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