Findings Of Fact Although numerous customers were present, four of them testified at the hearing. No service quality problems were described with regard to either water or sewer service. Indeed, several of the customers described water quality as being good or excellent. The primary concern of the customers was the magnitude of the proposed rate increase, although a number of then opined that some increase in rates may he necessary. Expert engineering witnesses presented by both the Comission and the Petitioner established that the Utility has not been cited by any local, state or federal agency for health or environmentally related violations. No corrective orders are in force either by the Department of Environmental Regulation, the Lee County Health Department, or the Public Service Commission. The water and sewer treatment exceeds all governmental quality standards extant. In order to enhance service quality, the company has constructed a one million gallon ground storage tank and has installed an additional high-service pump. All parties agree that the cost of these improvements should be added to the Utility's rate base for purposes of this proceeding. Rate Base The Utility propounded evidence alleging its proper water rate base to be $1,872,470.00 and the appropriate sewer rate base to be $1,917,931.00. In arriving at the Utility's net investment in property used in the public service (rate base), it is necessary to calculate the amount of contributions-in-aid-of-construction, which serve to decrease the Utility's investment. Normally, where there has been a previous rate case for a utility in which the utility's net investment would have been determined by the Commission, the calculation of the utility investment in a current rate case is generally competed by adding additions to plant-in-service and subtracting additional contributions-in-aid-of construction in order to arrive at the current net "return yielding" investment. In the instant proceeding, however, Lehigh has elected to take issue with the amount of contributions-in-aid-of-construction (CIAC) previously determined by the Commission in the last rate case. In that last case (Docket No. R-73384-WS), the amount of CIAC was determined by multiplying water connections by $350.00 and sewer connections by $400.00. (See Exhibits 10, 19 and 20) The Utility in the prior proceeding agreed with that method of calculation and, further, two land sales contracts in evidence show that a charge of $750.00 for "sales price of water and sewer" to purchasers of houses in the service area has been imposed by the Utility or its predecessor, Lehigh Corporation (development company), when the Utility was merely a division of the development company. Notwithstanding that prior position, the Utility in this proceeding has elected to attempt to prove its level of CIAC ab initio and has conducted a "Special CIAC Study" in an attempt to show that the amount of contributions is now substantially less than the amount it and the Commission agreed to be applicable in the last rate proceeding and that which the Commission maintains is germane to this proceeding. The Utility thus is alleging that the appropriate charge per connection for CIAC is $650.00 for a water and sewer connection as opposed to the Commission's contention that the figure should be $750.00 per connection. Although a developer's agreement with an affiliated company shows a water and sewer connection charge of $650.00, the testimony of a senior officer of the Utility establishes that there were a total of 1,308 such contracts indicating a sales price for water and sewer service of $750.00. The Utility contends that only $650.00 of the $750.00 charge in question was actually transferred to the utility company and that, therefore, the $650.00 is the appropriate amount to attribute to CIAC. There is no question, however, that with regard to these 1,308 land sales contracts, that $750.00 was actually collected from the lot purchasers involved as the sales price of water and sewer service. Thus, the actual amount of CIAC paid by those 1,308 customers was $750.00 each, for a total of $981,000.00 for water and sever service and that figure represents in its entirety contributions-in-aid-of-construction. The contracts for which the customers involved paid $750.00 for water and sewer service, were entered into in the latter 1960's and early 1970's. Prior to that time, the same type of contracts carried an amount of $650.00 for water and sewer and following the period of time when the fee was $750.00, the line item in the contract was changed so that there was no longer any separate item providing for "sales price of water and sewer." The water and sewer charge was thereafter included in the amount charged for "sales price of improvements." Thus, contrary to the position of Lehigh, because of the segregation of the items in the purchase price shown in these land sales contracts into separate figures for price and for the sales price of water and sewer service, there have been shown to be definite, proven amounts of contributions-in-aid-of-construction supported by company records. The remaining portion of the contributions attributable to the Utility and not represented by these contracts were contributed in the sum of $650.00 per connection, with which figure both parties agree. An additional issue regarding contributions and the "Special CIAC Study" concerns contributions recorded as income from the inception of the Utility operation until November 30, 1964. As demonstrated by Exhibit 12, the amount of contributions recorded as income equals $756,656.00. The Utility's own "Special CIAC Study" refers to contributions recorded as income and Lehigh received sums of money for the availability of water and sewer service in the early 1960's which it treated as income. During the early 1960's when the Utility was regulated by Lee County, the Lee County regulatory board allowed it and other water and sewer utilities to receive and record service availability fees as revenue. This was done in order to enhance the apparent financial posture of the utilities and therefore improve their credit status as an aid to financing improvements. There is no question that those fees during this time period were paid into the Utility or its predecessor for water and sewer service availability and hence should properly be accounted for as CIAC. It might be argued, as the Utility does, that if Lehigh declared the contributions it received to be revenues with the Internal Revenue Service, then the benefit of those contributions or the amount of revenue they represent to the Utility would be reduced by the amount of the resulting income tax, and that if they are now determined to be contributions instead of revenue that an additional detriment to the Utility would occur by the reduction by that amount of its rate base and, therefore, its dollar return. It should be pointed out, however, that because of the tax advantages of the Utility's demonstrated operating loss carry-overs and investment tax credits, as well as accelerated depreciation, all of which tax advantages this Utility has been able to employ, no actual income tax has been paid on such "revenue." Further, Lehigh is depreciating this $756,655.00 in assets in its returns to the Internal Revenue Service and is thereby recovering the costs of the assets. If the Utility is permitted to treat them for regulatory rate-making purposes as revenue instead of CIAC, then the effect would be to maintain rate base and return at a correspondingly higher level than if these amounts are determined to be CIAC, which would reduce rate base and thereby the net investment upon which a return could be earned for regulatory purposes. Thus, the appropriate amount of contributions-in-aid-of-construction for the water system as of the closing date of March 31, 1979, equals $1,057,000.00. The amount of contributions-in-aid-of-construction attributable to the sewer system as of that date equals $1,389,977.00. (Net of amortization). The detailed calculations and adjustments supportive of the above findings with regard to rate base are attached hereto and incorporated by reference herein as Schedules I, II and II. The first issue to be concerned with in calculating the operating expense basis for the revenue requirement is the cost of the above-referenced CIAC study. The Utility prepared this special CIAC study because of its fear that, in view of the Commission's decision in Tamarac Utilities, Inc. v. Hawkins, 354 So.2d 437, that it would not otherwise be able to meet its burden of proof on the issue of contributions and therefore would suffer a dismissal of the petition. In the Tamarac case, the Public Service Commission auditors encountered numerous problems resulting from a lack of primary data supporting the amount of contributions and the Commission issued an order allowing the Utility to provide clarifying evidence. When the Utility failed to satisfactorily perform this task, it ultimately suffered a dismissal of its petition and a refund of monies collected under interim rates. In this case, however, it has been demonstrated that there is no dearth of primary data or books and record supportive of the level of CIAC; nor has an order been issued requiring this Utility to provide such clarification or a "study" of its CIAC. Moreover, in the case of this utility, a previous rate case has been finalized wherein it was found by the Commission that there was a definite, specific level of contributions which were also consistent with those alleged by the petitioner in that proceeding. Thus, there is adequate primary data upon which a determination of CIAC can be computed in this proceeding without resort to a "Special CIAC Study" and the additional increment of rate case expense it represents. It should be further noted that even if the instant case involved a "Tamarac situation" where financial books and records were not adequate to properly document contributions-in-aid-of-construction that, in that event, if a CIAC study were made, then the proper rate-making treatment would be to amortize tile cost of that study over several years, since it is a large, nonrecurring expense in the Utility's operation, as opposed to allowing the entire expense to be written off (and charged to the customers through rates) based upon one year. The Utility has alleged that certain additional pro-forma adjustments to various expense items should be accomplished in order to arrive at the appropriate revenue which will support an adequate rate of return. Thus, the increased costs alleged for purchases of lime, chlorine and gasoline, depicted in the attached schedules incorporated herein, were undisputed, agreed to, are reasonable and therefore should be accepted. The alleged pro-forma cost for payroll is a mere estimate and not supported by competent, substantial evidence. Additionally, it was established by the Commission's accounting witness that certain rate case expenses arose from a prior rate case and therefore should be removed from consideration in arriving at revenue requirements for purposes of this proceeding. This adjustment was not contested, nor were similar adjustments to remove depreciation expense on construction work in progress, to remove depreciation expense on the contributed property, to remove unsupported property taxes, and to remove property tax as an expense and depreciation expense attributable to non-used and useful portions of the Utility's invested plant. None of these adjustments were disputed by the Utility. They are appropriate and reasonable and should be adopted. The Utility has also requested allowance of a $55.00 annual fire hydrant charge and a $10.00 charge for the initial commencement of service. The Utility submitted evidence (Exhibits 6 and 7) supportive of the actual number of water and sewer connections made during the test years as well as the costs upon which the initial commencement of service charge requested is based. The Commission did not dispute, therefore, the requested $10.00 charge for initial commencement of service and, inasmuch as the current $25.00 annual fire hydrant charge was established in the late 1960's and was shown to be no longer sufficient to cover costs, the Commission also did not dispute the increase in the annual fire hydrant charge from $25.00 to $55.00, which accordingly should be increased. Cost of Capital The Utility has requested a rate of return of 11.76 percent which includes an attrition allowance of .78 percent. There is no dispute as to the debt-equity ratios in the capital structure of the Utility. The common stock equity represents approximately 49.57 percent of the total capitalization. Long-term debt makes up 35.96 percent of capital and cost-free capital items make up 14.47 percent. The cost rate of the equity in the capital structure was established by the Commission's financial expert witness to be 14.5 percent or the midpoint in a range for companies and utility companies possessing a similar degree of risk to equity investors of 13.5 percent to 15.5 percent. The 14.5 percent cost of equity figure represents an accurate assessment of the opportunity costs of equity capital for such a company. The imbedded cost of long-term debt is 8.3 percent, which is a very advantageous rate to be enjoyed by such a company in today's money market and reflects a high degree of management efficiency on the part of the operation and management personnel of the petitioner. These two items, when combined with a zero cost factor shown to be appropriate for the cost-free capital items, results in a calculated rate of return of 10.35 percent, which does not take into account an attrition allowance due to inflation. The Utility advocated an attrition allowance equal to 10 percent of the weighted cost of equity capital to help offset the erosion in earnings caused by inflation. There can be little doubt that attrition of earnings due to significant inflation in costs of operation experienced by such companies is a very real factor. However, this record contains no substantial and competent evidence to demonstrate whether the utility wants coverage of capital attrition or attrition of its ability to cover operation and maintenance expenses nor which could justify the alleged 10 percent factor or any other quantification of attrition of earnings which may be experienced. Thus in the absence of a definitive establishment of the appropriate attrition factor, a cost of equity and a corresponding return on rate base in the midpoint of the range found above is appropriate. Thus, the proper return on rate base for this Utility has been shown to be 10.35 percent, which is within the range 9.85 percent to 10.84 percent. A summary of the cost of capital structure and weighted cost of capital calculation is depicted as follows: CALENDAR YEAR 1979 COMMON STOCK EQUITY RATIO 49.57 COST RATE 14.5 WEIGHTED COST 7.19 LONG TERM DEBT 35.96 8.8 3.16 COST FREE 14.47 -0- -0- 10.35 Floor CSE at 13.5 9.85 Ceiling CSE at 15.5 10.34 In summary, the required operating revenue for the Utility's water system should be $658,451.00 which results in an operating income of $211,407.00. The sewer system requires an annual, gross operating revenue of $475,629.00 in order to obtain a return or operating income of $130,017.00. The operating expenses and adjustments supportive of these figures are depicted in more detail in Schedules IV, V and VI attached hereto and incorporated by reference herein. The sewer revenue requirement found herein is less than the interim revenues authorized for sewer service, thus a refund is in order.
Recommendation In consideration of the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the application of Lehigh Utilities, Inc. be granted in part, and that the Utility be authorized to receive a gross annual water revenue of $658,451.00 and gross annual sewer revenue of $475,629.00 to be achieved by rates filed with and approved by the Public Service Commission. It is further RECOMMENDED that the Utility be required to file revised tariff pages containing rates designed to produce annual revenues in the above amounts. It is further RECOMMENDED that the Utility be required to refund the interim sewer revenues previously authorized in this proceeding which exceed those sewer revenues determined to be appropriate herein. It is further RECOMMENDED that the above refunds be accomplished within ninety (90) days. This Recommended Order entered this 13th day of October, 1980, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of October, 1980. COPIES FURNISHED: R. M. C. Rose, Esquire 1020 East Lafayette Street Tallahassee, Florida 32301 William H. Harrold, Esquire 101 East Gaines Street Tallahassee, Florida 32301
The Issue The issues to be determined are whether the water service provided by Lands, Inc. of Rhinelander meets all pertinent quality standards of the Public Service Commission and the Department of Environmental Regulation, the establishment of an appropriate rate structure for the utility, and a determination of the amount of revenue which will be lost, reasonable and compensatory, but not unfairly discriminatory, pursuant to Section 367.081 of the Florida Statutes.
Findings Of Fact Quality of Service Two customers of the utility, a representative of the utility, as well as a Public Service Commission engineer, testified regarding the quality of water service provided. Water quality meets all pertinent regulatory standards; however, the public witnesses have experienced problems with low pressure during peak usage periods of the day. This intermittent problem with insufficient water pressure will soon be alleviated by the installation and operation of an additional supply well. Thus, the company's water production, treatment and delivery efficiency complies with all regulatory standards and is found to be satisfactory. Rate Base The utility alleged a valuation of $15,552.00 for its plant in service "used and useful" in serving the customers. Adjustments to that figure to allow for accumulated depreciation, contributions-in-aid-of-construction, accumulated depreciation on contributions-in-aid-of-construction, a working capital allowance, as well as an allowance for income tax lag established the correct rate base for the water system, upon which a rate of return may be earned, to be $13,143.00. The adjustments supportive of that figure appear in more detail in Schedule I attached hereto and incorporated by reference herein. The utility ultimately agreed with that figure for rate base. It is appropriate and should be accepted. Cost of Capital Representatives from the Public Service Commission presented evidence on the issue of cost of capital. The utility presented no independent evidence on this issue but agreed with the position espoused by the Public Service Commission. Lands, Inc. of Rhinelander is the parent company of which the utility is a division, and consequently the capital structure of the parent company was appropriately employed. The capitalization consists of 56.58 percent debt and 43.42 percent equity, with a debt cost rate of 7 percent. The cost rate or appropriate return ascribed to the equity portion of the capital structure is 14.75 percent. Employment of this capital structure then results in a calculated weighted cost of capital or return on rate base of 10.36 percent. No evidence was offered in opposition to this demonstrated capital structure nor the ultimate rate of return on rate base derived therefrom. Thus, the use of this capital structure in this proceeding and the resultant return on the utility's rate base is appropriate and should be allowed. Revenue Requirement Schedule II, attached hereto and incorporated by reference herein, details the various operation and maintenance expenses, such as chlorine, electric power purchased, salaries and administrative expenses and others, as well as depreciation on invested plant, taxes other than income, and income taxes, for a total actual operating expense of $5,014.00. In order to achieve the appropriate 10.36 percent rate of return on rate base, a net operating income of $1,362.00 is required. Accordingly, the sum of the two figures demonstrates that a total annual operating revenue for the utility of $6,376.00 is necessary. This revenue figure represents an increase of $3,571.00 over the test year revenue actually received by the utility ($27,805.00), and which resulted in an operating loss posture for that test year. The above figures and calculations were essentially uncontroverted by the utility. Rate Structure At the time of the initial petition in this cause, the customers of the utility were unmetered and were charged a flat rate for water service. The Public Service Commission thereafter entered Order No. 8455 on August 29, 1979, ordering installation of water meters and implementation of a base facility charge rate design. In order to allow the Commission to obtain data on metered rates over a twelve-month time span, the utility also agreed to waive the eight- month time period during which a decision should be entered in the cause pursuant to Chapter 367.081(5), Florida Statutes. The meters were installed on March 1, 1979, thus the utility has in excess of a year's experience operating under the interim and metered rates. The rates thus put into effect for the test period produced annual revenues at the rate of $2,805.85. During this test period, the utility supplied water to an average of 46 single family residential customers and all customers are metered. Approximately 28 percent of all customers billed are seasonal, so that a substantial portion of their bills are for zero consumption. The interim rates were structured using the base facility charge (BFC) rate design. The rationale for this type of rate design is to establish a monthly charge whose foundation is based on the actual fixed cost of providing service to the residential customer. Such a charge provides coverage for expenses such as depreciation, an allocated portion of billing and collecting expense, property taxes, debt interest, maintenance of mains and services, etc. The amount of the charge is determined by an "equivalent residential connection" (ERC) formula, using a standard five-eights inch by three-quarter inch meter as the basis. There is no charge for gallonage consumed included in the framework of this base charge. The second portion of this type of rate structure is designed to establish a charge for the pumping, treating and delivery of the water to the customer. Thus, this additional charge would cover associated costs such as pumping expenses, treatment expenses, the unallocated portion of billing and collecting expenses, meter reading expenses, and other varying costs. The basic reason for such a charge is that each customer will thus pay his prorata share of the related facility cost necessary to provide service and then would pay for only the gallons actually consumed under the gallonage portion of the charge. This design helps alleviate the discriminatory charge problem associated with part-time residents, since such residents are required to pay their prorated share of the cost of providing service. Such an approach is an important factor in this utility's rate design since a substantial number of the customers are seasonal or part-time residents. The base facility charge rate design should thus be continued in the permanent rates. The utility is presently collecting a $30.00 per year "standing fee" for vacant lots. The Commission has in the past allowed the utility to collect this type of fee up to the amount of the actual meter installation charge. Thus, when a customer taps into the system, the meter installation charge is the difference between the charge and the fees previously collected for the vacant lot. The utility has requested increased meter installation charges. The present meter installation fees include the cost of the meter, the meter box, the labor and the cost of tapping into the water main. Such service availability charges should be divided into a meter installation fee and a tap fee. The meter installation fee would be in a fixed dollar amount representing the average cost incurred by the utility to install the meter, meter box, and the associated labor. (Rule 25-10(17), Florida Administrative Code.) The tap fee would then be the actual cost to the utility of tapping into the water main and extending the service pipeline from the main to the customer's installation. (Rule 25-10(22), Florida Administrative Code.) The Public Service Commission has agreed to the utility's request for the increased service availability charges and they should be allowed, separated into separate charges for meter installation and tapping fees.
Recommendation Accordingly, in consideration of the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the application of Lands, Inc. of Rhinelander, Route 1, Box 425-B1, Floral City, Florida 32636, be GRANTED and that that utility be authorized to receive gross annual revenues for its water service of $6,376.00, to be achieved by rates filed with and approved by the Public Service Commission. It is further RECOMMENDED: That the utility be required to adopt a base facility charge concept of rate design for its water rates and to make concomitant changes in its tariff. It is further RECOMMENDED: That service availability charges be increased and separated into two portions, a meter installation fee and a tap fee, with the meter installation fee to be a fixed amount representing the average cost incurred by the utility to install meters, meter boxes and attendant labor. The tap fee should he the actual cost to the utility of tapping into the water main in extending the service line from the main to the customer's residential installation. DONE and ENTERED this 3rd day of September, 1980, in Tallahassee, Florida. P. MICHAEL RUFF, 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 September, 1980. COPIES FURNISHED: C. J. Parker Route 1, Box 425-B1 Floral City, Florida 32636 Arthur R. Shell, Jr., Esquire Public Service Commission Legal Department 101 East Gaines Street Tallahassee, Florida 32304
The Issue Whether the alleged violation exists and, if so, whether orders for corrective action should be made final against respondents or either of them?
Findings Of Fact On October 17, 1984, Sunshine acquired from R & F what had been a filling station at the corner of U.S. Highway 98 and Laurie Avenue in Bay County, Florida. The old gas pumps had been moved some time before October 17, 1984. Only loose pipe connections leading to the underground storage tanks remained. The deed K & F executed in favor of Sunshine made no mention of these tanks. Respondent's Exhibit No. 1. Sunshine later contracted with Jake Walters, who began construction the following April to convert the site into a convenience store with gas pumps. On January 25, 1985, long before bringing any petroleum product onto the property, Jake Walters' construction foreman, John Kenneth Barnes, began taking up the two-foot slab of concrete that overlay K & F's underground storage tanks. The ground underneath the concrete smelled of gasoline. James Guris, who was overseeing the job for Sunshine, ordered work stopped and told Harold Millis, Sunshine's vice-president for real estate and construction, about the feel and smell of the soil. When Mr. Millis learned of the situation, he decided that DER should be notified. Because by then it was too late in the day to reach DER, Jim Guris called DER's office in Panama City on the following Monday, January 28, 1985. He spoke to DER's Grady Swann, who told him to file a discharge notification form with DER. Mr. Swann said removal of the underground tanks could go forward. Before removing the storage tanks, Mr. Barnes, or somebody at his direction, measured the depth of the tanks with a stick to determine how deep to dig. In this way two or three inches of gasoline were discovered in the bottom of each tank. Even though workmen secured a pump and pumped gasoline from each underground tank (into a 500-gallon tank mounted on a truck), they were unable to pump the tanks completely dry. In each of the three underground tanks, about a half inch of gasoline remained. With a crane and lifting rigs, they raised the tanks in an upright position, without spilling any gasoline. Except inside where the half inch of gasoline stood, the tanks and appurtenant pipes and tubing were dry. Mr. Guris ordered pressure tests done on the tanks, each a cylinder some five feet in diameter. Two of the tanks passed this test, but the third failed. That tank had a hole approximately one quarter inch in diameter a little left of center, about half way up one end of the tank. Groundwater on the site came within four and a half or five feet of the surface in early February of 1985. Because it contains less than 10,000 parts per million total dissolved solids, it is properly classified as G-II. A marine clay separates the surficial aquifer from the Floridan, but the surficial aquifer recharges the Floridan. Northeast of where the storage tanks were dug up and 300 to 350 feet way a two-inch well 390 feet deep supplies water from the Floridan aquifer to three households. Nobody has detected any odor or taste of gasoline in water from those wells. Grady Swann took soil samples on site on February 8 and again on February 26, 1985. On his first visit, he noticed no sheen on the surface of the water standing in the area excavated around the old tanks, smelled no odor emanating from the standing water and did not take a sample. On his second visit, he did notice evidence of groundwater contamination and took water as well as soil samples. Mr. Swann returned on March 11, 1986, with Kenneth L. Busen and Mike Wilson of DER's Operation Response Team and used a power augur to put in temporary wells from which additional water samples were taken. These tests confirmed suspicions that the old gas tanks had leaked and revealed groundwater contamination attributable to gasoline including, in some samples, more than 1,000 times the allowable concentration of benzene. Gasoline seeping through soil leaves residual hydrocarbons which contaminate percolating rain or other groundwater moving through the same soil. Petitioner's Exhibit No. 6 depicts the probable initial configuration of the plume of hydrocarbons in the vicinity of the old tanks. Contamination is moving down gradient to the northeast, spreading out but growing more dilute. The steps called for by the proposed corrective orders are a reasonable way to mitigate environmental damage.
Findings Of Fact Service At the end of the test year (calendar year 1978), the utility provided water service to approximately 203 customers located in the Country Estates Subdivision in Holiday, Pasco County, Florida. The system was connected to the Pasco Water Authority (PWA) in June, 1977, and approximately 80 percent of the water sold to its customers is derived from that source. The utility has no further growth potential inasmuch as it is presently operating at full capacity. Two customers testified at the hearing. One was dissatisfied with the requirement that Valmont be connected to the PWA, and complained of a sulfur- type odor emanating from the system. The other complained of excess water pressure and salt water intrusion in the water, both of which began after the connection of the system to the PWA pipeline. Notwithstanding the above complaints, the utility is now meeting all State Standards for water quality, quantity and pressure. The few complaints previously lodged with regulatory agencies have been expeditiously resolved. Rate Base The utility has proposed an average water rate base in the amount of $20,295 (Exhibit No. 6). This figure is derived by taking the balance in plant in service as reflected on the books of the utility, subtracting accumulated depreciation and contributions in aid of construction, and adding a working capital allowance. The following schedule portrays the appropriate rate base to be used herein. Valmont, Inc. Average Water Rate Base Year Ending December 31, 1978 Utility Plant in Service $42,385 Accumulated Depreciation (11,534) CIAC (Net of amortization) (14,215) Working Capital Allowance 3,767 Rate Base $20,295 Operating Income The utility reflects a per books operating loss for the test year of $3,156 (Exhibit No. 7). After including changes in the level of various expenses and the additional revenues sought herein ($10,305), the utility's proposed adjusted operating income is $2,638. The Commission agrees with the computations presented by the utility, and this amount should be accepted. The following schedule depicts the pro forma operating income of the utility for calendar year 1978. Valmont, Inc. Operating Income Year Ended December 31, 1978 Operating Revenues $34,911 Operating Expenses: Operation 29,397 Maintenance 736 Depreciation 516 Misc. Taxes 1,084 Income Taxes 540 Total Expenses 32,283 Operating Income $ 2,638 Cost of Capital The capital structure of the utility is composed of 100 percent common equity. The Commission advocates a cost rate of 13 percent be assigned to equity based upon a regression analysis of interest rates since 1946. The utility agrees this is an appropriate cost of capital, and it should be used in determining the revenue requirements of the utility. Revenue Requirements Based upon a 13 percent overall cost of capital, the utility should be entitled to increase its water revenues by $10,305 on an annual basis in order to achieve that return. Rate Design The utility presently has three customer classifications for water service: residential, general service and commercial. However, it has no customers receiving service under the general service category. The billing structure for each of the three classifications is based upon a minimum charge, depending on the size of the motor, and an excess charge for each 1000 gallons used thereafter. The base facilities charge advocated by the Commission is superior to the rate design presently used. Under this type of structure, a minimum charge will be assessed to recover the fixed or base costs of providing service, such as depreciation, taxes, insurance and a portion of billing and collecting expenses. Thereafter, a variable charge will be made for the gallons actually consumed. Because this type of rate structure offers greater control to the customer as to the amount of his bill, and allocates costs in a more equitable manner, it should be adopted.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent Valmont, Inc. be authorized to file new tariffs to be approved by the Public Service Commission that will generate $10,305 in additional annual gross revenues for its water operations. It is further RECOMMENDED that the utility file appropriate tariff sheets in conformity with the Rate Design portion of this Order. This Recommended Order entered on this 9th day of December, 1980, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of December, 1980. COPIES FURNISHED: Marta M. Crowley, Esquire 101 East Gaines Street Tallahassee, Florida 32301 William E. Sundstrom, Esquire Suite 103, 1020 East Lafayette Street Tallahassee, Florida 32301
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.
Findings Of Fact Petitioner provides electric, gas and water utility service at various Florida locations. During the 1979 test year, its Fernandina Beach Water Division served an average of 2,500 residential customers, 523 general service customers and nine private fire line customers. In addition, it maintained 210 fire hydrants for the City of Fernandina Beach. Service The Utility is providing satisfactory water service. There were no service complaints presented at the public hearing, nor were there any citations or corrective orders outstanding. Rate Base The Utility seeks recognition of a $1,332,178 rate base. This amount includes $82,128 for an office building completed in the last month of the test year, a $7,600 chlorinator building completed after the test year (March, 1980) , and a pumphouse still under construction at an estimated completed cost of $106,000. Neither the amounts nor their completion dates are in dispute. However, the Commission seeks to utilize a 13-month average year rate base which would result in the exclusion of all the above facilities except for the office building investment during the final month of the test year. Both parties cite Citizens of Florida v. Hawkins, 356 So.2d 254 (Fla. 1978) in support of their positions. Although the Court discusses the various methods of computing a utility rate base, it concludes that unusual or extraordinary growth is a prerequisite to use of a year end rate base. The Utility did not demonstrate unusual or extraordinary growth. Rather, customer growth during the test year was only about two percent, mandating use of an average rate base. The Utility suggests that construction of the chlorinator was required by the federal government under the provisions of the Safe Drinking Water Act. If so, the Utility would be permitted to include this Investment in its rate base. 1/ However, the Utility was in compliance with the Safe Drinking Water Act prior to construction of the pumphouse and made no showing that it was required to undertake this project by government authority. Capitalization of interest on the funds used in construction of new facilities should be authorized. However, this amount will not be subject to inclusion in the rate base until the facility itself is included. The Utility plant was shown to be 100 percent used and useful in the public service. In view of this, and the adjustments discussed above, the Utility's average rate base for the test year is $1,103,201. See Schedule 1 for detail. Operating Revenues The Utility seeks a test year revenue authorization of $581,037 based on expenses of $456,184 and a 9.39 percent return on its proposed rate base. It seeks to include an expense item of $2,400 for tank maintenance, basing this amount on the five-year amortization of a projected $12,000 expenditure. Although this procedure is proper, since tank maintenance is periodically required, the $12,000 is the anticipated cost of future maintenance rather than an actual cost. Therefore, this figure must be adjusted to one-fifth of the last actual maintenance cost, or $1,105. Prior to December, 1979, when its office building was completed, the Utility rented the required space. Since the new building was not recognized for rate making purposes until the final month of the test year, it is proper to include the rent expense actually involved during the preceding 11 months. Therefore, an upward adjustment in expenses of $1,524 is required. Authorized expenses should also include $45,281 proposed by the Utility to meet known increases in the cost of purchased electrical power. The limitation on test year expenses is not the same as that on test year investment. Rather, Chapter 367, Florida Statutes, specifically provides for recognition of outside test year increases in electrical power costs. See Section 367.081(4)(b), Florida Statutes (1980). The Utility supported its proposed rate case expense of $5,100 by late filed exhibit. Neither the amount nor the proposed three-year amortization period were opposed by the Commission and are appropriately included herein. In view of the above findings and a 9.10 percent return on investment (discussed below) , the Utility is entitled to revise its rates to produce annual revenue of $536,970. See Schedule 2 for detail. Cost of Capital The parties agreed that 15 percent is an appropriate return on equity investment. This amount, when weighed against the current cost of debt, supports an overall 9.10 percent rate of return. Rate Structure The parties propose adoption of a base facility charge rate structure. This rate design includes a fixed charge to each customer served based 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 structure provides an equitable method of allocating service costs and is consistent with statutory requirements that rates be just and nondiscriminatory. See Section 307.081(2), Florida Statutes (1980). The Utility proposes to increase its fire hydrant charge from $8 to $12 monthly and to include this amount in its regular service rates to all customers rather than as a separate charge to the City of Fernandina Beach. The amount of the increase is consistent with overall revenue needs and was not opposed by the Commission. The procedure to include fire hydrant charges in customer charges was requested by the City Commission of Fernandina Beach and would not discriminate against any customer or group of customers, since all benefit from the fire protection represented by these charges.
Recommendation Based on the foregoing Findings of Fact and Conclusions A, of Law, it is RECOMMENDED that Florida Public Utilities Company be authorized to file revised rates structured on the base facility charge concept, designed to generate annual gross revenue of $536,970 based on the average number of customers served during the test year. DONE and ENTERED this 18th day of December, 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 Respondent illegally and without permit removed a drain field and now has an unapproved septic system on a structure intended for human occupancy, and if so, what is the appropriate correction and fine.
Findings Of Fact On June 17, 2009, Department of Health employee Stephanie Daughtery was driving down Lake Erie Road in Groveland, Florida, past Respondent’s residence located at 6345 Lake Erie Road, when she noticed the sand mound that had held the septic system drain field for Respondent’s home was no longer there. Ms. Daughtery was familiar with the mound that had been located on Respondent’s land because, in her capacity as Petitioner’s employee, she had previously conducted a stabilization check on the mound. A sand mound for Respondent’s drain field was required under applicable law and regulations because, during the rainy season, the water table in the area of Respondent’s home was ten inches “below grade,” which means that the water level was just ten inches below ground level during the rainy season. Therefore, a sand mound was necessary for proper filtration of the raw sewage (effluent) entering the septic system. A septic system without a proper drain field will allow effluent to escape and constitute a public health risk. Upon returning to her office at the Lake County Health Department that same afternoon, Ms. Daughtery told her supervisor, Elias Christ, of her observation. One of Respondent’s neighbors had already reported the situation involving the removal of Respondent’s drain field to Mr. Christ. The next day, one of Petitioner’s inspectors, Daniel McColley, went out to Respondent’s property and met with Respondent. Respondent told the inspector that the mound which had been removed was just a pile of dirt. Contrary to Respondent’s assertion, the mound that was removed had been part of the drain field for Respondent’s septic system. Respondent was responsible for the removal of the mound and drain field. On June 22, 2009, Petitioner sent, by certified mail to Respondent, an Official Notice to Abate a Sanitary Nuisance, which advised: On 06/18/2009 an onsite investigation disclosed that an approved drain field had been removed and either not replaced or replaced without a permit, which violates Chapter 386.041(1)(a)(b)(e)(f) of Florida Statutes. You are hereby directed to contact this Department within 24 hours of this notice to discuss corrective action. A repair permit must be applied for and a system installed with Department approval. Approximately a week to ten business days later, after Respondent had failed to apply for a permit, Petitioner again sent an inspector to inspect Respondent’s septic system and found it to be still in nuisance condition, with no drain field. In addition to being in an area with water just ten inches below grade during rainy season, Respondent’s property is adjacent to a lake. Since the sand mound was removed, there is no proper drain field and Respondent’s septic system is a sanitary nuisance. As explained by Mr. Christ at the administrative hearing, Respondent’s septic system without a drain field is a threat to public health: Because we have untreated sewage that we have no idea where its going to. He has - - he also has a lake behind his property, so we don’t know if he’s somehow plumbed it into dumping into the lake or if it’s just dumping out on the ground. Respondent told one or more of Petitioner’s employees that he had connected his septic system to an old septic tank in an adjacent house on the property. He did not, however, obtain a permit to do so, and the old system was inadequate, without renovation, to handle the additional effluent. In addition, although Respondent further claimed that a septic contractor had pumped out his old system, Respondent would not give the name of the alleged contractor. On July 6, 2009, Petitioner sent, by certified and regular mail, a “Notice of Intended Action” to Respondent which advised: You have not yet come to apply for a permit to replace this system you removed. Failure to do so will result in legal action and possible revocation of your CO and further Lake County Code Enforcement Action. Please contact this office within 24 hours of receipt of this notice to discuss a corrective action plan at (352) 253-6130 or FAX (352) 253-6133. If this sanitary nuisance is not abated and a proper septic tank repair permit applied for and work is completed in a satisfactory manor, inspected by this department, you may be subject to fines up to $500.00 per day authorized therein accordance with the authority outlined in Section 381.0065(5) Florida Statutes(F.S.). If you have further questions please call Elias Christ or Russ Melling at 352-253-6130. Respondent came into the Lake County Health Department on July 22, 2009, and was given an application and a checklist for permitting the repair of his septic system. During that visit, Respondent told Mr. Christ that the cows had destroyed the mound. He also told Mr. Christ that he had been trying to sell his house and that the mound had been an eye-sore that was interfering with the sale. Later, in a telephone conversation with Mr. Christ, Respondent advised that he really did not have the money to replace the drain field, but he would be happy to have it replaced if the county would pay for it. By September 25, 2009, Respondent still had not applied for a permit or repaired his septic system. On September 25, 2009, Petitioner issued a Citation for Violation Onsite Sewage Program/Sanitary Nuisance to Respondent (Citation). Part 1 of the Citation alleges that Respondent is in violation of Section 386.041(a), (e), and (f), Florida Statutes, and Florida Administrative Code Rules 64E- 6.001(2) and 64E-6003(1), on the grounds that Respondent “[h]as illegally and without any permits removed his drain field and now [has] an unapproved system on a structure intended for human occupancy.” The Citation further provides: The person named in this citation is hereby ordered to correct the violation(s) listed in Part 1 within 10 days [from] the service of this citation. The person identified in this citation is hereby directed to pay a fine in the amount of $500 plus $100 per [day] additionally from receipt of this citation until the drain field is repaired legally for the violations listed in Part 1. Payment must be made to the LAKE County Health Department within 21 days of the receipt of this citation, or you may choose the option listed on Part 9. Part 9 of the Citation provides for a request for an administrative hearing and warned Respondent that if he requested a hearing and then failed to appear to contest the citation, he would waive the right to contest the citation. By his signature dated October 1, 2009, in Part 9 of the Citation, Respondent requested an administrative hearing. This administrative hearing followed. Respondent failed to attend or present any evidence at the final hearing. Prior to the hearing, Respondent indicated to Petitioner’s counsel that he was not financially able to put the drain field back the way it was and that he did not see the point in appearing at the administrative hearing. On the other hand, the evidence presented by Petitioner at the administrative hearing, as outlined in the findings above, clearly and convincingly demonstrated that Respondent removed a mound and drain field required by applicable law and regulations for his septic system, and that Respondent’s septic system has not been repaired as required to comply with the law.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health enter a Final Order finding that Respondent illegally and without permit removed a drain field and now has an unapproved septic system on a structure intended for human occupancy, and ordering Respondent to pay a fine in the amount of $500.00 for deposit into the county health department trust fund, obtain a septic system repair permit, and effect repairs on his septic system to correct the violations of Section 386.041(a)(e)(f), Florida Statutes, and Florida Administrative Code Rules 64E-6.001(2) and 64E-6.003(1), within forty-five (45) days from the Final Order. DONE AND ENTERED this 2nd day of April, 2010, in Tallahassee, Leon County, Florida. S JAMES H. PETERSON, III Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of April, 2010.
The Issue The issues in this case are whether Petitioner tampered with her electricity meter and, if so, whether Respondent has established a reasonable estimate of the un-metered electricity consumed, for which Petitioner could be retroactively billed.
Findings Of Fact Respondent Florida Power & Light Company ("FPL") is a utility that sells electricity to residential and commercial customers in Florida; as such, FPL is subject to the PSC's regulatory jurisdiction. FPL measures the amount of electricity used by its residential customers in kilowatt-hours ("kWhs"). A customer's cumulative electricity usage is recorded on a meter. Each month, a meter reader looks at a customer's meter and records the current cumulative total of kWhs consumed. From the current cumulative total of kWhs is subtracted the previous month's cumulative total, which equation produces the number of kWhs used during the preceding month, for which amount the customer is then billed. For example, if a meter read on May 5, 2005, shows a current cumulative total of 6950 kWhs, and if the same meter, when read on April 5, 2005, had shown 5750 kWhs, then the customer's usage, for the 30-day period from April 5, 2005, to May 5, 2005, is 1200 kWhs. The customer will then be sent a bill for May 2005 reflecting the cost of 1200 kWhs of electricity. Petitioner Leticia Callard ("Callard") is one of FPL's residential customers. Years before the present dispute arose, FPL installed meter #5C35633 at the house in Miami, Florida, where Callard resides. Meter #5C35633 has five dials on its face that display kWhs. The dials are protected under a glass canopy, which is sealed to the meter to guard the meter's integrity. The dials cannot be accessed without breaking the seal. On July 5, 2001, a meter reader conducted a regularly scheduled reading, for billing purposes, of meter #5C35633. (A customer's monthly invoice from FPL tells which day the meter reader will next look at the customer's meter.) He recorded a cumulative total of 5361 kWhs. This was a red flag because the previous reading, taken on June 5, 2001, had been 5733 kWhs. Thus, the meter appeared to have run backwards. This is known as a "regressive reading." A regressive reading is suspicious because the dials on a properly functioning meter should move in only one direction——forward. When a regressive reading is taken, FPL investigates further to determine if meter tampering has occurred. Accordingly, FPL sent an investigator named Chase Vessels to the Callard residence to conduct an unscheduled reading of meter #5C35633. (An unscheduled reading——that is, one taken between the normal monthly meter-read dates——is called a "check reading." Check readings are useful in investigating possible meter tampering because they occur without advance warning to the customer.) Mr. Vessels read the meter on July 6, 2001, which then showed 5497 kWhs. This, too, was a regressive reading relative to that taken on June 5, 2001. Mr. Vessels discovered that the seal on meter #5C35633 was broken and had been "rigged" to appear intact. Mr. Vessels also noticed that there were smudges on the face of the meter around the dials, suggesting that someone might have been manipulating the dials. Another check reading was taken on July 16, 2001, at which time Callard's meter showed 6515 cumulative kWhs. Thereafter, Mr. Vessels attempted to make additional check readings but was unable to access the meter without alerting the customer. He finally saw the meter again on June 27, 2002. On that date, Mr. Vessels again noted the rigged seal and the smudges on the meter's face, near the dials. Believing that tampering likely had taken place, FPL directed Edward List to remove meter #5C35633 and replace it with another one, which he did on July 24, 2002. Mr. List also observed the rigged seal and the smudges around the dials on meter #5C35633. When he removed the meter, Mr. List placed a sticker on the canopy, which he initialed, identifying the date of removal and the location from which the meter was taken. Mr. List then sent meter #5C35633 back to FPL for testing. At FPL's Meter Technology Center, James Bartlett inspected and tested meter #5C35633. He confirmed that the seal was broken, and that the meter's face was scratched and smudged. Further, when Mr. Bartlett tested the meter, he found that it was "off scale," meaning that it was not measuring kWhs as accurately as it should have been. Based on the above facts, which are established by credible and persuasive evidence in the record, the undersigned finds and determines that, more likely than not, meter #5C35633 was tampered with, preventing FPL from fully charging Callard for her actual electricity consumption. Specifically, it is determined that Callard (or someone) physically manipulated the meter's dials, rolling them backwards to reduce the cumulative total of kWhs used and hence understate usage. More difficult to determine is when this tampering occurred. As FPL acknowledges, tampering of this sort is episodic, and affects only the instant billing cycle. That is, if a customer were to tamper with his meter on, say, May 15, 2005, then the bill covering the period that includes May 15, 2005, would be inaccurate, but future bills would be correct (assuming no further tampering), just as bills covering earlier periods would be accurate or not depending on whether tampering had previously occurred during those periods. To come up with a reasonable estimate of the energy used but not paid for, then, it is necessary to establish, in some reasonable fashion, the period(s) affected by the tampering. FPL estimates that from the billing cycle which ended on January 2, 1997,1 until July 5, 2002, Callard used a total of 101623 kWhs for which she was not billed, due to meter tampering. The cost of this amount of electricity, according to FPL, is $8,930.97. For reasons that will be discussed later, it is determined that FPL's estimate of the amount of "un-metered" electricity significantly overstates Callard's probable actual usage and hence is not reasonable. FPL has introduced enough data into the record, however, for the fact-finder to make a reasonable determination of the amount of un-metered electricity that Callard used. As a starting point, the evidence shows the total kWhs for which Callard was actually billed each month from January 1997 to July 2002. Thus, Callard's annual "as billed" electricity usage for each of the years in question, expressed in kWhs, can easily be ascertained. The figures are as follows: 1997: 23899 1998: 27483 1999: 13383 2000: 14840 2001: 14134 In addition, from January 2002 to July 2002, Callard was billed for 8395 kWhs, according to readings taken from meter #5C35633. It does not take a trained eye to spot the dramatic difference between the years 1997 and 1998, on the one hand, and 1999 through 2001 (and 2002) on the other. Based on these figures, the undersigned made the tentative determination that the tampering probably began in 1999. To confirm or falsify this preliminary determination, the undersigned considered the concept of Percentage of Annual Usage, Monthly ("PAUM"). PAUM shows what part of a customer's annual energy consumption occurred in a given month; it is calculated by dividing the year's total usage (in kWhs) into the subject month's usage. Thus, for example, if a customer consumed 30000 kWhs in 2004, and if his usage in May 2004 was 3000 kWhs, then the customer's PAUM for May 2004 would be 0.10, or 10 percent. PAUM is a useful datum because residential customers tend to use more or less energy depending on the time of year. As Floridians know from common experience, for example, electricity usage in this state tends to increase in the hot summer months, when air conditioners are running, and decrease in the milder autumn or winter months, when windows are open. To estimate un-metered electricity usage, FPL employs a methodology that factors in the PAUMs of an average customer for each of the months during which tampering is suspected to have occurred. Thus, in this case, FPL produced numbers that purportedly are the average customer's PAUMs for every month from January 1997 through July 2002. The following table shows the PAUMs of an average customer, according to FPL. 1997 1998 1999 2000 2001 2002 JAN 6.84 6.88 7.51 6.57 7.43 7.43 FEB 6.59 5.75 6.32 5.79 6.48 6.48 MAR 7.03 5.82 5.72 6.13 6.78 6.78 APR 6.96 6.23 7.04 6.73 7.08 7.08 MAY 7.65 7.38 8.12 9.44 7.26 7.26 JUN 9.41 9.90 9.06 10.09 9.24 9.24 JUL 10.35 10.93 9.77 10.54 10.14 10.14 AUG 10.59 10.71 11.23 10.54 10.20 SEP 10.26 10.82 10.81 10.43 11.01 OCT 9.50 9.99 9.70 9.54 9.15 NOV 7.82 8.08 7.78 7.29 7.73 DEC 7.00 7.52 6.94 6.91 7.50 Using an average customer's PAUMs, it is possible to calculate an actual customer's estimated annual usage ("EAU") even if there is a paucity of reliable data concerning the actual customer's true usage. Suppose, for example, that FPL suspects Smith is tampering with his meter and, as a result, conducts check readings on May 10, 2000, and May 20, 2000, recording cumulative totals of 7250 kWhs and 8420 kWhs, respectively. This tells FPL that Smith used 1170 kWhs in 10 days, or 117 kWhs per day. The June 2000 billing cycle is 30 days, so FPL can estimate that Smith's actual usage for that month should be approximately 3510 (30 x 117).2 If the average customer's PAUM for June 2000 is 10.09 percent, then FPL can calculate an EAU for Smith, based on the two check readings. The formula is: EAU = kWhs(JUN2000) PAUM(JUN2000) In this example, therefore, EAU would be 3510 ÷ 0.1009, which equals 34787. If Smith were billed for only 27500 kWhs in 2000, then the estimated amount of un-metered electricity for that period, based on an EAU of 34787, would be 7287 kWhs (34787 – 27500). Here, FPL failed to introduce any evidence explaining how the average customer's PAUMs were derived, or by whom. Moreover, there is no evidence shedding light on whether the average PAUMs were based on usage data collected in a particular county or counties, or throughout the state. Nor does the evidence show whether the usage data from which the average customer's PAUMs were derived reflect the consumption patterns of FPL customers specifically, or some other, broader group of electricity consumers.3 The undersigned therefore has determined that it would be unreasonable to apply these average PAUMs against Callard to determine EAUs for the years in question, except as a last resort, in the absence of better data. As it happens, there might be better data concerning Callard's usage patterns. Using the kWhs for which Callard was actually billed for each of the months in issue, it is possible to calculate Callard-specific PAUMs. Based on the number of kWhs for which Callard was billed each month from January 1997 through July 2002, Callard's PAUMs were as follows: 1997 1998 1999 2000 2001 2002 JAN 5.10 5.27 10.16 4.10 18.25 6.88 FEB 5.04 3.21 4.86 4.55 0.06 6.91 MAR 4.23 3.60 4.55 5.16 10.26 6.30 APR 4.14 3.60 6.55 4.75 6.86 9.75 MAY 4.47 4.78 7.96 5.60 6.19 10.68 JUN 11.00 10.09 8.13 7.96 7.33 10.57 JUL 14.40 15.14 9.86 11.93 4.05 8.37 AUG 14.75 14.68 22.54 8.42 11.70 SEP 15.25 14.73 5.75 23.09 9.67 OCT 10.24 11.51 5.56 10.16 8.98 NOV 6.59 8.32 5.51 7.94 8.79 DEC 4.78 5.07 8.57 6.34 7.87 Once again, the figures show a marked difference between the years 1997 and 1998, on the one hand, and 1999 through July 2002 on the other. The PAUMs for 1997 and 1998 are consistent with one another and indicate practically identical seasonal usage patterns. In contrast, from 1999 forward, the PAUMs are punctuated with several facially anomalous figures, as well as a number of irregular seasonal figures. Beginning with the facial anomalies, note the extremely high PAUMs for August 1999 and September 2000——22.54 percent and 23.09 percent, respectively. These numbers are plainly out of line with the corresponding PAUMs for 1997 and 1998. Further, it seems unlikely that a customer would consume nearly one quarter of her entire annual electricity demand in one month. The same observations can be made about January 2001, whose PAUM, at 18.25 percent, is not only inconsistent with the corresponding PAUMs for 1997 and 1998, but also suggests, implausibly, that Callard used nearly one-fifth of a year's worth of electricity in one month. The PAUM for February 2001 is facially anomalous, too, but for the opposite reason: it is highly unlikely that a customer would use so little electricity (just 1/1667th of a year's supply) in a given month. The seasonal abnormalities are nearly as striking. Take the PAUMs for January 1999; July 1999; September 1999; October 1999; August 2000; March 2001; July 2001; April 2002; May 2002; and July 2002. None of these is consistent with the putatively normal seasonal use patterns reflected in the PAUMs for 1997 and 1998. Plus, the undersigned considers it highly improbable, for example, that Callard used just 4.04 percent of her annual energy demand in the hot summer month of July 2001 or, conversely, consumed a heavy 10.26 of her annual usage that year in the usually mild month of March. These figures, in short, are not believable. The likeliest explanation for the anomalous PAUMs during the years 1999 through 2002 is that meter tampering skewed the usage percentages. Thus, the undersigned believes that Callard's PAUMs, as calculated based on "as billed" kWhs, buttress his preliminary determination that the tampering began in 1999, raising the inference that Callard's PAUMs for 1997 and 1998, as shown in the table above, likely reflect her actual seasonal usage patterns for those years. To verify the validity of such an inference, the undersigned compared the average of Callard's PAUMs for 1997 and 1998 to the average of the average customer's PAUMs for the same years as reported by FPL. The table below shows the numbers. Callard FPL JAN 5.19 6.86 FEB 4.13 6.17 MAR 3.92 6.43 APR 3.87 6.60 MAY 4.63 7.54 JUN 10.55 9.66 JUL 14.77 10.64 AUG 14.72 10.65 SEP 14.99 10.54 OCT 10.88 9.75 NOV 7.46 7.95 DEC 4.93 7.26 Comparing one column to the other reveals that Callard's seasonal usage patterns mirror those of FPL's average customer; the energy consumption of both rises and falls in tandem throughout the year. Indeed, the PAUMs for January, June, October, and November are quite close (within about one percentage point, on average). To be sure, these figures reveal that Callard used about four percent more electricity than the average customer during the hottest summer months (July, August, September) and approximately two-and-a-half percent less during the milder winter and spring months. But the undersigned considers such disparities to be of far less consequence than the identity of the usage patterns.4 In sum, the comparison of Callard's average PAUMs for 1997 and 1998 to the average of FPL's average customer's PAUMs for those same years persuades the undersigned that the average PAUMs for Callard reasonably reflect her true usage patterns. Thus, the undersigned finds and determines that, more likely than not, the tampering began in 1999——and that Callard is not liable for un-metered electricity usage during 1997 and 1998. From the foregoing determination it is possible to home-in on a reasonable EAU for Callard. A good starting point is the average of Callard's total kWhs for 1997 and 1998, which is 25691.5 As an average of true annual usage figures (i.e. numbers untainted by tampering), this number should be a reasonably accurate predictor of Callard's probable annual usages in the years 1999 to 2002. Comparing this average figure to the EAUs that can be derived from meter readings taken in subsequent years at times when tampering is not suspected should either confirm the reliability of 25691 as a valid predictor of subsequent annual usage, or invalidate it. Recall the check readings of 5497 and 6515, respectively, that were taken on July 6, 2001, and July 16, 2001. These readings show that Callard consumed 1018 kWhs in 10 days, or 101.8 kWhs per day during the August 2001 billing cycle. Since that was a 29-day billing period, it is reasonable to infer that Callard should have been billed for approximately 2952 kWhs in August 2001 (29 x 101.8). Because Callard's average PAUM for August is 14.72 percent, the EAU based on these check readings is 20054 (2952 ÷ 0.1472). Next, there is a reading of 1774 kWhs, which was taken on August 5, 2002, from the replacement meter that had been installed on July 24, 2002. This reading demonstrates that Callard used 1774 kWhs in 12 days, or 147.8 kWhs per day during the August 2002 billing cycle. This was a 31-day cycle, so it is reasonable to infer that Callard should have consumed 4582 kWhs in August 2002.6 Because Callard's average PAUM for August is 14.72 percent, the EAU based on this initial reading from the replacement meter is 31128 (4582 ÷ 0.1472). The average of the respective EAUs based on the check readings from July 2001 and the reading of the replacement meter on August 5, 2002, is 25591 kWhs7——which is remarkably similar to the average of Callard's total kWhs for 1997 and 1998. (The latter figure, again, is 25691.) That these averages are so close not only reconfirms the undersigned's determination that no tampering occurred in 1997 and 1998, but also persuades him that in any month where the number of Callard's "as billed" kWhs produces an EAU within the range of 20054 kWhs to 31128 kWhs, tampering is unlikely to have occurred. Using the "as billed" kWhs for each month from January 1999 to July 2002, and applying the average of Callard's PAUMs for 1997 and 1998 as shown in paragraph 29 above, the undersigned calculated an EAU for every month in which tampering might have occurred. The results are set forth in the table below. 1999 2000 2001 2002 JAN 26204 11715 49692 18728 FEB 15738 16344 194 23632 MAR 15536 19541 36990 22679 APR 22661 18217 25065 35556 MAY 23002 17948 18098 32570 JUN 10313 11204 9820 14142 JUL 8937 11984 3873 8003 AUG 20489 8485 11230 SEP 5137 22855 9119 OCT 6838 13860 11664 NOV 9879 15804 16662 DEC 23266 19087 22556 It is easy to spot, in the above figures, the months where tampering likely occurred: they are the months whose "as billed" kWhs number produces an EAU of less than 20054 (usually quite a bit less). Likewise, the months where tampering probably did not occur are readily distinguished: they are the ones where the EAU is greater than 20054. As it happens, there are not many close calls. The figures for most months either reflect obvious tampering or clearly appear to be legitimate. Based on the above data, the undersigned finds and determines that, in all likelihood, tampering did not occur in the following 14 months: January, April, May, August, and December 1999; September 2000; January, March, April, and December 2001; and February, March, April, and May 2002.8 The average EAU for these 14 months is 27658. Therefore, the undersigned finds and determines that a reasonable EAU for 1999, 2000, and 2001 is 27658 (a figure, incidentally, that differs little from Callard's actual annual usage in 1998). To determine an EAU for the first seven months of 2002, the undersigned added Callard's average PAUMs for those months and found that Callard used, on average, 47.06 percent of her annual electricity consumption during the months from January to July. Thus, it is found and determined that a reasonable EAU for the first seven months of 2002 is 13016 (27658 x 0.4706). With these numbers in hand, the reasonable amount of un-metered electricity consumption for which Callard is liable can now be ascertained, as shown in the following table: EAU "As Billed" Usage Difference (Un- Metered Usage) 1999 27658 13383 14275 2000 27658 14840 12818 2001 27658 14134 13524 2002 13016 8385 4621 It is found and determined that from January 1999 to July 2002, Callard consumed a total of 45238 kWhs of electricity for which she was not billed, due to meter tampering. The value of 45238 kWhs of electricity, delivered during the period at issue, is $3,975.66.9 It was previously found that FPL's estimate of the amount of Callard's un-metered electricity usage was unreasonable. The undersigned will now summarize the reasoning behind this determination. FPL's first methodological flaw was assuming, without proving, that the meter tampering began in January 1997. In this regard, FPL offered no evidence——at least none that was persuasive——that Callard's meter was tampered with that year, or in 1998 for that matter. In fact, contrary to FPL's assumption, the data in evidence persuasively establish that no meter tampering occurred during 1997 and 1998. Thus, it would be unreasonable to retroactively bill Callard for the months from January 1997 through December 1998, as FPL proposes to do. FPL's second methodological flaw was assuming, without proving, that the average customer's PAUMs (which figures were not really properly proved, either) could reasonably be applied to Callard. The unreasonableness of this particular assumption is magnified by the fact that there exists reliable data (from 1997 and 1998, when no tampering occurred) about Callard's actual PAUMs, making resort to the average customer's PAUMs unnecessary. These two flaws led FPL to derive an EAU for Callard for the years in question (including, erroneously, 1997 and 1998) that significantly and unreasonably overstated her probable usage. To calculate an EAU, FPL first assumed that tampering had not occurred in July 1998, September 1998, November 1998, or during the initial 12 days' service of the replacement meter, from July 24, 2002 to August 5, 2002. (FPL did not persuasively explain its selection of the particular months of 1998, but for reasons already detailed, the undersigned agrees and has found that no tampering occurred then——or at any other time in 1998.) Next, FPL calculated an EAU for each of the foregoing periods, using the "as billed" kWhs for the chosen months of 1998 and a projected monthly total for August 2002, to each of which was applied the average customer's PAUM for the respective period. The following table shows the numbers. Month/Year KWhs Avg. FPL Customer's PAUM EAU July 1998 4160 10.93 38060 September 1998 4048 10.82 37412 November 1998 2286 8.08 28292 August 2002 444010 10.20 43529 Taking the average of the foregoing EAUs, FPL concluded that Callard's true annual usage from January 1997 to July 2002 averaged 36824 kWhs. (This figure is substantially greater than the amount the undersigned ultimately has determined reflects Callard's average annual usage——27658.) As an aside, the undersigned observes that if accurate PAUMs are applied to reliable figures for monthly kWhs consumption, then the resulting EAUs, as calculated from the periodic readings, should be fairly close to one another. With this in mind, notice what happens when Callard's average PAUMs (based on 1997 and 1998 usages) are substituted for the average customer's PAUMs in FPL's equations: Month/Year KWhs Callard's Avg. PAUM EAU July 1998 4160 14.77 28165 September 1998 4048 14.99 27005 November 1998 2286 7.46 30643 August 2002 4440 14.72 30163 Using Callard's average PAUMs for the periods in question produces EAUs that are, more so than FPL's numbers, fairly close to one another, which outcome persuasively reestablishes that Callard's average PAUMs are true numbers, and hence more reasonably applied in this case than the average FPL customer's PAUMs.11 Indeed, a comparison of the two preceding tables underscores the unreasonableness of FPL's methodology. Notice that FPL happened to pick the three peak summer months (July, August, and September), when Callard's usage exceeds the average customer's by 4.2 percent on average. FPL's approach has a built-in bias against Callard and is guaranteed to produce inflated EAUs. At any rate, once FPL had concluded that Callard's average annual usage should be 36824 kWhs, it multiplied that figure times the average customer's PAUM for each of the 67 months from January 1997 to July 2002, producing monthly "re- bill" amounts of kWhs. For example, the average customer's PAUM for December 2001 is 7.5 percent. Thus, FPL contends that Callard should have been billed for 2762 kWhs that month (36824 x .075); it refers to this figure (2762) as the "re-bill" amount for December 2001. FPL then added together all the "re-bill" figures, subtracted therefrom the aggregate of the "as billed" numbers, and came up with a difference of 101623 kWhs, for which FPL contends Callard is liable. This amount, however, exceeds a reasonable estimate of the un-metered energy consumed, by 56385 kWhs. The undersigned therefore rejects FPL's calculation. As a final point, FPL claims that it is entitled to recover from Callard $348.21 as reimbursement for investigative costs. FPL failed to offer any proof, however, concerning the goods and/or services upon which it spent this sum. Consequently, while the amount requested is neither shocking nor unreasonable on its face, there is no evidential basis on which the undersigned can make a finding that the sum of $348.21 is reasonable in this case.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a final order authorizing FPL to retroactively bill Callard $3,975.66 for the un-metered energy she used from January 1999 through July 2002. DONE AND ENTERED this 13th day of May, 2005, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM 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 May, 2005.
Findings Of Fact The Utility's water plants are operating satisfactorily and are under no citations or corrective orders promulgated by the Department of Environmental Regulation. One customer service problem exists with regard to frequency of service outages and low pressure. The Utility had not previously been informed of the particular customer's problem and gave assurances that it would be corrected immediately. As demonstrated by a report of the Department of Environmental Regulation incorporated in Exhibit 1, the Utility provides good quality water that meets all pertinent standards of the Florida Safe Drinking Water Act of 1977, and in every way the quality of water service provided by the Utility was shown to be satisfactory. Rate Base In order to present a truer picture of the Utility's average rate base, and taking into account the factor of recent growth of the system, Commission expert engineering and accounting witnesses recalculated the Utility's figures for plant in service based upon a thirteen-month average as opposed to the twelve-month test year employed by the Utility. Thus equipment accounts and equipment retirement accounts were recalculated on a thirteen-month average in arriving at a total plant in service figure, based upon which the actual rate base was calculated. These calculations as well as adjustments to reclassify certain expenses which should have been capitalized in the plant accounts and then based on a thirteen-month average, demonstrated a total plant in service adjustment figure of $7,770. These, together with an adjustment for additional total accumulated depreciation of $2,807 and other relatively minor adjustments to the Utility's capital accounts, none of which were contested by the Utility, result in a rate base, or net investment figure, of $90,173. The adjustments and calculations supportive of this figure, all of which were uncontroverted by the Petitioner, appear attached hereto and are incorporated by reference herein as Schedule 1, Attachments 1 and 2. Operating Statement The Utility seeks to increase its revenues to the above- stated amount. Determination of an appropriate revenue figure necessitate re-allocations and adjustments to operation and maintenance expenses to add in necessary employee salaries and to reclassify and delete certain operation and maintenance expenses properly attributable to water systems not involved in this rate case. Additional, depreciation expense on contributed property must be disallowed and an adjustment for increased revenues necessary to result in an agreed upon 12.45 percent rate of return on rate base with concomitant adjustments to allow for increased gross receipts tax and income tax, established an appropriate revenue requirement of $35,922 per year. The Respondent's accounting witness established that the 12.45 percent rate of return on the Utility's rate base is the minimum necessary to insure a reasonable, compensatory rate of return to the Utility and to assure the company's financial viability in order that the quality of service to customers does not deteriorate. These adjustments to the initial operating statement accounts depicted in Exhibit 2, were not refuted by the Utility. The adjustments and calculations supportive of this revenue figure are set forth in greater detail in Schedule 2 of Exhibits 2 and 2A attached hereto and incorporated by reference herein. There was no dispute regarding the appropriate cost of capital for the company. The weighted cost of capital was shown to be 12.45 percent, based upon the Utility's undisputed cost of equity at 14 percent, as well as its imbedded debt cost of 9.47 percent. The rate structure should be predicated upon a base facility charge rate design. The base facility charge type of rate structure will insure that each customer, even seasonal residents who do not use a minimum amount of water per month sufficient to defray their portions of the cost of service, actually pay the minimum necessary for the Utility to meet its fixed costs which are attributable to their connections. In the case of the systems involved in this proceeding, a base facility charge of $3.35 for a 5/8" x 3/4" meter and a gallonage charge of 88 cents per 1,000 gallons will produce the revenue requirement of $35,922. Both the Petitioner and the Respondent agree to the feasibility and appropriateness of this base facility charge rate design and these amounts.
Recommendation Having considered the competent, substantial evidence of record, the foregoing findings of fact and conclusions of law, it is RECOMMENDED that John V. Smith Water Company should be authorized to receive gross annual revenues for its water service to customers in Walton County, Florida of $35,922 and that the Utility be authorized to file revised tariff pages containing rates designed to produce annual water revenues in that amount. It is further RECOMMENDED that the $4,000 letter of credit previously required to be filed by the Public Service Commission be returned to the Utility for cancellation. DONE and ENTERED this 20th day of November, 1980, in Tallahassee, Florida. P. MICHAEL RUFF Hearing Officer Division of Administrative Hearings Room 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of November, 1980. COPIES FURNISHED: John V. Smith 234 Deer Avenue Niceville, Florida William H. Harrold, Esquire 101 E. Gaines Street Tallahassee, Florida 32301 Robert T. Mann Chairman Public Service Commission 101 East Gaines Street Tallahassee, Florida 32301 Steven C. Tribble Commission Clerk Public Service Commission 101 East Gaines Street Tallahassee, Florida 32301
