The Issue This proceeding is for the purpose of resolving a territorial dispute regarding the extension of gas service to areas of The Villages of Sumter Lake (“The Villages”) in Sumter County, Florida, pursuant to section 366.04(3)(b), Florida Statutes, and Florida Administrative Code Rule 25-7.0472; and whether a Natural Gas System Construction, Purchase, and Sale Agreement (“Agreement”) between the City of Leesburg (“Leesburg”) and South Sumter Gas Company (“SSGC”) creates a “hybrid” public utility subject to ratemaking oversight by the Public Service Commission (“Commission”).
Findings Of Fact The Parties and Stipulated Issues PGS is a natural gas local distribution company providing sales and transportation delivery of natural gas throughout many areas of the State of Florida, including portions of Sumter County. PGS is the largest natural gas provider in Florida with approximately 390,000 customers, over 600 full-time employees, and the same number of construction contract crews. PGS’s system consists of approximately 19,000 miles of distribution mains throughout Florida. PGS operates systems in areas that are very rural and areas that are densely populated. PGS currently serves more than 45,000 customers in Sumter and Marion counties. PGS is an investor-owned “natural gas utility,” as defined in section 366.04(3)(c), and is subject to the Commission’s statutory jurisdiction to resolve territorial disputes. Leesburg is a municipality in central Florida with a population of approximately 25,000 within the city limits, and a broader metropolitan service area (“MSA”) population of about 50,000. Leesburg provides natural gas service in portions of Lake and Sumter counties. Leesburg is a “natural gas utility” as defined in section 366.04(3)(c). Leesburg has provided natural gas service to its customers since 1959, and currently serves about 14,000 residential, commercial, and industrial customers both within and outside its city limits via a current system of approximately 276 miles of distribution lines. Leesburg is subject to the Commission’s statutory jurisdiction to resolve territorial disputes. SSGC is a Florida limited liability company and an operating division of The Villages. SSGC is the entity through which The Villages has entered into a written contract with Leesburg authorizing Leesburg to supply natural gas services to, initially, the Bigham developments. The issues of cost of capital and amortization and depreciation are not applicable to this dispute. The Dispute A territorial dispute is a disagreement over which natural gas utility will serve a particular geographic area. In this case, the area in dispute is that encompassed by the Bigham developments. PGS argued that the dispute should be expanded to include areas not subject to current development, but that are within the scope of anticipated Villages expansion. The extension of this territorial dispute beyond the Bigham developments is not warranted or necessary, and would have the effect of establishing a territorial boundary in favor of one of the parties. As a result of the Agreement to be discussed herein, SSGC has constructed residential gas infrastucture within Bigham, and has conveyed that infrastructure to Leesburg. Leesburg supplies natural gas to Bigham, bills and collects for gas service, and is responsible for upkeep, maintenance, and repair of the gas system. The question for disposition in this proceeding is whether service to Bigham is being lawfully provided by Leesburg pursuant to the standards applicable to territorial disputes. Natural Gas Regulation PGS is an investor-owned public utility. It is subject to the regulatory jurisdiction of the Commission with regard to rates and service. Its profits and return on equity are likewise subject to regulation. Leesburg is a municipal natural gas utility. The Commission does not regulate, or require the reporting of municipal natural gas utility rates, conditions of service, rate-setting, or the billing, collection, or distribution of revenues. The evidence suggests that the reason for the “hands- off” approach to municipal natural gas utilities is due to the ability of municipal voters to self-regulate at the ballot box. PGS argues that customers in The Villages, as is the case with any customer outside of the Leesburg city limits, do not have any direct say in how Leesburg sets rates and terms of service.1/ That may be so, but the Legislature’s approach to the administration and operation of municipal natural gas utilities, with the exception of safety reporting and territorial disputes, is a matter of legislative policy that is not subject to the authority of the undersigned. History of The Villages The Villages is a series of planned residential areas developed under common ownership and development. Its communities are age-restricted, limited to persons age 55 and older. It has been the fastest growing MSA for medium-sized and up communities for the past five years. The Villages started in the 1970s as a mobile home community known as Orange Blossom Gardens in Lake County. That community proved to be successful, and the concept was expanded in the 1980s to include developments with golf courses and clubhouses. Residents began to customize their mobile homes to the point at which the investment in those homes rivaled the cost of site-built homes. In the 1990s, The Villages went to site-built home developments. By then, one of the two original developers had sold his interest to the other, who proceeded to bring his son into the business. They decided that their approach of building homes should be more akin to traditional development patterns in which growth emanates from a central hub. Thus, in 1994, the Spanish Springs Town Center was built, with an entertainment hub surrounded by shopping and amenities. It was a success. By 2000, The Villages had extended southward to County Road (“CR”) 466, and a second town center, Lake Sumter Landing, was constructed. The following years, to the present, saw The Villages continue its southward expansion to State Road (“SR”) 44, where the Brownwood Town Center was constructed, and then to its southernmost communities of Fenney, Bigham North, Bigham West, and Bigham East, which center on the intersection of CR 468 and CR 501. The Villages currently constructs between 200 and 260 residential houses per month. Contractors are on a computerized schedule by which all tasks involved in the construction of the home are set forth in detail. The schedule was described, aptly, as rigorous. A delay by any contractor in the completion of the performance of its task results in a cascading delay for following contractors. Gas Service in the Area Gas mains are generally “arterial” in nature, with relatively large distribution mains operating at high distribution pressure extending outward from a connection to an interstate or intrastate transmission line through a gate station. Smaller mains then “pick up” growth along the line as it develops, with lower pressure service lines completing the system. In 1994, Leesburg constructed a gas supply main from the terminus of its existing facility at the Lake County/Sumter County line along CR 470 to the Coleman Federal Prison. In August 2009, PGS was granted a non-exclusive franchise by the City of Wildwood to provide natural gas service to Wildwood. SSGC Exhibit 6, which depicts the boundaries of the City of Leesburg, the City of Wildwood, and the City of Coleman, demonstrates that most, if not all, of the area encompassed by the Bigham developments is within the Wildwood city limits. In 2015, the interstate Sabal Trail transmission pipeline was being extended south through Sumter County. The line was originally expected to run in close proximity to Interstate 75. Even at that location, Leesburg decided that it would construct a gate station connecting to the Sabal Trail pipeline to provide backfill capabilities for its existing facilities in Lake County, and for its Coleman prison customer. In 2016, the Sabal Trail pipeline was redirected to come much closer to the municipal limits of Leesburg. That decision made the Leesburg determination to locate a gate station connecting to the Sabal Trail pipeline much easier. In addition, construction of the gate station while the Sabal Trail pipeline was under construction made construction simpler and less expensive. By adding the connecting lines to the Sabal Trail pipeline while it was under construction, a “hot tap” was not required. In May 2016, PGS began extending its gas distribution facilities to serve industrial facilities south of Coleman. It started from the terminus of its existing main at the intersection of SR 44 and CR 468 -- roughly a mile and a half west of the Lake County/Sumter County line and the Leesburg city limit -- along CR 468 to the intersection with U.S. Highway 301 (“US 301”), and extending along US 301 to the town of Coleman by January 2017. The distribution line was then extended south along US 301 to Sumterville.2/ In addition, Sumter County built a line off of the PGS line to a proposed industrial customer/industrial park to the south and west of Coleman, which was assigned to PGS. It is common practice for investor-owned utilities to extend service to an anchor customer, and to size the infrastructure to allow for the addition of customers along the route. By so doing, there is an expectation that a line will be fully utilized, resulting in lower customer cost, and a return on the investment. Nonetheless, PGS has not performed an analysis of the CR 468/US 301 line to determine whether PGS would be able to depreciate those lines and recover the costs. The CR 468/US 301 PGS distribution line is an eight- inch line, which is higher capacity in both size and pressure. The entire line is ceramic-coated steel with cathodic protection, which is the most up-to-date material. PGS sized the CR 468/US 301 distribution line to handle additional capacity to serve growth along the corridor. Although PGS had no territorial or developer agreement relating to any area of The Villages when it installed its CR 468/US 301 distribution line, PGS expected growth in the area, whether it was to be from The Villages or from another developer. Although it did not have specific loads identified, the positioning of the distribution line anticipated residential and commercial development along its route. Nonetheless, none of the PGS lines were extended specifically for future Villages developments. PGS had no territorial agreement, and had no discussion with The Villages about serving any development along the mains. PGS constructed a gate station at the intersection of CR 468 and CR 501 connecting to the Sabal Palm pipeline to serve the anchor industrial facilities. The Sabal Trail gate station was not constructed in anticipation of service to The Villages. Gas Service to The Villages In 2017, The Villages decided to extend gas service to its Fenney development, located along CR 468. Prior to that decision, The Villages had not constructed homes with gas appliances at any residential location in The Villages. The Villages has extended gas to commercial facilities associated with its developments north of SR 44, which had generally been provided by PGS. The Villages’ development in Fruitland Park in Lake County included commercial facilities with gas constructed, installed, and served by Leesburg. Prior to the time in which the Fenney development was being planned, The Villages began to require joint trenching agreements with various utilities contracted to serve The Villages, including water, sewer, cable TV, irrigation, and electric lines. Pursuant to these trenching agreements, The Villages’ contractors excavate a trench to serve residential facilities prior to construction of the residences. The trenches are typically four-feet-wide by four-feet-deep. Each of the utilities install their lines in the trench at a designated depth and separation from the other utility lines in order to meet applicable safety requirements. Using a common trench allows for uniformity of installation and avoids installation mishaps that can occur when lines are installed after other lines are in the ground. The trenching agreements proved to be effective in resolving issues of competing and occasionally conflicting utility line development. The PGS CR 468 distribution line runs parallel to CR 468 along the northern boundary of the Fenney development. Therefore, PGS was selected to provide service when the decision was made to extend gas service into Fenney. PGS entered into a developer agreement with The Villages that was limited to work in Fenney. PGS was brought into the Fenney development project in August 2017, after four development units had been completed. Therefore, PGS had to bring gas service lines into residences in those units as a retrofitted element, and not as a participant to the trenching agreements under which other utilities were installed. There were occasions during installation when the PGS installation contractor, R.A.W. Construction, severed telephone and cable TV lines, broke water and sewer lines, and tore up landscaped and sodded areas. As a result, homes in the four completed Fenney development units were delayed resulting in missed closing dates. However, since PGS was not brought in until after the fact for the four completed developments, it is difficult to assign blame for circumstances that were apparently not uncommon before joint trench agreements were implemented, and which formed the rationale for the creation of joint trench agreements.3/ The Villages was not satisfied with the performance of PGS at its Fenney development. The problems described by The Villages related to construction and billing services. The Villages also complained that PGS did not have sufficient manpower to meet its exceedingly rigid and inflexible construction requirements. Mr. McDonough indicated that even in those areas in which PGS was a participant in joint trenching agreements, it was incapable of keeping up with the schedule. Much of that delay was attributed to its contractor at the time, R.A.W. Construction. After some time had passed, PGS changed contractors and went with Hamlet Construction (“Hamlet”), a contractor with which The Villages had a prior satisfactory relationship. After Hamlet was brought in, most of the construction-related issues were resolved. However, Mr. Lovo testified that billing issues with PGS were still unsatisfactory, resulting in delays in transfer of service from The Villages to the residential home buyer, and delays and mistakes in various billing functions, including rebates. In late 2017, as the Fenney development was approaching buildout, The Villages commenced construction of the Bigham developments. The three Bigham developments were adjacent to one another. The Bigham developments will collectively include 4,200 residential homes, along with commercial support facilities. By September 27, 2017, Leesburg officials were having discussions with Mr. Geoffroy, a representative of its gas purchasing cooperative, Florida Gas Utility (“FGU”), as to how it might go about obtaining rights to serve The Villages’ developments. Mr. Rogers inquired, via email, “[w]hat about encroachment into [PGS] territory north of 468, which is where they plan to build next? [PGS] has a line on 468 that is feeding the section currently under development.” Some 15 minutes later, Mr. Geoffroy described the “customer preference” plan that ultimately became a cornerstone of this case as follows: Yes, the areas that the Villages “plans” to build is currently “unserved territory”, so the PSC looks at a lot of factors, such as construction costs, proximity of existing infrastructure and other things; however, the rule goes on to state that customer preference is an over-riding factor; if all else is substantially equal. In this case, simply having the Villages say they will only put gas into the homes if Leesburg serves them, but not TECO/PGS, will do it. (emphasis added). On November 16, 2017, Leesburg was preparing for a meeting with The Villages to be held “tomorrow.” Among the topics raised by Mr. Rogers was “territorial agreement?” to which Mr. Geoffroy responded “[d]epends on which option [The Villages] choose. If they become the utility, then yes. If not, you will eventually need an agreement with [PGS].” During this period of time, PGS had no communication with either Leesburg or The Villages regarding the extension of gas service to Bigham. PGS became aware that Hamlet was installing gas lines along CR 501 and CR 468 in late December 2017. PGS had not authorized those installations. Bigham West adjoined Fenney, and PGS had lines in the Fenney development that could have established a point of connection to the Bigham developments without modification of the lines. In addition, each of the three Bigham developments front onto CR 468 and are contiguous to the CR 468 PGS distribution line. The distance from the PGS line directly into any of the Bigham developments was a matter of 10 to 100 feet. The cost to PGS to extend gas service into Bigham would have been minimal, with “a small amount of labor involved and a couple feet of pipe.” PGS met with Leesburg officials in January 2018 to determine what was being constructed and to avoid a territorial dispute. PGS was directed by Leesburg to contact The Villages for details. Thereafter, PGS met with representatives of The Villages. PGS was advised that The Villages was “unappreciative” of the business model by which The Villages built communities, and a public utility was able to serve the residential customers and collect the gas service revenues for 30 or 40 years. The Agreement The Villages was, after the completion of Fenney, unsure as to whether it would provide gas service to Bigham, or would continue its past practice of providing all electric homes. The Villages rebuffed Leesburg’s initial advances to extend gas service to The Villages’ new developments, including Bigham. Thereafter, The Villages undertook a series of discussions with Leesburg as to how gas service might be provided to additional Villages’ developments in a manner that would avoid what The Villages’ perceived to be the inequity of allowing a public utility to serve The Villages’ homes, with the public utility keeping the revenues from that service. Leesburg and The Villages continued negotiations to come to a means for extending gas service to The Villages’ developments, while allowing The Villages to collect revenues generated from monthly customer charges and monthly “per therm” charges. SSGC was formed as a natural gas construction company to engage in those discussions. SSCG was, by its own acknowledgement, “an affiliate of The Villages, and the de facto proxy for The Villages in this proceeding.” On January 3, 2018, Leesburg internally discussed how to manage the issue of contributions in aid of construction (“CIAC”). It appeared to Mr. Rogers that gas revenues would continue to be shared with The Villages after its infrastructure investment, with interest, was paid off, with Mr. Rogers questioning “is there a legal issue with them continuing to collect revenue after their capital investment is recovered? Admittedly that may not occur for 15 years.” A number of tasks to be undertaken by The Villages “justifying the continued revenue stream” were proposed, with Mr. Geoffroy stating that: While this may seem a large amount for very little infrastructure, I think it would probably be okay. Because [PGS] distribution is so close, and the Villages has used them previously, it would be relatively easy for the Villages to connect to [PGS] and disconnect from [Leesburg], at any point in the future. In order to get and retain the contract, this is what [Leesburg] has to agree to win the deal. Not sure anyone has rate jurisdiction on this anyway, other than [Leesburg]. Those discussions led to the development of the Agreement under which service to Bigham was ultimately provided. The Agreement was a formulaic approach to entice The Villages into allowing Leesburg to be the gas provider for the residents that were to come. The Agreement governs the construction, purchase, and sale of natural gas distribution facilities providing service to residential and commercial customers in The Villages’ developments. On February 12, 2018, the Leesburg City Commission adopted Resolution 10,156, which authorized the Mayor and City Clerk to execute the Agreement on the Leesburg’s behalf. The Agreement was thereupon entered into between Leesburg and SSGC, with an effective date of February 13, 2018. Then, on February 26, 2019, the Leesburg City Commission adopted Ordinance 18-07, which enacted the Villages Natural Gas Rate Structure and Method of Setting Rates established in the Agreement into the Leesburg Code of Ordinances. The Agreement has no specific term of years, but provides for a term “through the expiration or earlier termination of [Leesburg]’s franchise from the City of Wildwood.” Mr. Minner testified that “the length of the agreement is 30 years from when a final home is built, and then over that overlay is the 30-year franchise agreement from the City of Wildwood.” However, SSGC’s response to interrogatories indicates that the Agreement has a 30-year term. Though imprecise, the 30-year term is a fair measure of the term of the Agreement. For the Bigham developments, i.e., the Agreement’s original “service area,” facilities are those installed into Bigham from the regulator station at the end of Leesburg’s new CR 501 distribution line, and include distribution lines along Bigham’s roads and streets, all required service lines, pressure regulator stations, meters and regulators for each customer, and other appurtenances by which natural gas will be distributed to customers. The Agreement acknowledges that Leesburg and SSGC “anticipate that the service Area will expand as The Villages® community grows, and thus, as it may so expand, [Leesburg and SSGC] shall expand the Service Area from time to time by written Amendment to this Agreement.” SSGC is responsible for the design, engineering, and construction of the natural gas facilities within Bigham. SSGC is responsible for complying with all codes and regulations, for obtaining all permits and approvals, and arranging for labor, materials, and contracts necessary to construct the system. Leesburg is entitled to receive notice from SSGC prior to the construction of each portion of the natural gas system, and has “the right but not the obligation” to perform tests and inspections as the system is installed. The evidence indicates that Leesburg has assigned a city inspector who is on-site daily to monitor the installation of distribution and service lines. SSGC has, to date, been using Hamlet as its contractor, the same company used by PGS to complete work at Fenney. Upon completion of each section in the development, SSGC provides Leesburg with a final inspection report and a set of “as-built” drawings. SSGC then conveys ownership of the gas distribution system to Leesburg in the form of a Bill of Sale. Upon the conveyance of the system to Leesburg, Leesburg assumes responsibility for all operation, maintenance, repairs, and upkeep of the system. Leesburg is also responsible for all customer service, emergency and service calls, meter reading, billing, and collections. Upon conveyance, Leesburg operates and provides natural gas service to Bigham through the system and through Leesburg’s facilities “as an integrated part of [Leesburg’s] natural gas utility operations.” In order to “induce” SSGC to enter into the Agreement, and as the “purchase price” for the system constructed by SSGC, Leesburg will pay SSCG a percentage of the monthly customer charge and the “per therm” charge billed to Bigham customers. Leesburg will charge Bigham customers a “Villages Natural Gas Rate” (“Villages Rate”). The “per therm” charge and the monthly customer charge for each Bigham customer are to be equal to the corresponding rates charged by PGS. If PGS lowers its monthly customer charge after the effective date of the agreement, Leesburg is not obligated to lower its Villages Rate. Bigham customers, who are outside of Leesburg’s municipal boundaries and unable to vote in Leesburg municipal elections, will pay a rate for gas that exceeds that of customers inside of Leesburg’s municipal boundaries and those inside of Leesburg’s traditional service area. A preponderance of the evidence indicates that for the term of the agreement, The Villages will collect from 52 percent (per Mr. Minner at hearing) to 55 percent (per Mr. Minner in deposition) of the total gas revenues paid to Leesburg from Bigham customers. The specific breakdown of revenues is included in the Agreement itself, and its recitation here is not necessary. The mechanism by which The Villages, through SSGC, receives revenue from gas service provided by Leesburg, first to its “proxy” customer and then to its end-user customers, is unique and unprecedented. It has skewed both competitive and market forces. Nonetheless, PGS was not able to identify any statute or rule that imposed a regulatory standard applicable to municipal gas utilities that would prevent such an arrangement. The evidence establishes that, under the terms of the Agreement, Leesburg is the “natural gas utility” as that term is defined by statute and rule. The evidence establishes that SSGC is, nominally, a gas system construction contractor building gas facilities for Leesburg’s ownership and operation. The evidence does not establish that the Agreement creates a “hybrid” public utility. Extension of Service to the Bigham Developments Leesburg’s mains nearest to Bigham were at SR 44 at the Lake County/Sumter County line, a distance of approximately 3.5 miles from the nearest Bigham point of connection; and along CR 470, a distance of approximately 2.5 miles to the nearest Bigham point of connection. When the Agreement was entered, neither the Leesburg 501 line nor the Leesburg 468 line were in existence. At the time the Agreement was entered, Leesburg knew that PGS was the closest provider to the three Bigham developments. In order to serve Bigham, Leesburg constructed a distribution line from a point on CR 470 near the Coleman Prison northward along CR 501 for approximately 2.5 miles to the southern boundary between Bigham West and Bigham East. Leesburg constructed a second distribution line from the Lake County line on SR 44 eastward to its intersection with CR 468, and then southward along CR 468 to the Florida Turnpike, just short of the boundary with Bigham East, a total distance of approximately 3.5 miles. The Leesburg CR 468 line will allow Leesburg to connect with the Bigham distribution line and “loop” or “backfeed” its system to provide redundancy and greater reliability of service to Bigham and other projects in The Villages as they are developed. The new Leesburg CR 468 line runs parallel to the existing PGS CR 468 line along its entire CR 468 route, and crosses the PGS line in places. There are no Commission regulations that prohibit crossing lines, or having lines in close proximity. Nonetheless, having lines in close proximity increases the risk of, among other things, complicating emergency response issues where fire and police believe they are responding to one utility's emergency when it is the other’s emergency. Safety Although PGS was the subject of a Commission investigation and violation related to a series of 2013-2015 inspections, those violations have been resolved to the satisfaction of the Commission. Mr. Szelistowski testified that PGS has received no citations or violations from the Commission, either from a construction standpoint or an operation and maintenance standpoint, for the past three years. Mr. Moses testified that both PGS and Leesburg are able to safely provide natural gas service to customers in Sumter County. His testimony is credited. Given the differences in size, geographic range, nature, and density of areas served by the PGS and Leesburg systems, the prior violations are not so concerning as to constitute a material difference in the outcome of this case. All of the distribution and service lines proposed by Leesburg and PGS to serve and for use in the disputed territory are modern, safe, and state-of-the-art. Reliability As stated by Leesburg in its PRO, “[t]he reliability of a natural gas distribution system to serve a designated area depends on the nature, location and capacity of the utility's existing infrastructure, the ability of the utility to secure the necessary quantities of natural gas, and the ability of the natural gas utility to supply gas in a safe manner.” As set forth herein, the location of PGS’s existing infrastructure, vis-a-vis the disputed territory, weighs strongly in its favor. As to the other reliability factors identified by Leesburg, both parties are equally capable of providing reliable service to the disputed territory. Both PGS and Leesburg demonstrated that they have the managerial and operational experience to provide service in the disputed area. There was no evidence to suggest that end-user customers of either Leesburg or PGS, including PGS’s Fenney customers, are dissatisfied with their service. Regulatory Standards for Territorial Disputes Rule 25-7.0472 establishes the criteria for the resolution of territorial disputes regarding gas utilities. Rule 25-7.0472(2)(a) Rule 25-7.0472(2)(a) includes the following issues for consideration in resolving a territorial dispute regarding gas utilities: The capability of each utility to provide reliable natural gas service within the disputed area with its existing facilities and gas supply contracts. Leesburg currently obtains its natural gas supply from the Florida Gas Transmission (“FGT”) distribution system, and purchases natural gas through FGU, a not-for-profit joint action agency, or "co-op" for purchasing natural gas. FGU's membership consists of city or governmental utility systems in Florida that distribute natural gas to end-user customers, or that use natural gas to generate electricity. FGU purchases and provides gas and manages interstate pipeline capacity for its members. FGU's members contractually reserve space in interstate transmission lines. FGU aggregates its members’ contracts into a single consolidated contract between FGU and the interstate pipelines and collectively manages its members’ needs through that contract. FGU has flexibility to transfer pipeline capacity from one member to benefit another member. Leesburg currently takes its natural gas through a "lateral" pipeline from the FGT transmission line. Gas travels through one of two gate stations, one in Haines Creek, and the other near the Leesburg municipal airport, both of which are located in Leesburg’s northeast quadrant. At the gate stations, transmission pressure is reduced to lower distribution pressure, and the gas is metered as it is introduced into Leesburg’s distribution system. The FGT transmission capacity is fully subscribed by FGU. Leesburg has not fully subscribed its lateral pipeline and has sole access to its lateral line capacity. Prior to the entry of the Agreement, and Leesburg/SSGC’s extension of distribution lines along CR 501 and CR 468, Leesburg’s distribution lines extended into Sumter County only along CR 470 to the Coleman Federal Prison. One other Leesburg line extended to the county line along SR 44, and then north to serve a residential area in Lake County. Leesburg argues that it has already extended lines, and is providing service to thousands of homes in Bigham, and that those facilities should be considered in determining whether it can “provide reliable natural gas service within the disputed area with its existing facilities.” PGS did not know of Leesburg’s intent to serve Bigham until late December 2017, when it observed PGS’s Fenney contractor, Hamlet, installing lines along CR 468, lines that it had not approved. PGS met with Leesburg officials in January 2018 to determine what was being constructed and to avoid a territorial dispute. PGS was directed by Leesburg to contact The Villages for details. PGS filed its territorial dispute on February 23, 2018, 10 days from the entry of the Agreement, and three days prior to the adoption of Ordinance 18-07. Construction of the infrastructure to serve Bigham occurred after the filing of the territorial dispute. Given the speed with which The Villages builds, hundreds of homes have been built, and gas facilities to serve have been constructed, since the filing of the territorial dispute. To allow Leesburg to take credit for its facilities in the disputed territory, thus prevailing as a fait accompli, would be contrary to the process and standards for determining a territorial dispute. The territory must be gauged by the conditions in the disputed territory prior to the disputed extension of facilities to serve the area. Leesburg’s existing facilities, i.e., those existing prior to extension to the disputed territory, were sufficient to serve the needs of Leesburg’s existing service area. The existing facilities were not sufficient to serve the disputed territory without substantial extension. 2. The extent to which additional facilities are needed. Both PGS and Leesburg have sufficient interconnections with transmission pipelines. Prior to commencement of construction at Bigham, the area consisted of undeveloped rural land. As discussed herein, the “starting point” for determining the necessity of facilities is the disputed territory property before the installation of site-specific interior distribution and service lines. To find otherwise would reward a “race to serve.” PGS demonstrated that it is capable of serving the disputed territory with no additional facilities needed. Its distribution mains are located directly adjacent to the disputed territory from the Fenney development from the west, and are contiguous to each of the Bigham developments from CR 468. The PGS CR 468 line was not constructed in specific anticipation of serving Bigham, and its cost is not fairly included in PGS’s cost to provide natural gas service to the disputed area presently and in the future. PGS’s existing distribution mains are capable of providing service to Bigham literally within feet of a point of connection. PGS’s cost to reach the disputed territory from its existing facilities in Fenney was estimated at $500 to $1,000. The cost of connecting the interior Bigham service lines to PGS’s CR 468 line is, at most, $10,000. PGS’s total cost of extending gas distribution lines to serve Bigham is, at most, $11,000. The evidence demonstrated that Leesburg required substantial additional facilities to serve the disputed territory. In order to meet the needs for reliable service to Bigham established in the Agreement, Leesburg constructed a new high-pressure distribution line from the existing CR 470 line north along CR 501 to Bigham for a distance of 2.5 miles at a cost of $651,475. The CR 501 line was constructed in specific anticipation of serving Bigham and is fairly included in Leesburg’s cost to provide natural gas service to the disputed area presently and in the future. In order to meet the needs for reliable service to Bigham established in the Agreement, Leesburg constructed a new high-pressure distribution line along SR 44 and CR 468 to Bigham for a distance of 3.5 miles at a cost of $560,732. The CR 468 segment of Leesburg’s line is adjacent and parallel to PGS’s existing CR 468 pipeline. Leesburg plans to connect the CR 468 line with the CR 501 line by way of a regulator station to create a system loop. Although Leesburg’s CR 468 pipeline is, ostensibly, not the primary distribution line for Bigham, it is directly related to the CR 501 line, and provides desired redundancy and reliability for Bigham, as well as infrastructure for the further expansion of Leesburg’s gas system to The Villages. Thus, the cost of extending Leesburg’s CR 468 line is fairly included in Leesburg’s cost as an “additional facility” to provide “reliable natural gas service,” to the disputed area presently and in the future. Leesburg’s total cost of extending gas distribution lines designed as primary distribution or redundant capability to serve Bigham is a minimum of $1,212,207. In addition to the foregoing, Leesburg, in its response to interrogatories, indicated that it “anticipates spending an amount not to exceed approximately $2.2 million dollars for gas lines located on county roads 501 and 468.” Furthermore, Leesburg stated that “[a]n oral agreement exists [between Leesburg and SSGC] that the amount to be paid by Leesburg for the construction of natural gas infrastructure on county roads 468 and 501 will not exceed $2.2 million dollars. This agreement was made . . . on February 12, 2018.” That is the date on which Leesburg adopted Resolution 10,156, which authorized the Mayor and City Clerk to execute the Agreement on Leesburg’s behalf. The context of those statements suggests that the total cost of constructing the gas infrastucture to serve Bigham could be as much as $2.2 million. PGS argues that Leesburg’s cost of connecting to the Sabal Trail transmission line should be included in the cost of serving the disputed territory. Leesburg began planning and discussions to connect to Sabal Trail as early as 2015, when the construction of Sabal Trail through the area became known. Leesburg entered into a contract for the Sabal Trail connection in February 2016. The Sabal Trail connection was intended to provide Leesburg with additional redundant capacity for its system independent of service to The Villages. The cost of constructing the Sabal Trail gate station is not fairly included in Leesburg’s cost to provide natural gas service to the disputed area presently and in the future. Rule 25-7.0472(2)(b) Rule 25-7.0472(2)(b) includes the following issues for consideration in resolving a territorial dispute regarding gas utilities: The nature of the disputed area and the type of utilities seeking to serve it. The area in dispute was, prior to the commencement of construction, essentially rural, with rapidly encroaching residential/commercial development. Although the area was generally rural at the time PGS installed its CR 468/US 301 distribution line, there was a well-founded expectation that development was imminent, if not by The Villages, then by another residential developer. The disputed territory is being developed as a master-planned residential community with associated commercial development. The Bigham developments are currently proximate to the Fenney development. Other non-rural land uses in the area include the Coleman Federal Prison and the American Cement plant. As indicated, Leesburg is a municipal gas utility, and PGS is a public gas utility. The utilities seeking to serve the disputed territory are both capable, established providers with experience serving mixed residential and commercial areas. There is nothing with regard to this factor that would tip the balance in either direction. 2. The degree of urbanization of the area and its proximity to other urban areas. As it currently stands, the disputed territory is bounded to its south and east by generally undeveloped rural property, to its south by rural property along with the Coleman Prison and American Cement plant, to its west by the Fenney development and additional undeveloped rural property, and to its north by low-density residential development. The disputed territory is characterized by residential areas of varying density, interspersed with commercial support areas. The nearest of the “town centers,” which are a prominent feature of The Villages development, is Brownwood Paddock Square, which is located north of SR 44, and a few miles north of Fenney and Bigham. The town center is not in the disputed territory. The terms “urban” and “rural” are not defined in Florida Administrative Code chapter 25-7, or in chapter 366. Thus, application of the common use of the term is appropriate. “Urban” is defined as “of, relating to, characteristic of, or constituting a city.” Merriam-Webster, https://www.merriam- webster.com/dictionary/urban. “Rural” is defined as “of or relating to the country, country people or life, or agriculture.” Merriam-Webster, https://www.merriam- webster.com/dictionary/rural. The disputed territory was rural prior to the development of Bigham. The area is becoming more loosely urbanized as The Villages has moved into the area and is expected to experience further urban growth to the south and east. Fenney and Bigham are, aside from their proximity to one another, not currently proximate to other urban areas. There is nothing with regard to this factor that would tip the balance in either direction. 3. The present and reasonably foreseeable future requirements of the area for other utility services. Since the disputed territory is a completely planned development, there are requirements for basic utilities. Leesburg provides other utility services to the greater Leesburg MSA and the Villages Fruitland Park development, including electric, water, and sewer service, and has, or is planning to provide such services to other developments for The Villages in the area. Leesburg’s ability to provide other utility services to The Villages in addition to gas service is a factor in Leesburg’s favor. Rule 25-7.0472(2)(c) Rule 25-7.0472(2)(c) establishes that the cost of each utility to provide natural gas service to the disputed area presently and in the future is an issue for consideration in resolving a territorial dispute regarding gas utilities. Various costs are broken out in subparagraphs 1. through 9. of the rule, and will be addressed individually. However, it is clear, as set forth in the facts related to rule 25-7.0472(2)(a) above, that the cost of extending service into Bigham was substantially greater for Leesburg than for PGS. The individually identified costs include the following: Cost of obtaining rights-of-way and permits. There was no evidence to suggest that the cost of obtaining rights-of-way and permits for the construction of the gas infrastructure described herein varied between Leesburg and PGS. There is nothing with regard to this factor that would tip the balance in either direction. 2. Cost of capital. The parties stipulated that the issue of cost of capital is not applicable to this dispute. 3. Amortization and depreciation. The parties stipulated that the issues of amortization and depreciation are not applicable to this dispute. 4. through 6. Cost-per-home. The cost-per-home for extending service to homes in Bigham includes the costs identified in rule 25-7.0472(2)(c)4. (labor; rate per hour and estimated time to perform each task), rule 25-7.0472(2)(c)5. (mains and pipe; the cost per foot and the number of feet required to complete the job), and rule 25- 7.0472(2)(c)6. (cost of meters, gauges, house regulators, valves, cocks, fittings, etc., needed to complete the job). The cost-per-home for Leesburg and SSGC is $1,800 (see ruling on Motion to Strike). In addition, Leesburg will be installing automated meters at a cost of $72.80 per home. The preponderance of the evidence indicates that the PGS cost-per-home is $1,579, which was the cost-per-home of extending service in the comparable Fenney development. The cost-per-home is a factor -- though slight -- in PGS’s favor. 7. Cost of field compressor station structures and measuring and regulating station structures. None of the parties specifically identified or discussed the cost of field compressor station structures and measuring and regulating station structures in the Joint Pre- hearing Stipulation or their PROs. Thus, there is little to suggest that the parties perceived rule 25-7.0472(2)(c)7. to be a significant factor in the territorial dispute. As a result, there is nothing with regard to this factor that would tip the balance in either direction. 8. Cost of gas contracts for system supply. None of the parties specifically identified or discussed the cost of the respective gas contracts for system supply in the Joint Pre-hearing Stipulation or their PROs. Thus, there is little to suggest that the parties perceived rule 25-7.0472(2)(c)8. to be a significant factor in the territorial dispute. As a result, there is nothing with regard to this factor that would tip the balance in either direction. 9. Other costs that may be relevant to the circumstances of a particular case. There was considerable evidence and testimony as to the revenues that would flow to SSGC under the 30-year term of the Agreement. SSGC's revenues under the Agreement are not relevant as they are not identified as such in rule 25-7.0472, and are not directly related to the rates, which will likely not exceed PGS’s regulated rate. Rule 25-7.0472(2)(d) Rule 25-7.0472(2)(d) includes that the Commission may consider “other costs that may be relevant to the circumstances of a particular case.” This factor is facially identical to that in rule 25-7.0472(2)(c)9., but is, nonetheless, placed in its own rule section and must therefore include costs distinct from those to provide natural gas service to the disputed area presently and in the future. Cost of service to end-user customers. Due to the nature of the Agreement, Leesburg will charge a “Villages Rate” that will be equal to the fully regulated PGS rate.4/ Thus, as a general rule, the cost of service to end-user customers will be the same for PGS and Leesburg. There is nothing with regard to this factor that would tip the balance in either direction. 2. Uneconomic duplication of facilities. Neither section 366.04(3), nor rule 25-7.0472, pertaining to natural gas territorial disputes, expressly require consideration of “uneconomic duplication of facilities” as a factor in resolving territorial disputes. The Commission does consider whether a natural gas territorial agreement “will eliminate existing or potential uneconomic duplication of facilities” as provided in rule 25-7.0471. A review of Commission Orders indicates that many natural gas territorial dispute cases involve a discussion of uneconomic duplication of facilities because disputes are frequently resolved by negotiation and entry of a territorial agreement. In approving the resultant agreement, the Commission routinely considers that the disposition of the dispute by agreement avoids uneconomic duplication of facilities. See In re: Petition to Resolve Territorial Dispute with Clearwater Gas System, a Division of the City of Clearwater, by Peoples Gas System, Inc., 1995 Fla. PUC LEXIS 742, PSC Docket No. 94-0660-GU; Order No. PSC-95-0620- AS-GU (Fla. PSC May 22, 1995)(“[W]e believe that the territorial agreement is in the public interest, and its adoption will further our longstanding policy of avoiding unnecessary and uneconomic duplication of facilities. We approve the agreement and dismiss the territorial dispute.); In re: Petition by Tampa Electric Company d/b/a Peoples Gas System and Florida Division of Chesapeake Utilities Corporation for Approval of Territorial Boundary Agreement in Hillsborough, Polk, and Osceola Counties, 1999 Fla. PUC LEXIS 2051, Docket No. 990921-GU; Order No. PSC-99-2228-PAA-GU181 (Fla. PSC Nov. 10, 1999)(“Over the years, CUC and PGS have engaged in territorial disputes. As each utility expands its system, the distribution facilities become closer and closer, leading to disputes over which is entitled to the unserved areas. The purpose of this Agreement is to set forth new territorial boundaries to reduce or avoid the potential for future disputes between CUC and PGS, and to prevent the potential duplication of facilities.”); In re: Joint Petition for Approval of Territorial Agreement in DeSoto County by Florida Division of Chesapeake Utilities Corporation and Sebring Gas System, Inc., 2017 Fla. PUC LEXIS 163, Docket No. 170036-GU; Order No. PSC-17-0205-PAA-GU (Fla. PSC May 23, 2017)(“The joint petitioners stated that without the proposed agreement, the joint petitioners’ extension plans would likely result in the uneconomic duplication of facilities and, potentially, a territorial dispute . . . . [W]e find that the proposed agreement is in the public interest, that it eliminates any potential uneconomic duplication of facilities and will not cause a decrease in the reliability of gas service.”). There are Commission Orders that suggest the issue of uneconomic duplication of facilities is an appropriate field of inquiry in a territorial dispute even when it does not result in a territorial agreement. See In re: Petition to Resolve Territorial Dispute with South Florida Natural Gas Company and Atlantic Gas Corporation by West Florida Natural Gas Company, 1994 Fla. PUC LEXIS 1332, Docket No. 940329-GU; Order No. PSC-94-1310-S-GU (Fla. PSC Oct. 24, 1994)(“On March 31, 1994, West Florida filed a Petition to Resolve a Territorial Dispute with South Florida and Atlantic Gas On August 26, 1994, West Florida, South Florida, and Atlantic Gas filed a Joint Petition for Approval of Stipulation, which proposed to resolve the territorial dispute by West Florida's purchase of the Atlantic Gas facilities . . . . We believe that approval of the joint stipulation is in the public interest because its adoption will avoid unnecessary and uneconomic duplication of facilities.”). The evidence in this case firmly establishes that Leesburg’s extension of facilities to the Bigham developments, both through the CR 501 line and the CR 468 line, constituted an uneconomic duplication of PGS’s existing gas facilities. As set forth in the Findings of Fact, PGS’s existing gas line along CR 468 is capable of providing safe and reliable gas service to the Bigham developments at a cost that is negligible. To the contrary, Leesburg extended a total of roughly six miles of high-pressure distribution mains to serve the Bigham developments at a cost of at least $1,212,207, with persuasive evidence to suggest that the cost will total closer to $2,200,000. This difference in cost, even at its lower end, is far from de minimis, and constitutes a significant and entirely duplicative cost for service. Leesburg argues that if uneconomic duplication of facilities is a relevant factor, “the evidence of record demonstrates that the City will suffer significant financial impact if it is not permitted to continue to serve the Bigham Developments.” The fact that Leesburg, with advance knowledge and planning, was able to successfully race to serve Bigham, incurring its “financial impact” after the territorial dispute was filed, does not demonstrate either that PGS meets the standards to prevail in this proceeding, or that PGS should be prevented from serving development directly adjacent to its existing facilities in the disputed territory. Rule 25-7.0472(2)(e) Rule 25-7.0472(2)(e) establishes that customer preference is the “tie-breaker” if all other factors are substantially equal. The Villages is the “customer” for purposes of the selection of the provider of natural gas service to Bigham. There is no dispute that The Villages, as the proxy for the individual end-user customers, has expressed its preference to be served by Leesburg. The direct financial benefit to The Villages, and Leesburg’s willingness to enter into a revenue sharing plan -- a plan that, if proposed by PGS, would likely not be allowed by the Commission in its rate- setting capacity -- no doubt plays a role in that decision. Gas service to end-user customers living in in Bigham will be a revenue-generating venture for The Villages if served by Leesburg, and will not if served by PGS. Leesburg and SSGC have suggested that customer preference should occupy a more prominent role in the dispute since gas service, unlike electric, water, and sewer services, is an optional utility service. SSGC argued that since The Villages expressed that it would forego providing gas service to its developments if PGS is determined to be entitled to serve -- a position oddly presaged by Mr. Geoffroy in his September 27, 2017, email with Leesburg (see paragraph 35) -- and “in consideration of the business practices, size, track record of success, and economic import of The Villages,” the preference of The Villages for service from Leesburg should “be a significant factor in the resolution of this dispute.” Neither of those reasons can serve to elevate customer preference from its tie-breaker status as established by rule.
Conclusions For Petitioner: Andrew M. Brown, Esquire Ansley Watson, Esquire Macfarlane Ferguson & McMullen Suite 2000 201 North Franklin Street Tampa, Florida 33602 Frank C. Kruppenbacher, Esquire Frank Kruppenbacher, P.A. 9064 Great Heron Circle Orlando, Florida 32836 For Respondent South Sumter Gas Company: John L. Wharton, Esquire Dean Mead & Dunbar 215 South Monroe Street, Suite 815 Tallahassee, Florida 32301 Floyd Self, Esquire Berger Singerman, LLP Suite 301 313 North Monroe Street Tallahassee, Florida 32301 For Respondent City of Leesburg: Jon C. Moyle, Esquire Karen Ann Putnal, Esquire Moyle Law Firm, P.A. 118 North Gadsden Street Tallahassee, Florida 32301
The Issue The issue is whether the challenged two working day notice provision of existing Rule 5F-11.047(1), Florida Administrative Code, constitutes an invalid exercise of delegated legislative authority as defined in Section 120.52(8), Florida Statutes.
Findings Of Fact The Department is the state agency charged by law with regulation of the liquefied petroleum (LP) gas industry. Sections 570.07(16)(k), 570.07(23), 527.055, and 527.06, Florida Statutes. Petitioner bears the name "1st Propane of Bushnell," a registered fictitious name of Par-Gas, Inc. Petitioner is a Category I liquefied petroleum gas distributor, licensed and regulated by the Department. There are approximately 460 licensed LP gas dealers in Florida. Florida’s licensed LP gas dealers include one-man operations, mom and pop family-owned businesses, regional marketers and national multi-state marketers. LP gas operations in Florida are unique compared to other states, in that Florida has many small volume users. The Department issues the Category I LP gas dealer license only to entities, not to individuals. The license permits the licensee gas company to transport LP gas, fill LP gas containers, sell LP gas containers, and to service, install, or repair appliances or equipment that use LP gas. Most LP gas dealers own the LP gas tank or cylinder installed at the customer location. Accordingly, when the dealer delivers LP gas to its customer, it is filling or refilling its own container; unless the customer owns the container, then the dealer fills the customer’s container. LP is a by-product of the oil refining process. The most common LP gas in Florida is propane. LP gas has a boiling point of minus 44 degrees Fahrenheit. The very cold LP gas is stored in the container under pressure of approximately 145 pounds per square inch (PSI).1 LP gas expands approximately 270 times as it changes from a liquid to a vapor. LP gas vapor is one and one-half times heavier than air. Because LP gas is heavier than air, when released into the air, LP gas vapor drops, pools and accumulates in low areas. It will not disperse in areas where there is no wind movement. A spark from static electricity, electric motors, automobile fan motors, exhaust pipes, catalytic converters, air conditioning compressors or lit cigarettes will ignite LP gas, causing explosion or fire. LP gas is more volatile than natural gas. Unlike natural gas which is delivered to the customer by pipe, LP gas is typically stored at residential, commercial or school installations in a pressurized container. Two kinds of LP gas containers are tanks and cylinders. Other LP gas system components include the regulator, valves, interior and exterior piping, meter, and appliances. The National Fire Protection Association, Standard 58, LP Gas Code 2001 Edition, ("NFPA 58") makes the container owner responsible for ensuring his containers are suitable and qualified for service. LP gas tanks are typically horizontal and much larger than LP gas cylinders. Tanks used in residential and commercial applications, generally range in size up to 1,000 gallons. Tanks are deemed permanent installations. Cylinders are generally upright and have a specified lifetime, after which they must be re-qualified by the owner. Cylinders are deemed temporary or portable installations. LP gas cylinders and tanks are both “liquefied petroleum gas equipment” within the meaning of Chapter 527, Florida Statutes. Rule 5F-11.047, Florida Administrative Code, governs LP gas container disconnections in Florida. The genesis of Rule 5F-11.047, Florida Administrative Code, dates back to the 1940’s and 1950’s and a State Regulation2 that allowed only the LP gas tank owner, or those authorized by him, to disconnect a tank from a customer’s system. In 1958, Florida’s Attorney General, Richard Ervin, became concerned that the Regulation could be applied in an anti-competitive manner, but in 1959, the Regulation was amended to allow one gas company to disconnect another company’s tank whether or not it was authorized, provided advance notice was given to the gas company owning the tank. In the 1970’s this “advance notice” concept was continued and again adopted, this time in an administrative rule promulgated under Chapter 120, Florida Statutes. In 1990, The Department of Insurance (“DOI”) promulgated Rule 4B-1.008, Florida Administrative Code, under Chapter 120, Florida Statutes.3 In 1994, DOI’s Rule 4B-1.008, Florida Administrative Code, was properly transferred to the Department without changes. The Department properly filed Rule 5F-11.047, Florida Administrative Code, for adoption without changes as required by Chapter 120, Florida Statutes, and Chapter 1S-1, Florida Administrative Code, effective March 15, 1994. When the Rule was initially adopted in 1990, David Rogers wrote a letter4 to DOI on behalf of The Florida Propane Gas Association (“The Association”) recommending rule language which became Rule 4B-1.008, Florida Administrative Code. The same language lives on in challenged Rule 5F-11.047(1), Florida Administrative Code. The Association specifically recommended the Rule language “in the interest of safety to the propane industry and consumers” and because the Rule allowed “orderly disconnects to be made in a safe manner.” As stipulated by the parties at final hearing, Rogers’ October 31, 1990, letter is the Association’s past and present position on Rule 5F-11.047(1), Florida Administrative Code. Other states have tank disconnect rules similar to Florida’s Rule, and other states have modeled their disconnect rules after Florida’s Rule 5F-11.047(1), Florida Administrative Code. No company has ever challenged Rule 5F-11.047(1), Florida Administrative Code, except Petitioner. Petitioner challenges only the two working day notice requirement of Rule 5F-11.047(1), Florida Administrative Code, alleging it is an invalid exercise of delegated legislative authority. Section 120.52(8), Florida Statutes. Petitioner alleges that the “Department has exceeded its grant of rulemaking authority because Section 527.06, Florida Statutes, does not specifically include nor contemplate or require notice to cylinder, tank and system owners prior to a disconnection;” that the existing rule enlarges, modifies and contravenes the specific provisions of Sections 527.06 and 527.07, Florida Statutes, in that neither statutory provision requires or authorizes a 48-hour/two working day pre-disconnection notice to an LP gas tank or system owner”; that the existing rule is arbitrary and capricious in that the pre-disconnection notice requirement has no relation or connection to any health, safety or welfare concerns; and that the Rule does not promote the health, safety or welfare of the public and, therefore, cannot be supported by competent substantial evidence. Petitioner also alleges that application of the two working day notice requirement has an anti-competitive effect on the LP gas market. Rule 5F-11.047(1), Florida Administrative Code, pertains to disconnecting LP gas containers. No statute prohibits a person or gas company from disconnecting another gas company’s LP gas container. However, Section 527.07, Florida Statutes, prohibits a person or gas company from filling, refilling, using, or delivering another gas company’s LP gas container without authorization from the gas company that owns the container. Section 527.07, Florida Statutes, reads: No person, other than the owner and those authorized by the owner, shall sell, fill, refill, deliver, permit to be delivered, or use in any manner any liquefied petroleum gas container or receptacle for any gas or compound, or for any other purpose. Section 527.07, Florida Statutes, is one of the statutes implemented by Rule 5F-11.047(1), Florida Administrative Code, the other being Section 527.06, Florida Statutes. As a practical matter, when a gas customer wants to change LP gas companies, his new choice of companies cannot use his existing gas company’s LP gas container unless authorized by the existing company, which owns the installed container. So, if the customer does not own his own container5 and authorization to use the existing company’s container is not obtained, the existing container will have to be disconnected so the new company can install its own container. Section 527.07, Florida Statutes. When one gas company disconnects another gas company’s container in order to install its own container, it is called a “switch-out” or “changeover.” Rule 5F-11.047, Florida Administrative Code, determines when the disconnect notification must occur. When disconnected, a LP gas container is either empty (out-of-gas)6 or it contains LP gas. If the tank is empty, the tank owner must be notified within 24 hours after the empty tank has been disconnected. See Rule 5F-11.047(2), Florida Administrative Code. Thus, no advance notice is required when the customer is out-of-gas. However, if the existing container contains gas (hereinafter referred to as a “gas-filled container”),7 Rule 5F-11.047(1), Florida Administrative Code, requires the new, incoming gas company to give two working days advance notice to the existing gas company/tank owner that it intends to disconnect the existing container after two working days. Rule 5F-11.047(1), Florida Administrative Code, reads: No person, firm or corporation, other than the owner and those authorized by the owner, shall connect or disconnect any cylinder, tank, or system containing liquefied petroleum gas, except in an out- of-gas situation, unless due and sufficient notice has been given by any person, firm or corporation to the owners of any cylinder or tank, prior to disconnecting or connecting such cylinder, tank, or system. Due and sufficient notice shall be received by the owners at least two (2)working days prior to installing the cylinder, tank, or system of said person, firm, or corporation, and shall be evidenced by a signed receipt. Acceptable evidence of receipt of notification shall be a signed certified mail receipt, signed receipt of hand delivery or facsimile transmission receipt. If after two working days the cylinder, tank, or system has not been disconnected by the owner, the said person, firm or corporation may then disconnect downstream of the system regulator or meter. It shall be mandatory that the person, firm or corporation who so disconnects any such cylinder or tank, whether empty or full, upon the premises of a consumer, does so in a manner that renders the cylinder or tank tight with valves turned off, the cylinder or tank service valve plugged with brass or steel fittings, and all other cylinder, tank or system openings properly plugged. In addition, any cylinder, tank, or system disconnected must be done so in a manner that is in compliance with the requirements of NFPA 58. (Emphasis supplied). The advance notice requirement only applies to gas-filled containers. After receiving two working days notice, the existing company/tank owner has several options: 1) The tank owner/company can disconnect and remove its gas-filled container from the property within the two working days; 2) swap containers with the incoming company, exchanging the existing container with a similar container delivered to its storage yard by the incoming company; 3) sell the existing gas-filled container to the incoming company or the consumer; 4) coordinate a switch-out with the incoming company; or 5) if it knows and trusts the safety training of the incoming company’s personnel, it can authorize the incoming company to disconnect its tank and put it in an agreed-upon safe location at the customer property until it can be picked up in a reasonable time. Disconnecting a gas-filled container is an inherently dangerous activity even though the person doing the disconnect has been properly trained. If the existing gas-filled container is sold or swapped to the incoming gas company, the inherently dangerous disconnect is not required. By contrast, after a gas- filled container is disconnected it must be temporarily stored on the customer property if it is not immediately removed. As established by testimony of the Department’s safety expert even trained persons sometimes store gas-filled containers on customer property in an unsafe and improper manner. Even LP gas companies’ employees are known to violate the two working day notice requirement leaving another company’s gas-filled container, unplugged, unprotected hazardous, unsafe condition on the consumer’s property. The two working day notice requirement of Rule 5F-11.047(1), Florida Administrative Code, provides sufficient time for the two gas companies to work out the switch-out or terms of transfer. Less than two working days' notice would not be sufficient to promote the safe handling of LP gas and proper installation of LP gas equipment. The Department presented the testimony of a Suburban Propane (“Suburban”) employee, Tom Ross. Ross is Suburban’s Florida regional manager. Suburban is a multi-state marketer and is the third largest propane company in Florida. Suburban’s 29 Florida locations are licensed by the Department and serve 80,000 customers. Suburban has twice as many LP gas containers in the field in Florida as any other region due largely to the fact that Florida has a lot of small volume users. Ross testified that training of personnel to perform disconnect varies, some companies providing better training than others. Suburban prefers to disconnect its own gas-filled tanks primarily because it knows the training its employees have received, and has no idea what kind of training a competitor company’s personnel may have received. Ross testified that as it relates to Suburban, Rule 5F-11.047(1), Florida Administrative Code, promotes the safe handling of propane gas. The two working day notice requirement gives Suburban the opportunity to evaluate the safety/liability of the situation and the potential safety/liability involved in moving the tank. Safety/liability issues related to the disconnect and removal of the gas-filled tank may make it advantageous for the existing tank owner to negotiate a tank swap with the company taking over the account. In that circumstance, no disconnect is required. The Department presented the testimony of Mike Ivestor. Ivestor is the operations manager of Quality Propane in Havana, Florida, a small mom-and-pop, independent LP gas company. Ivestor knows his own employees have been properly trained, but he cannot be sure how well all his competitors train their employees. Ivestor has a good relationship with most, but not all, competitors in his market. There are some LP gas companies Ivestor would not want to disconnect his company’s tanks. In the past, competitor gas companies have disconnected Quality Propane tanks and left them on a customer's property in unsafe condition. Two working days allows Ivestor sufficient time to coordinate with the incoming gas company a time to disconnect his tank so as to not interfere with the new installation or disrupting service to the customer. If Ivestor knows the incoming company, he may authorize it to disconnect his gas-filled container and temporarily store it in an agreed-upon place at the customer property which Ivestor knows is safe. Ivestor is concerned about his company’s liability when he has no control over who, when, or how his gas-filled tank is disconnected and set aside. Petitioner and the Department stipulated that if one gas company disconnects another company’s gas-filled container and relocates it on the customer’s property, it creates liability for the owner of the container. Rule 5F-11.047, Florida Administrative Code, is a safety rule, not a rule that regulates competitiveness. Further, the two working days' notice promotes proper installation and transporting of LP gas equipment. Rule 5F-11.047, Florida Administrative Code, states that it implements Section 527.06, Florida Statutes. The Florida Legislature provided in Section 527.06(1), Florida Statutes, that: The department may adopt rules necessary to effectuate any of the statutory duties of the department in the interest of public health, safety, and welfare and to promote the safe handling of liquefied petroleum gas and proper installation, storing, selling, utilizing, transporting, servicing, testing, repairing, and maintaining of liquefied petroleum gas equipment and systems. The department shall adopt rules reasonably necessary to assure the competence of persons to safely engage in the business of liquefied petroleum gas, including, but not limited to, the licensure, testing, and qualifying of such persons for the protection of the health, welfare, and safety of the public and persons using such materials. These rules shall be in substantial conformity with generally accepted standards of safety concerning the same subject matter and shall not extend, modify, or conflict with any laws of this state or the reasonable implications of such laws.” The Florida Legislature also provided in Section 527.06(2), Florida Statutes that: (2) The department shall promulgate and enforce rules setting forth minimum general standards covering the design, construction, location, installation, and operation of equipment for storing; handling; transporting by tank truck, tank trailer, or pipeline; and utilizing liquefied petroleum gases and specifying the odorization of such gases and the degree thereof. The rules shall be such as are reasonably necessary for the protection of the health, welfare, and safety of the public and persons using such materials and shall be in substantial conformity with the generally accepted standards of safety concerning the same subject matter. Petitioner and the Department each presented testimony of Vicki O’Neil in their respective case-in-chief. Ms. O’Neil has been Bureau Chief of the Bureau of LP Gas Inspection since August 1994. She oversees Bureau licensing, training, investigations, examinations, and the marketing assessment program. Ms. O’Neil testified that the Department’s interpretation of Section 527.06(1), Florida Statutes, is that the Department may take reasonable steps necessary to ensure the public’s safety through the rule-making process, and that the safe handling of LP gas is in the interest of the public health, safety, and welfare. This has been the Department’s interpretation of Section 527.06, Florida Statutes, since 1994 when responsibility for LP gas regulation was transferred from the DOI to the Department, along with Ms. O’Neil. As established by Ms. O’Neil's testimony, the Department’s policy is that proper installation, storing, selling, utilizing, transporting, servicing, testing, repairing, and maintaining of LP gas equipment and systems is in the interest of the public health, safety, and welfare and that Rule 5F-11.047, Florida Administrative Code, is an exercise of the Department’s power and duty to promote those public interests. The Department’s policy is that Rule 5F-11.047(1), Florida Administrative Code, is a safety rule necessary to promote the safe handling of LP gas. Rule 5F-11.047(1), Florida Administrative Code, is a safety rule, which is in substantial conformity with the published standards of the National Fire Protection Association and is also in substantial conformity with generally accepted standards of safety. As a result of the two working day notice requirement, the incoming and outgoing LP gas companies can dialogue about the proposed disconnection, repairs, safety, or hazardous conditions that might exist. The dialogue may also result in the two companies swapping tanks; thus, the inherently dangerous process of disconnecting the tank is avoided altogether. In light of recent terrorist events in this country, law enforcement has taken a heightened interest in LP gas and gas-filled LP gas containers. Security bulletins from various federal agencies, including the U.S. Department of Transportation, show the potential for terrorist groups to target commercial LP gas tanks and hazardous material storage facilities. There is a potential for theft of even small quantities of these materials for the purpose of making weapons of mass destruction. Each Category I LP gas dealer must have one “master qualifier” at each business location. Each Category I LP gas dealer must also have one “qualifier” for each 10 employees performing LP gas work. A gas company employee does not have to be a qualifier or a master qualifier to connect or disconnect LP gas containers for the company. Any gas company employee can disconnect gas-filled containers if he or she has been trained by the gas company to do so. These employees are not required to receive training or testing from the Department. The gas company must only document employee training in their company files. The Department generally does not know if a company employee is actually performing disconnects correctly or not, nor whether the employee has ever been disciplined by the employer for safety violations. The quality of employee training varies from company to company. For this reason, some LP gas companies prefer to have their own trained employees disconnect their tanks. Even though companies train their employees, some have been known to leave disconnected gas-filled containers in unsafe, hazardous condition on a customer’s property. As established by testimony of Ernest Barany, an employee of the Department within the Department’s Bureau of LP Gas Inspection for seven years and current supervisor of the Department’s LP gas inspectors, the Rule’s two working day notice requirement applies to LP gas containers in residential and commercial locations, LP gas dispensers, and containers installed in school facilities. Further, the two working day notice requirement of the Rule promotes public safety and the safe handling of LP gas. The two working day notice requirement of the Rule promotes the proper installation, storage, selling, and transporting of LP gas equipment. A customer’s existing gas company usually has superior knowledge of safety conditions at the LP gas installation because it installed the container and/or the entire LP gas system; has been delivering LP gas into the container; has maintained and/or repaired the system; and knows about any "red-tag" situations that exist on the LP gas system. In the LP gas industry, a red tag is a warning of an unsafe or hazardous condition in a LP gas system. The red tag is a paper tag hung by a wire from the tank cover or an appliance or other system component to warn all persons who see it that there is a problem or unsafe condition in the system. A gas company/tank owner will red-tag its LP gas container, appliance, or other system component when a temporary repair has been made or when the gas company knows of a defect in the system. A common temporary repair requiring a red tag is when the on-and-off valve leaks gas that can be detected at the threads between the handle and the body of the valve. The leak can be temporarily stopped by fully opening the valve and then with hand pressure turning the valve counterclockwise a little harder. A red tag would then be put on the tank saying "don’t refill until a permanent repair is made." Next, when the tank goes empty the repair can either be made on site or by changing the container on a scheduled basis. Customers sometimes remove a red tag after it is placed on the system by the current gas company. If the red tag is removed, the new, incoming LP gas company coming to disconnect the gas-filled container would not be aware that the system has a problem, defect, or temporary repair unless the existing gas company/tank owner has informed them. Accidents have occurred because customers have removed red tags without the knowledge of the gas company. The two working day notice requirement allows the existing company to address safety matters that are unknown to the incoming company, thus promoting a safe transfer of gas service. A switch-out or changeover requires more that just safely disconnecting the gas-filled container. If a gas company does not disconnect and remove its own gas-filled container, the gas-filled container must be disconnected and temporarily stored on the consumer’s property by the new incoming company. A disconnected gas-filled container is more dangerous than a disconnected empty container. Gas-filled containers temporarily stored on the customer’s property present a variety of safety concerns. If a gas-filled cylinder is disconnected and stored on its side at the customer location, liquid propane coming into contact with the safety valve can cause the valve to fail and leak. A gas filled cylinder can fall over creating a hazardous situation if it is punctured, or falls, and begins to roll or hits a person or vehicle. Failure to comply with Rule 5F-11.047(1), has resulted in at least one fatality in Florida because the tank was stored improperly on the customer property. Sometimes there is no safe place to temporarily store a gas-filled container on the customer property. In metropolitan markets there are unique safety concerns requiring that a gas-filled container be removed immediately upon disconnection. In some metropolitan areas there are limited property lines on residential tanks, underground tanks, commercial tanks that are stacked up behind strip malls with no place to move them, and tanks that are installed around schools or parks that could be tampered with by children. Without advance notice the tank owner cannot address these safe/liability concerns and responsibility for mishaps fall squarely on him. The two working day notice requirement gives the tank owner time to review customer records, evaluate the situation, and coordinate the disconnection and removal of its gas-filled tank. Sometimes the terrain makes safe temporary storage impossible or immediate removal of the tank required. In flood plain areas, local ordinances require the container to be chained or bolted down or bracketed to a wall. Vehicular traffic conditions at some locations require that a gas-filled container be protected behind a barrier. If the location requires that the new container be installed behind the existing barrier, the disconnected gas-filled container may end up stored in an un-barricaded area. The gas company that owns the existing installed container, has an investment in it, has serviced the customer location, and often will know whether or not there is a safe place to temporarily store the disconnected gas-filled container on the property. Two days' advance notice allows the existing gas company time to assess the safety situation unique to a customer location, thus promoting a safe transfer of gas service. Some LP gas containers are buried underground and must be excavated so the incoming gas company can install its own container underground. A crane, back-hoe, or other special equipment may be required to unearth and move the tank. The existing tank owner may also have to locate existing utilities and obtain governmental authorization or permits to excavate the tank. Some localities require the tank owner to notify local fire or building officials or apply for permits to move the container. If the tank is buried, other buried utilities on the property must be located before excavation. A gas-filled container sometimes must have the gas pumped out of it before the tank can be transported on Florida roads. This usually requires special equipment and two different kinds of trucks. The existing tank owner also has to schedule his employees to do the work. The Rule gives the tank owner the time to work out the logistics and scheduling of equipment to draw the gas out of the tank before it can be transported from the consumer’s property. In 1958, Florida’s tank disconnect rule was called LP Gas Regulation 11, of the Fire Marshall’s rules. LP Gas Regulation 11, Circa 1958 reads: No person, firm or corporation, other than the owner and those authorized by the owner so to do, shall connect or disconnect or transport or carry any means of conveyance whatsoever, any cylinder or tank containing Liquefied Petroleum Gas, whether in the liquid or vapor state. Thus, in 1958 all disconnects were prohibited unless authorized by the tank owner. A tank owner could monopolize a customer’s LP gas system by simply withholding authorization for the disconnect. The Insurance Commissioner at the time asked for an opinion from the Attorney General because he was troubled that a natural gas supplier was disconnecting LP gas containers without authorization from the owner. Voicing public safety concerns, the Attorney General opined that: Serious problems of public safety are involved in the disconnecting of L.P. gas cylinders and tanks and the above rule has its legitimate purpose in insuring public safety. I am of the opinion that this regulation can be legitimately enforced against the private utility in question, however, it must be applied in terms of public safety and not in such a manner as will unreasonably restrict competition. Acknowledging the serious public safety concerns related to LP gas tank disconnections, Attorney General Ervin also saw the potential evil of construing Regulation 11 to prohibit tank disconnections “under any circumstances.” “Advanced reasonable notice” was the cure. Attorney General Ervin opined: Said rule should not be construed to prohibit the private utility from disconnecting the L.P. gas tanks and cylinder under any circumstances. If after reasonable notice to the LP gas dealer said dealer does not disconnect his cylinders or tanks, the private utility should be permitted to disconnect them if it does so in a manner which leaves the tanks or cylinders in a safe condition. If the private utility should persist in failing to give reasonable notice and in leaving the tanks and cylinders in an unsafe condition, the State Fire Marshal may hold a hearing . . . and issue a cease and desist order. Subsequent to the Attorney General’s July 3, 1958, Opinion, on February 27, 1959, Regulation 11 was amended after Public Hearing. The revised, adopted Regulation 11 provided for “due and sufficient” notice to the tank owner prior to disconnecting his tank. Thus, in similar fashion to Rule 5F-11.047(1), Florida Administrative Code, if the notified tank owner did not disconnect his tank after a reasonable time, the tank could be disconnected by the company desiring to install its own tank.
The Issue In this proceeding, Florida Power Corporation (FPC) seeks approval to construct and operate 470 MW of natural gas-fired advanced design combined cycle (NGCC) generating capacity at its proposed Polk County Site. Additionally, FPC seeks a determination that the Polk County Site has the environmental resources necessary to support an ultimate capacity of 3,000 MW of combined cycle generating capacity fueled by a combination of natural gas, coal-derived gas and distillate fuel oil. Such an ultimate site capacity certification may be granted pursuant to Section 403.517, Florida Statutes and Rule 17-17.231, Florida Administrative Code.
Findings Of Fact Project Site and Vicinity FPC's proposed Polk County Site is located on approximately 8,200 acres in southwest Polk County, Florida, in an area dominated by phosphate mining activities. The Polk County Site is approximately 40 miles east of Tampa, 3 miles south of Bartow and 3.5 miles northwest of Fort Meade. Homeland, the nearest unincorporated community, lies about one mile to the northeast of the site boundary. The Polk County Site is bounded on the north by County Road (CR) 640 and along the southeast and south by a U.S. Agri-Chemical Corporation (USAC) mine. CR 555 runs north-south through the site. The Polk County Site is comprised of land in four different phases of mining activity: mine pits, clay settling ponds associated with phosphate mining, land which has been mined and reclaimed, and land which has yet to be mined. Approximately one-half of the Polk County Site is subject to mandatory reclamation. Land uses adjacent to the Polk County Site consist almost entirely of phosphate mining activities. One mobile home is located at the intersection of CR 640 and CR 555 approximately 2 miles from the proposed location of the principal generating facilities. General Project Description The initial generating capacity at the Polk County Site will be NGCC units. Under what has been designated as the Case A' scenario, ultimate site development will consist of 1,000 MW of NGCC and 2,000 MW of CGCC generating capacity, for a total of 3,000 MW. Under the alternative Case C scenario, the ultimate site capacity would consist of 3,000 MW of all NGCC capacity. The Case C scenario was initially developed as the worst case scenario for the socioeconomic impact analysis (i.e., the one that would produce the least amount of economic benefit.) The combined cycle units which initially burn natural gas can be modified to burn coal gas if necessary to meet changes in fuel supply or pricing. However, under the proposed ultimate site capacity, CGCC generating capacity will be limited to a maximum of 2,000 MW out of the total of 3,000 MW. At ultimate buildout the major facilities at the Polk County Site will include the plant island, cooling pond, solid waste disposal areas, and brine pond. The plant island will be located on mining parcels SA-11, SA-13 and the northerly portion of SA-12. The plant island ultimately will contain the combined cycle power block, oil storage tanks, water and sewage treatment facilities, coal gasification facilities, coal pile and rail loop, and coal handling facilities. The cooling pond at ultimate buildout will be located in mining parcels N-16, N-15 and N-11B, with a channel through N-11C. Mining parcels N-11C, P-3, Phosphoria, Triangle Lakes and P-2, if not used as a solid waste disposal area, will be used as water crop areas to collect rainfall for supplying the cooling pond. The brine pond will receive wastewater reject from the reverse osmosis (RO) water treatment system and will be located on mining parcel SA-9. Two solid waste disposal areas (SWDA) are planned for ultimate development of the Polk County Site. The SWDAs will be mining parcel SA-8 initially and mining parcel P-2 in later phases, if necessary. Coal gasification slag will be the predominant solid waste to be disposed of in the SWDAs. Other areas included within the Polk County Site are mine parcels N- 11A, N-13, N-9B, Tiger Bay East, Tiger Bay, the northerly 80 acres of N-9, SA-10 and the southerly 225 acres of SA-12. Along with providing a buffer for the Polk County Site facilities, these parcels also will provide drainage to Camp Branch and McCullough Creek. Linear facilities associated with the initial 470 MW of generating capacity at the Polk County Site will include a 230 kilovolt (kV) transmission line upgrade, a reclaimed water pipeline, and a backup natural gas pipeline. Site Selection A comprehensive process was used to select the Polk County Site. The goal of that process was to identify a site which could accommodate 3,000 MW of generating capacity and offer characteristics including: (1) multi-unit and clean coal capability; (2) technology and fuel flexibility; (3) cost effectiveness; (4) compatibility with FPC's commitment to environmental protection; (5) ability to comply with all government regulations; and (6) consistency with state land use objectives. The site selection process included the entire State of Florida. Participants in the site selection process included a variety of FPC departments, environmental and engineering consultants, and an eight-member Environmental Advisory Group (EAG) composed of environmental, educational, and community leaders. In October, 1990, with the concurrence of the EAG, the Polk County Site was selected. The ultimate basis for the selection of the Polk County Site was the disturbed nature of the site as a result of extensive phosphate mining activities. The Polk County Site also is compatible with FPC's load center and transmission line network, and is accessible to rail and highway transportation systems. PSC Need Determination On February 25, 1992, the PSC issued Order No. 25805 determining the need for the first 470 MW of generating capacity at the Polk County Site. The PSC concluded in its order that the first two combined cycle units (470 MW) at the Polk County Site will contribute to FPC's electric system reliability and integrity. It also concluded that the first two units would enable FPC to meet winter reserve margin criteria and to withstand an outage of its largest unit at the time of system peak demand. The PSC stated that it was important for FPC to secure a site to meet future needs and that the first two units would contribute toward this goal. Basis for Ultimate Site Capacity The Site Certification Application (SCA), including the Sufficiency Responses, addressed the impacts associated with 3,000 to 3,200 MW of generating capacity under several scenarios. FPC eliminated or modified several of the scenarios by filing a Notice of Limitations which addressed the capacity and environmental effects of 1,000 MW of NGCC and 2,000 MW of CGCC generating capacity at the Polk County Site. Throughout the SCA, Sufficiency Responses and Notice of Limitations, the capacity constraints and environmental effects were analyzed under a worst case scenario, i.e., the maximum environmental effects that could be expected at ultimate site capacity. An ultimate site capacity determination will significantly reduce the time and expense associated with processing supplemental applications for future units at the Polk County Site under the expedited statutory procedures of the Power Plant Siting Act. This will allow FPC to respond more quickly to changes in growth and demand. An ultimate site capacity determination also provides FPC the assurance that the Polk County Site has the land, air and water resources to support future coal gas-fired generating capacity. Project Schedule and Costs Construction of the initial 470 MW of NGCC generating capacity is scheduled to begin in 1994. These units will go into operation in 1998 and 1999. Based on current load forecasts, it is expected that approximately one 250 MW unit will be added every other year to the Polk County Site. Under this schedule, ultimate site development of 3,000 MW would occur about 2018. Capital investment for the Polk County Site is expected to be approximately $3.4 billion for the 1,000 MW NGCC/2000 MW CGCC Case A' scenario and approximately $1.7 billion for the all NGCC Case C scenario. Project Design Generating units for the Polk County Site will be advanced design combined cycle units firing natural gas and/or coal gas, with low sulfur fuel oil as backup. Each combined cycle unit will consist of one or two combustion turbines (CT), a heat recovery steam generator (HRSG) for each CT and one or two steam turbines (ST). The first 470 MW of generating capacity will consist of two CTs firing natural gas, two HRSGs and one or two STs. At ultimate site capacity, the Polk County Site will consist of 12 CTs, 12 HRSGs, and 6 to 12 STs. A combined cycle unit is a generating system that consists of two sequential generating stages. In the first stage, the natural gas, coal gas or fuel oil is burned to operate the CT. Hot exhaust gas from the CT is passed through the HRSG to produce steam to operate the ST. The CT and steam from the HRSG can be arranged to drive individual generators or a single generator. In later phases of the Polk County Site, up to 2,000 MW of combined cycle generation may be fired on coal gas. The combined cycle units that were initially constructed to operate on natural gas can be modified to operate on coal gas. Under the Case A' scenario, two coal gasification plants would be built to produce coal gas for the combined cycle units. Associated with the coal gasification phase of the project will be the expansion of the plant island to accommodate the storage and handling of coal. Coal will be transported onsite by railroad. A rail loop for coal trains will be constructed on the plant island. It will be sized to accommodate a 100-car coal train. The coal storage area and limestone stockout will be located within the coal loop. Limestone is used in the coal gasification process as a fluxing agent to improve the viscosity of the coal slag, a by-product of the coal gasification process. The coal storage area, including the coal piles and emergency coal stockout system, will be lined with an impervious liner, and runoff from the coal storage area will be recycled to the coal gasification plants. The cooling pond for the Polk County Site will be located north and east of the plant island. Water from the cooling pond will be used for producing steam and condenser cooling. The cooling pond will be constructed initially in mining parcel N-16 and then in parcels N-15 and N-11B for later phases. These areas are mined-out pits which are surrounded by earthen dams. These dams will be upgraded where required to provide stability equivalent to the requirements of Chapter 17-672, Florida Administrative Code, for phosphate dams. Soil and Foundation Stability To evaluate the existing soil conditions at the Polk County Site, more than 165 test borings were made. The plant island is an existing mine pit which has been partially filled with sand tailings from phosphate mining operations. Underlying the sand is the Hawthorn formation which is often used as the base for deep load bearing foundations. Foundations for the heavier loads of power plant facilities will require pile foundations or similar types of deep foundations that will extend into the Hawthorn formation. The potential for sinkhole development at the Polk County Site was investigated by reviewing historic sinkhole records, aerial photographs, well drillers' logs, and by drilling three deep borings at the site. The investigation demonstrated that the potential for sinkhole development at the Polk County Site is low and acceptable for this type of construction. Construction Activities Construction of the Polk County Site will be phased over an approximately 25-year period beginning in 1994. The development of the Polk County Site is expected to take place in seven phases. Changes in the scope or sequence of the individual phases may occur depending on capacity needs over time. During Phase I, the initial earthwork and dewatering activities required for the construction of the plant island and cooling pond will take place. The initial cooling pond and plant island area will be dewatered and fill will be placed in SA-11 and SA-13 for the initial power plant construction. Water from the dewatering activities will be conserved by storage in mining parcels SA-8, SA-9, SA-10, N-15 and the northerly part of SA-12, except for quantities used in IMC's recirculation system. Clay consolidation will commence for other parcels, such as N-11A, N-11B, N-11C, N-13 and N-9B. Phosphate mining and related operations will still function in parcels P-2, P-3, Phosphoria, Triangle Lakes, and N-9. The initial vertical power plant construction for the first 470 MW of generating capacity will take place in Phase II. Water stored in Phase I, along with reclaimed water from the City of Bartow, will be used to fill the cooling pond in parcel N-16. Any excess reclaimed water from the City of Bartow, if necessary, will be stored in the eastern portion of N-16. Mining parcels SA-10, the southerly part of SA-12, and a portion of the offsite Estech Silver City plant site will be configured for drainage enhancement to McCullough Creek. Mining parcel SA-8 will be prepared to receive solid waste and parcel SA-9 will be prepared to receive wastewater from the RO system and neutralization basin. Wildlife habitat creation and enhancement will begin in parcels N-9B and N-13. Phase III of the Polk County Site represents the operation of the power plant from 235 MW to 1,500 MW, currently projected as NGCC capacity. The plant island, which will contain the generating units, will be located on mining parcels SA-11 and SA-13. The cooling pond will be located in N-16 and will receive reclaimed water from the City of Bartow and water crop from mining parcels P-3, Phosphoria, P-2, Triangle Lakes, N-15, N-11B, N-11C, the northerly end of SA-12 and the east end of N-16. Phase IV will encompass the development of the Polk County Site from 1,500 MW to 2,000 MW, currently projected as NGCC capacity. In conjunction with the additional generating units onsite, the cooling pond in N-16 will be enlarged to 1,219 acres. Other portions of the Polk County Site would remain the same as in Phase III. During Phase V, coal gasification is projected to be introduced to the Polk County Site. Generating capacity will be increased to 2,250 MW of which 1,000 MW are projected to be NGCC and the remaining 1,250 MW will be CGCC. To accommodate the coal gasification facilities, the northerly portion of SA-12 would be filled. The balance of the site would remain as described in Phase IV. During Phase VI, the generating capacity at the Polk County Site is projected to increase from 2,250 MW to 3,000 MW. This generating capacity will be a combination of 1,000 MW on NGCC and 2,000 MW on CGCC. During this phase, the cooling pond will be enlarged to 2,260 acres and will include parcels N-16, N-15 and N-11B, and a channel through N-11C. Earthwork will be required in N-15 and N-11B to repair and improve dams, and add slope protection on the dam inner faces and seeding on the exterior faces. Phase VII will be the final phase of the Polk County Site. During this phase, if the solid waste disposal area in mining parcel SA-8 were to become full it would be closed and mining parcel P-2 would be prepared to receive solid waste from the power plant operations. Parcels P-3 and Phosphoria will be available for mitigation, if necessary, as a result of activities in parcel P-2. This phase might not occur if coal slag is successfully recycled. Fuel Supply Fuel for the initial 470 MW of combined cycle generation will consist primarily of natural gas, with light distillate fuel oil as backup. Natural gas will be delivered by pipeline to the Polk County Site at a rate of 3.75 million cubic feet per hour. FPC currently plans to receive natural gas from the proposed Sunshine Pipeline for which certification is being sought in a separate proceeding. The Application for the Sunshine Pipeline was filed with DEP in August 1993. The other source for natural gas will be the backup natural gas pipeline which is being certified in this proceeding as an associated linear facility. Fuel oil will be delivered to the site by tanker truck, and enough fuel oil will be stored onsite for three days of operation for each combined cycle unit. At ultimate development, three 4-million gallon oil tanks will be located on the Polk County Site. All fuel handling and storage facilities, including unloading areas, pump areas, piping system, storage tanks, and tank containment areas will meet the requirements of DEP Chapter 17-762, Florida Administrative Code, and applicable National Fire Prevention Association Codes. At ultimate site development, the combined cycle units would use both natural gas and coal gas as primary fuels, and fuel oil as a backup fuel. As with the initial phase of operation, natural gas will be supplied by pipeline. At 1,000 MW of NGCC capacity, six to eight million cubic feet per hour of natural gas will be required. Coal for the coal gasification units will be delivered by railroad. For 2,000 MW of CGCC generating capacity, approximately 15,000 to 20,000 tons of coal a day will be required. Linear Facilities The initial 470 MW of NGCC generation includes three associated linear facilities: a 230-kV transmission line upgrade, a reclaimed water pipeline, and a backup natural gas pipeline. 230-kV Transmission Line The 230-kV transmission line will be routed from the existing FPC Barcola Substation within the Polk County Site to the FPC Ft. Meade Substation adjacent to CR 630. The transmission line corridor is approximately 1,000 feet wide within the Polk County Site boundary and narrows to 500 feet as the corridor leaves the site. The transmission line corridor follows several linear facilities including an existing transmission line right-of-way, CR 555 and CR 630. Land uses along the corridor are primarily phosphate mining, agricultural and industrial. Wetlands within the transmission line corridor are minimal and are associated primarily with roadside ditches. Where the transmission line crosses McCullough Creek, the creek will be spanned. The 230-kV transmission line will be constructed using single shaft tubular steel poles with a double circuit configuration for two 230-kV circuits. The transmission line structures will range in height from 110 feet to 145 feet. The conductor for the transmission line is a 1590 ACSR conductor that is approximately 1.54 inches in diameter. Conductor span lengths between structures will range from 500 to 900 feet. The transmission line will be constructed in six phases. During the first phase, the right-of-way will be cleared. Clearing in upland areas will be done using mowers and other power equipment. Clearing in wetlands, if necessary, will be accomplished by restrictive clearing techniques. After the right-of-way has been cleared, existing structures which will be replaced with new transmission line structures will be removed by unbolting them from their foundations and removing the structures with a crane. Foundations for new transmission line structures will be vibrated into the ground using a vibratory hammer or placed into an augured hole and backfilled. After the foundations are in place, new structures will be assembled on the foundations using a crane. Insulation and pole hardware will be mounted on the structures after erection. In the fifth phase of construction, conductors will be placed on a structure by pulling the conductors through a stringing block attached to the structure. During the final phase of construction, the structures will be grounded and any construction debris will be removed from the right-of-way. The construction of the 230-kV transmission line is estimated to require approximately 17 weeks. Construction of the transmission line will meet or exceed standards of the National Electrical Safety Code; FPC transmission design standards; Chapter 17- 814, Florida Administrative Code; and the Florida Department of Transportation Utility Accommodation Guide, where applicable. Electric and magnetic fields from the 230-kV transmission line will comply with the standards set forth in Chapter 17-814, Florida Administrative Code. Audible noise from the transmission line should occur only during rainy weather and will not exceed 39.1 dBA at the edge of the right-of-way. Since the transmission line is not located near many residences, interference to television and AM radio reception should be minimal. If interference does occur, it can be identified easily and corrected on an individual basis. Backup Natural Gas Pipeline The backup natural gas pipeline will originate at the Florida Gas Transmission pipeline in Hillsborough County at CR 39. The backup pipeline corridor runs generally east for 18 miles until it enters the Polk County Site at the western boundary of the plant island. The pipeline corridor is 1,000 feet wide and it generally follows linear facilities such as Jameson Road, a Tampa Electric Company transmission line, the CSX Railroad, Durrance Road, and Agricola Road. Several subalternate corridors are proposed in Polk County where the backup natural gas pipeline crosses phosphate mining land. The subalternate corridors, all of which are proposed for certification, are necessary to maintain flexibility in routing the backup natural gas pipeline around active mining operations. The uses of land crossed by the backup natural gas pipeline corridor consist primarily of phosphate mining and some agriculture. There are only two areas of residential land use along the corridor, one along Jameson Road in Hillsborough County, and the other near Bradley Junction along Old Highway 37 in Polk County. Ecological areas crossed by the natural gas pipeline corridor include a portion of Hookers Prairie in Polk County, some isolated wetlands associated with phosphate mining activities, and the South Prong Alafia River near CR 39 in Hillsborough County. The backup natural gas pipeline will consist of a metering facility, a scraper trap for pipeline cleaning, a maximum 30-inch buried pipeline made of high strength steel, a pressure regulating station, a cathodic protection system for corrosion control, and a Supervisory Control and Data Acquisition (SCADA) system to monitor and operate the pipeline. The pipe to be used for the natural gas pipeline will be manufactured in accordance with standards specified in 49 CFR 192 and the industrial standards referenced therein. Pipe thickness will vary depending on the population of the area crossed. External corrosion control for the pipe will be provided by an external coating around the pipe and a cathodic protection system designed to prevent electrochemical corrosion of the pipe. Pipeline sections will be hydrostatically tested before leaving the factory to 125 percent of the design pressure. Activities associated with the construction of the backup natural gas pipeline will include survey and staking of the right-of-way, right-of-way preparation, stringing of the pipe, bending, lineup welding and nondestructive testing, ditching, lowering in of pipeline sections, backfilling, tying in pipeline sections, testing and right-of-way restoration. Construction of the pipeline will take place typically within a 75 foot-wide right-of-way. A wider right-of-way may be required where specialized construction activities, such as jack and bore methods, are used. After construction, the natural gas pipeline will have a permanent 50-foot right-of-way. Where the pipeline crosses federal and state highways or water courses, directional drilling or jack and bore construction methods will be used to minimize disturbance. Where the pipeline crosses the South Prong Alafia River, directional drilling will be used to locate the pipeline underneath the river bed. Pipeline welding will be done by highly skilled personnel who have been qualified in accordance with 49 CFR 192. Pipeline welds will be visually inspected and a percentage of the welds will be x-rayed for analysis. Once the pipeline is constructed, buried and tie-in welds completed, the pipeline will be hydrostatically tested. Hydrostatic testing will use water with a minimum test pressure of 125 percent of maximum operating pressure. Water for hydrostatic testing will be pumped from and returned to the Polk County Site cooling pond. Construction of the pipeline will comply with Title 49 CFR Part 192, Transportation of Natural and Other Gas by Pipelines: Minimum Federal Safety Standards; Chapter 25-12, Florida Administrative Code; Safety of Gas Transportation by Pipeline; and the FDOT Utility Accommodation Guide. After construction of the backup natural gas pipeline, the right-of- way will be restored and a 50-foot-wide permanent right-of-way will be maintained. Line markers will be located along the pipeline at regular intervals and warning signs will be posted where the pipeline crosses roads, railroads, or stream crossings. The estimated cost for the pipeline construction is $611,100 per mile, or $11.2 million for the 18.2 mile pipeline route. Reclaimed Water Pipeline The reclaimed water pipeline will run from the City of Bartow to the cooling pond near the eastern side of the Polk County Site. The reclaimed water pipeline corridor follows the CSX Railroad and U.S. Highway 17/98 south from the southerly Bartow city limit turning west toward the Polk County Site just south of Homeland. Land uses along the corridor include phosphate mining, commercial sites, rural residences and recreation. The corridor does not cross any environmentally sensitive habitats. The reclaimed water pipeline consists of a buried pipe, 24 to 36 inches in diameter, butterfly valves about every mile along the pipeline, and a flow meter. Pumping of reclaimed water will be provided by the Bartow Sewage Treatment Plant. Construction of the reclaimed water pipeline is similar to that of the natural gas pipeline and includes the following activities: survey and staking of the right-of-way, right-of-way preparation, ditching or trenching construction, stringing of the pipe and pipe installation, back filling, hydrostatic testing, and right-of-way restoration. Where the pipeline crosses state or federal highways or railroads, the pipe will be installed by using jack and bore construction. Construction of the reclaimed water pipeline is estimated to cost $500,000 per mile or $5,000,000 for the total length of the pipeline. Construction of the reclaimed water pipeline will comply with the standards in Chapter 17-610, Florida Administrative Code, the Florida Department of Transportation Utility Accommodation Guide, and the EPA Guidelines for Water Reuse Manual. The pipeline will be hydrostatically tested prior to operation. Corrosion control of the pipeline will depend on the material used for the pipeline and the soil conditions. If a polyethylene or a polyvinylchloride material is used, no corrosion control will be necessary. If ductile iron is used, the soil will be tested for corrosive properties and, if necessary, the pipeline will be protected from corrosion with a poly wrap material. Solid Waste Disposal Various types of solid waste will be generated by the operation of the Polk County Site. Depending upon the type of solid waste, disposal may be made in the onsite solid waste disposal areas or it may be disposed of offsite. Waste inlet air filters from the combustion turbines and general waste, such as office waste, yard waste and circulating water system screenings, will be recycled or disposed of offsite at the Polk County North Central Landfill. Solid waste from the well water pretreatment and blowdown pretreatment will be disposed of onsite in the solid waste disposal area to be constructed in mining parcel SA-8. Sulfur, a by-product of coal gasification, will be of marketable grade and will be stored in a molten state onsite and delivered to buyers by rail car or tanker truck. Slag, a by-product of coal gasification, will be the largest volume of solid waste generated at the Polk County Site. Slag is potentially marketable and FPC will make efforts to recycle this by-product as construction aggregate. If slag is not marketable, it will be disposed of in the onsite solid waste disposal areas initially in mining parcel SA-8 and later, if necessary, in parcel P-2. Low volume spent acidic and basic solutions produced in the regeneration of demineralizer resin bed ion exchanges during operation of the facility will be treated in an elementary neutralization unit to render them non-hazardous. Other potentially hazardous waste will be tested and if determined hazardous will be disposed of in accordance with all applicable federal and state laws. Onsite disposal of slag, and well water and blowdown pretreatment solids will be made in the solid waste disposal areas to be constructed in parcels SA-8 and later, if necessary, P-2. These parcels are clay lined impoundments that have clays generally 20 to 40 feet thick. Prior to disposal of any solid waste in a clay settling area, that area will be drained and the clays consolidated. The clays will be probed and if the clay thickness is less than 10 feet it will be refurbished or patched with a synthetic liner. Additionally, a geotextile net will be installed to provide tensile strength to the upper layer of clay. Perimeter leachate collection piping will be installed. Leachate in the interior of the solid waste disposal areas will be monitored and collected by the use of well points to maintain the leachate head at no greater than 4 feet. The solid waste disposal area in parcel SA-8 will be closed by installing a two-foot thick soil cover which will be seeded and graded to provide water crop to parcel N-16. At closure, the leachate level will be pumped down to minimize the residual leachate head. The clay which lines the base of the solid waste disposal areas decreases in permeability as it consolidates and the solids content of the clay increases. In the first 20 to 50 years of consolidation, the hydraulic gradient of the clay is reversed and water will drain upward. Analysis of the clay shows that it would take 60 to 100 years for leachate to seep through the clay liner. After closure and capping of the solid waste disposal area occurs and the leachate residual head is pumped out, leachate is not expected to break through the liner. Based on the design of the solid waste disposal areas and the analysis of the clay, the solid waste disposal areas in parcels SA-8, and later P-2, should provide equivalent or superior protection to that of a Class I landfill under Chapter 17-7.01, Florida Administrative Code. Industrial Wastewater The Polk County Site is designed to be a zero discharge facility. There will be no offsite surface water discharge of contaminated stormwater or cooling pond blowdown. Cooling pond blowdown will be treated first by a lime/soda ash softening pretreatment system. A portion of the softened effluent will be routed to the cooling pond and a portion will be treated further by reverse osmosis (RO). High quality water from the RO system will be reused in the power plant as process water. The reject wastewater from the RO system will be sent to the brine pond for evaporation. In later stages of the Polk County Site operation, the RO reject wastewater will be concentrated prior to disposal in the brine pond. The brine pond will be constructed in parcel SA-9, a waste clay settling pond. Parcel SA-9 has thick waste clay deposits which will act as a liner. A synthetic liner will be placed along the interior perimeter of the brine pond out to a point where the clay is at least 10 feet thick. The synthetic liner will prevent seepage of the brine through the embankment of the brine pond and will provide added protection near the perimeter of the brine pond where the clay liner is thinner. Groundwater Impacts/Zone of Discharge The brine pond and solid waste disposal areas will be located in waste clay settling ponds with thick clay liners. They will be constructed to minimize, if not eliminate, seepage of brine and leachate to groundwater. If brine or leachate should seep through the clay liner, dispersion and dilution will reduce chemical concentrations so that neither primary nor secondary groundwater quality standards will be exceeded at the boundary of the zone of discharge. A zone of discharge has been established for the solid waste disposal area in parcel SA-8, the brine pond in parcel SA-9, and the cooling pond in parcels N-11B, N-15 and N-16. The zone of discharge will extend horizontally 100 feet out from the outside toe of the earthen dam along a consolidated boundary surrounding these facilities and vertically downward to the top of the Tampa member of the Hawthorn Group. A groundwater monitoring plan will be implemented to monitor compliance with groundwater standards at the boundary of the zone of discharge. Surficial Hydrology and Water Quality Impacts The Polk County Site is located along the divide between the Peace River Drainage Basin and the Alafia River Drainage Basin. Water bodies near the site include McCullough Creek, Camp Branch, Six Mile Creek, Barber Branch, and South Prong Alafia River. Mining has disrupted or eliminated natural drainage patterns from the Polk County Site to these water bodies. Currently the only drainage from the Polk County Site to these water bodies is through federally permitted National Pollutant Discharge Elimination System (NPDES) outfalls to McCullough Creek and Camp Branch. To assess the impact to the surficial hydrology of the Polk County Site and surrounding water bodies, the baseline condition was assumed to be the surficial hydrology which would be present under current mandatory reclamation plans for the mining parcels onsite and offsite. The baseline for non-mandatory parcels was assumed to be the minimum reclamation standards under the DEP/Bureau of Mine Reclamation (BOMR) (formerly within the Department of Natural Resources) Old Lands Program and the baseline for non-mandatory offsite parcels was considered to be the existing condition. The one water body onsite for which the baseline condition presently exists is Tiger Bay, which has been reclaimed and released. The baseline condition for the Polk County Site ultimately would include elimination of seepage from N-16 to Tiger Bay and removal of the NPDES outfall weir from Tiger Bay to Camp Branch. These conditions will result in a lowering of the water table in Tiger Bay and the drying out of wetlands in that area. Under current reclamation plans, water bodies also will be created in parcels SA-12 and SA-11. Other than the reclaimed Tiger Bay and Tiger Bay East, DEP, Southwest Florida Water Management District (SWFWMD) and Polk County have not claimed jurisdiction over any of the water bodies onsite within areas in which phosphate mining activities have been or will be conducted. The major construction activities which may impact offsite surface water bodies are the dewatering activities associated with the initial phase of construction. During this period, parcels SA-11, SA-13 and N-16 will be dewatered to allow earth-moving activities to take place. Dewatering effluent will be stored onsite, reused in IMC's recirculation system, or discharged in the event of above-average rainfall. After the earthwork is complete, the water will be returned to N-16. Based on this construction scenario, no adverse impact to offsite surface water bodies is expected from the construction activities associated with the Polk County Site. The Polk County Site has been designed to function as a "zero discharge" facility. No surface water will be withdrawn from or discharged to any offsite surface water body as a result of plant operations. Certain non- industrial areas within the Polk County Site will be designed, however, to provide offsite drainage to enhance flows to McCullough Creek and Camp Branch. Flow to McCullough Creek will be enhanced by drainage from parcel SA-10, an offsite portion of the Estech Silver City Plant Site, and the southerly portion of parcel SA-12. Drainage from parcels N-11A, N-13, N-9B, Tiger Bay East and Tiger Bay will enhance flows to Camp Branch. Additionally, FPC has agreed to explore the possibility of restoring drainage to Six Mile Creek if onsite water cropping produces more water than FPC needs for power plant operations and if such drainage can be accomplished without additional permits. The net effect of the drainage enhancement plans will be to equal or improve flows to McCullough Creek and Camp Branch over the baseline condition for the site. There are several types of surface water systems to be developed on the Polk County Site. Surface water runoff from the plant island, other than that from the coal and limestone storage areas, will be routed to the site runoff pond and then used in the cooling pond as makeup water. Surface water runoff from the coal and limestone storage areas, as well as runoff from the active solid waste disposal area, will be routed to a lined recycle basin and will be used as process makeup water for the coal gasification plant. Surface water runoff from mining parcels N-11C, Triangle Lakes, N-11B and N-15 prior to its use as part of the cooling pond, P-3, Phosphoria, P-2 prior to its use as a solid waste disposal area, and SA-8 after it has been closed as a solid waste disposal area, will be directed to the cooling pond as makeup water. All of the surface water management systems will meet the requirements of the SWFWMD Management and Storage of Surface Water rules. Subsurface Hydrology and Impacts from Water Withdrawal The Polk County Site will use a cooling pond for process water and for cooling water for the combined cycle units and the coal gasification facilities. For the initial 940 MW of generating capacity, makeup water for the cooling pond will come from onsite water cropping and reclaimed water from the City of Bartow. FPC has negotiated an agreement with the City of Bartow for 3.5 or more million gallons per day (mgd) of reclaimed water from its wastewater treatment facility. At ultimate site capacity, the Polk County Site will require up to 23.6 mgd from a combination of offsite sources and groundwater for the operation of the power plant. FPC has agreed with the SWFWMD to obtain at least 6.1 mgd from reclaimed water and other offsite non-potable water sources, including the City of Bartow, for use as makeup water for the cooling pond. The additional 17.5 mgd of water may be withdrawn from the Upper Floridan Aquifer if additional sources of reclaimed water are not available. FPC has identified substantial amounts of reclaimed water that may be available. A limited quantity of potable water from the Upper Floridan Aquifer will be needed to supply drinking water and other potable water needs for power plant employees. Well water from the Upper Floridan Aquifer will be treated, filtered and chlorinated in an onsite potable water treatment system prior to consumption. At ultimate site development, potable water consumption is estimated to average 19,000 gallons per day, with a peak consumption of 36,000 gallons per day. As an alternative, FPC may connect with the City of Bartow or the City of Fort Meade potable water system. The subsurface hydrology of the Polk County Site consists of three aquifer systems. The uppermost system is the surficial aquifer which is located in the upper 20 to 30 feet of soil. Due to mining operations, the surficial aquifer has been removed from the site except beneath highway rights-of-way and portions of some dams. Below the surficial aquifer lies the intermediate aquifer which is comprised of an upper confining layer approximately 120 feet thick, a middle water bearing unit about 60 feet thick, and a lower confining unit about 80 to 100 feet thick. This aquifer system provides potable water to some small quantity users in the area. Below the intermediate aquifer is the Floridan Aquifer, which consists of the Upper Floridan Aquifer, a discontinuous intermediate confining unit, and the Lower Floridan Aquifer. The Upper Floridan Aquifer provides a larger source of potable water for the area. The Lower Floridan Aquifer is characterized by poorer quality water and has not been used generally for water supply. The principal impact to groundwater from construction of the Polk County Site will be from the dewatering activities in parcels N-16, SA-11 and SA-13. This impact, if not mitigated, could result in the lowering of groundwater levels in the surficial aquifer in adjacent wetlands. During construction, recharge trenches will be constructed in certain locations near wetlands. Modeling analysis demonstrates that the recharge trenches will adequately mitigate any offsite groundwater impacts that otherwise would be caused by construction dewatering. The principal groundwater impact from the operation of the Polk County Site will be the withdrawal of water from the Upper Floridan Aquifer for process water and cooling pond makeup. Water from the Upper Floridan Aquifer is the lowest quality of groundwater that can be used for the Polk County Site while maintaining the cooling pond as a zero discharge facility. The withdrawal of 17.5 mgd from the Upper Floridan Aquifer at ultimate site development will not adversely impact offsite legal users of groundwater and will comply with the SWFWMD consumptive use criteria for groundwater withdrawal. Ecological Resources The baseline for the ecological resources at the Polk County Site was established as the site condition that would exist following (i) mandatory reclamation under reclamation plans approved by the DEP/BOMR, and (ii) non- mandatory reclamation normally carried out by the mining companies. In the cases of Tiger Bay, which has been reclaimed and released by DEP/BOMR, and Tiger Bay East, which has revegetated naturally without reclamation, the ecological baseline was represented by the current condition of these parcels. This baseline methodology was proposed by FPC in a Plan of Study which was accepted by DEP in a Binding Written Agreement. The predominant land cover that would occur under the baseline condition at the Polk County Site would be agriculture. Approximately 70 percent of the Polk County Site, or approximately 5,678 acres, would be developed as crop land, citrus or pasture. The remaining 30 percent of the site would be reclaimed as non-agricultural uplands, wetlands and open water bodies. Tiger Bay already has been reclaimed and released by DEP/BOMR and Tiger Bay East has revegetated naturally. These two parcels represent one-fourth (524 acres) of the natural habitat under the ecological baseline condition. The quality of the baseline land cover and vegetation was established by surveying several onsite and offsite areas which have been reclaimed and released. Baseline aquatic resources at the Polk County Site consist of Tiger Bay and the aquatic resources which would have been developed under existing reclamation plans. This baseline would include open water bodies and forested wetlands in parcels SA- 11 and SA-12, and forested and herbaceous wetlands in parcel N-16. Both Estech and IMC have exceeded their mine-wide wetlands mitigation obligations even without those wetlands. The quality of the baseline open water bodies on the Polk County Site was evaluated by surveying parcel N- 16, which currently consists of open water habitat. The quality of wetlands was determined by surveying Tiger Bay, which contains wetlands that have been reclaimed and released. The baseline aquatic resources were found to have significant fluctuations of dissolved oxygen, and were characterized by encroachment of cattail, water hyacinth and other nuisance species. All of the aquatic areas sampled as representative of baseline conditions showed significant eutrophication. No DEP or SWFWMD jurisdictional wetlands currently exist onsite, within areas in which phosphate mining activities have been or will be conducted, except in the reclaimed Tiger Bay and Tiger Bay East. Baseline evaluation of threatened and endangered species, and species of special concern (listed species) was conducted by collecting information regarding regional habitat descriptions; plant species lists and ecological reports for the area; lists and ecological reports of birds, mammals, reptiles and amphibians common to the area; species checklists; reports of sightings or abundance estimates; interspecific relationships and food chains of important species; location of rare, threatened or endangered species or critical habitat for these species in the region; and occurrence of potential preexisting stresses. Information from the Florida Natural Areas Inventory and approved mine reclamation plans was reviewed. Visits were made to nearby reclaimed sites by land and low-flying helicopters. No listed plant species were found at the site or offsite study areas. Existing reclamation plans, and consequently the ecological baseline condition, do not require the planting of such species. Listed animal species which were observed at the Polk County Site and are expected under the baseline conditions include the American alligator, woodstork, southeastern kestrel, osprey, little blue heron, snowy egret and tricolored heron. The baseline conditions would provide suitable feeding habitat for these species, but only limited areas of suitable nesting habitat. Both the current condition of the site and baseline condition provide feeding habitat for the American bald eagle, however, the nesting potential for this species will be greater after the implementation of the baseline condition. Impacts to the baseline ecological resources from the construction and operation of the Polk County Site will be more than compensated by habitat creation and enhancement programs proposed by FPC. The primary impacts to the baseline ecological resources will occur when power plant facilities, such as the plant island, cooling pond, brine pond and solid waste disposal area are constructed, eliminating these parcels from the baseline ecological resources. Without development of the Polk County Site, these parcels would represent approximately 2,268 acres of viable lakes and upland and wetland habitats. FPC has proposed a total of 3,713 acres of viable wildlife habitat as part of the ultimate development of the Polk County Site. Accordingly, the available wildlife habitat after construction of the Polk County Site represents a net increase of 1,445 acres over the baseline ecological resource conditions. This increase in habitat, particularly in the buffer area, will be a net benefit for protected species. In providing more wildlife habitat than baseline conditions, FPC has agreed to certain enhancement activities that will specifically offset any impact to baseline ecological resources. These enhancement programs include habitat and wetland creation in parcels N-9B and N-13; habitat creation and offsite drainage enhancement in parcel SA-10; implementation of a wildlife habitat management plan and exotic vegetation control in parcels SA-10, N-9B and N-13; drainage enhancement to McCullough Creek and Camp Branch; and funding the acquisition of a 425 acre offsite area to serve as part of a wildlife corridor. Air Pollution Control Polk County has been designated by the U.S. Environmental Protection Agency (EPA) and DEP as an attainment area for all six criteria air pollutants. Federal and state Prevention of Significant Deterioration (PSD) regulations provide that the project will be subject to "new source review." This review generally requires that the project comply with all applicable state and federal emission limiting standards, including New Source Performance Standards (NSPS), and that Best Available Control Technology (BACT) be applied to control emissions of PSD pollutants emitted in excess of applicable PSD significant emission rates. The project will limit emission rates to levels far below NSPS requirements. For the initial 470 MW phase of the Project, BACT must be applied for the following pollutants: sulfur dioxide (SO2), nitrogen oxides (NOx), particulates (PM and PM10), volatile organic compounds (VOCs), carbon monoxide (CO), beryllium, inorganic arsenic, and benzene. For the ultimate site capacity, BACT is required for each of these pollutants, and sulfuric acid mist (H2SO4), mercury, and lead as well. BACT is defined in DEP Rule 17-212.200(16), Florida Administrative Code, as: An emission limitation, including a visible emission standard, based on the maximum degree of reduction of each pollutant emitted which the Department, on a case-by-case basis, taking into account energy, environmental and economic impacts, and other costs, determines is achievable through application of production processes and available methods, systems and techniques (including fuel cleaning or treatment or innovative fuel combustion techniques) for control of each such pollutant. The primary purpose of a BACT analysis is to minimize the allowable increases in air pollutants and thereby increase the potential for future economic growth without significantly degrading air quality. Such an analysis is intended to insure that the air emissions control systems for the project reflect the latest control technologies used in a particular industry and is to take into consideration existing and future air quality in the vicinity of the project. The BACT analysis for the project therefore evaluated technical, economic, and environmental considerations of available control technologies and examined BACT determinations for other similar facilities across the United States. For the first 470 MW of NGCC units, BACT for SO2 emissions from the CTs is the use of natural gas as the primary fuel and the use of low sulfur oil for a limited number of hours per year. For the first 470 MW of NGCC units, BACT for CO, VOCs, PM, beryllium, arsenic, and benzene emissions from the CTs is efficient design and operation of the CTs, the inherent quality of natural gas (the primary fuel), and a limitation on the annual use of fuel oil. For the first 470 MW of combined cycle units, BACT for NOx emissions from the CTs is the use of advanced dry low NOx combustors capable of achieving emissions of 12 parts per million by volume dry (ppmvd) at 15 percent oxygen when burning natural gas, water/steam injection to achieve 42 ppmvd at 15 percent oxygen when burning fuel oil, and limited annual fuel oil use. For the first 470 MW of NGCC units, the DEP staff initially proposed BACT for NOx emissions from the CTs as 9 ppmvd at 15 percent oxygen when burning natural gas, using dry low NOx combustor technology. However, after careful consideration, it was determined that, because of the lack of proven technology to achieve such emission rate, it would be more appropriate to establish BACT at 73 lb/hour/CT (24-hour average, based on 12 ppmvd at 15 percent oxygen and 59o F) using dry low NOx combustor technology and to require FPC to make every practicable effort to achieve the lowest possible NOx emission rate with those CTs when firing natural gas. FPC also is required to conduct an engineering study to determine the lowest emission rate consistently achievable with a reasonable operating margin taking into account long-term performance expectations and assuming good operating and maintenance practices. Based on the results of that study, DEP may adjust the NOx emission limit downward, but not lower than 55 lb/hour/CT (24-hour average, based on 9 ppmvd at 15 percent oxygen and 59o F.). For the 99 MBtu/hour auxiliary boiler that is part of the initial phase of the project, BACT for NOx emissions is low NOx burners, limited annual fuel oil use, and limited hours of annual operation. BACT for NOx emissions from the 1300 kW diesel generator is combustion timing retardation with limited hours of annual operation. For the 99 MBtu/hour auxiliary boiler and the diesel generator as part of the initial phase of the project, BACT for CO, VOC, SO2, PM, benzene, beryllium, and arsenic emissions consists of good combustion controls, the inherent quality of the fuels burned, the use of low-sulfur fuel oil, and limited hours of operation. For the fuel oil storage tank as part of the initial phase of the project, BACT is submerged filling of the tank. For the coal gasification and other facilities to be built during later phases of the project, a preliminary BACT review was undertaken by FPC to support the demonstration that the Polk County Site has the ultimate capacity and resources available to support the full phased project. Air Quality Impact Analysis Air emissions from the project also must comply with Ambient Air Quality Standards for six criteria pollutants and Prevention of Significant Deterioration increments for three pollutants. Polk County and the contiguous counties are classified as Class II areas for PSD purposes; the nearest Class I area is the Chassahowitzka National Wilderness Area, located approximately 120 km. from the Site. An air quality analysis, undertaken in accordance with monitoring and computer modeling procedures approved in advance by EPA and DEP, demonstrated that the project at ultimate capacity utilizing worst-case assumptions will comply with all state and federal ambient air quality standards as well as PSD Class I and II increments. For nitrogen dioxide, sulfur dioxide and particulate matter, air quality modeling was based on conservative assumptions, including background concentrations based upon the highest long- term and second highest short-term measured values (established through an onsite one-year air quality monitoring program and regional data), existing major sources at their maximum emissions, the estimated maximum emissions from certain other proposed projects, and the impacts of the proposed FPC project at ultimate site capacity. For other pollutants, detailed analyses were not performed because offsite impacts were predicted to be insignificant. Impacts of the project's estimated emissions of certain hazardous air pollutants (antimony, arsenic, barium, beryllium, benzene, boron, cadmium, calcium, chromium, cobalt, copper, formaldehyde, magnesium, manganese, nickel, selenium, vanadium, and zinc) at ultimate capacity were compared to the DEP draft no-threat levels under DEP's draft "Air Toxics Permitting Strategy." All pollutants except arsenic were projected to be below the corresponding draft no- threat level. Because of the conservatism of DEP's draft no-threat levels, it was concluded that arsenic impacts would not pose a significant health risk to the population in the surrounding area. Impacts on vegetation, soils, and wildlife in both the site area and the vicinity of the Chassahowitzka National Wilderness Area, the nearest PSD Class I area, will be minimal. Visibility in the vicinity of the Chassahowitzka National Wilderness Area will not be impaired significantly by the project's emissions. Air quality impacts from commercial, industrial, and residential growth induced by the project are expected to be small and well-distributed throughout the area. Impacts from the initial phase of the Project (470 MW) will comply with all State and federal ambient air quality standards as well as PSD Class I and II increments. The impacts from the initial phase of the Project are also well below the draft no-threat levels. The initial phase of the Project will not significantly impair visibility in the vicinity of the Chassahowitzka National Wilderness Area, and the impact on vegetation, soils, and wildlife in both the site area and the vicinity of the Chassahowitzka National Wilderness Area will be minimal. The air quality impacts due to commercial, industrial, and residential growth from the initial phase of the Project will be small, and are not expected to impact air quality. Land Use Planning/Socioeconomic Impacts of Construction and Operation The proposed site is an appropriate location for the Polk County Site project. The Polk County Site has adequate access to highway and rail networks, including CR 555, a major collector road, and the CSX railroad. The Polk County Site is located away from major residential areas in a location already heavily disturbed by mining activity. The site is located in reasonable proximity to major metropolitan areas that can supply an adequate work force for construction. Development of the Polk County Site in a mined-out phosphate area is a beneficial use of land and will provide an economic benefit for Polk County. The Polk County Site also is close to existing facilities, such as existing transmission line corridors and reclaimed water facilities, which will benefit the operation of the site while minimizing the impact of the project. The linear facilities associated with the Polk County Site are sited in appropriate locations. The 230-kV transmission line upgrade, reclaimed water pipeline and backup natural gas pipeline corridors: (i) are located adjacent to other linear facilities, such as existing roads and transmission lines, (ii) avoid major residential areas, and (iii) minimally disrupt existing land uses. The Polk County Site is compatible with the State Comprehensive Plan, the CFRPC Regional Policy Plan, and will meet the requirements of the Polk County Conditional Use Permit. The portion of the backup natural gas pipeline located in Hillsborough County is consistent with the Hillsborough County Comprehensive Plan and the policies of the TBRPC Regional Policy Plan. Construction of the Polk County Site will occur over an approximately 25-year period beginning in 1994. If the Polk County Site is developed only for NGCC capacity, construction employment will average 153 jobs per year with a peak employment of 350. The average annual payroll for construction of the Polk County Site on all NGCC is expected to be $7.1 million per year. If 1,000 MW of NGCC and 2,000 MW of CGCC units are built at the Polk County Site, peak construction employment will be 1,000 with an average annual construction employment of 315 over the approximate 25-year period. Average annual payroll under this scenario would be $14.6 million per year. Indirect jobs created as a result of buildout of the Polk County Site will average 231 jobs for all NGCC and 477 jobs if 2,000 MW of CGCC is added to the Polk County Site. After completion of the construction of the Polk County Site at ultimate capacity, 110 permanent direct jobs will be created if the site uses all NGCC and 410 jobs will be created if coal gasification is added to the Polk County Site. The operation of the Polk County Site will have a multiplier effect on the Polk County economy. The all NGCC scenario will create 272 indirect jobs and the Case A' scenario with CGCC will create 1,013 indirect jobs. After buildout, property taxes generated by the Polk County Site are estimated to be $24.3 million per year for the all NGCC scenario and $37.4 million per year if CGCC capacity is constructed at the site. Noise Impacts The ambient noise, or baseline noise condition at the Polk County Site was measured in five locations. These measurements show that the baseline noise condition for the site ranges between 30 dBA and 65 dBA at the nearest residential location. The higher noise levels are caused by truck traffic associated with the phosphate mining industry. Noise impacts from construction will be loudest during initial site preparation and steel erection stages. Earth moving equipment will produce noise levels of 45 to 50 dBA at the nearest residence in Homeland. During final phases of construction, steam blowout activity to clean steam lines will produce short duration noise levels of 69 dBA at the nearest residence. This activity will take place only during daylight hours. Noise levels from the operation of the Polk County Site were calculated using a computer program specifically designed for assessing noise impacts associated with power plant operation. The highest predicted continuous noise level will be 41 dBA at several houses 2.9 miles south of the site and 47 dBA at the nearest church. Noise impacts from fuel delivery trucks and coal trains will not significantly increase the noise levels over existing conditions. The continuous noise level from the operation of the Polk County Site at the nearest residence or church will be below the 55 dBA level recommended by the U.S. Environmental Protection Agency. Traffic Traffic analyses were made for impacts to highway traffic which will result from the construction and operation of the Polk County Site. These analyses included impacts at rail crossings caused by the delivery of coal to the Polk County Site under the Case A' scenario. A highway traffic analysis was made to determine if the existing roadway network in the vicinity of the Polk County Site would operate at acceptable levels of service based upon increased volumes of traffic associated with the construction and operation employment at the Polk County Site. Methodologies for evaluating traffic impact complied with Polk County, FDOT and CFRPC criteria. County roads were evaluated using Polk County criteria and state roads were evaluated using both Polk County and FDOT criteria. Traffic volumes were evaluated for peak construction traffic in 2010 and full plant operations, estimated in 2018. The traffic evaluation included analysis of existing traffic conditions, increased traffic volume associated with growth in the area not associated with the Polk County Site, and increased traffic associated with construction and operation employment at the Polk County Site. During peak construction employment under the Case A' scenario, 1,000 employees are expected at the Polk County Site. Under this scenario, the expected trip generation of the Polk County Site is expected to be 1,792 trips per day, with a morning peak of 717 trips and an afternoon peak of 717 trips. Based on this analysis, all roadways are expected to operate at acceptable levels of service with currently planned improvements to the roadways. Intersection levels of service were found acceptable for 7 out of 11 intersections. FPC has recommended improvements to four intersections at U.S. 98 and SR 60A, SR 60 and CR 555, SR 37 and CR 640, and CR 555 and CR 640 at specified traffic levels. Peak operation employment under the Case A' scenario is expected to be 410 employees in 2018. Based upon this employment figure, the expected trip generation of the Polk County Site is 964 trips per day with a morning peak of 195 trips and an afternoon peak of 154 trips. At peak operation employment, all roadways evaluated were found to operate at acceptable levels of service. All intersections, except the intersection at SR 60 and CR 555, were found to operate at acceptable levels. FPC has recommended a protected/permissive westbound left turn lane at this intersection. With FPC's recommended improvements, which have been incorporated as conditions of certification, and those improvements currently planned by FDOT, the existing roadway network will meet Polk County and FDOT approved levels of service at peak employment during the construction and operation of the Polk County Site to its ultimate capacity. In addition to the highway traffic impact analysis, FPC evaluated the impact on rail/highway crossings from the transportation of coal by rail under the Case A' scenario. It was assumed that all coal for the Polk County Site will be delivered by rail over existing CSX transportation lines. It is expected that at full operation two 90-car trains per day will be required for the delivery of coal, resulting in four train trips per day. It was also assumed that trains will travel at speeds averaging 35 to 45 miles per hour. Evaluation of the impacts at rail crossings found an increase of .5 second per vehicle per day at urban rail crossings and .3 second per vehicle per day at rural rail crossings. Based on the 1985 Highway Capacity Manual, the total delay at rail crossing intersections caused by the increased train traffic to and from the Polk County Site will not cause a significant delay and the rail crossing intersections will maintain level of service A. Archaeological and Historic Sites The Florida Department of State, Division of Historical Resources, has stated that because of the location of the Polk County Site, it is unlikely that any significant archaeological or historical sites will be affected. Mandatory Reclamation of Mining Parcels The Polk County Site is comprised of phosphate mining parcels, portions of which are subject to mandatory reclamation under the jurisdiction of DEP/BOMR. The mandatory mining parcels are currently owned by Estech, IMC, and USAC. FPC has entered into stipulations with each mining company agreeing to reclamation of the mandatory mining parcels in accordance with the conditions of certification proposed by DEP/BOMR. In those conditions, DEP has proposed to incorporate the reclamation conceptual plan modifications included in Appendix 10.9 of the SCA into the certification proceeding for the Polk County Site and has redesignated those conceptual plan modifications as EST-SC-CPH and IMC-NP- FPC. The portions of the site which will be developed by FPC will be released from mandatory reclamation requirements when FPC purchases the Polk County Site. Variances FPC has requested variances from certain reclamation standards set forth in Rule 16C-16.0051, Florida Administrative Code, which will be necessary until the affected mining parcels on the Polk County Site are released from reclamation. FPC has requested a variance from Rule 16C-16.0051(5)(a), which requires artificial water bodies to have an annual zone of fluctuation, and Rule 16C-16.0051(5)(b), which requires submerged vegetation and fish bedding in artificially-created water bodies. The criteria in these rules are inappropriate for a cooling pond, because it is an industrial wastewater treatment facility which cannot be efficiently or safely operated with fluctuating water levels and aquatic vegetation zones. With regard to the construction of dams for the cooling pond, brine pond and solid waste disposal areas, FPC will need a variance from Rule 16C-16.0051(2)(a), which requires a 4:1 slope for dam embankments and Rule 16C-16.0051(9)(b) and (c), which requires vegetation of upland areas, which may include dam embankments. Dams for the cooling pond, brine pond and solid waste disposal areas will have steeper slopes and the interiors of the dams will be concrete blanket revetments, synthetic liners or solid waste consistent with the industrial purposes for which these facilities have been constructed. Access to these areas will be controlled to prevent any potential safety hazard. Finally, FPC will need a variance from Rule 16C-16.0051(11)(b)(4), which requires reclamation to be completed within two years after mining operations are completed. Construction of the Polk County Site requires extensive dewatering and earthwork which cannot be completed within this timeframe. Applications for variances from mining reclamation criteria were included in Appendix 10.9 of the SCA and have been incorporated into the certification proceeding for the Polk County Site. DEP has redesignated these variance applications as EST-SC-FPC-V and IMC-NP-FPC-V. These variances are appropriate and should be granted. Agency Positions and Stipulations The Department of Environmental Protection, Southwest Florida Water Management District, and Polk County have recommended certification for the construction and operation of the initial 470 MW of natural gas combined cycle generating capacity and have recommended the determination that the Polk County Site has the ultimate capacity for 3,000 MW of natural gas and coal gas combined cycle generating capacity, subject to appropriate conditions of certification. No other state, regional or local agency that is a party to the certification proceeding has recommended denial of the certification for the construction of the initial 470 MW of generating capacity or determination of ultimate site capacity. Several agencies which expressed initial concern regarding certification of the Polk County Site have resolved those concerns with FPC and have entered into stipulations with FPC as discussed below. The Florida Department of Transportation, the Game and Fresh Water Fish Commission, and the Department of Community Affairs have entered into stipulations with FPC recommending certification of the Polk County Site and a determination that the Polk County Site has the ultimate site capacity to support 3,000 MW of NGCC and CGCC generating capacity subject to proposed conditions of certification. Hillsborough County, the Environmental Protection Commission of Hillsborough County, and the Tampa Port Authority have entered into a stipulation and agreement with FPC recommending certification of the backup natural gas pipeline corridor subject to proposed conditions of certification. FPC and the agency parties have agreed on a set of conditions of certification for the Polk County Site. Those conditions are attached as Appendix A to this Recommended Order.
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED that: Florida Power Corporation be granted certification pursuant to Chapter 403, Part II, Florida Statutes, for the location, construction and operation of 470 MW of combined cycle generating capacity as proposed in the Site Certification Application and in accordance with the attached Conditions of Certification. Florida Power Corporation's Polk County Site be certified for an ultimate site capacity of 3,000 MW fueled by coal gas, natural gas, and fuel oil subject to supplemental application review pursuant to 403.517, Florida Statutes, and Rule 17-17.231, Florida Administrative Code, and the attached Conditions of Certification. A zone of discharge be granted in accordance with the attached Conditions of Certification. The conceptual plan modifications (EST-SC-CPH and IMC-NP-FPC) for the mandatory phosphate mining reclamation plans be granted subject to the attached Conditions of Certification. The variances from reclamation standards (EST-SC-FPC-V and IMC-NP-FPC- V) as described herein be granted subject to the attached Conditions of Certification. DONE AND ENTERED this 3rd day of December, 1993, in Tallahassee, Florida. DIANE K. KIESLING, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of December, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-5308EPP RECOMMENDED CONDITIONS OF CERTIFICATION * * NOTE: 114 page Recommended Conditions of Certification plus attachments is available for review in the Division's Clerk's Office. COPIES FURNISHED: Gary P. Sams Richard W. Moore Attorneys at Law Hopping Boyd Green & Sams Post Office Box 6526 Tallahassee, Florida 32314-6526 Representing Applicant Pamela I. Smith Corporate Counsel Florida Power Corporation Post Office Box 14042 St. Petersburg, Florida 33733-4042 Richard Donelan Assistant General Counsel Department of Environmental Regulation 2600 Blair Stone Road, Room 654 Tallahassee, Florida 32399-2400 Representing DER Hamilton S. Oven, Jr. Office of Siting Coordination Division of Air Resources Mgmt. Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Lucky T. Osho Karen Brodeen Assistant General Counsels Department of Community Affairs 2740 Centerview Drive Tallahassee, Florida 32399-2100 Representing DCA Michael Palecki, Chief Bureau of Electric & Gas Florida Public Service Commission 101 East Gaines Street Tallahassee, Florida 32399-0850 Representing PSC M. B. Adelson, Assistant General Counsel Department of Natural Resources 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Representing DNR Carolyn S. Holifield, Chief Chief, Administrative Law Section Department of Transportation 605 Suwanee Street, Mail Station 58 Tallahassee, Florida 32399-0458 Representing DOT Doug Leonard, Executive Director Ralph Artigliere, Attorney at Law Central Florida Regional Planning Council 409 East Davidson Street Bartow, Florida 33830 Representing CFRPC Julia Greene, Executive Director Tampa Bay Regional Planning Council 9455 Koger Boulevard St. Petersburg, Florida 33702 Representing Tampa Bay Regional Planning Council John J. Dingfelder Assistant County Attorney Hillsborough County Post Office Box 1110 Tampa, Florida 33601-1110 Representing Hillsborough County Mark Carpanini Attorney at Law Office of County Attorney Post Office Box 60 Bartow, Florida 33830-0060 Representing Polk County Martin D. Hernandez Richard Tschantz Assistant General Counsels Southwest Florida Water Management District 2370 Broad Street Brooksville, Florida 34609-6899 Representing SWFWMD James Antista, General Counsel Florida Game and Fresh Water Fish Commission Bryant Building 620 South Meridian Street Tallahassee, Florida 32399-1600 Representing GFWFC Sara M. Fotopulos Chief Counsel Environmental Protection Commission of Hillsborough County 1900 Ninth Avenue Tampa, Florida 33605 Representing EPCHC Joseph L. Valenti, Director Tampa Port Authority Post Office Box 2192 Tampa, Florida 33601 Representing Tampa Port Authority Board of Trustees of the Internal Improvement Trust Fund Don E. Duden, Acting Executive Director Department of Natural Resources 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000 Representing the Trustees Honorable Lawton Chiles Governor State of Florida The Capitol Tallahassee, Florida 32399 Honorable Robert A. Butterworth Attorney General State of Florida The Capitol Tallahassee, Florida 32399-1050 Honorable Bob Crawford Commissioner of Agriculture State of Florida The Capitol Tallahassee, Florida 32399-0810 Honorable Betty Castor Commissioner of Education State of Florida The Capitol Tallahassee, Florida 32399 Honorable Jim Smith Secretary of State State of Florida The Capitol, PL-02 Tallahassee, Florida 32399-0250 Honorable Tom Gallagher Treasurer and Insurance Commissioner State of Florida The Capitol Tallahassee, Florida 32399-0300 Honorable Gerald A. Lewis Comptroller State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350
Findings Of Fact Petitioner owns and operates a gasoline station located at 4625 U.S. 27 North, Davenport, Florida. The site was constructed in late 1986 and opened in early 1987. The underground tanks storing the gasoline are connected by pipes running underground to the pumps from which the gasoline is dispensed. A small portion of the underground supply pipe is accessible from the surface through a manhole. The excavated area exposing the pipe and what appears to be a valve are separated from the surrounding soil by a large, cylindrical corrugated pipe laid perpendicular to and above the underground supply pump. The leak in question was caused when the lower edge of the corrugated pipe cut into the underground supply pipe for the premium gasoline. The cut was caused by the cumulative effect of vehicular traffic driving over the manhole cover, placing pressure on the corrugated pipe, and eventually forcing the edge of the corrugated pipe to rupture the underground supply pipe with which it was in contact. Petitioner owns and operates a large number of gasoline stations. This incident is the first time that a corrugated pipe has cut into an underground supply pipe. The use of the corrugated pipe is not at issue in the present case. Pursuant to company policy, station employees complete a daily recap each day and forward the recap document to Petitioner. Part of the recap document is devoted to "gas inventory." The daily recap, which covers the preceding 24 hours, requires that an employee determine the amount of gasoline in each underground storage tank, adjust the figure for amounts sold and delivered, and then compare the figure to the amount determined to have been in the tank 24 hours earlier. This reconciliation is normally completed by mid- to late-morning each day. A station employee "sticks" each tank to determine how much gasoline it contains. The procedure requires that the employee insert a pole into the bottom of an underground tank. By observing the length of the pole dampened by gasoline, the employee can calculate approximately the amount of gasoline in the tank. Although stick reading results in an approximation, the results are fairly accurate, leaving at most, in the case of this 12,000-gallon tank, a margin of error of 50 gallons. "Sticking" normally takes place daily between 6:30 a.m. and 7:00 a.m. On the morning of March 6, 1988, which was a Sunday, the employee sticking the tank calculated that the premium tank held 5419 gallons. There had been no deliveries during the preceding 24 hours. During the same period, the station had sold 914 gallons of premium gasoline. However, the last sticking 24 hours earlier had disclosed 7989 gallons. A total of 1656 gallons were thus unaccounted for. The recap document requires that the station notify Respondent's "Dist. Mgr. immediately if shortage of 500 gallons or more appears." The employee failed to do so. On the morning of March 7, 1988, the employee sticking the premium tank calculated that it held 2147 gallons. During the preceding 24 hours, there had been no deliveries and 826 gallons of premium gasoline had been sold. Consequently, 2446 gallons were missing, for a total of 4102 gallons over the past two stickings. As soon as the reconciliation was completed, the employee contacted Respondent's management, which ordered that the pump be shut down during the afternoon of March 7, 1988. Comparing the sales of premium gasoline for the 24- hour period ending March 8 with those ending March 7, which are comparable because the sale of regular gasoline on those two days is almost identical, the station sold about 39% of a normal day's sales of premium gasoline. Reflecting the shutdown of the premium pumps on March 7, the employee sticking the tank on the morning of March 8, 1988, found 593 gallons. During the preceding 24 hours, there had been no deliveries and sales of 321 gallons of premium had been sold, leaving 1233 gallons unaccounted for. The total over the three stickings was 5335 gallons lost. The station had previously not experienced losses even approaching this magnitude. The daily recap for the 24-hour period ending on March 5, 1988, showed no significant loss. Although fluctuations in volume may occur shortly after deliveries due to temperature differentials, such fluctuations could not reasonably have accounted for these vast discrepancies. Theft, measurement errors, and recording errors may also account for variations in readings, but not of the magnitude and repetition involved in this case. Between the time of the reconciliation on the morning of March 6 and the system shutdown on the afternoon of March 7, the system continued operating and, thus, leaking for 28-30 hours. Given that 2446 gallons were lost during the 24-hour period ending on March 7 and 1233 gallons lost during about 9 hours on March 8, at least 100 gallons per hour were escaping from the pipe during these last 28-30 hours, for a total of between 2800 and 3000 gallons. For reasons discussed in the Conclusions of Law, the actions and omissions of the station employees following the reconciliation of inventory figures on March 6 constituted gross negligence in the maintenance of a petroleum storage system. These actions and omissions were in the scope of employment. During the relevant period of time, none of Respondent's employees performed monthly checks of the monitoring wells to determine the presence of leaks. This failure was due to ignorance and was not wilful. This failure in no way contributed to the leak or to any delay in discovering the leak. During the relevant period of time, the monitoring wells had not been properly grouted to prevent introduction of surficial contamination. However, this failure was unknown to Petitioner, which had hired a contractor to construct the wells and reasonably had relied on the contractor to grout properly the monitoring wells. The improper grouting in no way contributed to the leak or to any delay in discovering the leak. During the relevant period of time, Petitioner was not performing weekly or five-day averages of inventory records concerning gasoline. The failure to perform these reconciliations in no way contributed to the leak or to any delay in discovering the leak. Following the discovery of the leak, Petitioner notified Respondent on March 8. Petitioner requested approval to participate in the Early Detection Incentive Program by filing a Notification Application dated March 29, 1988. On July 14, 1988, Respondent completed the Pollutant Storage Tank System Inspection Report Form and Early Detection Incentive Program Compliance Verification Checklist. These documents indicate that Respondent was not monitoring monthly its monitoring wells, failed to grout properly its monitoring wells, was not performing the weekly or five-day averages of inventory (although it was taking daily inventory and reconciling opening and closing inventories), and did not immediately investigate the 1600-gallon shortage disclosed on the morning of March 6, 1988. By letter dated September 30, 1988, Respondent notified Petitioner that its site was ineligible for state-administered cleanup under the Early Detection Incentive Program. The letter cited as reasons the wilful failure to perform monthly checks of the monitoring well, the failure to immediately investigate discrepancies in inventory records while the system continued to operate after initial discovery of the 1600-gallon loss, and the improper construction of the monitoring well with respect to the improper grouting. The letter concludes that these items constitute gross negligence in the maintenance of a petroleum storage system, which precludes participation in the program.
Recommendation Based on the foregoing, it is hereby recommended that the Department of Environmental Regulation enter a Final Order denying the application of Petitioner to participate in the Early Detection Incentive Program. RECOMMENDED this 26th day of March, 1990, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of March, 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-1561 Treatment Accorded Proposed Findings of Petitioner 1-4: adopted. 5-6: adopted in substance. 7-16: adopted. 17: rejected as unsupported by the greater weight of the evidence. 18-20: adopted or adopted in substance. 21: to the extent that this proposed finding suggests that Petitioner was performing the five-day or weekly averaging, rejected as unsupported by the greater weight of the evidence. However, in view of the findings and conclusions contained in the Recommended Order, rejected as unnecessary. 22-26: adopted. Treatment Accorded Proposed Findings of Respondent 1-4: rejected as conclusions of law. 5-6: adopted. 7-16: rejected as subordinate. 17: rejected as an inference unsupported by the greater weight of the evidence. 18-26: adopted. 27: rejected as irrelevant. 28-29 and 31: rejected as legal argument. 30: adopted. 32: adopted. 33: adopted except that the system was shut down at some point into the day of the second sticking showing a significant shortage. 34-38: adopted or adopted in substance. 39: rejected as speculation. 40: rejected as irrelevant. 41-42: adopted. 43: rejected as irrelevant. 44-45: rejected as subordinate. 46: adopted. 47-49: rejected as subordinate. 50: adopted. 51-53: rejected as vague with respect to reference to "Racetrac." 54: adopted. 55: rejected as cumulative. 56-57: rejected as unnecessary. COPIES FURNISHED: Dale H. Twachtmann Secretary Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, FL 32399-2400 Daniel H. Thompson General Counsel Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, FL 32399-2400 Steven M. Mills Decker & Hallman Suite 1200 Marquis II Tower 285 Peachtree Center Avenue Atlanta, GA 30303 Michael P. Donaldson Assistant General Counsel Twin Towers Office Building 2600 Blair Stone Road Tallahassee, FL 32399-2400
The Issue Whether a proposed amendment to Florida Administrative Code Rule 69A-6.005(2) constitutes an invalid exercise of delegated legislative authority in violation of section 120.52(8)(e), Florida Statutes (2011).1/
Findings Of Fact Combs Oil is engaged in the distribution and storage of petroleum products in southwest Florida. The distribution and storage facility (facility) operated by Combs Oil, which is located at 76 Industrial Boulevard in Collier County, Florida, contains both underground and aboveground petroleum storage tanks and is considered a bulk petroleum storage facility. As a bulk petroleum storage facility, the operation does not directly dispense fuel to cars, boats, planes, and the like. Through its operations, Combs Oil distributes petroleum products to retail locations and to entities, such as governmental agencies, golf courses, and the commercial fishing, cattle, and citrus industries. Several years ago, Combs Oil purchased three 29,000- gallon aboveground, double-walled storage tanks and currently desires to utilize the tanks at its facility to store Class I petroleum products. These tanks are considered secondary containment-type tanks. Regulatory officials in Collier County have advised Combs Oil that the company will not be able to store petroleum in the 29,000 gallon aboveground tanks because to do so would be in violation of the 12,000-gallon capacity limit established by NFPA 30. NFPA 30, section 22.11.4.1 (2008), is included within NFPA Standard 1, as referenced in section 633.0215(2), Florida Statutes. NFPA 30, section 22.11.4.1 (2008), provides that where a secondary containment-type tank is used to provide spill control, the capacity of the tank shall not exceed 12,000 gallons. The 2008 version of NFPA 30 made no change to the existing prohibition against the use of secondary containment- type, aboveground tanks in excess of 12,000 gallons. Substantively, NFPA 30, section 22.11.4.1 (2008), is the same as the 2000 and 2003 versions; however, the 2008 version, according to Combs Oil, includes commentary from NFPA's technical committee that was not in previous versions of the rule. The commentary from NFPA's technical committee reads, in material part, as follows, Subsection 22.11.4 was initially added, in 1993, as an exception to the spill control provisions of NFPA 30. The exception addressed the growing use of factory-built aboveground tanks that incorporated some form of secondary containment. The secondary containment is primarily an environmental protection measure and usually takes the form of a double shell with an annular (interstitial) space or an integral spill pan. In developing this exception, the NFPA 30 Technical Committee on Tank Storage and Piping Systems considered many issues and determined that a double shell alone would not provide the level of spill control originally intended. First, the technical committee recognized that secondary containment and spill control are not synonymous. Secondary containment is a term that was originally applied to double shell underground tanks; such tanks have been in use for many years and are now the choice for underground installations, as a result of stricter environmental regulations. The outer shell contains any release of product if the inner primary tank develops a leak. The concept has now been applied to aboveground tanks. However, almost all product releases from aboveground tanks result from overfilling or a break in a pipe connected to the tank. Rarely does an aboveground tank release product because of a leak in its shell. In a sense, secondary containment, when applied to an aboveground tank, is a solution in search of a problem. Second, the technical committee was not convinced that the bare steel outer shell would not fail prematurely from an exposure fire. Their concern arose from the fact that the contained liquid is not in contact with the outer shell and, therefore, cannot absorb the thermal energy impinging on it. Third, for smaller tanks, the outer shell offered virtually no impact protection. Piercing the outer shell would likely result in piercing the primary tank as well. Even if the primary tank were not damaged, secondary containment would have been compromised. Nevertheless, the technical committee determined that an aboveground secondary containment-type tank could be installed without meeting the original spill control provisions of NFPA 30, if the protective features enumerated here are provided. The maximum capacity of 12,000 gal for Class 1 liquids and 20,000 gal for Class II and III liquids was chosen to correlate with the maximum capacities allowed by NFPA 30A, Code for Motor Fuel Dispensing Facilities and Repair Garages, for aboveground tanks at service stations. Piping connections below the liquid level are not allowed and an anti-siphon device is required to prevent release of liquid should there be a break in the pipeline. The emphasized portion of the quoted material provides the basis for Petitioner's assertion that "NFPA has done no study to warrant the application of this standard to terminal or bulk facilities." Combs Oil did not offer any testimony from any person affiliated with NFPA's technical committee. Combs Oil did not call any witness who has served on NFPA's technical committee. Combs Oil did not offer any documentary evidence showing the workings of NFPA's technical committee as the committee contemplated the inclusion of the newly inserted notes into the technical committee's commentary. Per the requirements of section 633.0215, the Department, as part of its three-year update to the Florida Fire Prevention Code, seeks to amend rule 69A-6.005(2) to reflect the adoption of the 2008 version of NFPA 30. It is undisputed that NFPA 30 governs the facility operated by Combs Oil. It is also undisputed that NFPA 30A, when considered in isolation, does not apply to the facility at issue. Mr. Charles Frank works as an operations review specialist for the State Fire Marshall's Office, Bureau of Fire Prevention. In this capacity, Mr. Frank offers "informal interpretation for various agencies that are looking for code interpretations." Mr. Frank does not serve in a policy-making position with the State Fire Marshall's Office. From 2005 until 2009, Mr. Frank was a member of the NFPA. Mr. Frank is familiar with how NFPA develops and compiles its fire code, but he has personally never participated in NFPA's code development process. Mr. Frank is neither qualified, nor authorized to speak on behalf of NFPA with respect to technical matters related to NFPA's rules. Prior to filing the instant challenge, Combs Oil, pursuant to section 120.542, filed with the Department on or about August 3, 2007, a "Petition for Variance From, or Waiver of, Rule 69A-3[.]012(1), Florida Administrative Code [Waiver]." Petitioner's Waiver application requested that the Department waive the requirements of the applicable rule and allow Petitioner to install the three 29,000-gallon tanks. On or about November 2, 2007, the Department denied Petitioner's Waiver request. In response to the denial, Petitioner filed a Petition for Formal Administrative Hearing, which was assigned DOAH Case No. 08-1714. On July 8, 2008, pursuant to a Joint Motion to Dismiss, the Division of Administrative Hearings issued an Order closing its file and relinquishing jurisdiction to the Department.
The Issue The issue is whether Respondent engaged in an unlawful employment action with regard to Petitioner Billy J. Ford.
Findings Of Fact Mr. Ford is an African-American living in Panama City, Florida. He was born on December 22, 1967. Hanson Pipe is a company that manufactures pre-cast concrete pipe and other structures. It has its headquarters in Charlotte, North Carolina. Some of these pipes and structures manufactured by Hanson Pipes are fabricated for purchase by the Florida Department of Transportation (DOT). Hanson Pipe's Panama City Plant is in the company's eastern region. Hanson Pipe has a total of 61 plants and has 3,500 employees in its eastern region. The plant in Panama City at which Mr. Ford worked during times pertinent, which eventually became a Hanson Pipe facility, was acquired from WPC of Florida, Inc. (WPC) by Hanson Pipe, on July 17, 2004. The principal of WPC was George Wright (Mr. Wright). The plant manager, during times pertinent, was Michael Bascetta, a white person. His assistant was Renwick Chisolm, an African-American. Mr. Ford's first job with WPC was operating a forklift. He would receive printed directions and would load products onto trucks in accordance with those directions. Mr. Wright eventually promoted Mr. Ford to yard foreman. As such, he supervised four people and checked newly manufactured structures and turned in paperwork at the end of the work day. Subsequently he was promoted to Quality Control Technician. As Quality Control Technician (QC Technician), Mr. Ford would ensure that designated standards were met, including standards required by DOT. However, the stamp denoting acceptability would have to be applied by Gracie Dowdy or Terry Pittinger because they were certified quality control technicians, and Mr. Ford was not. When Hanson Pipe took over the WPC's Panama City plant, procedures remained largely unchanged, although some employees noticed that Hanson Pipe was more "strict." One procedure that was changed was the quality control procedure. Hanson Pipe recognized that only American Concrete Institute certified persons could sign off on product quality when the product was destined for DOT use and believed that the method used by WPC did not conform to DOT requirements. Hanson Pipe understood that the failure to comply with state-mandated procedures could result in DOT's District Materials Office withdrawing the plant from the list of qualified plants. This would result in the refusal of DOT to purchase their product. DOT publishes a Materials Manual that sets forth requirements for contractors selling materials to it. Section 6.3.7.2(D) of the DOT Materials Manual requires plants such as the Hanson Pipe plant in Panama City to have enough quality control technicians to "maintain adequate inspection and testing during the production of structures for Department projects." DOT requires that these technicians be certified as American Concrete Institute (ACI) Field Testing Technician, Grade I. DOT requires that all product bought by them have an approval stamp affixed by the ACI-certified technician who inspects the product. In order to adequately comply with this requirement, Hanson Pipe, through plant manager Bascetta, informed Mr. Ford that he would have to pass the ACI examination so that he could become certified. Although Mr. Bascetta was the person who informed Mr. Ford of this, the decision was made by Dana Butterfield, the Quality Control Manager for 20 Hanson Pipe facilities. Mr. Butterfield's office is in Green Cove Springs, Florida. There was no evidence adduced that indicated Mr. Butterfield was aware of Mr. Ford's race. Mr. Ford was given books to help him prepare for the examination and time to study them. Hanson Pipe paid for Mr. Ford's travel to Orlando to take the test, his testing fees, and his hotel expenses. He took the test September 11, 2004, but did not pass it. Hanson pipe paid Mr. Ford's expenses to take the test a second time on November 6, 2004, but he failed it again. When Mr. Butterfield learned on December 6, 2004, that Mr. Ford had failed the test yet again, he told Mr. Bascetta that Mr. Ford was no longer qualified to be quality control technician. Mr. Bascetta, not wishing to discharge Mr. Ford, offered him a position as a forklift driver at a salary of $10.56 per hour. Mr. Ford accepted this reduction from his former $13 per hour. Mr. Bascetta designated Montie Foster, a white employee, as quality control technician. He was informed that he would have to take and pass the ACI certification examination as a condition of holding that position. Mr. Foster took the examination twice, failed it twice, and resigned. Justin Perky was thereafter hired. He took the examination and passed it. He therefore was able to continue in the position of quality control technician. Mr. Ford believed his demotion represented a form of discrimination and harassment, and his attitude began to deteriorate as is demonstrated by the events related hereinafter. On December 8, 2005, Mr. Ford called Webber Ferguson, Hanson Pipes's Employee Relations Manager, on the telephone. Mr. Ferguson works in Hanson Pipe's Charlotte, North Carolina office. Mr. Ferguson provides employee relation support for 61 Hanson Pipe plants in the eastern United States. Mr. Ford complained about his demotion and asserted that Mr. Bascetta was mistreating him. He also alleged that he was a victim of discrimination. In response, Mr. Ferguson went to the plant and conducted an investigation. He interviewed Mr. Hanson, Mr. Bascetta, and some of the minority employees. He found no evidence of discrimination. He did not generate a written report because there was insufficient evidence adduced indicating discrimination or mistreatment of employees. Mr. Ford had some unexcused absences and on January 10, 2005, was "written up" for failure to appear for work on a Saturday as he had agreed to do. He responded to this by threatening to call Hanson Pipe's Human Resources Department. On March 21, 2005, Roy Myers was terminated from his job with Hanson Pipe. Mr. Myers bore the working title, "yard foreman," but he was paid the same as Mr. Ford. There was no job description for "yard foreman," and in fact, no job description for any position in Hanson Pipe. Mr. Ford wanted to be the "yard foreman," but Mr. Bascetta did not need a position like that and therefore did not move Mr. Ford into what was a nonexistent position. Mr. Ford believes this was a manifestation of prejudice. On April 27, 2005, Mr. Ford requested a training topic outline he had signed earlier in the day. By the time Mr. Bascetta took the time to obtain it, he was informed that Mr. Ford had departed the plant. On April 29, 2005, Mr. Bascetta was informed by several employees that Mr. Ford had turned in his uniforms. He did not inform management that he was terminating his employment and indicated to someone that he would return Monday, May 2, 2005. In fact, he never returned. On May 2, 2005, he called the plant office to announce that he had quit. No evidence was adduced that would indicate that Mr. Bascetta is prejudiced toward African-Americans. To the contrary, Mr. Ford said, "I couldn't really say" that Mr. Bascetta was prejudiced. Mr. Ford and other employees would have breakfast with Mr. Bascetta from time to time. Mr. Ford was invited to Mr. Bascetta 's home for a barbeque on one occasion. In the fall of 2005, Mr. Bascetta left Hanson Pipe and opened his own pre-cast concrete operation in Freeport, Florida. He employed Mr. Chisolm as his plant manager. It is unlikely that Mr. Bascetta would seek out and hire an African-American as his plant manager, if he were prejudiced.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED that Mr. Billy J. Ford's Employment Complaint of Discrimination and Amended Employment Complaint of Discrimination be dismissed. DONE AND ENTERED this 14th day of June, 2006, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER 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 14th day of June, 2006. COPIES FURNISHED: Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Billy J. Ford 4028 Charles Circle Pace, Florida 32571 Ganesh Chatani, Esquire Fowler White Boggs Banker P.A. 101 North Monroe Street, Suite 1090 Tallahassee, Florida 32301 Jerry Girley Qualified Representative 1350 Vickers Lake Drive Ocoee, Florida 34761 Kevin D. Zwetsch, Esquire Fowler White Boggs Banker P.A. Post Office Box 1438 Tampa, Florida 33602 Heather N. Jarrell, Esquire Fowler White Boggs Banker, P.A. 501 East Kennedy Boulevard, Suite 1700 Tampa, Florida 33602 Cecil Howard, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301
The Issue Whether Petitioner's service station site known as Siesta Key Exxon Village, at 5201 Ocean Boulevard, Sarasota, Florida, is eligible for state administered cleanup pursuant to Section 376.3071(9), Florida Statutes.
Findings Of Fact Weeks Oil Company, Inc., owns and operates a service station, Siesta Key Exxon, located at 5201 Ocean Boulevard, Sarasota, Florida. On December 21, 1988, Petitioner applied, pursuant to the Early Detection Incentive Program (EDI), for state assistance due to a suspected discharge of gasoline at the facility. The application indicated that a manual test of a monitoring well, conducted on December 16, 1988, detected contamination. After free product was discovered in the monitoring wells in December, 1988, subsequent monitoring well reports for the months of January - May, 1989, indicated the presence of free petroleum product. The January, 1989, monitoring report indicates six inches of free product; the February, 1989, monitoring report indicates twelve inches of free product; the March, 1989, report failed to indicate the presence of free product; and both the April and May, 1989, monitoring reports indicate the presence of sixteen inches of free product. Purity Well Company, the monitoring well contractor retained by Weeks Oil, bailed free product out of the monitoring wells once a month during the period January through May, 1989. On May 23, 1989, Richard Steele of the Sarasota County Pollution Control Division conducted an Early Detection Incentive Program Inspection at Siesta Key Exxon, 5201 Ocean Boulevard, Sarasota, Florida, DER Facility #588521170. During the inspection, Mr. Steele examined the monitoring well reports for Siesta Key Exxon for the months of January through May, 1989. Evidence of contamination was indicated by each month's monitoring well report, and the amount of free product indicated by the monitoring well reports increased over time. During the May 22, 1989, inspection, Mr. Steele observed a minimum of two feet of free product in monitoring well number three. As part of the Early Detection Incentive Program inspection, Mr. Steele requested inventory records for Siesta Key Exxon, which records were provided on June 7, 1989. Inventory records for January, February, March and April, 1989, indicated a total shortage of 441 gallons of gasoline. Mr. Steele's inspection report of May 22, 1989, indicates that no initial remedial action other than the bailing of monitoring wells occurred subsequent to the December, 1988, EDI application. During the May 22, 1989, inspection, Mr. Steele was neither provided with any evidence of repairs to the petroleum storage system made for the purpose of acting upon monitoring well reports, nor did he visually observe any evidence of repair. By letter dated May 24, 1989, from Richard Steele to Weeks Oil Company, Mr. Weeks was informed of the presence of two feet of free product in monitoring well number three and specifically requested a tank tightness test. The May 24, 1987, letter requested Mr. Weeks to send the results of the tank tightness test to the Sarasota County Pollution Control Office or the Department of Environmental Regulation district office. Mr. Weeks discussed with Steele the fact that the contaminants appeared to come from tanks no longer in service, which tanks were scheduled for relining. Mr. Weeks did not consider it practicable to test tanks scheduled for relining and thought Steele agreed that he could delay the testing until the tanks were refitted. Mr. Steele never made such a commitment, and the tank test was never conducted. On October 20, 1989, the tanks at Siesta Key Exxon were excavated and fiberglass coated. The August 22, 1989 ineligibility determination cites as the reason for denial, the failure of Weeks Oil to conduct a tank tightness test as requested by Sarasota County or otherwise immediately investigate and repair the contamination source as required by Chapter 17-61, Florida Administrative Code, The ineligibility letter concludes that failure to immediately investigate and repair the contamination source as required by Chapter 17-61, Florida Administrative Code, shall be construed as gross negligence in the maintenance of a petroleum storage system, which precludes participation in the Early Detection Incentive Program. A tank tightness test should be performed by the owner or operator of a petroleum storage system where there are any discrepancies in inventory records or monthly monitoring system checks. Rule 17-61.050(4)(c) 3., Florida Administrative Code, requires upon discovery of an inventory discrepancy that investigation of the system "shall not stop until the source of the discrepancy has been found, the tank has been tested, repaired, or replaced, or the entire procedure has been completed." Pursuant to Rule 17-61.050(6), Florida Administrative Code, the owner or operator of a storage system shall test the entire storage system whenever the Department has ordered that such a test is necessary to protect the lands, ground waters, or surface waters of the state. Specifically, the Department may order a tank test where a discharge detection device or monitoring well indicates that pollutant has been or is being discharged. Given the inventory record discrepancy and the amount of free product continually observed in the monitoring wells at Siesta Key Exxon, it was appropriate for Mr. Steele to request a tank tightness test. The bailing of a contaminated monitoring well is not an appropriate method of determining the source of petroleum contamination. The failure of Weeks Oil Company, Inc., to timely conduct a tank test as requested by Sarasota County, acting on behalf of the Department, creates a risk of or the potential for greater damage to the environment because a continual unchecked discharge leads to the release of more petroleum product into the environment.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Environmental Regulation enter a Final Order denying the application of Petitioner to participate in the Early Detection Incentive Program. ENTERED this 3rd day of May, 1990, in Tallahassee, Florida. K. N. AYERS, Hearing Officer Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of May, 1990. COPIES FURNISHED: Janet D. Bowman, Esquire Department of Environmental Regulation Twin Towers Office Building 2400 Blair Stone Road Tallahassee, FL 32399-2400 James B. Weeks, Jr. Weeks Oil Company Post Office Box 100 Sarasota, FL 34230 Dale H. Twachtmann Secretary Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, FL 32399-2400 Daniel H. Thompson General Counsel Department of Environmental Regulation Twin Towers Office Building 2600 Blair Stone Road Tallahassee, FL 32399-2400
