Florida Senate - 2014 CS for CS for CS for SB 272 By the Committees on Appropriations; Community Affairs; and Communications, Energy, and Public Utilities; and Senator Simpson 576-02573-14 2014272c3 1 A bill to be entitled 2 An act relating to water utilities; creating s. 3 367.072, F.S.; providing legislative findings; 4 defining the term “customer”; authorizing the Florida 5 Public Service Commission to revoke a certificate of 6 authorization upon receipt of a petition; providing 7 criteria for such petition; authorizing the commission 8 to adopt rules; creating s. 367.0812, F.S.; requiring 9 the commission to consider the quality of water 10 service when fixing rates; providing criteria that the 11 commission must consider in making its determination; 12 requiring the utility to meet with its customers to 13 discuss the costs and benefits of plausible solutions 14 if the commission finds that the utility has failed to 15 meet certain quality of water standards; prohibiting a 16 customer from petitioning the commission to revoke the 17 certificate of authorization of a utility under 18 certain circumstances; authorizing the commission to 19 prescribe penalties for certain failures of the 20 utility; requiring the commission to adopt rules; 21 providing an appropriation; providing an effective 22 date. 23 24 Be It Enacted by the Legislature of the State of Florida: 25 26 Section 1. Section 367.072, Florida Statutes, is created to 27 read: 28 367.072 Petition to revoke certificate of authorization. 29 The Legislature finds that it is in the public interest that 30 water service be of good quality and consistent with the 31 standards set forth in this chapter. Therefore, a utility’s 32 certificate of authorization to provide water service may be 33 revoked if, after its customers file a petition with the 34 commission, the commission finds that revocation is in the best 35 interest of the customers in accordance with this section. As 36 used in this section, the term “customer” means an individual 37 whose property is serviced by a single meter or a person whose 38 name appears on the bill for a master meter. 39 (1) If the commission receives a letter from the customers 40 of a utility stating their intent to file a petition, the 41 utility is prohibited from filing a rate case until the petition 42 is acted upon by the commission. 43 (a) Within 10 days after receipt of the letter, commission 44 staff shall notify the utility of the customers’ intent to file 45 a petition and that the utility may not file for a rate increase 46 until the petition is acted upon by the commission. 47 (b) Commission staff shall send to the customers 48 instructions regarding the information required on the petition 49 and the subsequent process the commission will follow. The 50 petition must be filed within 90 days after the receipt of the 51 instruction. Commission staff shall review the petition and 52 notify the customers within 10 days after receipt of the 53 petition that the petition is sufficient for the commission to 54 act or that additional information is necessary. The customers 55 must file a cured petition within 30 days after receipt of the 56 notice to cure and provide a copy of the petition to the 57 utility. If the customers fail to file or refile a petition 58 within the allotted time, the commission shall dismiss the 59 petition with prejudice, and the customers may not file another 60 petition for 1 year after the dismissal. 61 (2) A petition must: 62 (a) State with specificity each issue that customers have 63 with the quality of water service, each time the problem was 64 reported to the utility, and how long each issue has existed; 65 and 66 (b) Be signed by at least 65 percent of the customers of 67 the service area covered under the certificate of authorization. 68 A person whose name appears on the bill for a master meter may 69 sign a petition if at least 65 percent of the customers, 70 tenants, or unit owners served by the master meter support the 71 petition, in which case documentation of such support must be 72 included with the petition. 73 (3) If the petition is in compliance with this section and 74 the issues identified within the petition support a reasonable 75 likelihood that the utility is failing to provide quality of 76 water service, a docket shall be opened. The utility shall use 77 the following criteria in preparing a response to the 78 commission, addressing the issues identified within the petition 79 and defending the quality of its water service: 80 (a) Federal and state primary water quality standards or 81 secondary water quality standards pursuant to s. 367.0812; and 82 (b) The relationship between the utility and its customers, 83 including each complaint received regarding the quality of water 84 service, the length of time each customer has been complaining 85 about the service, the resolution of each complaint, and the 86 time it has taken to address such complaints. 87 (4) The commission shall evaluate the issues identified in 88 the petition, the utility’s response as to whether it is 89 providing quality of water service, and any other factor the 90 commission deems relevant. 91 (5) Based upon its evaluation, the commission shall: 92 (a) Dismiss the petition, in which case the decision must 93 be supported by clear and convincing evidence and is subject to 94 ss. 120.569 and 120.57; 95 (b) Require the utility to take the necessary steps to 96 correct the quality of water service issues identified in the 97 petition. The commission shall set benchmarks within a 98 timeframe, not to exceed 3 years, and may require the utility to 99 provide interim reports describing its progress in meeting such 100 benchmarks. The commission may extend the term 3 years for 101 circumstances that delay the project which are not in the 102 control of the utility, such as natural disasters and obtaining 103 permits necessary for meeting such benchmarks; or 104 (c) Notwithstanding s. 367.045, revoke the utility’s 105 certificate of authorization, in which case a receiver must be 106 appointed pursuant to s. 367.165 until a sale of the utility 107 system has been approved pursuant to s. 367.071. 108 (6) The commission shall adopt by rule the format of and 109 requirements for a petition and may adopt other rules to 110 administer this section. 111 Section 2. Section 367.0812, Florida Statutes, is created 112 to read: 113 367.0812 Rate fixing; quality of water service as 114 criterion.— 115 (1) In fixing rates that are just, reasonable, 116 compensatory, and not unfairly discriminatory, the commission 117 shall consider the extent to which the utility provides water 118 service that meets secondary water quality standards as 119 established by the Department of Environmental Protection. In 120 determining whether a utility has satisfied its obligation to 121 provide quality of water service that meets these standards, the 122 commission shall consider: 123 (a) Testimony and evidence provided by customers and the 124 utility; 125 (b) The results of past tests required by a county health 126 department or the Department of Environmental Protection which 127 measure the utility’s compliance with the applicable secondary 128 water quality standards; 129 (c) Complaints regarding the applicable secondary water 130 quality standards filed by customers with the commission, the 131 Department of Environmental Protection, the respective local 132 governmental entity, or a county health department during the 133 past 5 years; and 134 (d) If the commission deems necessary, the results of any 135 updated test. 136 (2)(a) In determining the quality of water service, the 137 commission shall consider a finding by the Department of 138 Environmental Protection as to whether the utility has failed to 139 provide water service that meets the secondary water quality 140 standards of the department. 141 (b) The utility shall create an estimate of the costs and 142 benefits of a plausible solution to each issue identified by the 143 commission. 144 (c) The utility shall meet with its customers within a time 145 prescribed by the commission to discuss the estimated costs and 146 benefits of and time necessary for implementing a plausible 147 solution for each quality of water service issue identified, and 148 the utility shall report the results of such meetings to the 149 commission. 150 (d) The utility shall inform the commission, if: 151 1. The customers and the utility agree on a solution for 152 each quality of water service issue identified, of each agreed 153 on solution and the cost of each solution; or 154 2. The customers and the utility prefer a different 155 solution to at least one of the quality of water service issues 156 identified, of the preferred solutions by each and the cost of 157 each solution. 158 (e) The commission may require the utility to implement a 159 solution that is in the best interest of the customers for each 160 quality of water service issue. The utility may recover its 161 costs in implementing the solutions ordered by the commission. 162 The commission may establish the necessary benchmarks that a 163 utility must meet for each solution and require the utility to 164 report periodically until each solution is completed. 165 (3) Notwithstanding s. 367.072, customers may not petition 166 the commission to revoke the certificate of authorization of a 167 utility if it is the subject of a proceeding under this chapter. 168 (4) The commission may prescribe penalties for a utility’s 169 failure to adequately resolve each quality of water service 170 issue as required. Penalties may include penalties as provided 171 in s. 367.161, a reduction of return on equity of up to 100 172 basis points, the denial of all or part of a rate increase for a 173 utility’s system or part of a system if it determines that the 174 quality of water service is less than satisfactory until the 175 quality of water is found to be satisfactory, or revocation of 176 the certificate of authorization pursuant to s. 367.072. 177 (5) The commission shall adopt rules to assess and enforce 178 compliance with this section. 179 Section 3. For the 2014-2015 fiscal year, the sums of 180 $212,521 in recurring funds and $12,012 in nonrecurring funds 181 from the General Revenue Fund and three full-time equivalent 182 positions with an associated salary rate of 131,235 are 183 appropriated to the Florida Public Service Commission to 184 implement the provisions of this act related to the regulation 185 of the quality of water service. 186 Section 4. This act shall take effect July 1, 2014.