Florida Senate - 2011                        COMMITTEE AMENDMENT
       Bill No. SB 950
       
       
       
       
       
       
                                Barcode 797272                          
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  03/23/2011           .                                
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       The Committee on Environmental Preservation and Conservation
       (Jones) recommended the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5  
    6         Section 1. Section 367.0819, Florida Statutes, is created
    7  to read:
    8         367.0819Recovery of costs for system improvement
    9  projects.—
   10         (1)(a)In order to promote utility investment in system
   11  improvement projects, the commission shall allow a utility to
   12  recover prudently incurred capital costs related to nonrevenue
   13  producing projects to enhance water quality, fire protection
   14  reliability, and long-term system viability through a surcharge
   15  collected pursuant to this section. The costs of existing or new
   16  facilities to serve new customers are not recoverable through
   17  this surcharge.
   18         (b)For purposes of this section, a the term “nonrevenue
   19  producing project” means a project that is not constructed or
   20  installed for the purpose of serving a new customer.
   21         (2)A utility seeking to establish a surcharge pursuant to
   22  this section must:
   23         (a)Submit, for commission approval, the proposed surcharge
   24  tariff establishing a formula for the calculation of rates
   25  reflecting the surcharge, which rates provide for recovery of
   26  depreciation and return on investment for each eligible project.
   27  The return on investment for each eligible project must be based
   28  on the utility’s last authorized pretax rate of return. The
   29  surcharge must be calculated, applied, and recovered in
   30  accordance with the utility’s last authorized rate structure.
   31  Until the surcharge is reset pursuant to paragraph (4)(d), the
   32  total cumulative amount of the surcharge revenue recovered by
   33  the utility may not exceed 8 percent of the utility’s total
   34  revenues, excluding revenues collected through the surcharge,
   35  for the preceding calendar year.
   36         (b)Provide notice by mail of the initial surcharge tariff
   37  filing to each customer in the affected service areas and
   38  publish notice of the surcharge filing in a newspaper of general
   39  circulation in the affected service areas.
   40         (c)Before implementing a surcharge under this section, the
   41  utility shall file a sworn affirmation as to the accuracy of the
   42  figures and calculations upon which surcharge or any adjustment
   43  thereto is based, stating that the change in rates will not
   44  cause the utility to exceed the range of its last authorized
   45  rate of return on equity. Whoever makes a false statement in the
   46  affirmation required under this paragraph, which statement he or
   47  she does not believe to be true in regard to any material
   48  matter, commits a felony of the third degree, punishable as
   49  provided in s. 775.082, s. 775.083, or s. 775.084.
   50         (d) If, within 15 months after the filing of a utility’s
   51  annual report required by s. 367.121, the commission finds that
   52  the utility exceeded the range of its last authorized rate of
   53  return on equity after the implementation of the surcharge
   54  authorized by this section within the year for which the report
   55  was filed, the commission may order the utility to refund, with
   56  interest, the difference to the ratepayers and adjust rates
   57  accordingly. This provision does require a bond or corporate
   58  undertaking in order for the utility to implement the surcharge.
   59         (3)A surcharge tariff submitted by a utility in compliance
   60  with the requirements of paragraph (2)(a) is not subject to s.
   61  367.091 and shall be approved as a matter of right without
   62  hearing within 60 days after filing the surcharge tariff with
   63  the commission.
   64         (4)A surcharge established pursuant to this section shall
   65  be:
   66         (a)Presented as a separate line item on the customer’s
   67  bill and billed in accordance with the billing cycle in the
   68  utility’s approved tariff. Any changes in the surcharge must be
   69  reflected on the first bill the customer receives following the
   70  change of the surcharge.
   71         (b)Revaluated, and if necessary adjusted, on a quarterly
   72  basis to reflect the costs of eligible projects placed into
   73  service. The utility shall file the supporting data to increase
   74  or reduce the surcharge with the commission for each revaluation
   75  along with a sworn affirmation required by paragraph (2)(c), and
   76  shall contemporaneously deliver copies of the supporting data
   77  and the sworn affirmation to the Office of Public Counsel. The
   78  surcharge adjustment is not be subject to s. 367.091 and shall
   79  take effect without hearing 45 days after the supporting data
   80  and sworn affirmation are filed with the commission and
   81  delivered to the Office of Public Counsel.
   82         (c)Subject to an annual reconciliation of revenues and
   83  costs based on a reconciliation period of 12 months, such period
   84  to begin on the date the surcharge tariff is approved as a
   85  matter of right pursuant to subsection (3). Within 30 days after
   86  the end of each reconciliation period, the utility shall file
   87  with the commission, and deliver to the Office of Public
   88  Counsel, a reconciliation report that shall compare the actual
   89  surcharge revenues received and the actual eligible costs
   90  incurred by the utility during the prior period along with the
   91  sworn affirmation required by paragraph (2)(c). A reconciliation
   92  report filed in accordance with these requirements shall be
   93  administratively approved by the commission without hearing
   94  within 45 days after filing. The difference between revenue and
   95  costs shall be recovered or refunded, as appropriate, by the
   96  utility without hearing as an automatic adjustment to the
   97  subsequent surcharge calculation. Revenues in excess of system
   98  improvement costs shall be refunded with interest to customers
   99  pursuant to the commission’s rule on interest for water and
  100  wastewater utilities.
  101         (d)Reset at zero as of the effective date of new base
  102  rates that provide for prospective recovery of the costs that
  103  had previously been recovered under the surcharge. Thereafter,
  104  only the costs of new eligible projects that have not previously
  105  been included in the base rate of the utility shall be reflected
  106  in the surcharge.
  107         (5)Recovery of project costs pursuant to this section does
  108  not preclude such costs from being included in base rates in
  109  subsequent rate proceedings. However, a project cost recovered
  110  in base rates may not be recovered through a surcharge
  111  established pursuant to this section.
  112         (6)A project is eligible for recovery of costs through the
  113  surcharge if it is:
  114         (a)Completed and placed into service after the test year
  115  upon which base rates were last established by the commission
  116  for the utility; and
  117         (b)For the construction of nonrevenue-producing
  118  improvement projects that are used for the production,
  119  treatment, transmission, storage, distribution, or provision of
  120  potable or recycled water to the public or for the collection,
  121  transportation, or disposal of wastewater for the public. Such
  122  projects may include, but are not limited to, water quality
  123  improvement projects designed to achieve primary or secondary
  124  water standards as determined by the Department of Environmental
  125  Protection, the United States Environmental Protection Agency,
  126  or any other governmental entity having similar regulatory
  127  jurisdiction; wastewater quality improvement projects; main,
  128  service line, and valve replacement projects; main relining and
  129  rehabilitation projects; fire and flushing hydrant installation
  130  and replacement projects; main extension to eliminate dead ends;
  131  interconnection projects; water, wastewater, and reuse meter
  132  installation and replacement projects; wastewater collection,
  133  replacement, relining, and rehabilitation projects; and manhole
  134  replacement and rehabilitation projects.
  135         (7)Water and wastewater treatment includes production of
  136  any sodium solution, excluding sodium hypochlorite, used in
  137  conjunction with the treatment process, but does not include the
  138  onsite manufacturing of liquid chlorine or bleach.
  139         (8)Upon approval of the surcharge tariff, the utility
  140  shall maintain and make available for public inspection during
  141  normal business hours at each utility location or on the
  142  utility’s website a detailed schedule for each completed
  143  project, including the plant account number and title, the
  144  category of the project, the project name and description, the
  145  cost of the project in the month of closing, and the month and
  146  year of closing. Notice of the availability of the schedules for
  147  public inspection shall be posted in each office of the utility.
  148         (9)The commission may review the prudence of all projects
  149  subject to the surcharge in the utility’s next base rate
  150  proceeding following the commission’s initial approval of the
  151  surcharge pursuant to subsection (3). Revenues from such
  152  surcharges are subject to refund if the commission subsequently
  153  determines that the costs of a project were not prudently
  154  incurred or that the project is not used and useful in the
  155  public service, and any such refund shall be made pursuant to
  156  the commission’s rule on refunds for water and wastewater
  157  utilities.
  158         Section 2. This act shall take effect July 1, 2011.
  159  
  160  ================= T I T L E  A M E N D M E N T ================
  161         And the title is amended as follows:
  162  
  163         Delete everything before the enacting clause
  164  and insert:
  165                        A bill to be entitled                      
  166         An act relating to water and wastewater utilities;
  167         creating s. 367.0819, F.S.; providing for recovery
  168         through a surcharge of certain costs relating to water
  169         and wastewater system improvement projects; defining a
  170         the term “nonrevenue-producing project”; requiring
  171         utilities to submit surcharge tariffs reflecting the
  172         surcharge calculation for recovery of such costs to
  173         the Florida Public Service Commission for approval and
  174         to provide specified notice of such surcharge tariff
  175         filings; providing for the automatic approval of the
  176         surcharge tariff within a specified period after
  177         filing the surcharge tariff with the commission;
  178         requiring the utility to file a sworn affirmation as
  179         to the accuracy of the figures and calculations;
  180         providing for penalties; requiring the utility to
  181         submit an annual report regarding the rate of return
  182         to the commission; allowing the commission to order
  183         the utility to make refunds, with interest, under
  184         certain circumstances; requiring the surcharge notice
  185         be presented as a separate line item on the customer’s
  186         bill; specifying a limitation for the surcharge
  187         amount; providing requirements for billing,
  188         reconciliation, and quarterly adjustment of the
  189         surcharge; specifying a limitation for recovery of
  190         project costs; providing project eligibility criteria;
  191         specifying water and wastewater treatment criteria;
  192         providing requirements for notice, maintenance, and
  193         availability of certain records; authorizing the
  194         commission to review specified projects; providing
  195         that surcharges are subject to refund under certain
  196         conditions; providing an effective date.