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.
Findings Of Fact Prior to July 10, 1984, Son-Mar Propane, Inc. (Son-Mar) was licensed by the Department as a dealer in liquefied petroleum gas, in appliances and in equipment for use of such gas and installation. Virgil Berdeaux was the president of Son-Mar and he and his wife were the sole stockholders. Virgil Berdeaux passed the competency exam which qualified Son-Mar for licensure. Sonny Wade Berdeaux Virgil Berdeaux's son, was the manager of Son-Mar. Son- Mar's business address and place of operation was 16034 U.S. Highway 19 North in Hudson, Florida. Virgil Berdeaux and his wife owned the property located at that address and leased it to Son-Mar. A propane pumping station and a building was located on the property at 16034 U.S. Highway 19. The building housed a pawn shop and supply store for mobile home and RV equipment. Son-Mar operated the pumping station and the stores. It also installed tanks and delivered gas to customers. 1/ On July 10, 1984, a final order was entered by the Department which ordered "[t]hat any and all of [Son-Mar's] licenses issued by the State Fire Marshal Division of Liquefied Petroleum Gas and eligibility to hold said licenses are hereby revoked." The revocation of Son-Mar's licenses was due to its violation of certain safety standards and rules. Specifically, it was found that an employee of Son-Mar, Mr. John Delham, filled a cylinder that had not been recertified, that he lay it horizontally in the customer's van, and that he failed to secure the tank in the van. While the van was still parked at Son-Mar an explosion occurred which destroyed the van and killed its occupant. On July 19, 1984, nine days after Son-Mar's licenses were revoked, Virgil Berdeaux submitted an application for licensure as a dealer in appliances and equipment for use of liquefied petroleum gas, listing the business address as 16034 U.S. Highway 19, Hudson, Florida, and listing the business name as Son- Mar Pawn Shop. On August 3, 1984, twenty-four days after the revocation of Son- Mar's licenses, Sonny Wade Berdeaux submitted an application for licensure as a dealer in liquefied petroleum gas, listing the business address as 16034 U.S. Highway 19, Hudson, Florida. The Department issues several different types of liquefied petroleum gas licenses. A Type 06, Class 02 license, known as a 602 license, is issued to a dealer in appliances and equipment for use of liquefied petroleum gas. The 602 license allows the holder to sell propane appliances and equipment, such as stoves, heaters, and gas grills but it does not permit the holder to install appliances or sell propane gas. A competency examination is not required for this type of license, and there is no inspection of the place of business prior to issuance of the license. Virgil Berdeaux applied for a 602 license. He completed the application and submitted the required fee. The application listed W. C. Johnson, Virgil Berdeaux's son-in-law, as the manager of the business. Bill Johnson had run the pawn shop for Son-Mar. Sonny Wade Berdeaux applied for a Type 06, Class 04 license known as 604 license, which is issued to a dealer in liquefied petroleum gas. This type of license permits the holder to pump liquefied petroleum gas for sale to the public. An applicant for this type of license must pass a competency test and file a surety bond or certificate of insurance. Further, if the licensee has a dispensing station, an inspection of the business location must be performed to ensure that it is in compliance with all safety regulations. Sonny Wade Berdeaux passed the competency examination, filed a certificate of insurance, and submitted the proper fee. Son-Mar held a Type 06, Class 01 license (a 601 license) as a dealer in liquefied petroleum gas, in appliances and in equipment for use of such gas and installation. A 601 license permits the holder to pump liquefied petroleum gas for sale to the public, to sell appliances and equipment for use of liquefied petroleum gas, and to install such appliances and equipment. In essence, it is a combination of a 602 license, a 604 license, and a license to install equipment. Both Sonny Wade Berdeaux and Virgil Berdeaux received letters dated October 8, 1984, which informed them that their applications for licensure had been denied. Both letters referred to the revocation of Son-Mar's licenses and pointed out that the applicants would be operating on the same premises and employing the same staff as Son-Mar. Both letters concluded as follows: Thus, it would appear that your application is seeking licensure for essentially the same entity that has only recently had its liquefied petroleum gas licenses revoked. Therefore, in the interest of public safety, this Bureau cannot permit an Order of Revocation to be obviated by a mere procedural reapplication in your name. The applications for licensure both list the business address as 16034 U.S. Highway 19 in Hudson, Florida. At the time of application Virgil Berdeaux owned that property and Sonny Wade Berdeaux had leased the pumping station. However, on July 1, 1985, the property at 16034 U.S. Highway 19 was sold. The pumping station was moved out along with the inventory that remained in the pawn shop. Neither Virgil Berdeaux or Sonny Wader Berdeaux retained any interest in the property, and at this time neither could operate a business at that location. Although there was testimony concerning the manner in which the business would have been operated and controlled had licensure been granted at the time of applications there was no testimony indicating where or how the business would now be operated. There was no attempt to amend either application to reflect a current business address, and the certificate of insurance entered into evidence lists 16034 U.S. Highway 19, Hudson, Florida, as the location covered. 2/
Recommendation Based on the foregoing findings of fact and conclusions of law; it is RECOMMENDED that a Final Order be entered denying petitioners' applications for licensure. DONE and ENTERED this 21st day of May, 1986, in Tallahassee, Florida. DIANE A. GRUBBS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 1986.
The Issue The question presented here concerns the Petitioner, State of Florida, Department of Agriculture and Consumer Services' Stop Sale Notice placed against Respondent, Pinner Oil Company under the alleged authority of Section 525.06, Florida Statutes (1980), by the process of requiring a refundable bond in the amount of $471.34, pending the outcome of this dispute in which it is contended that the Respondent supplied gasoline for sale which failed to comply with Rule Subsection 5F-2.01(1)(j), Florida Administrative Code, dealing with the allowed lead content in gasoline.
Findings Of Fact The Petitioner, State of Florida, Department of Agriculture and Consumer Services is an agency of government which has, among other responsibilities, the requirement to establish and enforce standards related to maximum allowable lead content in unleaded gasoline offered for sale to the general public. This regulation is designed to avoid the destruction of catalytic devices found in the exhaust systems of certain cars, in which the destruction of a catalyst would bring about problems, with the exhaust system causing its replacement and more importantly, lead to adverse effects on the environment due to an increase in undesired emission from the exhaust system. The Respondent, Pinner Oil Company of Cross City, Florida, is a jobber which supplies gasoline to retail outlets who in turn sales the gasoline to members of the motoring public. The facts reveal that on October 6, 1980, an official with the Petitioner made a routine inspection of the unleaded gasoline reservoir at the B. F. Goodrich-Texaco at 210 Rogers Boulevard, Chiefland, Florida, a customer of Pinner Oil Company. This gasoline was subsequently analyzed and on October 7, 1989, a Stop Sale Notice was served based upon a determination that the unleaded gasoline found in the reservoir at that station contained more than 0.05 grams of lead per U.S. gallon. The gasoline in question was provided to the B. F. Goodrich outlet by an employee of Pinner Oil Company as a part of his duties with the Respondent. In lieu of the total confiscation of the gasoline found in the reservoir tank at the station In question, the Respondent was allowed to post a refundable bond in the amount of $471.34 which represented the price for the number of gallons sold at a retail price since the time of the prior delivery to that station. (By Stipulation entered into between the parties, it was agreed that a finding of fact would be made to the effect that the Respondent, during the course of the last two years, had not been cited for a violation of the Florida Statutes pertaining to contaminated fuels.)
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 Whether the Respondent, Florida Public Utilities Company, established the natural gas account for Mother's Kitchen Restaurant in compliance with all applicable statutes, and Florida Public Service Commission (PSC) rules concerning establishment of service and customer deposits, specifically Rule 25-7.083(4)(a), Florida Administrative Code. Whether Petitioner, Mother's Kitchen, Ltd., provided a deposit of $500 to Respondent at any time to establish a new account for Mother's Kitchen Restaurant. Whether Respondent administered the account of Mother's Kitchen Restaurant in compliance with all applicable statutes and PSC rules concerning refusal or discontinuance of service, specifically Rules 25-7.089(2)(g), (3), (5), (6)(a) and (e), Florida Administrative Code. Whether Respondent should be required to provide a refund of all or any part of any deposit made to establish an account for Mother's Kitchen Restaurant or any amounts paid for natural gas usage, service charges, returned check charges, or other fees charged to that account.
Findings Of Fact Petitioner, Mother's Kitchen, Ltd., is a partnership formed to operate a restaurant under the name of Mother's Kitchen Restaurant. The partners consist of Anthony Brooks, II; Daniele M. Dow-Brooks; Eddie Hodges; and Arthur L. Brooks. Mr. Alford Byrd was an original partner, but has since withdrawn from the partnership. At all times in dispute, Mother's Kitchen Restaurant was physically located at 1744 West Airport Boulevard, Sanford, Florida 32772-0134. Respondent, Florida Public Utilities Company, is a natural gas utility regulated by the Florida Public Service Commission (PSC) pursuant to Chapter 366, Florida Statutes, and Chapter 25-7, Florida Administrative Code. On March 21, 1996, Mr. Alfred Byrd (Byrd), a partner in Mother's Kitchen Ltd., signed a Job-Work Contract authorizing Respondent to prepare and connect appliances at Mother's Kitchen Restaurant to receive natural gas service. On March 21, 1996, Byrd provided, in person at Respondent's Sanford Office, a $200 deposit on behalf of the partnership to Respondent in order to establish a gas account for Mother's Kitchen Restaurant. Byrd received a deposit receipt from Respondent dated March 21, 1996, in the amount of $200. On March 21, 1996, Respondent established account number 0131-07252 in the name of "Alfred Byrd, d/b/a Mother's Kitchen" with a mailing address of "P. O. Box 134, Sanford, Florida 32772- 0134." This was based on the information provided by and the instructions of Byrd. On March 22, 1996, Respondent's serviceman prepared and connected a range and a fryer at Mother's Kitchen Restaurant for gas service, pursuant to the March 21, 1996, Job-Work Contract, and turned on the gas supply to Mother's Kitchen Restaurant. On March 31, 1996, Respondent billed Byrd $126.59 for the labor and materials required to prepare and connect the appliances under the March 21, 1996, Job-Work Contract. On April 9, 1996, Respondent billed the "Alfred Byrd d/b/a Mother's Kitchen" account $67.32, consisting of $46.32 for gas usage from March 22, 1996, through April 2, 1996, and a $21.00 turn on charge from March 22, 1996. On April 23, 1996, Respondent credited $126.59 to the "Alfred Byrd d/b/a Mother's Kitchen" account, paid by Mother's Kitchen check No. 1013, dated April 22, 1996. On May 8, 1996, Respondent billed the "Alfred Byrd d/b/a Mother's Kitchen" account $297.07, consisting of $229.75 for gas usage from April 2, 1996, through May 1, 1996, and $67.32 in arrears. On May 23, 1996, Respondent credited $150.00 to the "Alfred Byrd d/b/a Mother's Kitchen" account, paid by Mother's Kitchen check No. 1074, dated May 20, 1996, and signed by Anthony Brooks (Brooks). Respondent issued a receipt in the name of "Mother's Kitchen" for this payment. On June 3, 1996, Byrd signed a Job-Work Contract authorizing Respondent to clean the pilot light on the gas oven at Mother's Kitchen Restaurant. Respondent's serviceman completed this work the same day. On June 7, 1996, Respondent billed the "Alfred Byrd d/b/a Mother's Kitchen" account $391.72, consisting of $244.65 for gas usage from May 1, 1996, through May 31, 1996, and $147.07 in arrears. On June 7, 1996, Mother's Kitchen check No. 1074 was returned for insufficient funds. Respondent imposed a $20.00 service charge on the "Alfred Byrd d/b/a Mother's Kitchen" account for the returned check. On June 11, 1996, Respondent credited $170.00 to the "Alfred Byrd d/b/a Mother's Kitchen" account, paid in cash on June 10, 1996, as reimbursement for the $150.00 returned check No. 1074 and the corresponding $20.00 service charge. Respondent issued a receipt in the name of "A. Byrd" for this payment. On July 9, 1996, Respondent billed the "Alfred Byrd d/b/a Mother's Kitchen" account $657.36, consisting of $265.64 for gas usage from May 31, 1996, through July 1, 1996, and $371.72 in arrears. On July 11, 1996, Respondent credited $160.00 to the "Alfred Byrd d/b/a Mother's Kitchen" account, paid in cash on July 11, 1996. Respondent issued a receipt in the name of "A. Byrd" for this payment. No person paid a $500.00 deposit on behalf of Petitioner to establish a new gas account with Respondent for Mother's Kitchen Restaurant on July 11, 1996. At no time during the month of July did any person pay such a deposit. On July 15, 1996, Respondent added a service charge of $30.00 to the "Alfred Byrd d/b/a Mother's Kitchen" account for service performed pursuant to the June 3, 1996, Job-Work Contract. On July 25, 1996, Respondent credited $211.72 to the "Alfred Byrd d/b/a Mother's Kitchen" account, paid by Mother's Kitchen check No. 1131, dated July 24, 1996, and signed by Alfred Byrd. Respondent issued a receipt in the name of "Mother's Kitchen" for this payment. On August 7, 1996, Respondent billed the "Alfred Byrd d/b/a Mother's Kitchen" account $540.04, consisting of $224.40 for gas usage from July 1, 1996, through July 31, 1996, $285.64 in arrears, and the $30 service charge added on July 15, 1996. On August 8, 1996, Mother's Kitchen check No. 1131 was returned for insufficient funds. Respondent imposed a $20.00 service charge on the "Alfred Byrd d/b/a Mother's Kitchen" account for the returned check. On August 12, 1996, Respondent discontinued gas service to Mother's Kitchen Restaurant for nonpayment of $285.64 in arrears on the "Alfred Byrd d/b/a Mother's Kitchen" account. On August 12, 1996, Brooks hand-delivered a $290.00 cash payment to Respondent's Sanford Office to be applied to the "Alfred Byrd d/b/a Mother's Kitchen" account. Respondent issued a receipt in the name of "Mother's Kitchen" for this payment. This payment was not credited to the account until August 28, 1996. The delayed crediting of this payment had no effect on any notices or bills concerning the account. On August 12, 1996, Brooks, in person at Respondent's Sanford office, requested that the mailing address for the "Alfred Byrd d/b/a Mother's Kitchen" account be changed to the physical address of Mother's Kitchen Restaurant. Respondent made the requested change that same day. On August 13, 1996, Respondent's serviceman reconnected gas service to Mother's Kitchen Restaurant based on the August 12, 1996, cash payment of $290.00. On August 28, 1996, Respondent credited $521.72 to the "Alfred Byrd d/b/a Mother's Kitchen" account. This credit consisted of the $290 cash payment made August 12, 1996, and a $231.72 payment made August 28, 1996. The $231.72 payment was made as reimbursement for the $211.72 returned check No. 1131 and the corresponding $20 service charge. Respondent prepared an in- house receipt for this credit. No person made a $521.72 payment to Respondent for the "Alfred Byrd d/b/a Mother's Kitchen" account on August 28, 1996. On August 30, 1996, Respondent mailed a disconnect notice for the "Alfred Byrd d/b/a Mother's Kitchen" account to the physical address of Mother's Kitchen Restaurant. This notice stated that gas service to the restaurant would be discontinued if payment of $230.04 in arrears on the account was not made by September 10, 1996. On September 9, 1996, Respondent billed the "Alfred Byrd d/b/a Mother's Kitchen" account $471.29, consisting of $221.25 for gas usage from July 31, 1996, through August 29, 1996, and $230.04 in arrears. This bill was mailed to the physical address of Mother's Kitchen Restaurant. On September 12, 1996, Respondent discontinued gas service to Mother's Kitchen Restaurant for nonpayment of $230.04 in arrears on the "Alfred Byrd d/b/a Mother's Kitchen" account. On September 12, 1996, Harry Johnson, an employee of Petitioner, hand-delivered a $261.04 cash payment, consisting of payments for the $230.04 in arrears and a $31 reconnect fee, to Respondent's Sanford office to be applied to the "Alfred Byrd d/b/a Mother's Kitchen" account. Respondent issued a receipt in the name of "Mother's Kitchen" for this payment. On September 13, 1996, Respondent's serviceman was dispatched between 8:30 a.m. and 9:00 a.m. to reconnect gas service to Mother's Kitchen Restaurant. On September 13, 1996, between 8:30 a.m. and 9:00 a.m., Byrd, in person at Respondent's Sanford office, spoke to Diane Keitt (Keitt) and requested that gas service be discontinued on the "Alfred Byrd d/b/a Mother's Kitchen" account. Keitt contacted the serviceman by radio as he was en route to Mother's Kitchen Restaurant and instructed him to tell someone at the restaurant to call Keitt at Respondent's Sanford office. The serviceman arrived at Mother's Kitchen Restaurant at approximately 9:00 a.m. Upon entering the restaurant's kitchen, the serviceman told the occupants that someone needed to call Keitt immediately at the Respondent's Sanford office. Next, he inspected the restaurant's natural gas appliances to make sure there were no open gas lines then exited the building to perform a meter test to check for the possibility of a gas leak on the customer's side of the meter. After natural gas service has been discontinued on any existing account, Respondent performs a meter test before reestablishing service in order to determine if there is a leak on the customer's side of the meter. The serviceman's meter test revealed a gas leak on the customer's side of the meter. He searched for the leak by inspecting the gas appliances and applying a soapy solution used to detect leaks to the gas connections on each appliance. The serviceman located the leak on a worn pilot adjustment screw on the range. The leak could not be repaired without replacing the pilot adjustment screw. Brooks was present at the restaurant and called Keitt while the serviceman was performing the meter test. Keitt informed Brooks that Byrd had requested discontinuance of service to the restaurant. Keitt also told Brooks that Respondent would continue providing service on a temporary basis, in order to provide Petitioner time to pay a $500 deposit to establish a new account. Keitt then called Respondent's Vice President Darryl Troy (Troy) at Respondent's home office in West Palm Beach, Florida, to inform him of the situation. Brooks called Troy, who confirmed Keitt's statements concerning Byrd's desire to have service discontinued and the necessity of providing a new deposit to establish a new account. The serviceman interrupted this phone conversation to tell Brooks that there was a gas leak on the restaurant's range. Brooks was upset that the serviceman had not yet restored gas service. Brooks refused to authorize or pay for repairs to the range. The serviceman prepared a Report of Hazardous Condition or Corrective Action Required to document the gas leak on the range and inform the customer of the necessary repairs. Brooks refused to sign this form. The serviceman capped the gas connection to the range, plugged the range, and placed the Report of Hazardous Condition or Corrective Action Required and a red tag on the range. He determined that the fryer could be operated safely, so he lit its pilot before exiting the restaurant. The serviceman spoke with Keitt by radio and told her that he had located a gas leak and that Brooks refused to authorize its repair. Keitt then called Troy for instructions on how to handle the account. Troy felt that Brooks did not believe a gas leak was present on the range. Troy was concerned that someone at the restaurant may attempt to reconnect the range, so he instructed Keitt to have the meter turned off and locked. The meter was turned off and locked due only to safety concerns; Byrd's request to discontinue service to the restaurant played no part in Troy's decision. Keitt contacted the serviceman by radio and instructed him to turn the meter off and lock it. The serviceman turned off the meter and locked it. He then notified Brooks that he had turned off the meter and locked it upon instructions from Keitt. The serviceman left the restaurant at approximately 10:00 a.m. That afternoon, Brooks, in person at Respondent's Sanford office, requested that Keitt provide him a refund of the $261.04 payment made September 12, 1996. Keitt refused to refund this amount. No record evidence exists to show that Petitioner paid a $500 deposit, or a deposit of any amount, to establish a new account with Respondent after gas service to Mother's Kitchen Restaurant was disconnected on September 12, 1996. On September 16, 1996, a serviceman took a final reading from the gas meter at Mother's Kitchen Restaurant and officially turned off the meter. On September 16, 1996, Respondent charged $100.50 to the "Alfred Byrd d/b/a Mother's Kitchen" account for gas usage from August 29, 1996, through September 16, 1996, to finalize the account. On September 19, 1996, Respondent applied Petitioner's $200.00 deposit from March 21, 1996, to the outstanding, final balance of $310.75 on the "Afred Byrd d/b/a Mother's Kitchen" account. No record evidence exists to show that any person paid a $500 deposit, or a deposit of any amount, on behalf of Petitioner to establish a new account with Respondent for gas service to Mother's Kitchen Restaurant since the "Alfred Byrd d/b/a Mother's Kitchen" account was established on March 21, 1996.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent be found to have acted in compliance with Public Service Commission rules concerning the establishment of new service and management of customer deposits when service was established in the name of Alfred Byrd, d/b/a Mother's Kitchen on March 21, 1996. It is further RECOMMENDED the Respondent be found to have properly administered the account at issue here at all times leading up to its disconnection on September 13, 1996, and that Respondent be found to have acted in compliance with all Commission rules regarding that disconnection and refusal to reconnect. It is further RECOMMENDED that Respondent not be required to provide a refund of any part of the deposit made on this account or any amounts paid for service or fees on the account. DONE AND ENTERED this 11th day of June, 1998, at Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE 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 Filed with the Clerk of the Division of Administrative Hearings this 11th day of June, 1998. COPIES FURNISHED: Anthony Brooks, II Qualified Representative Mother's Kitchen, Ltd. Post Office Box 1363 Sanford, Florida 32772 Kathryn G. W. Cowdery, Esquire Gatlin, Schiefelbein & Cowdery, P.A. 3301 Thomasville Road, Suite 300 Tallahassee, Florida 32312 Wm. Cochran Keating, IV, Esquire Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399 Blanca Bayo, Director of Records Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399 William D. Talbott, Executive Director Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399 Rob Vandiver, General Counsel Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399
Findings Of Fact On March 22, 1977 during a routine inspection of various service stations in Vero Beach, a sample of No. 2 diesel fuel was taken from the pump at English Brothers Truck Stop. Upon analysis at the mobile laboratory the sample was found to be below the minimum flash point for No. 2 diesel fuel and the inspector returned to the station the same day and issued a stop sale notice. (Exhibit 3). Three additional samples were taken, and when analyzed they too were found to be below minimum flash point for this type fuel. Upon receipt of the stop sale notice the station manager notified Respondent. After the fuel had been analyzed at the state laboratory Respondent was notified that since the retail value of the contaminated fuel exceeded $1,000 it could pay $1,000 in lieu of having the fuel confiscated. Respondent owns the fuel at English Brothers Truck Stop until such time as the fuel is removed through the pump for sale. Upon receipt of the notice of the contaminated fuel, which was in one 4,000 gallon tank, Respondent immediately sent three employees to remove the contaminated fuel and clean the tank. Thereafter Respondent attempted to locate the source of the contamination but without success. Since the flash point was lower than allowed for diesel fuel the most likely source of contamination was gasoline which is a higher priced fuel than diesel. Standards used by the Petitioner in determining the required characteristics of fuels are those prescribed by the ASTM. Respondent distributes some 750,000 gallons of diesel fuel per month and this is the first report of contamination of its fuel in the eight and one half years Respondent has been in business.
Findings Of Fact Early on the morning of September 3, 1982, Mr. Robert W. Taylor, a driver for Fleetwing Petroleum Company, loaded his truck at the Marathon Oil Company Refinery terminal in Tampa, Florida, for the Triangle Refineries, Inc., with 2,001 gallons of super-unleaded gasoline, 2,000 gallons of unleaded regular gasoline, and 3,501 gallons of regular leaded gasoline. The super-unleaded was loaded into Compartment 1 of four compartments on the trailer, which holds a maximum of 2,500 gallons. On the previous day, this trailer had been used by another driver, Floyd Mills; and before loading the trailer at the terminal, he, Taylor, personally flushed out the tanks to insure no contamination. After completing the loading procedure, Mr. Taylor drove directly to the Hardee's station at 24203 Highway 60 E, Lake Wales, Florida, where it was loaded into the station's tanks. The delivery consisted of 3,501 gallons of regular gas, 2,000 gallons of unleaded gas, and 2,001 gallons of super-unleaded gas, as reflected on the delivery log for that date. This was somewhat unusual, since it was the first time Mr. Taylor had ever taken super-unleaded to that station. The receipt for delivery, executed by Walter Winslett, Jr., on September 3, 1982, shows that the quantities and qualities described above were received. During a routine inspection of the Hardee station on September 29, 1982, Mr. Willis Aldridge, an inspector with the Florida Department of Agriculture, took samples of all the gas at the station, including the regular, the unleaded, and the Super-unleaded. These samples, taken in the normal manner, were sealed inside a case with a lead wire seal, identified, and sent off to the lab at Tallahassee. Several days later, on October 5, 1982, Mr. Aldridge received a phone call from the Department of Agriculture laboratory in Tallahassee advising him that the super-unleaded product taken from the Hardee station exceeded the lead tolerance and that he should immediately stop its sale. Thereafter, the following day, he went back to the Hardee station, where talking with the manager, Mr. Winslett, he told him what the problem was, issued a stop sale notice for that grade gas, and sealed the pump dispensing it. Mr. Winslett stated this one load of super-unleaded was the only one he had ever received. The Stop Sale Notice identifies, inter alia, the product, the brand name, the pump number, and the amount still in the tank. This last figure is determined by sticking a gauging stick into the tank. Since this was the first time the station had carried super-unleaded, 2,001 gallons had been delivered, and 998 gallons remained, that meant that slightly over 1,000 gallons had been sold of that product. At this point, Mr. Aldridge advised the station operator he could either give up what was in the ground or pay a penalty on the amount sold to a maximum of $1,000. Since this grade gasoline was selling at that time for $1.32 a gallon, the value of the gasoline still in the ground was greater than the penalty. When the Stop Sale Notice was issued on October 6, 1982, Fleetwing officials requested a few days to consider their options, and on October 14, 1982, advised Mr. Aldridge that they elected to post bond in the penalty amount ($1,000) and would meet him at the station the next morning. When he arrived, Mr. Aldridge met with Mr. C. W. May, Jr., a representative of Fleetwing Petroleum, who posted the required bond, and the remaining 998 gallons of super- unleaded were released. The product in question was tested at the Florida Department of Agriculture Lab Complex in Tallahassee under the supervision of Mr. Ben W. Bowen, of the Lab Testing Section. The tests seen on the super-unleaded sample, utilizing the American Society of Testing and Materials standards adopted by the State of Florida, revealed this particular sample contained 0.15 gram of lead per gallon. Two tests were utilized. An initial field test was used to scrutinize the samples as they came in. If any sample failed this test, a second test utilizing the X-ray florescence method is used. Since the maximum allowed is 0.05 gram per gallon, this sample had three times the lead limit and was therefore subject to confiscation. The effects of using excessively leaded gasoline in cars designed to burn unleaded gas are: (1) the calalytic converter will be ruined, and (2) damage to the engine with continued use. Replacement of a catalytic converter could run to several hundred dollars. The contaminated gasoline was the property of, and offered for sale by, the Respondent, Fleetwing Corporation. The pumps used for dispensing were identified as to type of gasoline and bore the Fleetwing logo.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Respondent be required to forfeit $500 of the $1,000 bond posted and the unforfeited $500 be returned to the Respondent. RECOMMENDED this 25th day of March, 1983, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of March, 1983. COPIES FURNISHED: Robert A. Chastain, Esquire General Counsel Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 Richard C. May, Esquire 4110 South Florida Avenue Suite B Lakeland, Florida 33803 The Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32301
The Issue Whether Petitioner's site, Hughes Supply, Inc. located at 2920 Ford Street, Fort Myers, Lee County, Florida is eligible for restoration under Section 376.3072, Florida Statutes.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: Hughes is a Florida Corporation in good standing and authorized to do business in the State of Florida. The Department's facility no. 36-8519331 (the Facility), owned and operated by Hughes and the subject matter of this proceeding, is located at 2920 Ford Street, Ft. Myers, Lee County, Florida, and is a "Facility" as defined in Section 376.301(5), Florida Statutes. The Facility consisted of (a) two underground storage tanks (USTs), one 4000 gallons UST (gasoline tank) and one 8000 gallons UST (diesel tank), and (b) four monitoring well, and is a "petroleum storage system" as defined in Section 376.301(15), Florida Statutes. At all times material to this proceeding, Hughes held, and was the name insured of, an effective third party pollution liability insurance policy (No. FPL 7622685 - Renewal No. FPL 7621566) applicable to the Facility that was issued in accordance with, and qualified under, Section 376.3072, Florida Statutes. Hughes paid annual premiums exceeding $20,000.00 for the above insurance. In accordance with Sections 376.3072, Florida Statutes, and Chapter 17- 769, Florida Administrative Code; the Department issued to Hughes a Notice of Eligibility pertaining to the Facility and the third party pollution liability insurance referred to in Finding of Fact 4 above. Lee County, Florida has a local program approved by the Department pursuant to Section 376.3073, Florida Statutes, to provide for the administration of the Department's responsibilities under certain sections of Chapter 376, Florida Statutes. Diesel fuel was placed into the diesel tank at the Facility on August 12, 1991, and no diesel fuel has been placed in the diesel tank at the Facility since that date. On Thursday, August 29, 1991, a contractor bidding on the removal of the tanks detected free product in one of the monitoring wells at the Facility and told Larry Carman, the Warehouse Manager for Hughes. Mr. Carman told Phillip Ross, the Branch Manager for Hughes, who in turn informed Gene Kendall, the Operations Coordinator for Hughes. All of this occurred on August 29, 1991. On Friday, August 30, 1991, an employee of IT Corporation, acting upon the request of Gene Kendall, sampled the four monitoring wells at the Facility and found six inches of free product in the northwest monitoring well. On Tuesday, September 3, 1991, Fred Kendall discussed the discharge with Bill W. Johnson, Supervisor, Lee County Storage Tank Local Program. During this discussion, Johnson learned that the diesel tank had not been emptied. Johnson advised Kendall that the diesel tank had to be emptied of its product and placed out of service. On Tuesday, September 3, 1991 Mr. Kendall completed the Discharge Reporting Form (DRF) pertaining to the discharge and mailed the DRF to Johnson on September 4, 1991. The DRF indicated August 30, 1992, the day that IT Corporation confirmed the discharge, as the day of discovery of the discharge. The discharge was diesel fuel as indicated by the DRF and a "petroleum product" as defined in Section 376.3-1(14), Florida Statutes. The discharge reported in the DRF constitutes a "discharge" as defined in Section 376.301(4), Florida Statutes, which constitutes an "incident" as defined in Section 376.3072(2)(c), Florida Statutes, and as described in Rule 17-769.600, Florida Administrative Code. On Wednesday, September 4, 1991, Mr. Kendall also mailed a letter to Johnson stating Hughes' intent to seek restoration coverage for the Facility, pursuant to Policy No. FPL 762285, Renewal No. FPL 7621566. On September 13, 1991 when Hooper, Inspector for the Lee County Storage Tank Local Program, inspected the Facility the diesel tank contained a total of 39 5/8 inches of diesel and water, of which 4 3/4 inches was water. On September 16, 1991 when Hooper again inspected the Facility, the diesel tank contained a total of 36 1/2 inches of diesel and water, of which 4 1/2 inches was water. On this date, Hooper advised Hughes that the diesel tank had to be emptied of its product. The inspection report issued on September 16, 1991 by Hooper advised Hughes that the Facility was not in compliance with Chapter 17-761, Florida Administrative Code. On September 17, 1991, Hughes had the diesel tank emptied of all its product. Although Hughes was in the process of emptying the diesel tank by giving diesel away, at no time between August 30, 1991 and September 16, 1991 was the diesel tank completely empty of its product. Between August 30, 1991 and September 16, 1991 Hughes did not test the diesel tank to determine if the diesel tank was leaking and, if so, to pinpoint the source of the leak. There was no evidence that either the Department or Lee County Storage Tank Local Program personnel ever informed Hughes before September 16, 1991 that there was a time frame within which the diesel tank had to be emptied of all of its product, and placed out of service in order for Hughes to be in compliance and eligible for reimbursement for restoration under the FPLIRP. Likewise, Hughes did not request any information from the Department or the Lee County Local Program personnel concerning any time frames within which the diesel tank had to be tested for leaks or emptied of its contents to prevent any further discharge in order to be eligible for reimbursement for restoration under the FPLIRP. Between August 29, 1991 and September 17, 1991 Hughes bailed the monitoring wells at the Facility on a daily basis, removed the free product from the monitoring wells, and placed the free product in a sealed 55-gallon drum. When the discharge was discovered, Hughes made the decision to close the Facility by tank removal, and at this point did not intend to repair or replace the Facility. As a result of an inspection of the Facility by the Lee County Local Program personnel in May, 1991, Hughes was made aware that the Facility was not in compliance with Chapter 17-761, Florida Administrative Code, since the gasoline tank had not been used in over three years, and there had been no closure of the gasoline tank. This noncompliance with Chapter 17-761, Florida Administrative Code, concerning the gasoline tank was also a portion of the noncompliance report filed by Hooper on September 16, 1991. The gasoline tank comes within the definition of "unmaintained" as defined by Rule 17-761.200(2), Florida Administrative Code. Both the diesel tank and the gasoline tank were removed on October 28, 1991 by a Florida licensed storage tank system removal contractor, and the Facility permanently closed by IT Corporation on October 29, 1991. In December, 1991, Hughes filed a tank closure assessment report pertaining to the removal of the diesel and gasoline tanks from, and closure of, the Facility. The tank closure assessment report was prepared by IT Corporation upon a request made by Hughes to IT Corporation on September 3, 1991 for a tank closure assessment proposal which was submitted by IT Corporation to Hughes on September 4, 1991. In April or May, 1992, Hughes filed with Lee County a contamination assessment report prepared by IT Corporation pertaining to the removal of the USTs from and closure of the Facility. Subsequent to discovery of the discharge. Hughes has expended approximately $60,000.00 as of June 10, 1992, on the Facility in connection with the USTs. Site rehabilitation costs for the Facility have been estimated in a range of $220,000.00 to $245,000.00 as of June 10, 1992. In the early part of 1991 water was present in the diesel tank, and approximately six months before discovering the discharge in August, 1991, Hughes had the water pumped out of the diesel tank. Hughes gave no explanation for the presence of water in the diesel tank. Neither the Department nor the Lee County Local Program personnel were notified of this unexplained presence of water in the diesel tank.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is recommended that the Department enter a Final Order denying Hughes application for restoration coverage under the Florida Petroleum Liability Insurance and Restoration Program. DONE and RECOMMENDED this 24th day of September, 1992, at Tallahassee, Florida. WILLIAM R. CAVE, 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 24th day of September, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 91-8334 The following constitutes my specific rulings, pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties in this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner The following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parenthesis is the Finding(s) of Fact which so adopts the Proposed Finding(s) of Fact:(1); 2-3(2); 4-5(3); 6- 8(4); 9(5); 10(6); 11(8,9); 12(10,11); 14(15,22); 15(10); 16(19); 18(10); 19(13); 20-21(7); 22-23(24); 24(21); 25(17); 26-29(20); 30(15); 31(16); 32(22); 33(23); 35(23); 36(7); 37(23); 38(24); 39(25); 40(26); 41(27); 42-43(27); and 44(15,22). Proposed Findings of Fact 13, 17 and 34 are neither material nor relevant to the conclusion reached in the Recommended Order. Rulings on Proposed Findings of Fact Submitted by the Respondent 1. The following Proposed Findings of Fact are adopted in substance as modified in the Recommended Order. The number in parenthesis is the Finding(s) of Fact which so adopts the Proposed Finding(s) of Fact:1-2(2); 3(3); 4-6(5); 7(6); 8(22); 9(7); 10(8); 11(9); 12(10); 13-16(11); 17(12); 18(13): 19(18); 20(17); 21-22(14); 23-24(15); 25-26(28); 27(16); and 28(23). COPIES FURNISHED: Scott E. Wilt, Esquire Maguire, Voorhis and Wells 2 South Orange Plaza Orlando, Florida 32801 Brigette A. Ffolkes, Esquire Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Carol Browner, Secretary Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Daniel H. Thompson, Esquire General Counsel Department of Environmental Regulation 2600 Blair Stone Road Tallahassee, Florida 32399-2400
Findings Of Fact During a routine inspection on March 30, 1983, a sample diesel fuel taken from Respondent's place of business in Clearwater, Florida, was tested and was found to have a flash point of 660F. Normal flash point for diesel fuel is 1000F. A Stop Sale Notice was issued March 30, 1983, and sales from this tank were stopped. On March 31, 1983, Respondent posted a $1,000 bond in lieu of having the fuel confiscated. Before the Stop Sale Notice, 1,282 gallons of contaminated diesel fuel had been sold from this tank at a price of $1.099 per gallon.
