Florida Senate - 2011 SB 950
By Senator Bennett
21-00790B-11 2011950__
1 A bill to be entitled
2 An act relating to water and wastewater utilities;
3 creating s. 367.0819, F.S.; providing for recovery
4 through a quarterly surcharge of certain costs
5 relating to water and wastewater system improvement
6 projects; defining a “non-revenue producing project;”
7 requiring utilities to submit surcharge tariffs
8 reflecting the surcharge calculation for recovery of
9 such costs to the Florida Public Service Commission
10 for approval and to provide specified notice of such
11 surcharge tariff filings; providing for the automatic
12 approval of the surcharge tariff within a specified
13 period after filing the surcharge tariff with the
14 commission; requiring the surcharge notice be
15 presented as a separate line item on the customer’s
16 bill; specifying a limitation for the surcharge
17 amount; providing requirements for billing,
18 reconciliation, and quarterly adjustment of the
19 surcharge; specifying a limitation for recovery of
20 project costs; providing project eligibility criteria;
21 specifying water and wastewater treatment criteria;
22 providing requirements for notice, maintenance, and
23 availability of certain records; authorizing the
24 commission to review specified projects; providing
25 that surcharges are subject to refund under certain
26 conditions; providing an effective date.
27
28 Be It Enacted by the Legislature of the State of Florida:
29
30 Section 1. Section 367.0819, Florida Statutes, is created
31 to read:
32 367.0819 Recovery of costs for system improvement
33 projects.—
34 (1)(a) In order to promote utility investment in system
35 improvement projects, the commission shall allow a utility to
36 recover prudently incurred capital costs related to nonrevenue
37 producing projects to enhance water quality, fire protection
38 reliability, and long-term system viability through a quarterly
39 surcharge collected pursuant to this section. The costs of
40 existing or new facilities to serve new customers are not
41 recoverable through this recovery surcharge.
42 (b) For purposes of this section, a “non-revenue producing
43 project” means a project that is not constructed or installed
44 for the purpose of serving a new customer.
45 (2) A utility seeking to establish a surcharge pursuant to
46 this section must:
47 (a) Submit, for commission approval, the proposed surcharge
48 tariff establishing a formula for the calculation of rates
49 reflecting the surcharge, which rates provide for recovery of
50 depreciation and return on investment for each eligible project.
51 The return on investment for each eligible project must be based
52 on the utility’s last authorized rate of return. The surcharge
53 must be calculated, applied, and recovered in accordance with
54 the utility’s last authorized rate structure so that the total
55 amount of the surcharge revenue recovered by the utility in any
56 one year does not exceed 8 percent of the utility’s total annual
57 water and wastewater service revenues for the previous year.
58 (b) Provide notice of the initial surcharge tariff filing
59 to each customer in the affected service area and publish notice
60 of the surcharge filing within the affected service area
61 pursuant to commission rule.
62 (3) A surcharge tariff submitted by a utility in compliance
63 with the requirements of subsection (2) shall be approved as a
64 matter of right within 60 days after filing the surcharge tariff
65 with the commission.
66 (4) A surcharge established pursuant to this section shall
67 be:
68 (a) Presented as a separate line item on the customer’s
69 bill. Any changes in the surcharge must be reflected on the
70 first bill the customer receives following the change of the
71 surcharge.
72 (b) Revaluated on a quarterly basis to reflect the costs of
73 eligible projects placed into service. The utility shall file
74 the supporting data to increase or reduce the surcharge with the
75 commission for each revaluation. The utility shall deliver the
76 supporting data to the Office of Public Counsel at least 10 days
77 before the effective date of the modified surcharge.
78 (c) Subject to an annual reconciliation of revenues and
79 costs based on a reconciliation period of 12 months ending
80 December 31 of each year. The revenue received from the
81 surcharge for the reconciliation period shall be compared to the
82 eligible costs of the utility for that period. The difference
83 between revenue and costs shall be recovered or refunded, as
84 appropriate, over a 12-month period beginning on April 1 of each
85 year. Revenues in excess of system-improvement costs shall be
86 refunded with interest to customers.
87 (d) Reset at zero as of the effective date of new base
88 rates that provide for prospective recovery of the costs that
89 had previously been recovered under the surcharge. Thereafter,
90 only the costs of new eligible projects that have not previously
91 been included in the base rate of the utility shall be reflected
92 in the quarterly surcharge.
93 (5) Recovery of project costs pursuant to this section does
94 not preclude such costs from being included in the base rate in
95 subsequent rate proceedings. However, a project cost recovered
96 in base rates may not be recovered through a surcharge
97 established pursuant to this section.
98 (6) A project is eligible for recovery of costs through the
99 surcharge if it is:
100 (a) Completed and placed into service after the test year
101 upon which base rates were last established by the commission
102 for the utility; and
103 (b) For the construction of nonrevenue-producing and
104 improvement projects that are used for the production,
105 treatment, transmission, storage, distribution, or provision of
106 potable or recycled water to the public or for the collection,
107 transportation, or disposal of wastewater for the public. Such
108 projects may include, but are not limited to, water quality
109 improvement projects designed to achieve primary or secondary
110 water standards as determined by the Department of Environmental
111 Protection, the United States Environmental Protection Agency,
112 or any other governmental entity having similar regulatory
113 jurisdiction; wastewater quality improvement projects; main,
114 service line, and valve replacement; main relining and
115 rehabilitation; fire and flushing hydrant installation and
116 replacement; main extension to eliminate dead ends;
117 interconnection projects; water, wastewater, and reuse meter
118 installation and replacement; wastewater collection,
119 replacement, relining, and rehabilitation; and manhole
120 replacement and rehabilitation.
121 (7) Water and wastewater treatment includes production of
122 any sodium solution, excluding sodium hypochlorite, used in
123 conjunction with the treatment process, but does not include the
124 onsite manufacturing of liquid chlorine or bleach.
125 (8) Upon approval of the surcharge tariff, the utility
126 shall maintain and make available for public inspection during
127 normal business hours at each utility location or on the
128 utility’s website a detailed schedule for each completed
129 project, including the plant account number and title, the
130 category of the project, the project name and description, the
131 cost of the project in the month of closing, and the month and
132 year of closing. Notice of the availability of the schedules for
133 public inspection shall be posted in each office of the utility.
134 (9) The commission may review the prudence of all projects
135 subject to the surcharge in the utility’s subsequent rate
136 proceeding. Revenues from such surcharges are subject to refund
137 if the commission subsequently determines that the costs of a
138 project were not prudently incurred or that the project is not
139 used and useful in the public service.
140 Section 2. This act shall take effect July 1, 2011.