CODING: Words stricken are deletions; words underlined are additions.House Bill 1699
Florida House of Representatives - 1997 HB 1699
By Representative Thrasher
1 A bill to be entitled
2 An act relating to water or wastewater systems;
3 amending s. 367.021, F.S.; defining
4 "environmental compliance costs"; limiting
5 certain determinations of the Florida Public
6 Service Commission; amending s. 367.022, F.S.;
7 providing a regulatory exemption for nonpotable
8 irrigation water, under certain circumstances;
9 amending s. 367.081, F.S.; revising procedure
10 in commission rate proceedings for
11 determinations regarding recovery of utility
12 property investments; providing for recovery of
13 environmental compliance costs; amending s.
14 367.171, F.S.; providing application of the
15 act; providing an effective date.
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17 Be It Enacted by the Legislature of the State of Florida:
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19 Section 1. Subsections (7) through (13) of section
20 367.021, Florida Statutes, are renumbered as subsections (8)
21 through (14), respectively, and a new subsection (7) is added
22 to said section to read:
23 367.021 Definitions.--As used in this chapter, the
24 following words or terms shall have the meanings indicated:
25 (7) "Environmental compliance costs" means all
26 reasonable expenses and a fair return on the investments
27 incurred in complying with federal, state, or local
28 environmental laws, rules, regulations, orders, ordinances, or
29 resolutions, or other such requirements. The commission shall
30 be bound by the determinations, permitting, and enforcement
31 decisions of the United States Environmental Protection
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1 Agency, the Department of Environmental Protection, or a water
2 management district, or other entity with jurisdiction, as to
3 the need for, capacity of, and type of facilities, including
4 land and processes, required for compliance, and the need for,
5 capacity of, and type of facilities, including land and
6 processes, to be included as part of any reuse system or
7 project.
8 Section 2. Subsection (11) is added to section
9 367.022, Florida Statutes, 1996 Supplement, to read:
10 367.022 Exemptions.--The following are not subject to
11 regulation by the commission as a utility nor are they subject
12 to the provisions of this chapter, except as expressly
13 provided:
14 (11) Any person providing only nonpotable water for
15 irrigation purposes in a geographic area where potable water
16 service is available from a governmentally or privately owned
17 utility or a private well.
18 Section 3. Subsection (2) of section 367.081, Florida
19 Statutes, is amended to read:
20 367.081 Rates; procedure for fixing and changing.--
21 (2)(a) The commission shall, either upon request or
22 upon its own motion, fix rates which are just, reasonable,
23 compensatory, and not unfairly discriminatory. In every such
24 proceeding, the commission shall consider the value and
25 quality of the service and the cost of providing the service,
26 which shall include, but not be limited to, debt interest; the
27 requirements of the utility for working capital; maintenance,
28 depreciation, tax, and operating expenses incurred in the
29 operation of all property used and useful in the public
30 service; and a fair return on the investment of the utility in
31 property used and useful in the public service. However, the
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1 commission shall not allow the inclusion of
2 contributions-in-aid-of-construction in the rate base of any
3 utility during a rate proceeding, nor shall it impute
4 prospective future contributions-in-aid-of-construction
5 against the utility's investment in property used and useful
6 in the public service; and accumulated depreciation on such
7 contributions-in-aid-of-construction shall not be used to
8 reduce the rate base, nor shall depreciation on such
9 contributed assets be considered a cost of providing utility
10 service. The commission shall also consider the investment of
11 the utility in land acquired or facilities constructed or to
12 be constructed in the public interest within a reasonable time
13 in the future, not to exceed, unless extended by the
14 commission, 24 months from the end of the historical test
15 period used to set final rates.
16 1. For purposes of such proceeding, to determine
17 whether utility property, including land acquired or
18 facilities constructed or to be constructed in the public
19 interest, is "used and useful in the public service," the
20 commission shall apply the following:
21 a. Utility property needed to serve current customers
22 shall be considered fully used and useful in the public
23 service.
24 b. Utility property needed to serve customers less
25 than 6 years from the date of the commission's final action on
26 a rate request as provided in subsection (6) shall be
27 considered fully used and useful in the public service.
28 c. Utility property needed to serve customers 6 years
29 or more but not more than 7 years from the date of the
30 commission's final action on a rate request as provided in
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1 subsection (6) shall be rebuttably presumed to be used and
2 useful in the public service.
3 d. Utility property needed to serve customers more
4 than 7 years from the date of the commission's final action on
5 a rate request as provided in subsection (6) shall only be
6 considered used and useful in the public service if the
7 commission determines that the utility has presented clear and
8 convincing evidence to justify such treatment.
9 2. Notwithstanding the provisions of subparagraph 1.,
10 the commission shall approve rates for service that allow a
11 utility to recover the full amount of environmental compliance
12 costs from customers. Rates for service shall not include
13 allowance for funds prudently invested or similar charges.
14 (b) In establishing initial rates for a utility, the
15 commission may project the financial and operational data as
16 set out in paragraph (a) to a point in time when the utility
17 is expected to be operating at a reasonable level of capacity.
18 Section 4. Subsections (6) and (8) of section 367.171,
19 Florida Statutes, 1996 Supplement, are amended to read:
20 367.171 Effectiveness of this chapter.--
21 (6) Any county in which utilities as herein defined
22 were regulated by the commission on or after January 1, 1980,
23 which subsequently cease to be so regulated, shall, within 90
24 days of the cessation of commission regulation or the
25 effective date of this act, adopt and follow as minimum
26 standards of regulation the provisions of s. 367.021, s.
27 367.081, except for paragraph (4)(a), and ss. 367.0817 and s.
28 367.082, except that the word "commission" shall be read as
29 "the governing body of such county" when the context implies
30 or admits. The authorized rate of return shall be no less than
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1 the weighted cost of the capital of the utility, including
2 debt and equity.
3 (8) Each county which is excluded from the provisions
4 of this chapter shall regulate the rates of all utilities in
5 that county which would otherwise be subject to regulation by
6 the commission pursuant to ss. 367.021, s. 367.081(1), (2),
7 (3), and (6), and 367.0817. The county shall not regulate the
8 rates or charges of any system or facility which would
9 otherwise be exempt from commission regulation pursuant to s.
10 367.022(2). For this purpose the county or its agency shall
11 proceed as though the county or agency is the commission.
12 Section 5. This act shall take effect upon becoming a
13 law.
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16 HOUSE SUMMARY
17
With respect to regulation of water and wastewater
18 utilities, defines "environmental compliance costs" to
include all reasonable expenses and a fair return on the
19 investments incurred in complying with governmental
regulation. Binds determinations of the Florida Public
20 Service Commission with respect to such costs to
requirements for compliance with the decisions of
21 specified governmental regulatory entities. Provides a
regulatory exemption for providers of only nonpotable
22 water for irrigation where potable water is available
from described sources. In commission rate proceedings
23 determinations regarding recovery of utility property
investments, provides criteria for determining whether
24 the property is "used and useful in the public service"
and provides for recovery of the full amount of
25 environmentally required costs from customers.
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