Florida Public Service Commission native order document 07449-2026

FILED 10/21/2026
DOCUMENT NO. 07449-2026
FPSC 	- COMMISSION CLERK
BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION
DOCKET NO. 2026003 1-WS
ORDER NO. PSC-2026-0366-FOF-WS
ISSUED: October 21,2026
The following Commissioners participated in the disposition of this matter:
GABRIELLA PASSIDOMO SMITH, Chairman
GARY F. CLARK
MIKE LA ROSA
BOBBY PAYNE
ANA ORTEGA
ORDER APPROVING PLACID LAKES RATE BASE VALUE
APPEARANCES:
J. JEFFRY WAHLEN, VIRGINIA 	L. PONDER and MATTHEW 	J. JONES,
ESQUIRES, Ansley McMullen Law Firm, Post Office Box 391, Tallahassee, FL
32302
On behalf of Sunshine Water Services Company (SWS) 	.
WALT 	TRIERWEILER, CHARLES REHWINKEL, OCTAVIO 	SIMOES-
PONCE and AUSTIN A. WATROUS, ESQUIRES, 	c/o 	the 	Florida 	Legislature,
111 West Madison 	Street, Suite 812, Tallahassee, Florida 32399-1400
On behalf of the Office of Public Counsel (OPC) 	.
SUZANNE 	BROWNLESS, 	MAJOR 	THOMPSON, 	and 	JENNIFER
CRAWFORD, ESQUIRES, 	Florida Public 	Service Commission, 2540 Shumard
Oak Boulevard, Tallahassee, Florida 32399-0850
On behalf of the Florida Public Service Commission (Staff) 	.
MARY ANNE HELTON, ESQUIRE, Deputy 	General 	Counsel, 	Florida 	Public
Service Commission, 2540 Shumard Oak Boulevard, 	Tallahassee, Florida 32399-
0850
Advisor to the Florida Public Service Commission .
In re: Petition to establish rate base value of
acquired system using alternative procedure,
by Sunshine Water Services Company.
ADRIA 	E. HARPER, 	ESQUIRE, 	General 	Counsel, 	Florida 	Public 	Service
Commission, 2540 Shumard Oak Boulevard, Tallahassee, Florida 32399-0850
Florida Public Service Commission General Counsel.

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BY THE COMMISSION:
BACKGROUND
On February 27, 2026, Sunshine Water Services Company (SWS or Utility) filed a
petition (Petition) to establish the rate base value of Placid Lakes Utilities, Inc. (Placid Lakes)
using the alternative procedure outlined in Section 367.0811, Florida Statutes (F.S.), and Rule
25-30.0372, Florida Administrative Code (F.A.C.).1 By its Petition, SWS requests that we
approve a rate base value of $5,750,000 for Placid Lakes. If SWS’s Petition is approved, the
Utility’s acquisition of Placid Lakes will be taken up in a separate docket.2 If the acquisition is
approved, SWS intends to consolidate Placid Lakes with the Utility’s other systems in its next
rate case (estimated to be effective in 2029).
Placid Lakes is a Class B water utility operating in Highlands County, serving
approximately 2,250 customers. Placid Lakes also operates a wastewater system, which is not
regulated by us, but may be added to SWS’s wastewater service territory and would be served
under the Utility’s current wastewater tariff if approved by us in a separate docket.3 The transfer
of the water system and amendment to acquire the wastewater system are currently pending and
are contingent upon our approval in this proceeding of a rate base value of $5,750,000.4
Section 367.0811, F.S., establishes an alternative method for establishing the rate base
value of an acquired utility. The purpose of the statute is to promote consolidation efforts with
water and wastewater utility systems in order to encourage economies of scale, better access to
lower material and supply costs, better access to capital, improvement in utility infrastructure,
and improvement in the overall quality of service. Section 367.0811(1), F.S. We adopted Rule
25-30.0372, F.A.C., to implement this statute. Under the alternative method, the rate base of an
acquired utility must not exceed the lesser of the purchase price or the average of three
appraisals. The statute and rule require three appraisals and that we randomly select the firms to
conduct such evaluations from our list of licensed appraisers. In this case, the three randomly
selected appraisers were Marshall and Stevens Incorporated, NewGen Strategies and Solutions,
LLC, and Raftelis Financial Consultants, Inc. The average of these appraisals is $6,506,633.
SWS’s negotiated purchase price for Placid Lakes is $5,750,000 and SWS requests this amount
as the alternative rate base value for the utility.
On March 16, 2026, the Office of Public Counsel (OPC) filed a notice of intervention.
This intervention was acknowledged on March 17, 2026.5
1 Document No. 01297-2026, filed February 27, 2026, in Docket No. 20260031-WS.
2 Docket No. 20260032-WS, In re: Application for authority to transfer facilities and water Certificate No. 401-W
from Placid Lakes Utilities, Inc. to Sunshine Water Services Company, in Highlands County.
3 Docket No. 20260033-WS, In re: Application for authority to transfer assets of exempt entity in Highlands County
by Placid Lakes Utilities, Inc. to Sunshine Water Services Company, and amendment of Certificate No. 347-S, by
Sunshine Water Services Company.
4 Herein, we will use the term “transfer” to refer to both the certificate transfer for the water system and the territory
amendment for the wastewater system.
5 Order No. PSC-2026-0063-PCO-WS, issued March 17, 2026, in Docket No. 20260031-WS, In re: Petition to
establish rate base value of acquired system using alternative procedure, by Sunshine Water Services Company.

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On March 24, 2026, an order establishing procedure was issued in this docket.6 A
prehearing order was issued July 24, 2026, and a hearing for this docket was held on August 10,
2026.7 Twenty-two exhibits and the testimony of six witnesses on behalf of the Utility were
admitted into the record. The parties filed post-hearing briefs on September 8, 2026.
We have jurisdiction over this matter pursuant to Chapter 367, Sections 367.0811,
367.071, and 367.081, F.S.
DECISION
Legal standard
Section 367.0811(6)(a), F.S., states that when considering a rate base value petition
pursuant to this section, “the commission may, in the public interest, grant the petition, in whole
or in part, or with modifications, or may deny the petition.” Chapter 367 does not define public
interest. However, the Florida Supreme Court has stated that the public interest standard “is a
fact-dependent inquiry generally focused upon – but not limited to – the commission’s historical
and statutory role.”8 In this instance, our statutory role is to “promote consolidation efforts with
water and wastewater utility systems in order to encourage economies of scale, better access to
capital, improvement in utility infrastructure, and improvement in the quality of service overall,”
Section 367.0811(1), F.S.
In the evaluation of the public interest, Section 367.0811(9), F.S., lists eight items that
must be considered to determine if the proposed transaction is in the public interest: quality of
service; compliance with regulatory requirements; rate reductions or rate stability; cost
efficiencies; arms-length transaction; economies of scale; acquiring utility’s net book value and
proposed rate base value of utility being acquired; and acquiring utility’s greater access to
capital.
Quality of service
Section 367.0811(9)(a), F.S., requires us to consider if the acquisition will result in
improvements in the overall quality of service for the customers of the system being acquired
when considering if a rate base value petition serves the public interest. A utility’s overall quality
of service is determined by evaluating the quality of its product (water) and its attempt to address
customer satisfaction (water and wastewater), pursuant to Rule 25-30.433(1), F.A.C.
A review of Placid Lakes’ historical chemical analyses for 2021 through 2024 in its
annual Consumer Confidence Reports (CCR) submitted to the Florida Department of
Environmental Protection (DEP) indicated that Placid Lakes’ water system has remained in
compliance with the DEP’s primary and secondary standards in all years except for 2021. At the
time the exhibit was provided, Placid Lakes’ 2025 CCR was still under DEP review. Primary
6 Order No. PSC-2026-0079-PCO-WS, issued March 24, 2026, in Docket No. 20260031-WS, In re: Petition to
establish rate base value of acquired system using alternative procedure, by Sunshine Water Services Company.
7 Order No. PSC-2026-0260-PHO-WS, issued July 24, 2026, in Docket No. 20260031-WS, In re: Petition to
establish rate base value of acquired system using alternative procedure, by Sunshine Water Services Company.
8 Sierra Club v. Brown, 243 So. 3d 903, 911 (Fla. 2018).

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standards protect public health while secondary standards regulate contaminants that may impact
the taste, odor, and color of drinking water.
Because SWS has not yet acquired the Placid Lakes systems, customer complaint data
was not available. As such, we reviewed the customer correspondence received during the
course of this docket in response to the notice regarding the acquisition transaction provided to
SWS’s and Placid Lakes’ customers. As of September 16, 2026, 14 customers have submitted
written comments in the docket. Of these customers, two are SWS customers who expressed
concerns regarding the transaction, and 12 are Placid Lakes customers who conveyed the need
for additional communication from SWS regarding the acquisition transaction, and/or expressed
opposition to the acquisition transaction. For reference, Placid Lakes serves approximately
2,250 customers and SWS serves 35,000 customers. At the hearing, SWS witness Twomey
testified that SWS intends to meet with Placid Lakes’ customers if the acquisition transaction is
approved to provide transparency regarding the transaction and address any questions and
concerns.
Regarding improvements in the quality of service provided to Placid Lakes’ customers
witness Twomey testified that benefits include: 1) SWS’s technical expertise and operating
practices that would strengthen the monitoring, treatment optimization, and water quality control
practices; 2) SWS’s greater access to capital to complete Placid Lakes’ infrastructure
improvements and meet water quality standards; 3) lower material and supply costs; 4) access to
SWS’s Florida-based customer service and billing operations, with dedicated employees, a 24/7
call center, and an online customer portal; 5) enhanced information technology and cybersecurity
support; and 6) access to SWS’s emergency and disaster response capabilities. In addition, SWS
witness Magro identified ten capital improvement plan (CIP) projects for Placid Lakes’ water
system, and nine CIP projects for Placid Lakes’ wastewater system in his engineering
assessment. These projects are discussed below. SWS witness Twomey indicated that SWS
intends to begin construction of these projects prior to its next rate proceeding if we approve the
acquisition transaction and transfer. Witness Twomey asserted that these projects are required
over the next several years to maintain an appropriate level of service to Placid Lakes’
customers. He further stated that completion of these projects would benefit the systems’
customers through improved service and system reliability and help prepare the system for any
potential storms or electrical outages.
OPC did not file testimony in this proceeding; however, in its brief, OPC argued that it
does not believe SWS demonstrated that the acquisition transaction will produce measurable
improvements in the quality of service provided to Placid Lakes’ customers. OPC asserted that
the engineering assessment did not include an evaluation of the water distribution and
wastewater collection systems. Furthermore, OPC argued that SWS's representation that service
will improve, given its recent Commission-documented quality of service issues, and the absence
of performance metrics or enforceable commitments, does not establish that approving the
proposed transaction will improve quality of service for Placid Lakes' customers.
We disagree with OPC. Although the engineering assessment did not include an
evaluation of Placid Lakes’ water distribution and wastewater collection systems, SWS indicated

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that it conducted its own review of available records for these systems and discussed the
condition and operating procedures with Placid Lakes. This review considered water volumes,
age of meters, and general pipe materials for Placid Lakes’ water distribution system, and wet
weather flow, materials of construction, age, and general pipe materials for Placid Lakes’
wastewater collection system. SWS determined that a more invasive analysis, such as hydraulic
modeling, was not warranted due to the size of the water distribution and wastewater collection
systems and therefore did not include this analysis in the Scope of Services for the engineering
assessment. Additionally, the record identifies specific improvements that would be made to
Placid Lakes’ systems that would benefit customers following the proposed acquisition,
including infrastructure improvements, enhanced technical and operational support, expanded
customer service and billing capabilities, enhanced information technology and cybersecurity
support, and access to SWS’s emergency and disaster response capabilities. SWS also identified
specific CIP projects that it intends to begin prior to its next proceeding if the transaction is
approved. While the improvements identified by SWS cannot be quantified at this time, we have
the authority to evaluate the Utility’s improvements in subsequent proceedings, and the record
demonstrates that these improvements would benefit Placid Lakes’ customers following the
proposed acquisition transaction.
Based on the above, the proposed transaction should improve the overall quality of
service provided to Placid Lakes’ customers. The improvements identified by SWS are aimed at
system reliability and operations, regulatory compliance, responsiveness, and overall customer
experience, and would be extended to the Placid Lakes’ customers following acquisition, as
some of these improvements are already implemented by SWS company wide. Further, SWS
has committed to engage with Placid Lakes’ customers to provide transparency regarding the
transaction and address any questions and concerns. For these reasons, we find that Placid
Lakes’ customers will benefit from improvements in quality of service following the transaction.
Regulatory compliance
Section 367.0811(9)(b), F.S., requires us to consider if the acquisition will result in
improvements in regulatory compliance for the system being acquired when considering if an
alternative rate base value petition serves the public interest. Pursuant to Rule 25-30.433(2),
F.A.C., in determining a utility’s regulatory compliance, we consider whether the infrastructure
and operating conditions of the plant and facilities are in compliance with Rule 25-30.225,
F.A.C., which requires each water and wastewater utility to maintain and operate its plant and
facilities by employing qualified operators in accordance with the rules of the DEP.
Pursuant to Rules 25-30.0372(3)(b)1. and 2., F.A.C., SWS submitted copies of the most
recent DEP and/or county health department sanitary survey, compliance inspection report, and
primary and secondary standards drinking water report. Copies of all correspondence with the
DEP, county health department, and water management district, including consent orders and
warning letters, and Placid Lakes’ responses to the same, for the past five years were provided by
SWS. Analysis of this issue considers this compliance information, as well as our determination
regarding Placid Lakes’ water system compliance in its last rate case. Any improvements
identified in the 3-year plan to address any deficiencies indicated in the engineering assessment

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required by Sections 367.0811(4)(b), and (5)(c) and (d), F.S., and any additional projects
identified by SWS that may improve compliance with environmental regulations were also
considered. The discussion regarding proposed projects by SWS is not intended to prejudge the
prudence or appropriateness for cost recovery of those items.
A summary of Placid Lakes’ water system compliance history is provided below.
1. December 30, 2019 – In Placid Lakes’ last rate case, we determined that the quality of
service for Placid Lakes’ water system9 was satisfactory and that its water quality was in
compliance with DEP standards. However, the order discussed a DEP Consent Order
dated November 19, 2018, which was issued due to disinfection byproduct (DBP)
exceedances for the water system. To address this issue, a new hydrogen peroxide
treatment system was installed.10 The hydrogen peroxide treatment system addressed the
DBP exceedances, and the Consent Order was closed on July 6, 2020.
2. January 2024 through May 2025 – The engineering report included an evaluation of
Placid Lakes’ monthly flow data for its water system, which showed that the total
groundwater withdrawals were within the Southwest Florida Water Management
District’s (SWFWMD) total Consumptive Use Permit (CUP) limits, but the average day
and peak month withdrawal limits for the individual well allocations were exceeded on
multiple occasions. The individual well allocations identified in the SWFWMD CUP are
for four wells; however, one well has yet to be constructed. To address the individual
well allocation exceedances, the engineering report indicated that a new well, Well No. 4,
should be constructed (Project No. 5 in the water project listing).
3. April 25, 2024 – The DEP issued a Compliance Assistance Offer Letter resulting from
the March 28, 2024, Sanitary Survey Inspection.
a. Missing tank inspection reports for ground storage and hydro-pneumatic tanks.
b. Bio growth in aerator ground storage #1 and #2, and pad of well #1 cracked.
c. Well #2 raw sampling taps were threaded.
d. Wells #1 and #2 raw water taps were not pointed downward.
e. Operator was not recording in and out times during site visits.
4. July 15, 2024 – The DEP issued a Return to Compliance Letter as Placid Lakes’ water
system was determined to be in compliance following provision of the requested
information regarding the April 25, 2024, Compliance Assistance Offer Letter (No. 3).
9 The quality of service determination is only applicable to Placid Lakes’ water system as the wastewater system is
not yet subject to our jurisdiction.
10 Order No. PSC-2019-0551-PAA-WU, issued December 30, 2019, in Docket No. 20190031-WU, In re:
Application for increase in water rates in Highlands County by Placid Lakes Utilities, Inc.

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5. January 27, 2026 – The DEP issued a warning letter due to a nitrate exceedance from a
drinking water sample collected on August 6, 2025.
6. July 27, 2026 – SWS indicated that Placid Lakes represents that its water system is in
compliance with the DEP.
A summary of Placid Lakes’ wastewater system compliance history is provided below.
1. January 17, 2024 – The DEP issued a Compliance Assistance Offer resulting from the
December 18, 2023 Compliance Evaluation Inspection.
a. Absence of a daily logbook for the facility.
b. Incorrect percent capacity calculations on the discharge monitoring reports
(DMRs).
c. Late submittal of DMRs.
2. April 23, 2024 – The DEP issued a Return to Compliance Letter as Placid Lakes'
wastewater system was determined to be in compliance following provision of the
requested information regarding the January 17, 2024 Compliance Assistance Offer
Letter (No. 1).
3. May 30, 2025 – The DEP issued a warning letter regarding its office file inspection
conducted on May 15, 2025, which indicated that Placid Lakes' wastewater system was
significantly out of compliance
a. Failure to submit a permit renewal application by February 3, 2024.
b. Operating with an expired permit.
4. September 15, 2025 – The DEP issued a final permit, which included Administrative
Order No. AO-014350-008-SD (DEP AO) requiring Placid Lakes’ wastewater system to
meet the new effluent limits of 6 milligrams per liter (mg/l) for total nitrogen and 3 mg/l
for total phosphorous.11 The existing facility is not designed to meet the new effluent
limits. As such, the engineering report indicated that new treatment tanks, mixers,
pumps, electrical upgrades, and groundwater monitoring wells will need to be installed
(Project Nos. 7, 8, and 9 in the wastewater project listing), and increased facility staffing
will be required to address the DEP AO action items, which are due by February 29,
2028.12
11 The DEP AO is due to requirement changes, not because the system has ongoing deficiencies with the DEP.
12 Document No. 01471-2026.

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5. July 27, 2026 – SWS indicated that Placid Lakes represents that its wastewater system is
in compliance with the DEP.
SWS witness Magro’s engineering report included an evaluation of Placid Lakes’ water
and wastewater system assets. The engineering report identified 19 CIP projects (ten water and
nine wastewater), with an estimated cost of $2,130,000. In addition, SWS witness DeStefano
identified an additional project for the water system, the Advanced Metering Infrastructure
(AMI) project. According to the witness, this project is necessary because the current non-
automated meters require replacement to integrate with SWS's system-wide AMI
implementation, which was approved in its last rate case, and achieve the associated benefits.
Witness DeStefano testified that the total estimated cost for all projects is $2.38 million.13
Below are the CIP projects identified for the water system in SWS witness Magro’s
engineering report, as well as the additional AMI project identified by SWS. Project Nos. 1
through 5 are expected to be completed by the end of 2027, and Project Nos. 6 through 11 are
expected to be completed by the end of 2028. The estimated total cost for these projects is
$1,203,575, if the transaction and transfer are approved.
1. AMI Meters Replacements – Replace approximately 750 non-automated meters with
AMI meters. The estimated total project cost is $393,575.
2. Well No. 1 Pump Rehabilitation – Remove and rehabilitate existing vertical turbine
pump and motor at Well No. 1, including disconnection, inspection, reinstallation, and
testing. The estimated total project cost is $25,000.
3. Well No. 2 Emergency Generator Installation – Furnish and install a new standby
generator at Well No. 2, including an automatic transfer switch (ATS), concrete pad,
wiring, conduit, and all electrical tie-ins. The estimated total project cost is $75,000.
4. Well No. 3 Emergency Generator Installation – Furnish and install a new standby
generator at Well No. 3, including an ATS, concrete pad, conduit, wiring, grounding, and
integration into the existing system. The estimated total project cost is $75,000.
5. New Well No. 4 – Drill a new 10 inch well, install a new pump, instrumentation,
SCADA, and a new raw water main. The estimated total project cost is $500,000.14
6. Water Treatment Plant Site Vault Safety Improvements – Fabricate and install
aluminum or galvanized steel safety covers over three existing pipe vaults; the project
includes minor site work, framing, and anchoring. The estimated total project cost is
$20,000.
13 The estimated total cost is $2,123,575. However, witness DeStefano included SWS’s internal capitalized labor
percentage and the then-approved Allowance for Funds Used During Construction rate. Therefore, the sum of the
individual project cost estimates does not equal the $2.38 million total estimated costs.
14 The engineering report included an estimated total cost of $900,000 for this project; however, SWS reduced the
estimated total project cost to $500,000 based on its experience implementing similar infrastructure in other
locations and the replacement cost-new identified in the engineering report.

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7. High Service Pump (HSP) Building Grating Replacement – Rehabilitate the existing
grating above influent and effluent piping in the HSP building. The estimated total
project cost is $15,000.
8. Compressor Replacement – Remove and dispose of two existing Ingersoll-Rand air
compressors located outdoors and furnish and install new replacement compressors. The
estimated total project cost is $10,000.
9. 14-inch Asbestos Cement Pipe Replacement – Excavate, remove, and replace
approximately 80 linear feet of 14-inch asbestos cement effluent water main with new
Ductile Iron Pipe. The estimated total project cost is $60,000.
10. Chlorine System Reliability Upgrade – Install a back-up chlorine storage tank and
metering pump to provide permanent back-up disinfection facilities. The estimated total
project cost is $20,000.
11. Chain Link Repair – Install approximately 80 linear feet of damaged chain link fence.
The estimated total project cost is $10,000.
SWS witness Magro testified that the ten CIP projects identified for the water system
include seven deferred maintenance projects (Project Nos. 2 and 6-11), two reliability projects
(Project Nos. 3 and 4), and one notable project (Project No. 5). Witness Magro indicated that
Project No. 5, the New Well No. 4 project, is notable due to Placid Lakes’ individual
groundwater well withdrawal allocation exceedances as previously discussed. SWS asserted that
the fourth well should resolve the well withdrawal exceedances.
Below are CIP projects identified for the wastewater system in witness Magro’s
engineering report. Project Nos. 1 through 5 are expected to be completed by the end of 2027,
and Project Nos. 6 through 9 are expected to be completed by the end of 2028. The estimated
total cost for these projects is $920,000, if the transaction and transfer are approved.
1. Lift Station No. 1 Full Replacement (Golf) – Abandon existing Lift Station No. 1 and
construct a new lift station, including a wet well, valve vault, pumps, controls, electrical
service, and site work. The estimated total project cost is $300,000.
2. Lift Station No. 2 Discharge Piping Rehabilitation – Remove and replace corroded
discharge piping, valves, and fittings within the wet well vault of Lift Station No. 2; the
project includes bypass pumping and restoration. The estimated total project cost is
$40,000.
3. Open Tank Grating Safety – Fabricate and install new aluminum grating covers over
four open process tanks to improve safety and prevent fall hazards; the project includes
brackets and hardware. The estimated total project cost is $10,000.

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4. Blower System Installation – Furnish and install a new blower unit and a back-up
blower at the wastewater treatment facility (WWTF), including structural supports,
mounting, conduit, and control wiring. The estimated total project cost is $30,000.
5. Generator Installation WWTF – Furnish and install a new standby generator at the
WWTF; the project includes an ATS, electrical panel upgrades, concrete pad, and all
connections. The estimated total project cost is $75,000.
6. New Bar Screen – Furnish and install a new influent bar screen. The estimated total
project cost is $15,000.
7. DEP Required Plan – Prepare a power outage contingency plan and a collections system
action plan. The estimated total project cost is $10,000.
8. Nutrient Removal Upgrades Basin Management Action Plan (BMAP) Compliance –
Install a new treatment tank and nitrogen recycle pump, in-tank mixer, alum injection
system, metering pump, auto-dialer, and electrical/control systems to comply with the
new nitrogen and phosphorous effluent limits. The estimated total project cost is
$400,000.
9. Monitoring Well Installation – Furnish and install groundwater monitoring wells in
accordance with the permit requirements; the project includes drilling, casing, wellhead
protection, and documentation. The estimated total project cost is $40,000.
SWS witness Magro noted that the nine wastewater CIP projects include seven deferred
maintenance projects (Project Nos. 2-7 and 9), and two notable CIP projects (Project Nos. 1 and
8). Witness Magro indicated that Project No. 1, the Lift Station No. 1 Full Replacement (Golf)
project, is considered of primary importance due to the age and condition of the existing lift
station, safety risks, and the need to comply with recommended wastewater pump station
standards. Witness Magro stated that Project No. 8, the Nutrient Removal Upgrades BMAP
Compliance project, is the second-most notable CIP project as it is required to comply with the
new BMAP effluent limits per the AO in the new DEP permit.
SWS stated that the Utility’s access to capital, enhanced information-technology and
cybersecurity support, and emergency and disaster response capabilities will benefit Placid
Lakes’ customers and support regulatory compliance. SWS also asserted that its experience as
an established operator of multiple utility systems across several counties is evidence of its
capabilities to maintain regulatory compliance and address non-compliance issues as they arise.
OPC did not file testimony in this proceeding; however, based on its brief, OPC does not
believe that SWS has established that the increase in rate base and rates will materially improve
regulatory compliance. Furthermore, OPC states that our decision on the acquisition transaction
does not improve new regulatory compliance due to regulatory compliance being needed and
independent from the value we assign.

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We disagree with OPC. Section 367.0811(9)(b), F.S., requires consideration of whether
the acquisition transaction is expected to result in improvements in regulatory compliance. The
record demonstrates that SWS has identified specific existing regulatory requirements and
operational issues, as well as proposed projects to address those issues.
Specifically, the proposed construction of Well No. 4 for Placid Lakes’ water system is
intended to address the individual well withdrawal allocation exceedances identified in the
SWFWMD CUP. In addition, the proposed Nutrient Removal Upgrades and Monitoring Well
Installation projects for Placid Lakes’ wastewater system are directly related to the new DEP
permit requirements and AO regarding the new effluent limits and groundwater monitoring
requirements. SWS has also indicated that it has the staffing necessary to meet the increased
staffing requirements identified in SWS witness Magro’s engineering report to address the DEP
AO action items.
The remaining proposed CIP projects for the Placid Lakes systems, including projects
addressing equipment rehabilitation, standby generation, disinfection system reliability, and
other infrastructure deficiencies, are intended to improve the reliability and operation of the
systems.
Based on the above, we find that the planned projects indicate SWS’s intention to
improve the reliability, safety, and system operations for the Placid Lakes water and wastewater
systems, which should contribute to continued regulatory compliance. The record also
demonstrates that SWS has access to the funding, staffing, operational, and infrastructure
resources needed to address existing deficiencies and meet the systems’ regulatory requirements.
Therefore, we find that the transaction should result in improvements in regulatory compliance.
Performance goals
Section 367.0811(10), F.S., states that we may set reasonable performance goals based on
the standards specified in Section 367.0811(9), F.S., and review utility performance regarding
these standards in a rate proceeding.
SWS did not provide testimony regarding this issue, and OPC did not file testimony in
this proceeding. However, in its brief, SWS recommended that no performance goals are
necessary but stated that the record established that the specific projects in the CIPs, with SWS’s
operational and regulatory experience, provide measurable commitments that render additional
performance goals under Section 367.0811(10), F.S., unnecessary. In its brief, OPC
recommended that we set a framework to develop a cost-benefit analysis of ratepayer impacts to
standardize the review of future acquisitions. Furthermore, OPC argued that the framework
should require the Utility to identify measurable service, compliance, and cost-efficiency targets
tied to approval of the acquisition transaction, and to report periodically on whether targets have
been met.
While OPC recommended that a framework to develop a ratepayer cost-benefit analysis
be set, we agree with SWS that no performance goals should be established pursuant to Section

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367.0811(10), F.S., at this time. SWS has not yet acquired the Placid Lakes’ water and
wastewater systems, and the record does not provide information for specific performance goals
to establish future performance goals. We also agree with SWS that the specific projects
identified in the CIPs and SWS’s operational and regulatory experience provide a basis for
evaluating the Utility’s performance in a future proceeding without establishing formal
performance goals at this time.
Based on above, we find that establishing formal performance goals is unnecessary at this
time because the considerations of Section 367.0811(9), F.S., are addressed throughout this
order, and the specific projects identified in the CIPs provide a basis for evaluating the Utility’s
performance in a future proceeding. Should future circumstances demonstrate otherwise, we
have the authority to evaluate the Utility’s performance in subsequent proceedings.
Rate reductions or rate stability
Pursuant to Section 367.0811(9)(c), in evaluating a rate base value petition, we must
consider whether the transaction will result in rate reductions or rate stability over a long-term
period. SWS witness Twomey stated that the proposed acquisition and ultimate consolidation
with SWS’s other systems will result in a rate reduction and rate stability for the customers of
Placid Lakes over a long-term period. However, witness Twomey indicated that Placid Lakes’
existing rates will not result in an immediate rate change. Witness Twomey asserted that post
consolidation, the customers’ average residential water and wastewater bills would decline.
OPC has asserted that the approval of the rate base value petition, acquisition of Placid
Lakes, and consolidation with SWS is expected to increase Placid Lakes’ rate base. OPC
indicated if the consolidation does not take place, the Placid Lakes customers would carry the
burden of a higher premium in the rate base. OPC further stated that without knowing all of
SWS’s system and capital expenditure plans, long term rate stability is speculative.
Furthermore, OPC highlighted known engineering deficiencies that “customers will almost
certainly pay for in a future rate case.” OPC argued that we should not treat rate stability as a
benefit of the transaction unless it is tied to a definite, enforceable timeline.
SWS witness DeStefano’s analysis presents calculations of stand-alone revenue increases
for Placid Lakes if it is not acquired by SWS, based on a 2027 test year, which result in higher
percentage increases of 13.14 percent for water and 257.57 percent for wastewater. If the
transaction and consolidation are successful, witness DeStefano’s analysis indicates an overall
percentage price increase of 6.48 percent for water and 7.93 percent for wastewater. Since
SWS’s rates are consolidated, we find it is reasonable to expect that Placid Lakes would be
incorporated into SWS’s consolidated rate structure upon completion of a future rate proceeding.
Placid Lakes’ customers would not be expected to experience the substantially higher stand-
alone increases identified in witness DeStefano’s analysis. Rather, the evidence demonstrates
that customers would experience substantially lower increases under the consolidated rate
structure than they would if Placid Lakes remained a stand-alone utility. Although the proposed
transaction does not result in an immediate rate reduction, the lower increases associated with
consolidation support the finding of more reasonable future rates for Placid Lakes customers.

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PAGE 13
Therefore, we find that the proposed transaction is reasonably likely to result in rate stability
over a long-term period and no evidence to the contrary has been presented.
Projected five-year impact
Pursuant to Section 367.0811(5)(e), F.S., the petition filed under this section must contain
a 5-year projected rate impact on the customers of the utility being acquired, including but not
limited to any cost efficiencies expected to result from the acquisition and the use of this section
instead of the cost method pursuant to Section 367.081, F.S., to establish rate base. SWS witness
DeStefano contends that SWS prepared projections showing Placid Lakes’ anticipated tariff rates
following acquisition and inclusion in its anticipated SWS’s 2027 test year rate case, estimated to
take effect in 2029. SWS projects an overall rate decrease for Placid Lakes water and
wastewater customers relative to Placid Lakes current rates.
Witness DeStefano indicated that the rate calculations include the proposed $5,750,000
rate base and recommended $2.38 million in capital improvements. Witness DeStefano stated
that the 5-year projected rate impact incorporates operational efficiencies resulting from SWS’s
anticipated use of three operating personnel and its existing management and administrative
teams. These efficiencies are expected to eliminate certain incremental salaries and benefits
costs, estimated to be $139,951 annually, beginning upon acquisition. Witness DeStefano’s
analysis demonstrates that Placid Lakes’ rates will go up if capital improvements are considered
on a stand-alone basis as indicated in the engineering assessment.
SWS stated that it would continue charging Placid Lakes’ existing rates in effect at the
time of closing and, on a going forward basis, continue filing annual index filings for the next
several years before consolidating Placid Lakes with SWS. The average consumption for water
is 3,555 gallons per month. With consolidation, a residential water bill, based on a 5/8-inch
meter size will reduce from the current charge of $31.72 to $28.42 a month in 2029. The
average consumption for wastewater is 4,592 gallons. A residential wastewater bill will reduce
from the current charge of $139.50 a month to $88.44 a month in 2029.
OPC argued that despite SWS’s projection that rates will eventually stabilize, the
acquisition will not necessarily produce savings. OPC cited inconsistencies between actual
numbers reported in both SWS and Placid Lakes’ 2025 Annual Reports, and the numbers used to
calculate witness DeStefano’s 5-year impact analysis. OPC argued that the most significant
discrepancy concerns Placid Lakes’ O&M expense, where in witness DeStefano, in the 5-year
impact analysis, used O&M expense of $583,948, while Placid Lakes reported $1,688,841 in its
2025 Annual Report. OPC further acknowledged concerns about the reliability of the 5-year rate
analysis, stating that because the inputs used to calculate it “materially diverge” from the annual
reports, we should not accept the projected benefits and rate impacts at face value. OPC also
referenced Rule 25-30.110(2), F.A.C., stating that it requires information furnished to us for
ratemaking purposes to be consistent with, and reconcilable to, Placid Lakes’ annual reports.
OPC’s comparison of the financial input used in SWS’s 5-year rate impact analysis to the
2025 Annual Reports is mislaid. The analysis was prepared using the most recent financial

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PAGE 14
information available at the time, the 2024 Annual Reports of SWS and Placid Lakes. SWS filed
its petition in February 2026, at a time when the 2025 Annual Report was not yet due. As a
result, the use of the 2024 Annual Report was reasonable and appropriate for preparing the
analysis. In addition, OPC’s comparison relies on an incorrect O&M expense for Placid Lakes.
Placid Lakes’ 2025 Annual Report reports O&M expense of $790,017, not the $1,688,841 cited
by OPC. SWS used the 2024 Annual Report O&M expense of $710,052. It was reduced in year
one to $583,948 to recognize the cost efficiencies realized upon the acquisition. Therefore,
OPC’s calculation of the alleged discrepancy is based on an inaccurate figure and does not
provide a reliable basis for questioning the analysis.
Based on the above, the projected rate impact of the proposed transaction under Section
367.081(5)(e), F.S., over the next five years is a decrease to the monthly residential bill for a 5/8-
inch x 3/4-inch meter from $31.72 to $28.42 for water and $139.50 to $88.44 for wastewater.
Rate stabilization plan
Section 367.0811(5)(h), F.S., provides that a rate stabilization plan must be filed if the
acquisition would result in a significant individual increase in rates during the 5-year period
following acquisition. Rule 25-30.0372(3)(f), F.A.C., provides that a “significant individual
increase” means a rate increase during any twelve consecutive months of the 5-year projected
rate impact period that is in excess of 15 percent over the current rates of the utility system being
acquired.
SWS witness Twomey testified that consistent with Rule 25-30.0372(3)(f), F.A.C., SWS
is not proposing a rate stabilization plan because the transaction will not result in a significant
individual increase that will result in an excess of 15 percent over Placid Lakes current rates or in
the rates charged to Placid Lakes during the 5-year period. In its brief, SWS asserted that the
Utility anticipates the acquisition and consolidation of Placid Lakes into SWS’s existing revenue
requirements would mitigate significant individual increases over the estimated 2026-2030
period.
In its brief, OPC stated that the Utility should be required to institute a rate stabilization
plan if the transaction satisfies the minimum statutory public interest factors. OPC further
explained that the rate stabilization plan should be coupled with performance requirements
including completion of capital projects, demonstration of operating efficiencies, and periodic
reporting concerning whether projected savings have materialized. Based on the 5-year
projected impact, a rate stabilization plan is not warranted.
The record evidence demonstrates there will not be a rate increase during any twelve
consecutive months of the 5-year projected rate impact period that is in excess of 15 percent over
the current Placid Lakes rates. Therefore, we find that if the proposed transaction under Section
367.0811(5)(h), F.S., is approved, a rate stabilization plan for Placid Lakes will not be required.

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PAGE 15
Cost efficiencies
Pursuant to Section 367.0811(9)(d), F.S., in considering a rate base value petition
pursuant to this section, we must consider whether the proposed acquisition provides cost
efficiencies in serving the public interest and pursuant to the goals of this section of the statute.
SWS is a wholly owned subsidiary of Nexus Regulated Utilities, LLC (Nexus), which is
an indirectly owned subsidiary of Nexus Water Group, Inc. SWS is a Class A water and
wastewater utility providing potable water and wastewater services to more than 35,000 and
30,000 customers, respectively, across 10 Florida counties. As a result of its size and operational
structure, SWS is positioned to achieve cost efficiencies via economies of scale through the
sharing of administrative functions, operational personnel, technical expertise, and other
resources across multiple systems and spreading fixed costs across a larger customer base.
These arrangements may improve operational efficiency, reduce duplicative costs, and help
moderate future increases in the cost of providing service.
The Utility has provided Placid Lakes’ 2021 through 2025 Annual Reports. According to
Placid Lakes’ 2025 Annual Report, the most recent year of operation, the water system reported
an operations and maintenance (O&M) expense of $790,017, which is 8.8 percent higher than its
projected O&M expense for that year. The average water O&M expense for the 5-year period
from 2021 through 2025 is $698,088, reflecting an average annual increase of 6.0 percent.
Placid Lakes’ wastewater system is currently unregulated by the Commission. SWS separately
filed an application for the transfer of Placid Lakes’ wastewater assets and for amendment of
Certificate No. 347-S, which would add the wastewater system to the Utility’s Commission-
regulated wastewater service territory.15
According to the Utility’s Cumulative Present Value of the Revenue Requirement
(CPVRR), SWS projects an average O&M expense of $610,580 for water, and $37,847 for
wastewater during the first five years following the proposed acquisition. Table 1 summarizes
Placid Lakes’ projected O&M expenses with acquisition by SWS and as a standalone system
without acquisition.
Table 1
Placid Lakes’ Projected O&M Expenses With and Without Acquisition
Year 0
(2024)
Year 1
(Projected)
Year 2
(Projected)
Year 3
(Projected)
Year 4
(Projected)
Year 5
(Projected)
5-year
Projected
Average
Without Acquisition (Standalone)
Water 	$710,052 	$725,886 	$742,073 	$758,622 	$775,539 	$792,833 $758,991
15 Docket Nos. 20260032-WS and 20260033-WS.

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PAGE 16
Wastewater $36,516 	$37,330 	$38,163 	$39,014 	$39,884 	$40,773 $39,033
With Acquisition
Water 	$710,052 	$583,948 	$596,970 	$610,283 	$623,892 	$637,805 $610,580
Wastewater $36,516 	$36,196 	$37,003 	$37,828 	$38,672 	$39,534 $37,847
Source: Exhibit 3, C1-14-C1-16.
SWS projects that O&M expense will decrease by 17.8 percent for water and 0.9 percent
for wastewater in Year 1 of operation, compared to Placid Lakes’ 2024 O&M expenses. The
Utility assumed a 2.2 percent annual increase in O&M expenses for each subsequent year. Over
the 5-year horizon, SWS projects O&M expenses that are 19.6 percent lower for water and 3.0
percent lower for wastewater compared to the O&M expenses projected for Placid Lakes as a
standalone system.
Regarding whether the acquisition of Placid Lakes is expected to provide cost
efficiencies, OPC stated the Utility has merely identified generalized efficiencies associated with
centralized management and administrative consolidation, but it has not demonstrated that these
efficiencies are quantifiable, verifiable, or sufficient to offset the increased costs. However, we
disagree with OPC’s stance and find that the Utility has provided evidence of anticipated cost
efficiencies resulting from the proposed acquisition. SWS has explained that cost efficiencies
are expected to result from consolidating personnel supporting the Placid Lakes system.
Specifically, the Utility anticipates using three operating personnel, with an estimated total cost
of $292,593, as well as existing SWS management and administrative teams to support the
operations of the Placid Lakes system. After accounting for the estimated costs associated with
the three operating personnel, SWS removed $432,544 in labor and benefits expenses reported in
Placid Lakes’ 2024 Annual Report, resulting in estimated operational savings of $139,951.
Based on SWS’s operational structure, the anticipated reduction in O&M expenses, and
Placid Lakes’ actual 2025 water O&M expense exceeding the projected O&M expense as a
standalone system, we find that the proposed acquisition of Placid Lakes is expected to provide
cost efficiencies.
Economies of scale
Pursuant to Section 367.0811(9)(f), F.S., in evaluating a rate base value petition, the
Commission must consider the economies of scale to be generated by the transaction. SWS
contends that the transaction is expected to generate economies of scale. SWS witness Twomey
testified that consolidating Placid Lakes with SWS will promote economies of scale by spreading
fixed costs across a larger customer base. Witness Twomey further contended that consolidating
Placid Lakes with SWS will reduce customer capital and operating costs. SWS has also argued
that there is a reduction of capital and operating costs along with access to financial, operational,

ORDER NO. PSC-2026-0366-FOF-WS
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PAGE 17
and technical expertise that a utility of Placid Lakes size would not have been able to achieve on
its own.
SWS witness DeStefano contended that the transaction will provide economies of scale
from a cost recovery perspective that would not otherwise be available to Placid Lakes. To
support its position, SWS asserted that consolidating Placid Lakes with SWS would eliminate the
need for stand-alone management, capital planning, support services, and operational leadership
roles or positions. Witness DeStefano testified that consolidation will provide savings for Placid
Lakes by allowing SWS to use its existing administrative and management team. Witness
DeStefano further stated that these costs are existing SWS costs and will not be incremental costs
for Placid Lakes.
OPC disagreed with SWS, stating that the evidence does not establish meaningful
economies of scale benefiting customers, and that the savings realized by SWS will increase
utility profits rather than being passed down to customers. OPC stated that SWS’s claims of
savings in emergency response, cybersecurity, centralized resources, and access to a large
organization “do not justify a reduction in Placid Lakes’ operating costs or establish a
measurable economic benefit attributable to this acquisition.”
We disagree with OPC’s assertions and find that the benefits testified to by the Utility’s
witnesses, including the sharing of existing management, administrative, and operational
resources and the spreading of costs across a large customer base, present opportunities for the
Utility to be operationally efficient and promote economies of scale. Therefore, we find that the
Utility’s proposed transaction under Section 367.0811(9)(f), F.S., will generate economies of
scale.
Arms length transaction
SWS asserted that the proposed transaction was negotiated at arm’s length between two
unaffiliated parties. SWS witness Twomey testified that the transaction for the Placid Lakes
systems satisfies the statutory requirements of an arms-length transaction and outlined the public
interest benefits, including improved service, regulatory compliance, and economies of scale.
Witness Twomey testified that SWS is an indirect subsidiary of Nexus Water Group, Inc. and
that Placid Lakes is an entirely separate corporate entity with no prior affiliation. SWS argued
that each party entered negotiations voluntarily, was represented by its own counsel, and acted in
their own self-interest.
OPC argued an arm’s-length purchase price does not necessarily reflect the utility’s
appropriate ratemaking value. Buyers may pay premiums for factors such as future earnings,
strategic advantages, financing, tax benefits, or anticipated efficiencies—benefits that may
accrue to the buyer rather than customers. Therefore, OPC states that we should not
automatically add the purchase price premium to rate base. OPC contends that the key distinction
is that what a buyer is willing to pay is not necessarily what customers should be required to pay
through rates.

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DOCKET NO. 20260031-WS
PAGE 18
Upon review of the testimony and exhibits, we find that the Utility has filed the required
documentation under Section 367.0811(9)(e), F.S., including, among other items, the Agreement
for Purchase and Sale of Water and Wastewater System Assets of the acquired utility. As
indicated above, the transaction involves two distinct corporate entities - SWS and Placid Lakes -
with no documented shared board members or parent company. Therefore, we find that the
acquisition is an arms-length transaction as required by Section 367.0811(9)(e), F.S.
Access to capital
Section 367.0811(9)(h), F.S., requires that we consider whether the acquiring utility
possesses greater access to capital than the utility being acquired. The record demonstrates that
SWS possesses greater access to capital than Placid Lakes through its larger financial resources,
diversified financing mechanisms, and affiliation with a large utility holding company, Nexus.
SWS has stated that the proposed acquisition is expected to create greater access to
capital. Consistent with that representation, SWS witness Twomey testified that SWS has access
to multiple sources of capital, including collateralized notes, private placement offerings, and
bank credit agreements as a subsidiary of Nexus. SWS asserted that Nexus is also credit rated by
Standard & Poor’s (specific rating was filed as confidential by SWS), which facilitates a wide
range of debt financing options at reasonable rates, including a revolving debt arrangement that
provides ready access to funds for operations or capital investment as needed. The credit rating
is considered private, not publicly available, and represents a complimentary credit assessment.
SWS asserted Placid Lakes, as a stand-alone utility, historically relied on significantly more
limited financing sources, including developer-provided equity and traditional bank loans.
Witness Twomey testified that SWS’s access to capital through both SWS, and its parent
company, Nexus, will allow the Utility to engage in capital improvements identified in SWS’s
Capital Improvement Plan. Further, Nexus is a subsidiary of Southwest Water Company, Inc.
that has a $700 million revolving credit facility through its equity investors. The Utility
explained the revolving credit facility is similar to the revolving credit agreements historically
available to SWS through its parent companies and has been part of its capital structure for
ratemaking. The revolver makes funds available to SWS for short-term funding needs without
requiring debt issuances or equity infusions, providing flexibility and reliability in fund
availability to maintain proper service for customers. To SWS’s knowledge, Placid Lakes has no
such credit line available. Additionally, SWS asserted that it utilizes a balanced capital structure
targeting a 50 percent equity ratio, compared to Placid Lakes’ Commission-approved 58.99
percent equity ratio, which effectively could lower the overall cost of capital.
OPC did not provide any testimony in the record; however, in its brief it argued:
Company witness Dante DeStefano, offered in part to address the “access to
capital” factor, could not confirm that Commission approval of the requested rate
base would create a new lending relationship, guarantee a loan, reduce Sunshine’s
borrowing costs, or otherwise concretely improve the Company’s access to
capital. Tr. 31-36. Repeated questioning on this point drew only speculation: “I

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PAGE 19
would have to ask our lenders. I am not sure how of this would impact that,” and,
when asked whether a higher rate base would improve Sunshine’s credit rating, “I
wouldn’t know that. I am not a treasury expert.” Tr. 32-36. Mr. DeStefano
likewise could not confirm that Commission approval would increase the
Company’s cash on hand or its equity capital. Tr. 36. A statutory factor cannot be
satisfied by an assertion that the Company’s own witness is unable to substantiate
when tested.
We are not persuaded by OPC’s arguments due to a lack of evidence supporting its
claims. Further, OPC’s arguments above are contrary to its position on this issue.
Based on the record, we find that the proposed acquisition provides SWS with access to
greater financial resources to support long-term infrastructure sustainability. Collectively, the
evidence described above demonstrates that SWS possesses greater financing flexibility and
access to capital than Placid Lakes.
Proposed rate base value vs. net book value
Section 367.0811(9)(g), F.S., requires us, in considering a rate base value petition, to
consider the NBV of the acquiring utility relative to the proposed rate base value of the acquired
utility.
SWS witness Twomey testified that its NBV as of December 31, 2024, is approximately
$195,393,737. SWS’s proposed rate base value for Placid Lakes is $5,750,000. The proposed
rate base value therefore represents approximately 2.9 percent of SWS’s NBV.
In their briefs, SWS and OPC relied on different comparisons. SWS argued that the
proposed rate base value is only 2.9 percent of SWS’s NBV and, therefore, the Placid Lakes
system can be consolidated with minimal impact on SWS’s existing customers while benefiting
Placid Lakes’ customers. OPC does not dispute the relative NBV calculation of 2.9 percent,
however, it asserted that the proposed $5,750,000 rate base value is approximately 674 percent
of Placid Lakes’ depreciated NBV and argued that customers would bear the resulting premium
through rates.16
Section 367.0811(9)(g), F.S., directs us to compare the acquiring utility’s NBV with the
proposed rate base value of the acquired utility. Thus, the relevant comparison under this factor
is SWS’s $195,393,737 NBV to the proposed $5,750,000 rate base value, or approximately 2.9
percent. OPC’s asserted 674 percent comparison relates the proposed rate base value to Placid
Lakes’ NBV and addresses the proposed premium, not the comparison specified by this statutory
factor. The relative size of the acquisition does not, by itself, demonstrate the rate impact on
SWS's existing customers or the benefits to Placid Lakes’ customers.
16 The proposed rate base value of $5,750,000 is approximately 704.3 percent of Placid Lakes’ year-end 2024 NBV.

ORDER NO. PSC-2026-0366-FOF-WS
DOCKET NO. 20260031-WS
PAGE 20
Based on the record, we find that SWS’s proposed $5,750,000 rate base value for Placid
Lakes represents approximately 2.9 percent of SWS’s $195,393,737 NBV. Accordingly, we find
that SWS’s NBV relative to the proposed rate base value of Placid Lakes is 2.9 percent.
Alternate rate base value
Section 367.0811, F.S., provides an alternative procedure for establishing the rate base
value of an acquired utility system. Under Section 367.0811(3)(b), F.S., the rate base value
established may not exceed the lesser of (1) the negotiated purchase price or (2) the average of
the three appraisals conducted under subsection (4). Section 367.0811(6)(b), F.S., further
authorizes us, in the public interest, to grant the petition in whole or in part, with modifications,
or to deny it. Thus, the lesser-of calculation establishes the maximum approvable value; we
must determine the appropriate value based on the competent and substantial evidence in the
record.
SWS witness Twomey testified that the Utility requested an alternative rate base value of
$5,750,000 for Placid Lakes. This amount is the negotiated purchase price as set forth in the
Asset Purchase Agreement (APA). The purchase price of $5,750,000 is less than the average of
the three independent appraisals of fair market value, or $6,506,633. Thus, the purchase price is
the lesser of the two values and shall be used as the proposed alternative rate base value pursuant
to Section 367.0811, F.S., and Rule 25-30.0372, F.A.C.
SWS retained three licensed appraisers selected from our approved list to value the Placid
Lakes water and wastewater systems. Each appraiser considered the cost, market, and income
approaches to value in conformity with the Uniform Standards of Professional Appraisal Practice
(USPAP).
In developing the appraisals, each appraiser relied, in part, on the Water and Wastewater
Treatment Facilities Assessment Report (Engineering Assessment) prepared by SWS witness
Magro of Aclus Engineering, LLC (Aclus). The Engineering Assessment was based on a May
27, 2025, site visit and reviews of available documentation, sampling results, reports, and
regulatory permits. The Engineering Assessment evaluated the existing water and wastewater
facilities, including installed equipment, system capacities, treatment processes, general facility
condition, and regulatory compliance, and developed an opinion of probable replacement cost
and a 3-year CIP. The assessment concluded that the observed water and wastewater facilities
were fully operational and generally in good condition while exhibiting normal wear. The
Engineering Assessment estimated the depreciated replacement cost of the combined water and
wastewater facilities at approximately $11.5 million. The assessment also identified
approximately $2.13 million in capital improvements anticipated over the following three years
to address known deficiencies, rehabilitation needs, and regulatory compliance improvements.
The Engineering Assessment did not include a comprehensive physical condition assessment of
the water distribution or wastewater collection systems and did not include flow, pressure,
leakage, hydrant, or closed-circuit television testing. The significance of these limitations is
addressed below.

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PAGE 21
The three generally recognized approaches used to value the system in this proceeding
are the cost, market, and income approaches. Under the cost approach, value is estimated based
on the current cost of replacing or reproducing a utility’s assets, with appropriate consideration
given to depreciation and other forms of obsolescence. The market approach develops an
indication of value by reference to sales or other market transactions involving comparable
utility systems, with adjustments made as appropriate for differences between the systems. The
income approach estimates value based on the economic benefits expected to be generated by
operating the utility, generally through the capitalization or discounting of anticipated future
income or cash flows. Each appraiser weighted the valuations produced by each approach based
on the relevance of each approach and the availability and reliability of supporting data.
I. 	Appraisals of Fair Market Value
Appraiser and SWS witness Festa, with Marshall & Stevens Incorporated, determined a
fair market value of $7,365,900 as of June 30, 2025. Under the cost approach, witness Festa
relied primarily on replacement-cost information developed by Aclus, independently tested that
information for reasonableness, and adjusted depreciation for physical condition, functional
obsolescence, and remaining useful life. He also used the Engineering Assessment to adjust the
remaining lives of certain assets. The cost approach produced an indicated value of $10,841,200.
Under the income approach, witness Festa discounted projected cash flows using an 11.5 percent
weighted average cost of capital (WACC), producing an indicated value of $2,153,000. He
considered publicly traded water utilities and comparable transactions under the market approach
but assigned that approach no weight because the available information was insufficient to
produce a reliable indication of value. Witness Festa assigned 60 percent weight to the cost
approach and 40 percent to the income approach, resulting in his $7,365,900 conclusion.17
Appraiser and SWS witness Wright, of NewGen Strategies and Solutions, LLC,
determined a fair market value of $5,744,000 for the Placid Lakes system as of June 12, 2025.
Witness Wright considered the cost, sales comparison, i.e., market, and income approaches.
Under the cost approach, witness Wright developed an original cost less accumulated
depreciation (OCLD) valuation of $4,743,000 and a reproduction cost new less accumulated
depreciation (RCNLD) valuation of $13,786,000, relying on replacement-cost information from
the Engineering Assessment and applying depreciation to account for the age and physical
deterioration of the assets. Under the sales comparison approach, witness Wright reviewed
transactions involving other water and wastewater utilities and developed valuations of
approximately $5,004,000 based on sales price to OCLD and $6,062,000 based on sales price per
customer.
However, witness Wright also did not rely on the market approach because of the limited
availability of complete comparable transaction data and the difficulty of adjusting utility
transactions for differences in location, system characteristics, growth prospects, and other
factors affecting value. Under the income approach, witness Wright performed a discounted
cash flow analysis over a 10-year period, incorporating anticipated asset retirements and
17 The 60/40 weighting of the cost and income approaches calculate to $7,365,920.

ORDER NO. PSC-2026-0366-FOF-WS
DOCKET NO. 20260031-WS
PAGE 22
replacements identified in part through the Engineering Assessment, and discounted projected
cash flows using a 9.5 percent weighted average cost of capital. The income approach produced
an indicated value of $5,744,000. After considering the relative strengths and weaknesses of the
three approaches, witness Wright concluded that the income approach best represented fair
market value because it reflected the prospective cash flows available to a hypothetical
purchaser. He therefore concluded a final fair market value of $5,744,000.
Appraiser and SWS witness Ling, of Raftelis Financial Consultants, arrived at a fair
market value of $6,000,000 to $7,000,000 for the Placid Lakes systems. Witness Ling considered
all three valuation approaches, using the RCNLD method under the cost approach, a
capitalization of cash flow method under the income approach, and the guideline public company
method under the market approach. Under the cost approach, witness Ling developed an
indicated value of $6,540,000 after adjustments that included a $559,000 allowance for
deficiencies and deferred maintenance identified in part through the Engineering Assessment,
external depreciation, and an allowance for going-concern value. The income approach
capitalized approximately $315,000 of normalized annual cash flow at a 6.5 percent
capitalization rate and produced an indicated value of $5,120,000, while the guideline public
company method produced an indicated value of $7,470,000. After applying applicable control
and marketability adjustments, the respective valuations were approximately $5,890,000 under
the cost approach, $4,610,000 under the income approach, and $8,730,000 under the market
approach. Those three indications average $6,410,000. Witness Ling did not assign
mathematical weights to the three approaches, concluding that no single method provided a more
precise indication of value, and instead reconciled the results using professional judgment to
arrive at its final fair market value of $6,000,000 to $7,000,000.
Using witness Festa’s $7,365,900 conclusion, witness Wright’s $5,744,000 conclusion,
and the $6,410,000 average of witness Ling’s three adjusted value indications, the average of the
three appraisal values is $6,506,633. Because the $5,750,000 negotiated purchase price is less
than this average, it establishes the statutory maximum that may be approved.
In addition to the $5,750,000 purchase price, witness DeStefano testified that SWS
proposes to include approximately $392,669 in estimated fees, transaction and closing costs, and
appraisal costs in rate base, consistent with Section 367.0811(3)(b), F.S., which specifically
authorizes inclusion of reasonable transaction and closing costs incurred by the acquiring utility.
The proposed journal entries to record the acquisition were entered into the record at the hearing.
Pursuant to Section 367.0811(3)(b), F.S., the proposed rate base value has not been adjusted to
reflect contributions-in-aid-of-construction or used and useful determinations.
Witness DeStefano prepared a 5-year Rate Impact Analysis comparing the customer rate
impact of the FMV rate base versus the traditional cost method. Witness Twomey projected that
Placid Lakes customer rates will decrease over the following 5-year period, or when Placid
Lakes’ rates are consolidated with SWS’s in a future rate case. Average water bills are projected
to decline from $31.72 per month to $28.42 per month and wastewater bills from $139.50 per
month to $88.44 per month (at average usage levels) by 2029. SWS demonstrated that Placid
Lakes customers would face higher rates on a stand-alone basis.

ORDER NO. PSC-2026-0366-FOF-WS
DOCKET NO. 20260031-WS
PAGE 23
In its post-hearing brief, SWS contended that the requested $5,750,000 rate base satisfies
Section 367.0811, F.S., because it is the purchase price and is less than the $6,506,633 average
of the three appraisals. SWS further relied on the random selection and licensure of the
appraisers, its testimony that the appraisals complied with USPAP, and the absence of any
adjustment for CIAC or used and useful considerations. OPC argued that limitations in the
engineering assessment and assumptions used in the valuation approaches materially overstate
the appraised values and asks us to require a corrected engineering assessment and revised
appraisals.
We agree with OPC that we are not required to accept an appraisal merely because the
appraiser was properly selected and licensed or because the appraisal states that it complies with
USPAP. Section 367.0811(6)(b), F.S., permits us to grant the petition in whole or in part, with
modifications, or to deny it. Therefore, the testimony elicited through cross-examination and the
admitted exhibits must be weighed along with the appraisers’ opinions. However, OPC did not
sponsor a competing appraisal, corrected engineering assessment, or quantified adjustment to
any appraised value. The absence of a competing expert opinion is not dispositive, but it limits
the record from which we can determine that a particular criticism reduces the average appraisal
below the purchase price.
Regarding the engineering assessment, witness Magro acknowledged that his was a
cursory, rather than comprehensive, review and that he did not conduct flow, pressure, leakage,
hydrant, or closed-circuit television testing. The report also excluded an assessment of the
physical condition of the distribution and collection systems. These limitations are relevant
when evaluating the resulting indications of value that rely on the assessment. Nevertheless,
Section 367.0811(4), F.S., does not prescribe the particular field tests that must be performed.
Further, witness Magro testified that the engineering assessment performed is consistent with
engineering assessments commonly performed in acquisitions such as the Placid Lakes proposal.
Witness Magro also testified that he was able to observe and review everything he
desired and was provided sufficient time to perform the scope he was asked to perform. The
Hartman report is an appraisal that was performed on behalf of SWS independent of this FMV
proceeding and is confidential. Witness Magro testified that he used the prior Hartman report
only for pipe length, age, and material information that was not otherwise available, and that the
prior valuation did not influence his engineering conclusions. Witness Twomey also testified
that the prior confidential appraisal was not provided to the three testifying appraisers. Thus, the
record does not establish OPC’s asserted circularity or that a prior valuation predetermined the
three appraisal conclusions.
OPC also challenged assumptions underlying the three appraisals. Regarding witness
Festa, OPC cited the unexplained reference to a zero-percent state tax rate, the use of a team
member to prepare the income analysis, and the sensitivity of that analysis to the selected 11.5
percent discount rate. Witness Festa testified that a one-percentage-point discount rate increase
would reduce the income-approach enterprise value by approximately $1.9 million, while a one-
percentage-point discount rate decrease would increase it by approximately $2.4 million. The
income indication, however, received 40 percent weight, and the record does not quantify the

ORDER NO. PSC-2026-0366-FOF-WS
DOCKET NO. 20260031-WS
PAGE 24
effect of correcting the challenged inputs on his final $7,365,900 conclusion. The omission of
Commission depreciation rates does not, standing alone, invalidate the appraisal because it is not
a cost-of-service depreciation study.
Witness Ling explained that OPC’s cited 1.1 percent historical consumption growth rate
was not comparable to her 2 percent long-term growth assumption. She also clarified that the
challenged discount-rate table was a general analytical framework and did not contain the inputs
used to determine her 8.5 percent discount rate. Witness Wright explained that his 9.5 percent
WACC and hypothetical capital structure reflected market-participant assumptions and that he
did not rely on the sales-comparison approach because complete comparable-transaction data
were unavailable. His $5,744,000 conclusion was the lowest of the three and was $6,000 below
the purchase price. Accordingly, OPC’s criticisms affect the weight afforded the appraisal
evidence, but the record does not quantify an adjustment to any final appraisal conclusion.
We have also reviewed the numerical comparisons in OPC’s brief. The first comparison
placed witness Wright’s market-participant discounted cash flow inputs beside SWS’s 5-year
regulatory rate-impact inputs. The two analyses serve different purposes and use different data
and assumptions. The differences included WACC, O&M, depreciation, and tax amounts and do
not indicate any errors or establish that either analysis is unreliable. Both sets of data are
projections and provided by two separate parties.
We could not replicate OPC’s second comparison from the cited 2025 Placid Lakes
Annual Report. In its 2025 Annual Report, Placid Lakes lists $790,017 of operating expenses,
$145,289 of depreciation expense, $48,098 of CIAC amortization, $104,480 of taxes other than
income, and a 6.38 percent total weighted cost of capital. The $583,948 O&M amount cited by
OPC instead appears in SWS’s rate-impact analysis and cumulative present value of the revenue
requirements, not the 2025 Annual Report. Consequently, we do not find that OPC’s numerical
comparisons demonstrate a defect in the appraisals.
In sum, OPC identified limitations and sensitivities that warrant consideration in
weighing the appraisal evidence. After considering those criticisms, we find that SWS met its
burden to support the requested alternative rate base value. Each appraisal was prepared by a
licensed appraiser selected from our approved list, considered the generally recognized valuation
approaches, and was supported by testimony and admitted exhibits. The three appraisal values
average $6,506,633, which exceeds the $5,750,000 negotiated purchase price. The purchase
price therefore establishes the statutory ceiling. Although OPC’s criticisms may affect the
weight afforded portions of the appraisal evidence, the record does not provide a reliable basis to
calculate a lower alternative rate base value. Accordingly, we find that the alternative rate base
value for Placid Lakes is $5,750,000.
Public interest
In determining if the proposed transaction is in the public interest Section 367.0811(9),
F.S., requires us to consider eight items: quality of service; compliance with regulatory
requirements; rate reductions or rate stability; cost efficiencies; arms-length transaction;

ORDER NO. PSC-2026-0366-FOF-WS
DOCKET NO. 20260031-WS
PAGE 25
economies of scale; acquiring utility’s net book value and proposed rate base value of utility
being acquired; and acquiring utility’s greater access to capital.
Our analyses have found that there should be improvements in the overall quality of
service and regulatory compliance, a reduction in rates once consolidation with SWS is
completed, cost efficiencies, economies of scale, and greater access to capital once Placid Lakes
is purchased by the Utility. The Placid Lakes water and wastewater systems have been well-
maintained but are 40-year-old systems that will require substantial upgrades in the near future as
detailed by witness Magro. SWS has demonstrated that it has the financial means and technical
expertise to operate Placid Lakes. The proposed transaction is an arms-length transaction since
Placid Lakes and SWS are two independent, unrelated corporate entities with no shared
ownership or affiliation. Finally, the proposed rate base value of $5,750,000 is less than the
average of the three appraisals testified to by witnesses Festa, Wright and Ling. While OPC
raised several criticisms of the data and techniques used by the appraisers, the record does not
contain a corrected appraisal or quantified adjustments supporting a reduction in the $5,750,000
purchase price. In sum, SWS has presented competent, substantial evidence demonstrating that
all of the items listed in Section 367.0811(9), F.S, have been addressed and found to advance the
purpose of the statute with minimum impact on the utility’s existing customers.
Based on the above, we find that the appropriate alternative rate base value for Placid
Lakes Utilities, Inc. of $5,750, 000 is compliant with Section 367.0811, F.S., and is in the public
interest.
Therefore, it is
ORDERED by the Florida Public Service Commission that the proposed transaction by
Sunshine Water Services Company pursuant to Section 367.081(9), F.S., establishing the
alternative rate base value of Placid Lakes Utilities, Inc. at $5,750,000, is in the public interest
and is found to advance the purpose of the statute with minimum impact on existing customers.
It is further
ORDERED that Sunshine Water Services Company’s net book value as of December 31,
2024, is approximately $195,393,737. The alternative rate base value of Placid Lakes Utilities,
Inc. is $5,750,000, which represents approximately 2.9 percent of Sunshine Water Services
Company’s net book value. It is further
ORDERED that Sunshine Water Services Company has demonstrated that: it has greater
access to capital than Placid Lakes; is an arms-length transaction; is expected to generate
economies of scale; is expected to provide cost efficiencies; is expected to result in rate stability
over a long-term period; should result in improvements in regulatory compliance; and should
result in improvements in overall quality of service. It is further
ORDERED that no performance goals are necessary at this time. Should future
circumstances demonstrate otherwise, the Commission has the authority to evaluate the Utility’s
performance in subsequent proceedings. It is further

ORDER NO. PSC-2026-0366-FOF-WS
DOCKET NO. 2026003 1 -WS
PAGE 26
ORDERED 	that the projected 	rate impact of the proposed transaction over the next five
years 	is a decrease 	to the monthly residential 	bill 	for a residential 	bill 	for a 5/8-inch x 3/4-inch
meter from $31.72 to $28.42 for water and $139.50 to $88.44 for wastewater. 	It is further
ORDERED that a rate 	stabilization plan 	shall not be instituted for Placid Lakes 	Utilities,
Inc. 	It is further
ORDERED 	that the docket 	shall be closed upon the expiration of the time 	for 	filing an
appeal.
By ORDER of the Florida Public Service Commission this 21st day of October. 2026 .
Florida Public Service Commission
2540 Shumard Oak Boulevard
Tallahassee, Florida 32399
(850)413-6770
www.floridapsc.com
Copies 	furnished: A 	copy 	of 	this document 	is
provided 	to 	the 	parties 	of record 	at 	the 	time of
issuance and, if applicable, interested persons.
SBr
NOTICE OF FURTHER PROCEEDINGS OR JUDICIAL REVIEW
The 	Florida 	Public 	Service 	Commission 	is 	required 	by 	Section 	120.569(1), 	Florida
Statutes, 	to notify parties of any administrative hearing or judicial review of Commission orders
that 	is available under Sections 120.57 or 120.68, Florida Statutes, as well as the procedures and
time 	limits 	that 	apply. 	This 	notice 	should 	not 	be 	construed 	to mean 	all 	requests 	for 	an
administrative hearing or judicial review will be granted or result in the relief sought.
Any party adversely affected by the Commission's final action in this matter may request:
1) 	reconsideration of the 	decision by 	filing 	a motion 	for 	reconsideration 	with 	the 	Office 	of
Commission 	Clerk, 2540 Shumard Oak 	Boulevard, 	Tallahassee, 	Florida 	32399-0850, 	within
fifteen (15) days of the issuance of this order in the form prescribed by Rule 25-22.060, Florida
Administrative Code; 	or 	2) 	judicial review by 	the 	Florida Supreme 	Court 	in 	the 	case 	of an
electric, gas or telephone utility or the First District Court of Appeal in the case of a water and/or

ORDER NO. PSC-2026-0366-FOF-WS
DOCKET NO. 20260031-WS
PAGE 27
wastewater utility by filing a notice of appeal with the Office of Commission Clerk, and filing a
copy of the notice of appeal and the filing fee with the appropriate court. This filing must be
completed within thirty (30) days after the issuance of this order, pursuant to Rule 9.110, Florida
Rules of Appellate Procedure. The notice of appeal must be in the form specified in Rule
9.900(a), Florida Rules of Appellate Procedure.