintenance logbook for the drinking water and domestic wastewater treatment plants. During this inspection, Respondent was again informed that he was required to maintain a separate logbook for each plant. Over the extended period reflected by the inspections cited in paragraphs 11 through 15, Respondent failed to maintain separate logbooks for the operation and maintenance of the Double D Mobile Home Ranch's drinking water and domestic wastewater treatment plants. On August 10, 2004, Petitioner inspected the Double D Mobile Home Ranch's domestic wastewater treatment plant and found that the logbook did not contain sufficient entries of the performance of preventative maintenance and repairs or request for repairs of equipment. During this inspection, Respondent was informed that he was required to keep adequate entries of preventative maintenance and repairs or request for repairs of equipment for the domestic wastewater treatment plant. A non-compliance letter and a copy of the August 10, 2004, inspection report were sent to Respondent informing him that he was required to maintain entries of the performance of preventative maintenance and repairs or request for repairs of equipment for the domestic wastewater treatment plant. On June 15, 2005, Petitioner inspected the Double D Mobile Home Ranch's domestic wastewater treatment plant and again found that Respondent was not keeping adequate entries of the performance of preventative maintenance or repairs for the domestic wastewater plant. During this inspection, Respondent was again informed that he was to keep such entries. A non-compliance letter and a copy of the June 15, 2005, inspection report were sent to Respondent informing him that he needed to maintain such entries for the domestic wastewater treatment plant. Photocopies of the combined logbook have essentially no entries for the performance of preventative maintenance or repairs or requests for repairs to a domestic wastewater treatment plant. Infrequent margin notes are not decipherable and do not differentiate between the two activities.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the licenses of John J. D'Hondt, as a Certified Operator Drinking Water and a Certified Operator Wastewater, be disciplined as set forth in the "probation" letter of March 15, 2006. DONE AND ENTERED this 13th day of February, 2007, in Tallahassee, Leon County, Florida. S JEFF B. CLARK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of February, 2007. COPIES FURNISHED: Ronda L. Moore, Esquire Department of Environmental Protection 3900 Commonwealth Boulevard Mail Station 35 Tallahassee, Florida 32399-3000 John J. D'Hondt 2 Tropic Wind Drive Port Orange, Florida 32128 Lea Crandall, Agency Clerk Department of Environmental Protection Douglas Building, Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Michael W. Sole, Secretary Department of Environmental Protection Douglas Building, Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Tom Beason, Acting General Counsel Department of Environmental Protection Douglas Building, Mail Station 35 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000
Findings Of Fact Petitioner, George H. Hopper, submitted an application for a license to operate a Class "C" wastewater treatment plant to the Respondent on or about April 8, 1977. On November 28, 1977, the Respondent issued a letter of intent to deny the license. This letter of intent was subsequently modified by a letter to petitioner from Respondent dated January 4, 1978. The Respondent, in the above-referenced correspondence, based its letters of intent to deny the Petitioner a Class "C" wastewater treatment plant operator's license based upon two primary grounds. Those grounds are as follows: "This Department has concluded that you have not fulfilled the actual experience requirement of section 17-16.03(2)(b), Florida Administrative Code (F.A.C.), as defined by section 17-16.02(8) F.A.C." (See letter dated November 28, 1977.) "In addition to the above referenced deficiency in actual work experience, it has been noted that you have not completed an approved course related to wastewater treatment plant operation as required by Section 17-16.03(2)(c), Florida Administrative Code." (See letter dated January 4, 1978.) Respecting the second allegation, Petitioner presented testimony during the course of the hearing which, in fact, indicates that he did complete an approved coarse related to wastewater treatment plant operation as required by Section 17-16.03(2)(c), Florida Administrative Code. Additionally, Petitioner presented a diploma supporting this contention. This certificate reflects the fact that the Petitioner satisfactorily completed the course on "Operation of Wastewater Treatment Plants" on or about May 2, 1977. Based thereon, and the testimony of Respondent's certification officer, Robert W. Hall, to the effect that the Respondent did comply with the Code requirement which mandates completion of an approved course related to wastewater treatment plant operation, that ground is no longer a basis for the denial of Petitioner's certification. Petitioner testified, and the other documentary evidence introduced during the coarse of the hearing indicates, that Petitioner was employed from January, 1975, through December 25, 1975, as administrator of the Margate Utility Authority. From December 25, 1975, through February 15, 1976, the Petitioner was employed in a position other than as administrator, his resignation being effective on February 15, 1976. Accordingly, the Petitioner was employed at the Authority for a period in excess of one year. What is at issue, is the Respondent's contention that the Petitioner was not actually performing duties tantamount to fulfillment of the actual experience requirement of Section 17-16.03(2)(b), Florida Administrative Cede, inasmuch as his duties as an administrator were more in the nature of being in charge of the facility, with little practical experience as the term "experience" is meant in Chapter 17 of the Florida Administrative Code. Additionally, it was noted that the Petitioner was re-employed by the City of Margate as a supervisor. During the hearing, the Petitioner outlined his duties as an administrator which included being in charge off the overall operation of the wastewater treatment plant. Petitioner testified that when he was first employed at the Margate Utility Authority, the wastewater treatment plants were not operational. He testified that a water-sewer moratorium had been placed by the Board of Health, citing approximately five violations. Petitioner testified that he instituted numerous changes in the operations of the wastewater treatment facilities which included hiring a contractor to supervise deficiencies in the wastewater treatment plant and its injector systems which were over-pressurized. He testified that within approximately two months of his employment with the Authority, he was able to correct approximately 80 percent of the problems and was able to again make the treatment plant operational. Petitioner testified that he normally worked a five day week; however, he was on duty in excess of forty hours weekly for the resolution of all daily operational problems. Evidence introduced during the course of the hearing reveals that the wastewater treatment facility here involved is fully automated and that the operators have very little to do in terms of manual tasks. In this regard, the Petitioner testified that he was on duty at the facility throughout his employment during the period January, 1975, through December, 1975, to operate the wastewater treatment plant. Additionally, the Petitioner testified that his office, as an administrator, was located in close proximity to the wastewater treatment facilities and he was available to in fact operate the wastewater treatment plant, as needed. Finally, Respondent's certification officer, Robert W. Hall, testified that in his opinion, being available to operate as opposed to actual operation is what is required by the actual experience requirements of the Florida Administrative Code. Based thereon, I shall recommend that the Respondent withdraw its notice of intent to deny Petitioner's application for a Class "C" wastewater treatment plant operator's license.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is hereby, RECOMMENDED: That Petitioner's application for a Class "C" wastewater treatment operator's license be GRANTED. RECOMMENDED this 8th day of May, 1979, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Russell L. Forkey, Esquire 3081 East Commercial Boulevard Fort Lauderdale, Florida 33308 Randall E. Denker, Esquire Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32301
Findings Of Fact Upon consideration of the oral and documentary evidence in the record, as well as the pleadings and joint prehearing stipulation, the following relevant facts are found: Cast-Crete owns and operates a concrete batch plant in Hillsborough County, Florida, and manufactures concrete products such as reinforced beams, lintels, seals and drainage structures on the property. The plant is located on the west side of State Road 579, 3/4 mile north of Interstate 4, Section 28, Township 28 South, Range 20 East. The concrete products are manufactured in various forms which are laid out over a large portion of Cast-Crete's property. Lubricating oils are utilized to facilitate the removal of the product from the confining forms. During this process some of the lubricating oil is spilled onto the ground. Also, cleaning solutions containing degreasers are utilized to wash the concrete trucks eight to ten times per day. This solution ends up on the ground. Aggregate limerock (crushed limestone) is used in the concrete formulation process and is stored in large piles on the property. In order to contain the dust, water is sprayed on the aggregate piles 24 hours a day. The wash water from the continuous process of wetting the aggregate, other waste water and some stormwater is channeled through the property and into a settling pond in the northwest corner of Cast-Crete's property. This pond discharges continuously off the property by way of a concrete flume into a county maintained ditch. Water in the ditch travels in a westerly direction approximately 200 to 300 yards before it passes under Black Dairy Road, where the watercourse deepens and widens. The ditch discharges into a marshy area which drains into Six Mile Creek and other water bodies. The pond at the northwest corner of Cast-Crete's property is equipped with a metal skimming device to remove oils and greases floating on the surface of the pond. Nevertheless, it is estimated that approximately 100 gallons of oil per year are discharged by Cast-Crete. Oil and grease in the outflow water is occasionally above 5 mg/L. Oil and grease layers have been observed on water at both Black Dairy Road and Six Mile Creek, probably resulting from road run- off. Approximately 90 percent of the water discharged from the property is a result of the wetting or washdown of the aggregate piles. The excess water which comes from the aggregate piles is laden with dissolved limestone, lime and limestone particles. This limestone dust raises the pH level of the water. Because of the continued wetting of the aggregate, water flows through the settling ponds and off of Cast-Crete's property at a rate of approximately 4.8 gallons per minute, or 7,200 gallons per day or 2.5 million gallons per year. During a rain event, the flow increases markedly. Except during times of heavy rainfall, water flowing from the respondent's property provides a thin stream of water in the drainage ditch approximately six inches wide and several inches deep. The pH of the wastewater from Cast-Crete's discharge flume is between 10 and 11 units. During high volume flows, the pH remains at or above 11 units. An increase of one unit of pH in the wastewater means that the wastewater has become 10 times more basic, since pH is measured on a logarithmic scale. The natural background of unaffected streams in the area of and in the same watershed as the Cast-Crete property is less than 8.5 units. Specific conductance or conductivity is the measure of free ions in the water. Typical conductivity readings from other water bodies in Hillsborough County range between 50 and 330 micromhos per centimeter. The specific conductance of Cast-Crete's wastewater ranges from 898 to 2000 micromhos per centimeter. This is due to the presence of calcium carbonate and calcium hydroxide in the water. Blue-green algae is the dominant plant species in the ditch between the Cast-Crete discharge flume and the first 150 meters of the ditch. A biological survey of the ditch system indicates that the diversity of species east of Black Dairy Road is low. This is attributable in part to the high pH of the wastewater. The low diversity can also be attributed to the fact that the County maintains the ditch by use of a dragline on an annual basis. Background samples from a site within one mile to the northwest of the Cast-Crete property were taken. The site (a stream passing under Williams Road) is an appropriate place to take background samples because the water there is unaffected by Cast-Crete's discharge or other man-induced conditions. The pH background sample ranged from 4.6 units to 5.1 units. The specific conductance background samples ranged from 70 to 100 micromhos per centimeter. Samples taken from a site potentially impacted by Cast-Crete's discharge showed a pH level of from 6.35 to 7.37 units and specific conductance of from 592 to 670 micromhos per centimeter. Cast-Crete discharges water from its concrete plants operation without a permit from the DER.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that a Final Order be entered requiring respondent to submit a complete application for an industrial wastewater permit within thirty (30) days, and that, if it fails to do so, it cease discharging wastewater from its property until such time as an appropriately valid permit is issued by the DER. Respectfully submitted and entered this 3rd day of May, 1985, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of May, 1985. COPIES FURNISHED: David K. Thulman Assistant General Counsel Department of Environmental Regulation Twin Towers Office Building Blairstone Road Tallahassee, FL 32301 W. DeHart Ayala, Jr. 501 E. Jackson Street Suite 200 Tampa, FL 33602 Victoria Tschinkel Secretary Department of Environmental Regulation Twin Towers Office Building 2600 Blairstone Road Tallahassee, FL 32301 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF ENVIRONMENTAL REGULATION DEPARTMENT OF ENVIRONMENTAL REGULATION, STATE OF FLORIDA, Petitioner, vs. CASE NO. 84-1647 CAST-CRETE CORPORATION OF FLORIDA Respondent. /
Findings Of Fact The Petitioner is a wholly owned subsidiary of Florida Land Company which is, in turn, a wholly owned subsidiary of the Continental Group, Inc., a New York corporation. The parent developer companies are providing and will continue to provide the required financial backing. The Utility served 421 primarily residential customers at the end of 1979, the test year agreed to by the parties. This was the first rate proceeding involving the Utility since it was established in 1975. Service The Utility is providing satisfactory water and sewer service. There were no service complaints presented at the public hearing by the customers, nor were there any citations or corrective orders outstanding. Rate Base The Utility experienced rapid growth during the 1976 - 1979 period, increasing the number of customers served from 62 to 421. Therefore, year end rate base rather than average rate base should be utilized. 1/ The water and sewer rate bases are $155,920 and $179,360 respectively. These amounts are based on the computations detailed below and incorporate proposed Commission adjustments to which the utility stipulated. In addition, reductions to plant in service and construction work in progress (CWIP) were made by the Utility to reflect excess plant capacity which is of no benefit to current customers. The Utility replaced its reverse osmosis water treatment plant with a lime softening system in 1979. The new facility will be somewhat more expensive to operate but will improve water quality and fire flow (pressure). Because of the reverse osmosis water treatment plant retirement, the $3,615 in building and $34,541 in treatment plant assets remaining on the Utility books should be removed. This is a total adjustment to Utility Plant in Service of $38,156. A further reduction in both water and sewer rate base is needed to adjust the working capital allowance to the standard authorization, which is one-eighth of operation and maintenance expenses. The proper amounts to he authorized in these accounts are $5,338 water and $2,931 sewer. TEST YEAR PER UTILITY UTILITY ADJ. TEST ADJ. TO YEAR PER COMM. ADJ. & CORRECT. TO UTILITY ADJ. UTILITY TEST YEAR EXHIBIT BALANCE TEST YEAR $820376. $-551059. $269317. $-38156. $231161. 57866. -57866. 0. 0. 0. -18841. 17155. -1686. 0. -1686. -238419. 159526. -78893. 0. -78893. Water Rate Base Plant in Svc. C.W.I.P. Accum. Depr. C.I.A.C. Net of Amort. Working Capital Allowance 4755. 1421. 6176. -838. 5338. Income Tax Lag 0. 0. 0. 0. 0. Rate Base $625737. $-430823. $194914. $-38994. $155920. Sewer Rate Base UTILITY COMM. ADJ. TEST UTILITY ADJ. TEST & CORRECT. YEAR PER ADJ. TO YEAR PER TO UTILITY ADJ. UTILITY TEST YEAR EXHIBIT BALANCE TEST YEAR Plant in Svc. $591945. $-205690. $386255. $0. $386255. C.W.I.P. 77919. -77919. 0. 0. 0. Accum. Depr. -2815. 2551. -264. 0. -264. C.I.A.C. Net of Amort. -321611. 112049. -209562. 0. -209562. Working Capital Allowance 2558. 401. 2959. -28. 2931. Income Tax Lag 0. 0. 0. 0. 0. Rate Base $347996. $-168608. $179388. $-28. $179360. Operating Revenues The Utility is seeking water revenue of $41,429 and sewer revenue of $35,550. Computations and adjustments in support of these amounts along with test year expenses are detailed below. Because of the extraordinary expenses associated with replacement of the water treatment plant, it would not be appropriate to utilize test year data to determine operating costs. Therefore, a projected or pro forma operating expense of $42,789 removing replacement expenses is proper. A further adjustment to water operations is required to eliminate $1,987 of depreciation expense on contributed property as not authorized by current law. 2/ In addition, the useful life of various items of equipment should be increased to periods of 20 to 40 years. These extended depreciation periods are based on an engineering study which the Utility does not challenge. Finally, the requested revenue increase of $27,432 and the associated gross receipts tax of $686 are reversed to show test year operating results. The requested sewer revenue increase of $19,413 and gross receipts tax of $485 are also reversed on the sewer operating statement to show test year operating results. As with the water plant, depreciation on contributed sewer plant is disallowed, reducing depreciation by $5,261. Water Operating Statement UTILITY COMM. ADJ. TEST UTILITY ADJ. TEST & CORRECT. YEAR PER ADJ. TO YEAR PER TO UTILITY ADJ. UTILITY TEST YEAR EXHIBIT BALANCE TEST YEAR $ 14006. $ 27423. $ 41429. $-27423. $ 14006. 38039. 11368. 49407. -6678. 42789. 0. 0. 0. 0. 0. 6325. 3762. 10087. -5525. 4562. 0. 0. 0. 0. 0. 1979. 500. 2479. -686. 1793. 0. 0. 0. 0. 0. 0. 0. 0. 0. 0. Oper. Revenues Oper. Expenses Operation Maintenance Depreciation Amortization Taxes Other Than Income Other Expenses Income Taxes UTILITY COMM. ADJ. TEST UTILITY ADJ. TEST & CORRECT. YEAR PER ADJ. TO YEAR PER TO UTILITY ADJ. UTILITY TEST YEAR EXHIBIT BALANCE TEST YEAR Total Operating Expenses $46343. $15630. $61975. $-12889 $49084. Oper. Income -32337. 11793. -20544. -14534. -35078. Rate Base $ 825737. $ 194914. $ 155920. Rate of Return -5.17 pct. -16.54 pct. -22.50 pct. Oper. Sewer Operating Statement UTILITY COMM. ADJ. TEST UTILITY ADJ. TEST & CORRECT. YEAR PER ADJ. TO YEAR PER TO UTILITY ADJ. UTILITY TEST YEAR EXHIBIT BALANCE TEST YEAR Revenues $16137. $19413. $35550. $-19413. $16137. Oper. Expenses Operation 20462. 3208. 23670. -233. 23437. Maintenance 0. 0. 0. 0. 0. Depreciation 619. 9060. 9679. -5261. 4418. Amortization 0. 0. 0. 0. 0. Taxes Other Than Income 1747. 630. 2377. -485. 1892. Other Expenses 0. 0. 0. 0. 0. Income Taxes 0. 0. 0. 0. 0. Total Operating Expenses $22828. $12898. $35726. $-5979. $29747. Oper. Income $-6691. $6515. $-176. $-13434. $-13610. Rate Base $847996. $179388. $179360. Rate of Return -1.92 pct. -10. pct. -7.59 pct. Capitalization Debt $ 555,624. 60.96 percent Customer Deposits 6,195. .68 The capitalization of the Utility is as follows: Amount Percent to Total Common Equity 349,627. 38.36 $ 911,446. 100.00 percent Rate Design Both parties seek adoption of a base facility charge rate structure. This rate design provides a fixed charge to each customer served computed on that customer's share of fixed operating costs. The second element of the base facility charge represents the variable cost of water actually used. This rate design provides an equitable method of allocating service costs and has been adopted in virtually all recent water and sewer rate proceedings. The base facility charge should also be utilized where there is a temporary discontinuance of service. The Commission proposes a tariff revision incorporating a monthly standby charge equal to the base facility charge. Again, this method allocates the Utility's readiness to serve costs equitably among both active and temporarily inactive customers.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the petition of Sugar Mill Utility Company be granted in part, and that Petitioner be authorized to file new rates structured on the base facility charge concept, designed to generate gross water revenue of $41,429 annually, and gross sewer revenue of $35,550 annually, based on the number of customers served at the end of the test year. It is further RECOMMENDED that the Petitioner be permitted to retain interim revenues collected pursuant to Respondent's Order No. 9392, and that tie rate refunding bond requirement of said order be cancelled. DONE and ENTERED this 20th day of November, 1980, in Tallahassee, Leon County, Florida. R. T. CARPENTER, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675
The Issue Whether a permit to convert previously permitted percolation ponds to a land application, reclaimed water, spray and drip irrigation system should be granted to Respondent, Destin Water Users, Inc.
Findings Of Fact The City of Destin, Florida is located on a sandy strip of land which lies between the Gulf of Mexico to the south and the Choctawhatchee Bay to the north. This strip of land generally consists of rapidly percolating soil. Importantly, the strip of land has a breakline running through it which functions similar to the Continental Divide of North America in determining the direction of flow of any water located on either side of the divide. In this case, the breakline causes water to flow either north or south depending on which side of the breakline the water is located. DWU provides water and sewer treatment to residents and businesses located in the City of Destin, Florida. In order to provide its sewer service, DWU operates a waste water treatment plant along with several wastewater percolation ponds and wastewater spray and drip irrigation systems. Sometime in 1991, DWU entered into a lease agreement with a third party in which DWU would permit the third party to construct a golf course on a thirty acre site which currently contains four of DWU's percolation ponds. The four percolation ponds, which are the subject of this proceeding are located off U.S. Highway 98 in Destin, Florida. The northern boundary of the subject site is the southern boundary of the property in which Petitioners' have an interest. After construction of the golf course, DWU plans to continue to dispose of treated wastewater at the site by using a dual irrigation system consisting of a sprinkler system for spray irrigation and a series of underground plastic pipes for slow drip irrigation. DWU desired to create a dual use for the 30 acre site in order to generate more income from the property and still be able to dispose of wastewater on the property. In order to accomplish its goal, DWU was required to obtain a permit for the planned conversion of the percolation ponds to a land application, reclaimed water, spray and drip irrigation system. Because a spray and drip irrigation system would be put into place, DWU would be required to provide additional nutrient and BOD removal before water is put on the property. DWU clearly has the capability and experience required to provide additional nutrient and BOD removal. Also because a spray and drip irrigation system would be substituted for the percolation ponds the maximum quantity of effluent to be applied to the property would be reduced to 1.58 gallons per day under the proposed permit. The location of the percolation ponds and consequently the proposed spray and drip irrigation system is a superior site for effluent disposal because of the sandy soil, high elevation relative to the property surrounding the site, and the high permeability rate of the soil. The ponds have been in existence for approximately ten years, and have operated under a permit which allows a maximum average of 1.65 million gallons of wastewater a day to be applied to the ponds' 30 acre site. Indeed, when the ponds were originally permitted approximately ten years ago all of the various factors affecting flow rates were reduced to calculations to determine the amount of effluent which could safely be placed on the percolation ponds' site to insure complete and continual compliance with Department requirements. To date, all of the effluent currently being applied to the percolation ponds meets the Department's standards when it leaves the percolation pond property and there have not been any violations of the operating permit or any other statutes, or rules for the subject percolation ponds during the history of their operation. Similarly, the design calculations for the proposed conversion to the spray and drip irrigation system on the proposed golf course show that the water quality will continue to meet the Department's standards when it leaves the property. The pond site is surrounded by eight monitoring wells. These wells measure the level of any contaminants which may seep into the groundwater and also measure any changes in groundwater levels. The monitoring wells are a requirement of the percolation ponds' permit to insure compliance, with state water quality standards and to insure that the percolation ponds are not adversely affecting any off-site property. DWU has submitted quarterly reports of the readings from these monitoring wells, as required by law, to the Department. The wells will remain in place should the property be converted to a golf course with a spray and drip irrigation wastewater disposal system. A portion of the monitoring wells which encircle the percolation ponds lie along the northern boundary of the percolation ponds, which is the southern boundary of Petitioners' property. Petitioners submitted the testimony of two lay witnesses in an attempt to establish a causal relationship between the percolation ponds and flooding in and around the percolation pond area. Petitioners' witness, Bud Sharon, testified that he saw water on property located immediately to the south of DWU's percolation ponds which he had previously owned. The water Mr. Sharon saw was a continuous stream of water running down the side of his property. The stream of water developed after the ponds had been built. However, this witness was not qualified to render any expert opinions correlating the presence of any water on his property to any activities on DWU's percolation ponds. Most importantly, the evidence showed that the ponds were not in continuous use by DWU and at times were dry while Mr. Sharon's stream was continuous. This fact alone leads to the conclusion that the stream of water Mr. Sharon testified about was caused by factors not attributable to the percolation ponds. Additionally, analysis of the water found upon this witness' property was determined to be free from any contaminants and did not pose any health risks. Finally, the evidence demonstrated that with improved storm water control throughout the general area the stream has abated. Dale Whitney was also proffered by petitioners and presented lay testimony regarding his observations of water in the vicinity of the percolation ponds. This witness testified that he saw water emanating from the berm which forms the southern boundary of the DWU percolation ponds. However, it was established during cross-examination that this witness did not know whether the DWU percolation ponds were in use at the time or when they had previously been in use. This witness also admitted under cross-examination that he was not qualified through experience, training or otherwise to opine about the source of water which he observed or whether it was in any way attributable to the percolation ponds. Additionally, the evidence showed that Mr. Whitney's observations occurred shortly after a heavy rain and during a particularly wet time of the year. In short, the water seen by Mr. Whitney more than likely was the result of storm water control in the area with rainwater percolating out of the berm. The evidence was insufficient to show that effluent from the percolation ponds was leaking through the berm. On the other hand, the empirical data from the monitoring wells surrounding the percolation ponds demonstrates that the breakline for the area is north of the percolation ponds' site and is on Petitioners' property. The groundwater at the subject site flows in a southerly direction to the Gulf of Mexico. The data from the monitoring wells also indicates that the wastewater stays in the groundwater and does not emanate to the surface and cause flooding. Similarly, there was no competent substantial evidence that the subject site caused any flooding at any time to the Petitioners' property. Indeed the historical data gathered from the percolation ponds' site demonstrates that water on that site runs away from Petitioners' property. In short, Petitioners failed to offer any plausible basis for inferring that water on the percolation ponds' site could flow uphill over the breakline and cause either flooding or raised nutrient levels on Petitioners' property. 1/ Moreover, for the past ten years during which the percolation ponds have been in existence, all effluent contaminant levels have been well within compliance with all Department rules. Moreover, Petitioners presented no substantial credible evidence, either testimonial or documentary, concerning any water sample analyses in support of their allegations regarding water borne contaminants emanating from the percolation ponds onto their property; and no substantial credible evidence in any way materially controverting the engineering information submitted by DWU in its application or the determinations made by the Department in its analyses and approval of DWU's application. Clearly, the actual performance of the percolation ponds over the past ten years establishes that the site will perform in accordance with the Department's rules should the proposed conversion be allowed. Additionally, given DWU's full compliance with all of the Department's rules relative to the performance and function of the percolation ponds over the past ten years, as well as compliance on DWU's use of its currently existing reclaimed water reuse systems and the fact that the conversion proposal meets the Department's water quality and design criteria requirements for reclaimed water use, reasonable assurances that DWU will continue to comply with all the Department's rules should the proposed conversion be allowed have been given and the permit should be granted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Department of Environmental Regulation enter a final order issuing permit application number DC46-199969 to Destin Water Users, Inc. RECOMMENDED this 3rd day of August, 1992, at Tallahassee, Florida. DIANE CLEAVINGER, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of August, 1992.
