Bill Amendment: FL S1050 | 2014 | Regular Session
NOTE: For additional amemendments please see the Bill Drafting List
Bill Title: Water and Wastewater Utility Systems
Status: 2014-05-02 - Died in Appropriations Subcommittee on Finance and Tax [S1050 Detail]
Download: Florida-2014-S1050-Senate_Committee_Amendment_840996.html
Bill Title: Water and Wastewater Utility Systems
Status: 2014-05-02 - Died in Appropriations Subcommittee on Finance and Tax [S1050 Detail]
Download: Florida-2014-S1050-Senate_Committee_Amendment_840996.html
Florida Senate - 2014 COMMITTEE AMENDMENT Bill No. CS for SB 1050 Ì840996ZÎ840996 LEGISLATIVE ACTION Senate . House . . . . . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— (Grimsley) recommended the following: 1 Senate Amendment 2 3 Delete lines 120 - 408 4 and insert: 5 secondary drinking water standards adopted by the Department of 6 Environmental Protection. In making its determination, the 7 commission shall consider: 8 a. Testimony and evidence provided by customers and the 9 utility. 10 b. Complaints that relate to the secondary drinking water 11 standards which customers have filed during the past 5 years 12 with the commission, the Department of Environmental Protection, 13 the county health departments, or the applicable local 14 government. 15 c. The results of past tests required by the Department of 16 Environmental Protection or county health departments which 17 measure the utility’s compliance with the applicable secondary 18 drinking water standards. 19 d. The results of other tests, if deemed necessary by the 20 commission. 21 4. In determining the value and quality of wastewater 22 service provided by a utility, the commission shall consider the 23 extent to which the utility provides wastewater service to its 24 customers which complies with the rules or ordinances governing 25 its activities. In making its determination, the commission 26 shall consider: 27 a. Testimony and evidence provided by customers and the 28 utility. 29 b. Complaints regarding violations of governing rules or 30 ordinances which customers have filed during the past 5 years 31 with any of the following: 32 (I) The commission; 33 (II) The Department of Environmental Protection; 34 (III) The county health departments; or 35 (IV) The local government. 36 5. If the commission determines that a utility provides 37 water service that does not meet the secondary drinking water 38 quality standards of the Department of Environmental Protection, 39 or that a utility provides wastewater service that adversely 40 affects customers due to a violation of the rules or ordinances 41 governing its operation, the utility shall provide the 42 commission with estimates of the costs and benefits of various 43 solutions to the problems. The utility shall meet with its 44 customers to discuss the costs and benefits of the various 45 solutions and report to the commission the conclusions of the 46 meetings. The commission shall adopt rules necessary to assess 47 and enforce the utility’s compliance with this subparagraph. The 48 rules shall prescribe penalties, including fines and reduction 49 of return on equity of up to 100 basis points, if a utility 50 fails to adequately address or offer solutions to the water or 51 wastewater problems. 52 6. A utility may recover its prudently incurred costs and 53 expenses to resolve deficiencies found by the commission 54 pursuant to this subsection or found by the Department of 55 Environmental Protection in a proceeding under chapter 403, 56 related to noncompliance with secondary drinking water 57 standards, or concerning wastewater service that adversely 58 affect customers due to a violation of the rules or ordinances 59 governing its operation. Such costs shall be recoverable through 60 a rate case filed pursuant to this section or through a separate 61 proceeding initiated by petition of the utility. In its filing, 62 the utility shall describe the activities and costs projected or 63 incurred to resolve the deficiencies found by the commission or 64 the Department of Environmental Protection. Such costs may be a 65 result of action agreed upon by the utility and the commission 66 or the Department of Environmental Protection or as a 67 consequence of a consent order. 68 69 Notwithstandingthe provisions ofthis paragraph, the commission 70 shall approve rates for service which allow a utility to recover 71 from customers the full amount of environmental compliance 72 costs. Such rates may not include charges for allowances for 73 funds prudently invested or similar charges. For purposes of 74 this requirement, the term “environmental compliance costs” 75 includes all reasonable expenses and fair return on any prudent 76 investment incurred by a utility in complying with the 77 requirements or conditions contained in any permitting, 78 enforcement, or similar decisions of the United States 79 Environmental Protection Agency, the Department of Environmental 80 Protection, a water management district, or any other 81 governmental entity with similar regulatory jurisdiction. 82 (b) In establishing initial rates for a utility, the 83 commission may project the financial and operational data as set 84 out in paragraph (a) to a point in time when the utility is 85 expected to be operating at a reasonable level of capacity. 86 (c) In establishing rates for a utility, the commission may 87 authorize the creation of a utility reserve fund. The commission 88 shall adopt rules to govern the fund, including, but not limited 89 to, rules relating to expenses for which the fund may be used, 90 segregation of reserve account funds, requirements for a capital 91 improvement plan, and requirements for commission authorization 92 before disbursements are made from the reserve fund. 93 (4)(a) On or before March 31 of each year, the commission 94 by order shall establish a price increase or decrease index for 95 major categories of operating costs incurred by utilities 96 subject to its jurisdiction reflecting the percentage of 97 increase or decrease in such costs from the most recent 12-month 98 historical data available. The commission by rule shall 99 establish the procedure to be used in determining such indices 100 and a procedure by which a utility, without further action by 101 the commission, or the commission on its own motion, may 102 implement an increase or decrease in its rates based upon the 103 application of the indices to the amount of the major categories 104 of operating costs incurred by the utility during the 105 immediately preceding calendar year, except to the extent of any 106 disallowances or adjustments for those expenses of that utility 107 in its most recent rate proceeding before the commission. The 108 rules shall provide that, upon a finding of good cause, 109 including inadequate service, the commission may order a utility 110 to refrain from implementing a rate increase hereunder unless 111 implemented under a bond or corporate undertaking in the same 112 manner as interim rates may be implemented under s. 367.082. A 113 utility may not use this procedure between the official filing 114 date of the rate proceeding and 1 year thereafter, unless the 115 case is completed or terminated at an earlier date. A utility 116 may not use this procedure to increase any operating cost for 117 which an adjustment has been or could be made under paragraph 118 (b), or to increase its rates by application of a price index 119 other than the most recent price index authorized by the 120 commission at the time of filing. 121 (b) Upon verified notice to the commission 45 days before 122 implementation of the increase or decrease, and without a 123 hearing, the approved rates of a utility shall automatically 124 increase or decrease. Such notice shall inform the commission 125 that the utility’s costs for a specified expense item have 126 changed. 127 1. The new rates shall reflect, on an amortized or annual 128 basis, as appropriate, the cost or amount of change in the cost 129 of the specified expense item. The new rates may not reflect the 130 costs of a specified expense item already included in the rates 131 of a utility. Specified expense items eligible for automatic 132 increase or decrease of a utility’s rates include, but are not 133 limited to: 134 a. The rates charged by a governmental authority or other 135 water or wastewater utility regulated by the commission which 136 provides utility service to the utility. 137 b. The rates or fees that the utility is charged for 138 electric power. 139 c. The amount of ad valorem taxes assessed against the 140 utility’s used and useful property. 141 d. The fees charged by the Department of Environmental 142 Protection in connection with the National Pollutant Discharge 143 Elimination System permit program. 144 e. The regulatory assessment fees imposed upon the utility 145 by the commission. 146 f. Costs incurred for water quality or wastewater quality 147 testing required by the Department of Environmental Protection. 148 g. The fees charged for wastewater biosolids disposal. 149 h. A loan service fee or loan origination fee associated 150 with a loan related to an eligible project. The commission shall 151 adopt rules governing the determination of eligible projects, 152 which shall be limited to those projects associated with new 153 infrastructure or improvements to existing infrastructure needed 154 to achieve or maintain compliance with federal or state primary 155 or secondary drinking water standards or wastewater treatment 156 standards that relate to: 157 (I) The provision of water or wastewater service for 158 existing customers; 159 (II) The remediation or prevention of a violation of 160 federal or state primary or secondary drinking water standards; 161 (III) The replacement or upgrade of aging water or 162 wastewater infrastructure if needed to achieve or maintain 163 compliance with federal or state primary or secondary drinking 164 water regulations; or 165 (IV) Projects consistent with the most recent long-range 166 plan of the utility on file with the commission. Eligible 167 projects do not include projects primarily intended to serve 168 future growth. 169 i. Costs incurred for a tank inspection required by the 170 Department of Environmental Protection or a local governmental 171 authority. 172 j. Operator and distribution license fees required by the 173 Department of Environmental Protection or a local governmental 174 authority. 175 k. Water or wastewater operating permit or license fees 176 charged by the Department of Environmental Protection or a local 177 governmental authority. 178 l. Consumptive or water use permit fees charged by a water 179 management district. 180 2. A utility may not use the procedure under this paragraph 181 to increase or decrease its rates as a result of an increase or 182 decrease in a specific expense item which occurred more than 12 183 months before the filing by the utility. 184 3. The commission may establish by rule additional specific 185 expense items that cause an automatic increase or decrease in a 186 utility’s rates as provided in this paragraph. To be eligible 187 for such treatment, an additional expense item shall be imposed 188 upon the utility by a federal, state, or local law, rule, order, 189 or notice and shall be outside the control of the utility. If 190 the commission exercises its authority to establish such rule, 191 the commission shall, at least once every 5 years, review the 192 rule and determine if each expense item should continue to be 193 cause for the automatic increase or decrease of a utility’s 194 rates, or if any additional items should become cause for the 195 automatic increase or decrease of a utility’s rates as provided 196 in this paragraphThe approved rates of any utilitywhich197receives all or any portion of its utility service from a198governmental authority or from a water or wastewater utility199regulated by the commission and which redistributes that service200to its utility customers shall be automatically increased or201decreased without hearing, upon verified notice to the202commission 45 days prior to its implementation of the increase203or decrease that the rates charged by the governmental authority204or other utility have changed.The approved rates of any utility205which is subject to an increase or decrease in the rates or fees206that it is charged for electric power, the amount of ad valorem207taxes assessed against its used and useful property, the fees208charged by the Department of Environmental Protection in209connection with the National Pollutant Discharge Elimination210System Program, or the regulatory assessment fees imposed upon211it by the commission shall be increased or decreased by the212utility, without action by the commission, upon verified notice213to the commission 45 days prior to its implementation of the214increase or decrease that the rates charged by the supplier of215the electric power or the taxes imposed by the governmental216authority, or the regulatory assessment fees imposed upon it by217the commission have changed. The new rates authorized shall218reflect the amount of the change of the ad valorem taxes or219rates imposed upon the utility by the governmental authority,220other utility, or supplier of electric power, or the regulatory221assessment fees imposed upon it by the commission. The approved222rates of any utility shall be automatically increased, without223hearing, upon verified notice to the commission 45 days prior to224implementation of the increase that costs have been incurred for225water quality or wastewater quality testing required by the226Department of Environmental Protection. The new rates authorized227shall reflect, on an amortized basis, the cost of, or the amount228of change in the cost of, required water quality or wastewater229quality testing performed by laboratories approved by the230Department of Environmental Protection for that purpose. The new231rates, however, shall not reflect the costs of any required232water quality or wastewater quality testing already included in233a utility’s rates. A utility may not use this procedure to234increase its rates as a result of water quality or wastewater235quality testing or an increase in the cost of purchased water236services, sewer services, or electric power or in assessed ad237valorem taxes, which increase was initiated more than 12 months238before the filing by the utility.239 4.The provisions ofThis subsection doesdonot prevent a 240 utility from seeking a change in rates underpursuant to the241provisions ofsubsection (2). 242 (c) Before implementing a change in rates under this 243 subsection, the utility mustshallfile an affirmation under 244 oath as to the accuracy of the figures and calculations upon 245 which the change in rates is based, stating that the change will 246 not cause the utility to exceed the range of its last authorized 247 rate of return on equity. A person whoWhoevermakes a false 248 statement in the affirmation required under this subsection 249hereunder, which statement he or she does not believe to be true 250 in regard to any material matter, commitsis guilty ofa felony 251 of the third degree, punishable as provided in s. 775.082, s. 252 775.083, or s. 775.084. 253 (d) If, within 15 months after the filing of a utility’s 254 annual report required by s. 367.121, the commission finds that 255 the utility exceeded the range of its last authorized rate of 256 return on equity after an adjustment in rates as authorized by 257 this subsection was implemented within the year for which the 258 report was filed or was implemented in the preceding year, the 259 commission may order the utility to refund, with interest, the 260 difference to the ratepayers and adjust rates accordingly. This 261 provision doesshallnotbe construed torequire a bond or 262 corporate undertaking not otherwise required. 263 (e) Notwithstanding anything in this sectionhereinto the 264 contrary, a utility may not adjust its rates under this 265 subsection more than two times in any 12-month period. For the 266 purpose of this paragraph, a combined application or 267 simultaneously filed applications that were filed under the 268 provisions of paragraphs (a) and (b) areshall beconsidered one 269 rate adjustment. 270 (f) At least annually, the commission shallmay regularly,271not less often than once each year,establish by order a 272 leverage formula or formulae that reasonably reflect the range 273 of returns on common equity for an average water or wastewater 274 utility and thatwhich, for purposes of this section, areshall275beused to calculate the last authorized rate of return on 276 equity for aanyutility which otherwise would not have anno277 established rate of return on equity. In any other proceeding in 278 which an authorized rate of return on equity is to be 279 established, a utility, in lieu of presenting evidence on its 280 rate of return on common equity, may move the commission to 281 adopt the range of rates of return on common equity which is 282that has beenestablished under this paragraph. 283 (7) A water utility may file tariffs establishing a 284 surcharge, or other method for the automatic adjustment of its 285 rates, which shall provide for recovery of the prudently 286 incurred fixed costs consisting of depreciation and pretax 287 returns of certain system improvement projects, as approved by 288 the commission, which are completed and placed in service 289 between base rate proceedings. Such projects shall be for the 290 specific purpose of achieving compliance with secondary drinking 291 water quality standards. With respect to each tariff filed, the 292 commission