Florida Senate - 2016                CS for CS for CS for SB 534
       
       
        
       By the Committees on Appropriations; Communications, Energy, and
       Public Utilities; and Environmental Preservation and
       Conservation; and Senator Hays
       
       576-04448-16                                           2016534c3
    1                        A bill to be entitled                      
    2         An act relating to water and wastewater; creating s.
    3         159.8105, F.S.; requiring the Division of Bond Finance
    4         of the State Board of Administration to review the
    5         allocation of private activity bonds to determine the
    6         availability of additional allocation and reallocation
    7         of bonds for water and wastewater infrastructure
    8         projects; amending s. 367.022, F.S.; exempting from
    9         regulation by the Florida Public Service Commission a
   10         person who resells water service to certain tenants or
   11         residents up to a specified percentage or cost;
   12         amending s. 367.081, F.S.; authorizing the commission
   13         to allow a utility to create a reserve fund upon the
   14         commission’s own motion or upon the request of the
   15         utility; requiring the commission to adopt rules to
   16         govern the implementation, management, and use of the
   17         fund; establishing criteria for adjusted rates;
   18         specifying expense items that may be the basis for an
   19         automatic increase or decrease of a utility’s rates;
   20         authorizing the commission to establish by rule
   21         additional specified expense items; requiring the
   22         commission to consider certain criteria, when
   23         specifically raised in writing by certain parties;
   24         specifying standards for evidentiary proceeding
   25         involving challenges to such criteria; authorizing the
   26         commission to allocate benefits between the customers,
   27         shareholders, owners, or affiliates and to disallow
   28         rate case expense under certain circumstances;
   29         amending s. 367.0814, F.S.; prohibiting the commission
   30         from awarding rate case expenses to recover attorney
   31         fees or fees of other outside consultants in certain
   32         circumstances; providing exceptions; requiring the
   33         commission to propose rules by a certain date;
   34         amending s. 367.0816, F.S.; providing an exception to
   35         the provision requiring rate case expense recovery to
   36         be apportioned over 4 years; prohibiting a utility
   37         from earning a return on the unamortized balance of
   38         rate case expense; excluding such expenses from rate
   39         bases; amending s. 367.111, F.S.; authorizing the
   40         commission to review water quality and wastewater
   41         service upon its own motion or based on complaints of
   42         customers; amending s. 367.165, F.S.; requiring a
   43         county that regulates water or wastewater services to
   44         comply with the requirements for abandoned water and
   45         wastewater systems; amending s. 403.8532, F.S.;
   46         authorizing the Department of Environmental Protection
   47         to require or request that the Florida Water Pollution
   48         Control Financing Corporation make loans, grants, and
   49         deposits to for-profit, privately owned, or investor
   50         owned water systems; deleting restrictions on such
   51         activities; providing an effective date.
   52          
   53  Be It Enacted by the Legislature of the State of Florida:
   54  
   55         Section 1. Section 159.8105, Florida Statutes, is created
   56  to read:
   57         159.8105 Allocation of bonds for water and wastewater
   58  infrastructure projects.—The division shall review the
   59  allocation of private activity bonds to determine the
   60  availability of additional allocation and reallocation of bonds
   61  for water and wastewater infrastructure projects.
   62         Section 2. Present subsections (9) through (12) of section
   63  367.022, Florida Statutes, are redesignated as subsections (10)
   64  through (13), respectively, and a new subsection (9) is added to
   65  that section, to read:
   66         367.022 Exemptions.—The following are not subject to
   67  regulation by the commission as a utility nor are they subject
   68  to the provisions of this chapter, except as expressly provided:
   69         (9)Any person who resells water service to his or her
   70  tenants or to individually metered residents for a fee that does
   71  not exceed the actual purchase price of the water service plus
   72  the actual cost of meter reading and billing, not to exceed 9
   73  percent of the actual cost of water service.
   74         Section 3. Paragraph (c) is added to subsection (2) of
   75  section 367.081, Florida Statutes, and paragraph (b) of
   76  subsection (4) and subsection (7) of that section are amended,
   77  to read:
   78         367.081 Rates; procedure for fixing and changing.—
   79         (2)
   80         (c) In establishing rates for a utility, upon its own
   81  motion or upon the request of a utility, the commission may
   82  authorize a utility to create a utility reserve fund for
   83  infrastructure repair and replacement for a utility for existing
   84  distribution and collection infrastructure that is nearing the
   85  end of its useful life or is detrimental to water quality or
   86  reliability of service, to be funded by a portion of the rates
   87  charged by the utility, by a secured escrow account, or through
   88  a letter of credit. The commission shall adopt rules to govern
   89  the implementation, management, and use of the fund, including,
   90  but not limited to, rules related to expenses for which the fund
   91  may be used, segregation of reserve account funds, requirements
   92  for a capital improvement plan, and requirements for commission
   93  authorization before disbursements are made from the fund.
   94         (4)
   95         (b) The approved rates of any utility which receives all or
   96  any portion of its utility service from a governmental authority
   97  or from a water or wastewater utility regulated by the
   98  commission and which redistributes that service to its utility
   99  customers shall be automatically increased or decreased without
  100  hearing, upon verified notice to the commission 45 days before
  101  prior to its implementation of the increase or decrease that the
  102  utility’s costs for any specified expense item the rates charged
  103  by the governmental authority or other utility have changed. The
  104  approved rates of any utility which is subject to an increase or
  105  decrease in the rates or fees that it is charged for electric
  106  power, the amount of ad valorem taxes assessed against its used
  107  and useful property, the fees charged by the Department of
  108  Environmental Protection in connection with the National
  109  Pollutant Discharge Elimination System Program, or the
  110  regulatory assessment fees imposed upon it by the commission
  111  shall be increased or decreased by the utility, without action
  112  by the commission, upon verified notice to the commission 45
  113  days prior to its implementation of the increase or decrease
  114  that the rates charged by the supplier of the electric power or
  115  the taxes imposed by the governmental authority, or the
  116  regulatory assessment fees imposed upon it by the commission
  117  have changed. The new rates authorized shall reflect the amount
  118  of the change of the ad valorem taxes or rates imposed upon the
  119  utility by the governmental authority, other utility, or
  120  supplier of electric power, or the regulatory assessment fees
  121  imposed upon it by the commission. The approved rates of any
  122  utility shall be automatically increased, without hearing, upon
  123  verified notice to the commission 45 days prior to
  124  implementation of the increase that costs have been incurred for
  125  water quality or wastewater quality testing required by the
  126  Department of Environmental Protection.
  127         1. The new rates authorized shall reflect, on an amortized
  128  or annual basis, as appropriate, the cost of, or the amount of
  129  change in the cost of, the specified expense item, required
  130  water quality or wastewater quality testing performed by
  131  laboratories approved by the Department of Environmental
  132  Protection for that purpose. The new rates, however, shall not
  133  reflect the costs of any specified expense item any required
  134  water quality or wastewater quality testing already included in
  135  a utility’s rates. Specified expense items that are eligible for
  136  automatic increase or decrease of a utility’s rates include, but
  137  are not limited to:
  138         a. The rates charged by a governmental authority or other
  139  water or wastewater utility regulated by the commission which
  140  provides utility service to the utility.
  141         b. The rates or fees that the utility is charged for
  142  electric power.
  143         c. The amount of ad valorem taxes assessed against the
  144  utility’s used and useful property.
  145         d. The fees charged by the Department of Environmental
  146  Protection in connection with the National Pollutant Discharge
  147  Elimination System Program.
  148         e. The regulatory assessment fees imposed upon the utility
  149  by the commission.
  150         f. Costs incurred for water quality or wastewater quality
  151  testing required by the Department of Environmental Protection.
  152         g. The fees charged for wastewater biosolids disposal.
  153         h. Costs incurred for any tank inspection required by the
  154  Department of Environmental Protection or a local governmental
  155  authority.
  156         i. Treatment plant operator and water distribution system
  157  operator license fees required by the Department of
  158  Environmental Protection or a local governmental authority.
  159         j. Water or wastewater operating permit fees charged by the
  160  Department of Environmental Protection or a local governmental
  161  authority.
  162         k. Consumptive or water use permit fees charged by a water
  163  management district.
  164         2. A utility may not use this procedure to increase its
  165  rates as a result of an increase in a specific expense item
  166  which occurred water quality or wastewater quality testing or an
  167  increase in the cost of purchased water services, sewer
  168  services, or electric power or in assessed ad valorem taxes,
  169  which increase was initiated more than 12 months before the
  170  filing by the utility.
  171         3. The commission may establish by rule additional specific
  172  expense items that are outside the control of the utility and
  173  have been imposed upon the utility by a federal, state, or local
  174  law, rule, order, or notice. If the commission establishes such
  175  a rule, the commission shall review the rule at least once every
  176  5 years and determine whether each expense item should continue
  177  to be cause for an automatic increase or decrease and whether
  178  additional items should be included.
  179         4.The provisions of This subsection does do not prevent a
  180  utility from seeking a change in rates pursuant to the
  181  provisions of subsection (2).
  182         (7) The commission shall determine the reasonableness of
  183  rate case expenses and shall disallow all rate case expenses
  184  determined to be unreasonable. No rate case expense determined
  185  to be unreasonable shall be paid by a consumer.
  186         (a) In determining the reasonable level of rate case
  187  expense, the commission shall consider the following criteria as
  188  a basis for disallowing such rate case expense when the criteria
  189  are specifically raised in writing by the Public Counsel, an
  190  intervenor, or commission staff:
  191         1. The extent to which a utility has utilized or failed to
  192  utilize the provisions of paragraph (4)(a) or paragraph (4)(b).
  193         2. Whether the customers have received a material benefit
  194  as a result of the rate case.
  195         3. The amount of time between each rate case.
  196         4. The extent to which, at the time of the initial filing,
  197  the utility filed complete documentation as required by
  198  commission rule, including, but not limited to, minimum filing
  199  requirements.
  200         5. Whether the utility’s rate case filing seeks
  201  preferential benefits to shareholders, owners, or nonregulated
  202  affiliates.
  203         6. The proportion of any rate increase approved by the
  204  commission as compared to the amount initially requested by the
  205  utility.
  206         7. The amount of overall rate case expense incurred and
  207  requested as compared to the amount of rate increase approved by
  208  the commission.
  209         8.The utility management’s culpability in causing any
  210  deficiencies in the quality of service provided by the utility.
  211         9.and Such other criteria as the commission it may
  212  establish by rule.
  213         (b) If any of the criteria specified under paragraph (a)
  214  are specifically contested in an evidentiary proceeding, the
  215  commission shall make specific findings of fact, supported by
  216  competent, substantial evidence, for each criterion and the
  217  extent to which each criterion benefits the customer. The
  218  commission may allocate the benefits between the customers and
  219  the shareholders, owners, or affiliates accordingly and disallow
  220  rate case expense in accordance with the specific findings of
  221  fact.
  222         Section 4. Subsection (3) of section 367.0814, Florida
  223  Statutes, is amended to read:
  224         367.0814 Staff assistance in changing rates and charges;
  225  interim rates.—
  226         (3) The provisions of s. 367.081(1), (2)(a), and (3) shall
  227  apply in determining the utility’s rates and charges. However,
  228  the commission may not award rate case expenses to recover
  229  attorney fees or fees of other outside consultants who are
  230  engaged for the purpose of preparing or filing the case if a
  231  utility receives staff assistance in changing rates and charges
  232  pursuant to this section, unless the Office of Public Counsel or
  233  interested parties have intervened. The commission may award
  234  rate case expenses for attorney fees or fees of other outside
  235  consultants if such fees are incurred for the purpose of
  236  providing consulting or legal services to the utility after the
  237  initial staff report is made available to customers and the
  238  utility. If there is a protest or an appeal by a party other
  239  than the utility, the commission may award rate case expenses to
  240  the utility for attorney fees or fees of other outside
  241  consultants for costs incurred after the protest or appeal. By
  242  December 31, 2016, the commission shall propose rules to
  243  administer this subsection.
  244         Section 5. Section 367.0816, Florida Statutes, is amended
  245  to read:
  246         367.0816 Recovery of rate case expenses.—
  247         (1) The amount of rate case expense determined by the
  248  commission pursuant to the provisions of this chapter to be
  249  recovered through a public utility’s utilities rate shall be
  250  apportioned for recovery over a period of 4 years, unless a
  251  longer period can be justified and is in the public interest. At
  252  the conclusion of the recovery period, the rate of the public
  253  utility shall be reduced immediately by the amount of rate case
  254  expense previously included in the rates.
  255         (2)A utility may not earn a return on the unamortized
  256  balance of rate case expense. Any unamortized balance of rate
  257  case expense shall be excluded in calculating the utility rate
  258  base.
  259         Section 6. Subsection (3) is added to section 367.111,
  260  Florida Statutes, to read:
  261         367.111 Service.—
  262         (3) The commission may, on its own motion or based on
  263  complaints of customers of a water utility subject to its
  264  jurisdiction, review water quality as it pertains to secondary
  265  drinking water standards established by the Department of
  266  Environmental Protection. The commission may, on its own motion
  267  or based on complaints of customers of a wastewater utility
  268  subject to its jurisdiction, review wastewater service as it
  269  pertains to odor, noise, aerosol drift, or lighting.
  270         Section 7. Section 367.165, Florida Statutes, is amended to
  271  read:
  272         367.165 Abandonment.—It is the intent of the Legislature
  273  that water or wastewater service to the customers of a utility
  274  not be interrupted by the abandonment or placement into
  275  receivership of the utility. Notwithstanding s. 367.171, this
  276  section applies to each county. To that end:
  277         (1) A No person, lessee, trustee, or receiver owning,
  278  operating, managing, or controlling a utility may not shall
  279  abandon the utility without giving 60 days’ notice to the county
  280  or counties in which the utility is located and to the
  281  commission. Anyone who violates the provisions of this
  282  subsection is guilty of a misdemeanor of the first degree,
  283  punishable as provided in s. 775.082 or s. 775.083. Each day of
  284  such abandonment constitutes a separate offense. In addition,
  285  such act is a violation of this chapter, and the commission may
  286  impose upon the utility a penalty for each such offense of not
  287  more than $5,000 or may amend, suspend, or revoke its
  288  certificate of authorization; each day of such abandonment
  289  without prior notice constitutes a separate offense.
  290         (2) After receiving such notice, the county, or counties
  291  acting jointly if more than one county is affected, shall
  292  petition the circuit court of the judicial circuit in which such
  293  utility is domiciled to appoint a receiver, which may be the
  294  governing body of a political subdivision or any other person
  295  deemed appropriate. The receiver shall operate the utility from
  296  the date of abandonment until such time as the receiver disposes
  297  of the property of the utility in a manner designed to continue
  298  the efficient and effective operation of utility service.
  299         (3) The notification to the commission under subsection (1)
  300  is sufficient cause for revocation, suspension, or amendment of
  301  the certificate of authorization of the utility as of the date
  302  of abandonment. The receiver operating such utility shall be
  303  considered to hold a temporary authorization from the
  304  commission, and the approved rates of the utility shall be
  305  deemed to be the interim rates of the receiver until modified by
  306  the commission.
  307         Section 8. Subsection (3) of section 403.8532, Florida
  308  Statutes, is amended to read:
  309         403.8532 Drinking water state revolving loan fund; use;
  310  rules.—
  311         (3) The department may make, or request that the
  312  corporation make, loans, grants, and deposits to community water
  313  systems; for-profit, privately owned, or investor-owned water
  314  systems;, nonprofit, transient, noncommunity water systems;, and
  315  nonprofit, nontransient, noncommunity water systems to assist
  316  them in planning, designing, and constructing public water
  317  systems, unless such public water systems are for-profit
  318  privately owned or investor-owned systems that regularly serve
  319  1,500 service connections or more within a single certified or
  320  franchised area. However, a for-profit privately owned or
  321  investor-owned public water system that regularly serves 1,500
  322  service connections or more within a single certified or
  323  franchised area may qualify for a loan only if the proposed
  324  project will result in the consolidation of two or more public
  325  water systems. The department may provide loan guarantees,
  326  purchase loan insurance, and refinance local debt through the
  327  issue of new loans for projects approved by the department.
  328  Public water systems may borrow funds made available pursuant to
  329  this section and may pledge any revenues or other adequate
  330  security available to them to repay any funds borrowed.
  331         (a) The department shall administer loans so that amounts
  332  credited to the Drinking Water Revolving Loan Trust Fund in any
  333  fiscal year are reserved for the following purposes:
  334         1. At least 15 percent for qualifying small public water
  335  systems.
  336         2. Up to 15 percent for qualifying financially
  337  disadvantaged communities.
  338         (b) If an insufficient number of the projects for which
  339  funds are reserved under this subsection have been submitted to
  340  the department at the time the funding priority list authorized
  341  under this section is adopted, the reservation of these funds no
  342  longer applies. The department may award the unreserved funds as
  343  otherwise provided in this section.
  344         Section 9. This act shall take effect July 1, 2016.