Florida Public Service Commission native order document 00877-2024

FILED 2/22/2024
DOCUMENT NO. 00877-2024
FPSC - COMMISSION CLERK
BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION
In re: Application for increase in water and 	DOCKET NO. 20230081-WS
wastewater rates in Broward County by Royal 	ORDER NO. PSC-2024-0046-PAA-WS
Waterworks, Inc. 	ISSUED: February 22, 2024
----~------------~
The following Commissioners participated in the disposition of this matter:
MIKE LA ROSA, Chairman
ARTGRAHAM
GARY F. CLARK
ANDREW GILES FAY
GABRIELLA P ASSIDOMO
NOTICE OF PROPOSED AGENCY ACTION
ORDER APPROVING A CHANGE IN WATER AND WAS TEWATER RA TES
AND
FINAL ORDER REQUIRING THE REMOVAL OF AMORTIZED
RATE CASE EXPENSE, CONFIRMING NO REFUND OF INTERIM RA TES,
AND REQUIRING PROOF OF ADJUSTMENTS
BY THE COMMISSION:
NOTICE is hereby given by the Florida Public Service Commission that the action
discussed herein, except with regard to the reduction of water rates to reflect removal of
amortized rate case expense, the confirmation of no interim refund, and the requirement of proof
of adju stme nt s, is preliminary in nature a nd will become final unless a person whose interests are
substantially affected files a petition for a formal proceeding, pursuant to Rule 25-22.029,
Florida Administrative Code (F.A.C.).
Background
Royal Waterworks, Inc. (Royal or Utility) is a Class B water and wastewater utility
providing service to approximately 410 residential and 111 general service water customers in
Broward County. Royal is located in the South Florida Water Management District. The Utility' s
initial rates were established in 1983 in Docket No. 19820237-WS.1 At that time, the Utility was
1ORDER NO. PSC-2024-0046-PAA-WS12170, issued June 24, 1983, in Docket No. 19820237-WS, In re:
Application of University Utility Corporation for an increase in its rat es to its customers in Broward County,
Florida.

ORDER NO. PSC-2024-0046-PAA-WS
DOCKET NO. 20230081-WS
PAGE 2
owned by University Utility Corporation. We have subsequently approved two transfers of the
system and Certificate Nos. 259-W and 199-S. 2
In 2022, the Utility recorded total company operating revenues of $704,462 and $713,819
for water and wastewater, respectively. Royal reported a net operating income for 2022 of
$12,515 for water and $201,311 for wastewater.
On August 14, 2023, Royal filed an application for increased interim and final water and
wastewater rates. However, on August 22, 2023, the Utility withdrew its request for interim rates
due to calculation errors.
The Utility requested that its application be processed using the Proposed Agency Action
(PAA) procedure. Royal's application for increased final water and wastewater rates is based on
the historical test year ended May 31, 2023. The requested final rates include adjustments for
seven pro forma plant addition projects (five water additions and two wastewater additions) and
five pro forma additions to operations and maintenance expenses.
Royal requested final rates designed to generate revenues of $837,140 for water
operations, and $805,685 for wastewater operations. This represents a revenue increase of
$66,835, or 8.7 percent, for water and $53,757, or 7.3 percent, for wastewater.
By letter dated September 13, 2023, Commission staff advised the Utility that its
Minimum Filing Requirements (MFRs) had deficiencies. Royal responded to that letter,
correcting some of the deficiencies, on September 15, 2023. Commission staff sent a second
deficiency letter on September 20, 2023. On the same day, the Utility provided responses to the
second deficiency letter. Royal corrected its deficiencies and the official filing date of the
application is September 20, 2023.
By ORDER NO. PSC-2023-0307-PCO-WS, issued October 16, 2023, we suspended final
rates proposed by the Utility to allow our staff sufficient time to process this case. The Office of
Public Counsel (OPC) intervened in this docket on November 14, 2023. We acknowledged
OPC’s intervention by ORDER NO. PSC-2023-0356-PCO-WS, issued on November 28, 2023.
Commission staff conducted a virtual customer meeting on December 11, 2023. The customer
comments filed in this docket are discussed in Section I.
We have jurisdiction pursuant to Sections 367.081 and 367.082, Florida Statutes (F.S.).
2ORDER NO. PSC-2024-0046-PAA-WS19867, issued August 22, 1988, in Docket No. 19880557-WS, In re:
Application of Royal Utility Company for transfer of Certifications Nos. 259-W and 199-S from University Utility
Corporation; and ORDER NO. PSC-2024-0046-PAA-WSPSC-2020-0458-PAA-WS, issued November 23, 2020, in
Docket No. 20190170-WS, In re: Application for transfer of facilities and Certificate Nos. 259-W and 199-S in
Broward County from Royal Utility Company to Royal Waterworks, Inc.

ORDER NO. PSC-2024-0046-PAA-WS
DOCKET NO. 20230081-WS
PAGE 3
Decision
I. 	Quality of Service
Pursuant to Section 367.081(2)(a)1., F.S., and Rule 25-30.433(1), F.A.C., we must make
a determination of the quality of service provided by the utility by evaluating in every rate case
the quality of the utility’s product (water) and the utility’s attempt to address customer
satisfaction (water and wastewater). The rule requires that we consider the most recent chemical
analyses, 	outstanding 	citations, 	violations, 	and 	consent 	orders 	on 	file 	with 	the 	Florida
Department of Environmental Protection (DEP) and the county health department, along with
any DEP and county health department officials’ testimony concerning quality of service. In
addition, we must also consider any customer testimony, comments, or complaints. The
operating condition of the water and wastewater systems are addressed in Section II.
A. 	Quality of Utility’s Product
In evaluation of Royal’s product, we reviewed the Utility’s compliance with the DEP
primary and secondary drinking water standards. Primary standards protect public health while
secondary standards regulate contaminates that may impact the taste, odor, and color of drinking
water. The most recent comprehensive chemical analyses was performed on September 6, 2023,
and all results were found to be in compliance with DEP regulations.
B. 	The Utility’s Attempt to Address Customer Satisfaction
We reviewed the complaints filed in the Commission’s Consumer Activity Tracking
System (CATS), complaints filed with the DEP, and complaints received by the Utility from
January 1, 2018, through December 31, 2023. During this time period, there were 15 complaints
filed in CATS, which were regarding quality of service, water pressure, water quality, and
improper bills. There were 29 complaints received by the DEP stating that the water is cloudy,
brown or yellow in color, has odor, tastes bad, and has hardness. There was one complaint filed
with the DEP in 2021 concerning the smell of the wastewater collection system. Over this same
time period, the Utility received 45 complaints. The majority of these complaints were regarding
its water system and reported low water pressure, no water, and leaks. The Utility responded to
the complaints by testing the meters, conducting testing for leaks, and flushing to improve the
water quality.
A virtual customer meeting was held on Monday December 11, 2023, where one
customer expressed concerns regarding the Utility’s reason for its requested rate increase and the
potential effects it could have on customers. That customer also provided a petition with 91
signatures opposing the rate increase.3 Five written comments were submitted that stated the rate
increase is unreasonable, and also reported sediment in the water, poor customer service, and
stated that boil water notices (BWN) were not timely received. We performed a supplemental
review of the complaints filed in CATS following the December 11, 2023 customer meeting
through January 22, 2024. One additional customer complaint was added to CATS; however, this
3Document No. 00142-2024, dated January 10, 2024.

ORDER NO. PSC-2024-0046-PAA-WS
DOCKET NO. 20230081-WS
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complaint was derived from the customer’s comment submitted to the docket file concerning the
overall rate increase, BWN timeliness, and a broken shut-off valve. In response to this complaint,
the Utility issued a service order to inspect the customer’s shut-off valve and explained that a
BWN was issued due to a power failure. The Utility also stated that the BWN was issued in
accordance with DEP Rules and was subsequently rescinded. Table 1 shows the number of
complaints, categorized by complaint type and source. The Utility has responded to customers
when a complaint was received. Additionally, the above information shows that Royal’s
customer complaints have decreased since the Utility’s transfer in 2019. Therefore, we find that
Royal has satisfactorily attempted to address its customer’s concerns.
Table 0
Number of Complaints by Type and Source
Correspondence /
Subject 	CATS 	Customer Meeting 	DEP 	Utility 	Total
Water Pressure 	2 	8 	10
Water Quality 	8 	1 	29 	2 	40
Customer Service 	2 	2
BWN not timely 	1 	1
No Water 	3 	6 	9
Condition of Meter 	1 	5 	6
Broken Valve 	1 	1
Billing 	1 	5 	6
Leaks 	19 	19
Rate Increase 	7 	7
Total* 	15 	12 	29 	45 	101
*A single customer complaint may be counted multiple times if it fits into multiple categories, was reported to
multiple agencies, or was reported multiple times.
C. 	Conclusion
Royal is meeting all DEP primary and secondary standards, and has been responsive to
customer complaints. Therefore, we find that the quality of service provided by Royal is
satisfactory.
II. 	Water System Compliance with DEP Regulations
Rule 25-30.225(2), F.A.C., 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. Rule 25-30.433(2), F.A.C., requires consideration of whether the infrastructure and
operating conditions of the plant and facilities are in compliance with Rule 25- 30.225, F.A.C. In
making this determination, we must consider testimony of the DEP and county health department
officials, sanitary surveys for water systems, compliance evaluation inspections for wastewater

ORDER NO. PSC-2024-0046-PAA-WS
DOCKET NO. 20230081-WS
PAGE 5
systems, citations, violations, consent orders issued to the utility, customer testimony, comments,
complaints, and utility testimony and responses to the aforementioned items.
A. 	Water System Infrastructure and Operating Conditions
Royal’s water system consists of three wells, each with a capacity of 350 gallons per
minute (gpm) for a total permitted design capacity of 1,050 gpm. The Utility also has three
storage units: two ground water storage tanks with a capacity of 500,000 gallons and 80,000
gallons, and a 10,000 gallon hydropneumatic tank. Royal uses gas and liquid chlorine to treat the
raw water. We reviewed Royal’s sanitary surveys conducted by the DEP to determine the
Utility’s overall water facility compliance. A sanitary survey was conducted on May 19, 2023,
indicating that Royal’s water treatment facility was not in compliance with the DEP’s rules and
regulations and there were deficiencies.4 The Utility corrected the deficiencies and notified the
DEP of the correction on June 14, 2023. On September 29, 2023, the DEP deemed Royal’s water
facilities to be in compliance with its rules and regulations. Royal does not have a wastewater
treatment plant, and purchases wastewater treatment from Broward County.
B. 	Conclusion
Royal’s water system is currently in compliance with DEP regulations.
III. 	Used and Useful Percentages, Excessive Unaccounted for Water, Infiltration and Inflow
Rule 25-30.4325, F.A.C., provides factors to be considered in determining used and
useful (U&U) and excessive unaccounted for water (EUW) calculations. As stated in Section II,
Royal’s water system is comprised of three wells with a permitted design capacity of 1,512,000
gpd, and three water tanks with a capacity of 590,000 gallons. We last determined Royal’s U&U
percentages in Docket No. 19820237-WS. 5
A. 	Used and Useful Percentages
Water Treatment Plant
Rule 25-30.4325(5), F.A.C., states that water treatment plant (WTP) U&U is calculated
by dividing the peak demand, which is based on the highest daily usage, by the firm reliable
capacity, which is the capacity of all wells excluding the single largest well. Pursuant to Rule 25-
30.4325(6)(b), F.A.C., 16 hours of pumping shall be used for the calculation when the system
has storage. The Utility calculated peak demand to be 679,000 gallons per day (gpd), and firm
reliable capacity to be 672,000 gpd. Royal calculated no EUW and a fire flow allowance of
4The deficiencies included leaky valves at the wells, a threaded raw water tap, corrosion on the wells, an aerator that
needed to be cleaned, and a leaking high service pump.
5ORDER NO. PSC-2024-0046-PAA-WS12170, issued June 24, 1983, in Docket No. 19820237-WS, In re:
Application of University Utility Corporation for an increase in its rates to its customers in Broward County,
Florida.

ORDER NO. PSC-2024-0046-PAA-WS
DOCKET NO. 20230081-WS
PAGE 6
120,000 gpd. In addition, the Utility calculated no growth as the system is built out. The result
([679,000 – 0 + 120,000 + 0]/672,000) is greater than 100 percent U&U. We agree with these
calculations, and find that the water treatment system is 100 percent U&U.
Water Storage
Rule 25-30.4325, F.A.C., states that water storage U&U is calculated by dividing the
peak demand by usable storage. A ground storage tank shall be considered 90 percent usable and
a hydropneumatic storage tank is considered zero percent usable. As noted in Section II, Royal
has two ground storage tanks with a total capacity of 580,000 gallons and one hydropneumatic
tank with a capacity of 10,000 gallons. The Utility calculated the water storage system to be 470
percent U&U based on a usable storage capacity of 170,000 gallons. Applying the rule to Royal,
we exclude the hydrodynamic tank from our calculation of usable storage, use 90 percent usable
storage for the ground storage tanks, and arrive at a usable storage value of 522,000 gallons. The
peak demand is 679,000 gallons. Rule 25-30.4325(8), F.A.C., states that if storage capacity is
less than the peak demand, the U&U shall be considered 100 percent. Therefore, we find that the
water storage system is 100 percent U&U.
Water Distribution and Wastewater Collection System
The water distribution and wastewater collection systems are evaluated based on
equivalent residential connections (ERCs) consisting of growth, customer demand, and system
capacity. There are 410 residential customers and 111 general service customers. The Utility
provided system maps that indicated all lots are connected to its water and wastewater systems.
Royal considers the service territory to be built out and does not anticipate any additional
growth. Considering all of the water mains and wastewater collection systems are required to
adequately serve the existing customers, and consistent with prior Commission practice, we find
the water distribution and the wastewater collection system be considered 100 percent U&U.
B. 	Excessive Unaccounted for Water
Rule 25-30.4325, F.A.C., provides factors to be considered in determining whether
adjustments to operating expenses are necessary for EUW. EUW is defined as “unaccounted for
water in excess of 10 percent of the amount produced.” Unaccounted for water is all water
produced that is not sold, metered, or accounted for in the records of the Utility. Royal estimated
no EUW based on producing 132,841,000 gallons, an estimated total sales of 118,679,000
gallons, and 19,750,000 gallons used for other uses, such as flushing, and to back wash the sand
filters at the water treatment plant during the test year. Our review confirmed the values for
water produced and other uses. Based on the audit report and our review, the actual gallons sold
during the test year were 117,540,000 gallons. The resulting calculation ([132,841,000 –
117,540,000 – 19,750,000] /132,841,000) for unaccounted for water is less than zero percent;
therefore, the Utility does not have any EUW. We find that that the EUW is zero percent and,
accordingly, Royal shall make no adjustments to purchased power and chemical expenses for
EUW.

ORDER NO. PSC-2024-0046-PAA-WS
DOCKET NO. 20230081-WS
PAGE 7
C. 	Infiltration and Inflow (I&I)
Infiltration typically results from groundwater entering a wastewater collection system
through broken or defective pipes and joints. Inflow results from water entering a wastewater
collection system through manholes or lift stations. By convention, the allowance for infiltration
is 500 gpd per inch diameter pipe per mile, and an additional 10 percent of residential water
billed is allowed for inflow.6 Rule 25-30.432, F.A.C., provides that in determining the
wastewater treatment plant amount of U&U, the Commission will consider I&I.
Since all wastewater collection systems experience I&I, the conventions noted above
provide guidance for determining whether the I&I experienced is excessive. We calculate the
allowable infiltration based on system parameters, and calculate the allowable inflow based on
water billed to customers. The sum of these amounts is the allowable I&I. We next calculate the
estimated amount of wastewater returned from customers. The estimated return is determined by
summing 80 percent of the water billed to residential customers with 96 percent of the water
billed to non-residential customers. Adding the estimated return to the allowable I&I yields the
maximum amount of wastewater that should be treated by the wastewater system without
incurring adjustments to operating expenses. If this amount exceeds the actual amount treated, no
adjustment is made. If it is less than the gallons treated, then the difference is the excessive
amount of I&I.
Royal calculated the allowance for infiltration as 10,965,347 gallons and the allowance
for inflow as 11,867,900 gallons; therefore, the total I&I allowance was calculated as 22,833,247
gallons. Based on Commission staff’s audit and our review, the total water billed to residential
customers was 50,447,000 gallons, and the total water billed to general service customers was
67,093,000. Therefore, the estimated amount of wastewater returned from customers was
calculated as 104,766,880 gallons. Summing the estimated return and the allowable I&I results in
a maximum of 127,486,227 gallons of wastewater that should be treated by the wastewater
system without incurring adjustments to operating expenses. As stated in Section II, Royal does
not have a wastewater treatment plant and purchases wastewater treatment from Broward
County. The Utility purchased 90,835,000 gallons. Based on the calculation (90,835,000 –
127,486,227), there is no excessive I&I and no adjustment to purchased power and chemicals is
warranted.
D. 	Conclusion
Based on the above, we find that that Royal’s water treatment, storage, and distribution
systems, as well as its wastewater collection system shall be considered 100 percent U&U.
Additionally, we find that no adjustments to purchased power and chemical expenses shall be
made for EUW and I&I.
6See ORDER NO. PSC-2024-0046-PAA-WSPSC-16-0525-PAA-WS issued November 21, 2016 in Docket No.
20160030-WS, In re: Application for increase in water rates in Lee County and wastewater rates in Pasco County
by Ni. Florida, LLC. and ORDER NO. PSC-2024-0046-PAA-WSPSC-15-0208-PAA-WS issued May 26, 2015 in
Docket No. 20140135-WS, In re: Application for increase in water/wastewater rates in Pasco County by Labrador
Utilities, Inc.

ORDER NO. PSC-2024-0046-PAA-WS
DOCKET NO. 20230081-WS
PAGE 8
IV. 	Adjustments to the Utility’s Water and Wastewater Test Year Rate Base
In MFR Schedule A-17, the Utility recorded a test year working capital balance of
$75,159 for water and $72,205 for wastewater. In this calculation, the Utility incorrectly
included $3,117 of pro forma expense related to operation and maintenance (O&M) Account 757
during the test year. As discussed in Section XII, we calculate a total test year O&M balance of
$589,570 for water and $558,281 for wastewater. Section 367.081(9), F.S., prohibits a utility
from earning a return on the unamortized balance of rate case expense (RCE). RCE has not been
included in the test year totals. Accordingly, we calculated test year working capital expense of
$73,696 ($589,570 ÷ 8) for water and $69,785 ($558,281 ÷ 8) for wastewater. This results in a
decrease to the Utility’s test year working capital expense of $1,463 ($75,159 - $73,696) for
water and $2,420 ($72,205 - $69,785) for wastewater.
Pro forma adjustments to Royal’s Utility Plant in Service (UPIS) and accumulated
depreciation are detailed in Section V.
Based on the calculations discussed immediately above, we have decreased the Utility’s
test year rate base by $1,463 for water and $2,420 for wastewater.
V. 	Adjustments to the Utility’s requested pro forma
The Utility requested five pro forma plant additions totaling $85,451 for water, and two
pro forma plant additions totaling $69,065 for wastewater. With these pro forma additions, the
Utility requested pro forma accumulated depreciation of $1,764 for water and $1,918 for
wastewater. These additions are reflected in revised MFR Schedule A-3. The Utility also
requested five pro forma additions to O&M expenses totaling $25,751 for water and $79,836 for
wastewater. These additions are reflected in revised MFR Schedules B-5 and B-6. Each of the
Utility’s requested pro forma adjustments is discussed below.
A. 	Pro Forma Plant Addition Projects
Repave Water Treatment Plant Parking Lot
Royal requested recovery of costs associated with repaving its WTP parking lot. The
Utility stated the WTP parking lot and driveway were in disrepair and there were several areas
where the asphalt had been compromised. The repaving project was completed on August 18,
2023. Royal received two quotes for this project, one for $22,443 and the other for $52,222.
Commission staff inquired as to why only two quotes were obtained, and Royal stated that it was
difficult to get additional quotes for the following reasons: (1) if contractors believed that they
would not be awarded the project they would refrain from bidding; (2) supply chain shortages;
(3) contractors are not interested in bidding for smaller projects; and (4) employee shortages.
There is no retirement associated with this project since the existing pavement was repaved. The
Utility provided an invoice for the project totaling $24,687, which included the cost of the
project ($22,443) and a 10 percent overhead markup by U.S. Water Services Corporation (U.S.

ORDER NO. PSC-2024-0046-PAA-WS
DOCKET NO. 20230081-WS
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Water) for its contractual services. The Utility recorded a cost of $22,443 for paving the WTP
parking lot. The Utility shall increase plant account 304 by $2,244 ($24,687- $22,443) to cover
the full cost of this project.
Refurbish WTP Control Panel
Royal refurbished its WTP Control Panel in July 2023 due to faulty alarm signals and the
overall poor condition of the panel. The WTP Control Panel monitors and controls various
components of the WTP such as monitoring the water levels in the tanks and operating the high
service pumps, wells, and valves. Royal explained that the refurbished panel provides reliable
real-time monitoring. In addition, the new interface allows the operator to control pumps and
settings through a digital screen display instead of requiring system changes be completed
physically through an analog system. This new control panel will be used with the new
Supervisory Control and Data Acquisition (SCADA) system that is being installed at the WTP.
Royal received one quote for this project and repeated the same reasons listed above to explain
why three quotes were not obtained for this project. In addition, Royal pointed out that this is a
complex and specialized project and not many contractors do this type of work. In its MFRs, the
Utility did not request retirement for this project. However, as indicated in discovery, Royal now
agrees with our past practice of retiring 75 percent of the new cost; therefore, the retirement
amount is $35,085. The invoice provided by the Utility showed a total project cost of $46,780,
which included the cost of the project ($42,527) and a 10 percent overhead markup by U.S.
Water. The Utility recorded a cost of $49,500 for refurbishing the WTP control panel.
Accordingly, the Utility shall decrease plant account 320 by $2,720 ($49,500 - $46,780).
Influent Meter Replacement
The Utility requested cost recovery for an influent meter replacement. The manufacture
of Royal’s existing influent meter was discontinued several years ago and replacement parts are
no longer available. Royal received one quote for this project for $4,568, but was unable to
obtain two additional quotes for the same reasons previously stated. The new meter was ordered
and installed in June 2023. The Utility recorded $4,600 for the replacement of the influent meter.
Based on our past practice, equipment retirement is calculated based on 75 percent of the new
equipment’s cost.7 The Utility agrees with our practice and that the appropriate retirement
amount is $3,426; however, the Utility did not record any retirement in its MFRs. Accordingly,
the Utility shall decrease plant account 309 by $32 ($4,600 - $4,568) to cover the replacement
cost of the influent meter.
7Order Nos. PSC-16-0525-PAA-WS, issued November 21, 2016, in Docket No. 20160030-WS, In re: Application
for increase in water rates in Lee County and wastewater rates in Pasco County by Ni Florida, LLC.; PSC-13-0187-
PAA-WS, issued May 2, 2013, in Docket No. 20120152-WS, In re: Applications for increase in water and
wastewater rates in Orange County by Pluris Wedgefield, Inc.; and PSC-11-0587-PAA-SU, issued December 2011,
in Docket No. 20110153-SU, In re: Application for increase in wastewater rates in Lee County by Utilities, Inc. of
Eagle Ridge.

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DOCKET NO. 20230081-WS
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Generator Radiator Repair
In July 2023, an emergency repair was completed on Royal’s main generator that
provides back-up power to the WTP, as required by DEP. When the generator was routinely
being tested, a leak in the radiator was discovered. The contractor was unable to repair the leak
and the radiator had to be refurbished (re-cored), which consisted of removing the old leaky core
and replacing it with a new clean core. As this was an emergency repair, the Utility only
contacted one contractor. The contractor charged $628 for the first attempt to repair the radiator
and $7,470 to re-core the radiator. U.S. Water billed Royal for this emergency repair with a 10
percent markup, consistent with its operations contract, for a total of $8,908, which was the total
recorded by the Utility for this project. There is no retirement associated with this project, as it
was a repair to the Utility’s existing main generator. Therefore, we make no adjustment to the
requested amount for plant account 310.
SCADA for WTP
The Utility requested cost recovery for installing SCADA at the WTP. In its MFRs,
Royal erroneously included the amount to install the SCADA for the WTP within the Lift Station
Control Panel project, which is a separate SCADA project, and is discussed in greater detail
below. Royal explained that SCADA systems are focused on control-system operations and have
a huge capacity for data collection. The SCADA records the parameters needed to determine
how efficiently the system is operating. The WTP SCADA project was completed December 6,
2023. Royal did not acquire three quotes because this project is complex and specialized. The
cost of the project is $59,000. There is no retirement for this project as this is a new SCADA
system. The Utility shall add $59,000 to account 320 for this pro forma plant addition.
Lift Station Control Panel
The Utility requested cost recovery for installing SCADA at its four lift stations. The
installations were completed the week of December 1, 2023. The SCADA system at the master
lift station will communicate with the three smaller lift stations to prevent overflows. Royal did
not acquire three quotes because this project is complex and specialized. For this project, the
Utility recorded a total of $61,500; however, the quoted price is $40,267. There is no retirement
for this project as this is a new SCADA system. Therefore, the Utility shall decrease plant
account 371 by $21,233 ($61,500 - $40,267) for this pro forma plant addition.
Wire Harness Replacement- Master Lift Station
Royal replaced a wire harness at its master lift station as an emergency repair in order to
keep the bypass pump operational to avoid a sewage overflow. The project was completed on
May 31, 2023, and Royal received an invoice for $7,565, which was the total amount recorded
by the Utility for this project. The Utility utilized the manufacturer of the bypass pump to
complete this repair. There is no pro forma cost recovery of this project since it was completed
during the test year.

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DOCKET NO. 20230081-WS
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Tables 2 and 3 compare the Utility’s requested and our approved pro forma cost recovery
for each of the Utility’s seven pro forma projects discussed above. The Utility shall increase
adjustments to its pro forma plant additions by $19,981 for water and decrease the adjustment to
its pro forma plant by $28,798 for wastewater. Additionally, Table 4 compares the Utility’s
requested and our approved retirement amounts for the Utility’s three applicable projects.
Table 2
Pro Forma Plant Addition Projects – Water System
Plant Account
Number 	Project Name 	Utility Requested*
Commission
Approved 	Difference
304 	Paving of WTP Parking Lot 	$22,443 	$24,687 	$2,244
320 	Refurbish WTP Control Panel 	$49,500 	$46,780 	($2,720)
309 	Influent Meter Replacement 	$4,600 	$4,568 	($32)
310 	Generator Radiator Repair 	$8,908 	$8,908 	$0
320 	SCADA for WTP 	$0 	$59,000 	$59,000
Total Water Pro Forma Project 	$85,451 	$143,943 	$58,492
*Utility requested amounts are based on the Utility’s revised A-3 MFR Schedule
Table 3
Pro Forma Plant Addition Projects – Wastewater System
Plant Account
Number 	Project Name 	Utility Requested*
Commission
Approved 	Difference
371 Wire Harness Replacement at
Master Lift Station** 	$7,565 	$0 	($7,565)
371 	Lift Station Control Panel 	$61,500 	$40,267 	($21,233)
Total Wastewater Pro Forma Projects 	$69,065 	$40,267 	($28,798)
*Utility requested amounts are based on the Utility’s revised A-3 MFR Schedule
**Project completed during test year
Table 4
Pro Forma Plant Addition Retirements
Project Name 	Utility Requested* 	Commission Approved
Refurbish WTP Control Panel 	$35,085 	$35,085
Influent Meter Replacement 	$3,450 	$3,426
Wire Harness Replacement at Master List Station** 	$0 	$0
*Utility requested amounts are based on the Utility’s revised A-3 MFR Schedule
**Project completed during test year
B. 	Pro Forma Accumulated Depreciation
Based on the Utility’s requested pro forma plant projects described above, Royal
recorded $1,765 in accumulated depreciation for water and $1,918 for wastewater. With our
adjustments to pro forma additions described above, accumulated depreciation is increased by
$469 for water and decreased accumulated depreciation for wastewater by $799.

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C. 	Pro Forma Depreciation Expense
We made corresponding adjustments to pro forma depreciation expense based on the
accumulated depreciation adjustments above. Therefore, the Utility shall increase pro forma
depreciation expense by $469 for water and decrease pro forma depreciation expense for
wastewater by $799.
D. 	Property Taxes Associated With Pro Forma Projects
On MFR Schedule B-15, the Utility recorded property tax on pro forma plant as $2,570
for water and $5,954 for wastewater. Based on our adjustments above, the Utility shall reduce
taxes other than income (TOTI) by $553 for water and $5,189 for wastewater to reflect the
appropriate property taxes associated with pro forma plant.
E. 	Pro Forma O&M Expenses
The Utility recorded pro forma O&M expense of $25,751 for water and $79,836 for
wastewater, respectively. These pro forma expenses included an increase in the U.S. Water
contract cost, an increased cost of purchased sewage treatment, an increase in insurance
premiums, rate case expense, and the removal of lime for the water system. No adjustments shall
be made to the U.S. Water contract or purchased sewage treatment costs.
Insurance Expense
The Utility recorded insurance expense of $3,117 for wastewater during the test year.
This amount reflects an increase in the insurance premium going forward, so it shall be included
as pro forma, not during the test year. We made a test year adjustment decreasing the wastewater
insurance expense by $3,117 and increasing wastewater pro forma expense by $3,117. There are
no adjustments to the water system, as the $3,117 insurance premium increase was correctly
recorded as pro forma by the Utility.
Rate Case Expense
We recalculated rate case expense (RCE) and allocated the costs between the water and
wastewater systems based on the number of customers. As such, we increased RCE by $526 for
water and decreased RCE by $31 for wastewater.
Miscellaneous Expense
Royal cleans its discharge ponds to remove lime buildup on an as-needed basis or
approximately every two years based on the water quality and water demand. The Utility
provided three quotes for the cleaning service. The first quote of $43,247 is based on the removal
of 1,444 cubic yards (Cu/Yd) of lime at $24.95 per Cu/Yd and a 20 percent allowance for
overages. The second quote consists of $6,000 plus a price per Cu/Yd of $24.90 for the removed
lime. The third quote is a flat amount of $70,550 to complete the work. The Utility chose the

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second contractor to complete the work. That contractor removed 2,244 Cu/Yd of lime. The
project was completed on August 18, 2023, and the invoice was for $68,063 which includes a 10
percent markup for the contractual services of U.S. Water. The Utility recorded a cost of $60,000
for this project. We find that the expense amount is $68,063, which covers the full cost of the
lime removal. The Utility did not amortize this amount; however, the Utility agrees that this
amount should be amortized over a two-year period, equaling $34,031 ($68,063 ÷ 2). Therefore,
the miscellaneous expense for water is decreased by $25,969 ($60,000 - $34,031).
F. 	Conclusion
We have increased UPIS by $58,492 for water, which was partially offset by a retirement
of $38,511, resulting in a net increase of $19,981 ($58,492 - $38,511). We decreased UPIS by
$28,798 for wastewater to reflect pro forma adjustments. Also, we increased accumulated
depreciation by $469 for water, and decreased accumulated depreciation for wastewater by $799.
Corresponding adjustments were also made increasing depreciation expense by $469 for water;
and decreasing depreciation expense for wastewater by $799. Additionally, we decreased
property taxes associated with pro forma by $553 for water and $5,189 for wastewater. Finally,
we have decreased pro forma O&M expenses by $25,443 for water and increased pro forma
expenses by $3,086 for wastewater.
VI. 	Appropriate Rate Base for the Test Year ended May 31, 2023
In its MFRs, the Utility requested a rate base of $1,083,114 for water and $515,481 for
wastewater. Based on the adjustments discussed above, the resulting rate base is $1,097,810 for
water and $485,348 for wastewater. The rate base schedules are attached as Schedule Nos. 1-A
and 1-B for water and wastewater, respectively. Adjustments to rate base are shown on Schedule
No. 1-C.
VII. 	Appropriate return on equity (ROE)
The ROE included in the Utility’s MFR Schedule D-1 is 9.70 percent. Based on the
current leverage formula in effect, and the Utility’s equity ratio of 54.11 percent, the appropriate
ROE is 9.71 percent.8 We recognize an allowed range of plus or minus 100 basis points for
earnings purposes.
VIII. 	Appropriate weighted average cost of capital for the test year ended May 31, 2023
In its filing, the Utility requested an overall cost of capital of 6.74 percent. The Utility’s
capital structure consists of long-term debt, common equity, and customer deposits. Based upon
8ORDER NO. PSC-2024-0046-PAA-WSPSC-2023-0189-PAA-WS, issued June 28, 2023, in Docket No. 20230006-
WS, In re: Water and wastewater industry annual reestablishment of authorized range of return on common equity
for water and wastewater utilities pursuant to Section 367.081(4)(f), F.S.

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DOCKET NO. 20230081-WS
PAGE 14
the proper components, amounts, and cost rates associated with the capital structure, the
appropriate weighted average cost of capital for the test year ended May 31, 2023, is 6.74
percent. Schedule No. 2 details the overall cost of capital.
IX. 	Appropriate Test Year Operating Revenues
In its revised MFRs, Royal’s test year operating revenues were $734,186 for water and
$761,470 for wastewater. The water revenues included $727,552 of service revenues and $6,635
of miscellaneous revenues. The wastewater revenues consisted of service revenues of $761,470.
The Utility was approved for a price index increase effective June 3, 2023. Therefore, we
annualized test year operating revenues by applying the number of billing determinants for water
and wastewater. As a result, we find that service revenues for water shall be $763,998, which is
an increase of $36,446 ($763,998 – $727,552). The service revenues for wastewater shall be
$751,928, which is a decrease of $9,542 ($761,470 - $751,928).
For miscellaneous revenues, the appropriate amount is $6,248 based on the number of
miscellaneous occurrences during the test year. We reduced miscellaneous revenues by $387
($6,635-$6,248). Based on the above, the appropriate test year revenues for the Utility’s water
system, including miscellaneous revenues, are $770,246 ($763,998 + $6,248) and $751,928 for
the wastewater system.
X. 	Adjustments to the Water and Wastewater O&M Expenses
Based on our review of the Utility’s O&M expenses, we find that the Utility shall make
several adjustments as summarized below.
A. 	Salaries & Wages – Officers (603/703)
In its filing, the Utility recorded officer’s salaries and wages of $30,000 for water and
$28,000 for wastewater. Using 2022 Annual Reports, OPC, in a letter sent to the Commission
Clerk and included in the docket file, stated that the President’s collective salary was $205,850
for 52 percent of time spent on Florida Community Water Systems, Inc., Sunny Hills Utility
Company, Seminole Waterworks Inc., Royal Waterworks, Inc. and HC Waterworks, Inc. At 100
percent time spent, an effective annual salary would equate to $395,865. Furthermore, OPC
noted that assuming 10 percent of the President’s time spent is on the remaining systems there
would be 38 percent of time remaining to devote to other positions. These positions include
serving as the Chief Executive Officer of the US Water Services Corporation as well as upper
management in 10 other companies.
In response to OPC’s concerns, Royal argued the salary is much less when you take into
consideration items that are a responsibility of the Officer, but not included in their salary, such
as insurance, tax, retirement benefits, and expenses while on the job. Also, the Utility noted that
geographical location should be considered, as the service territory of Royal and its sister utilities
span as far north as Okaloosa County down to Broward County. Furthermore, Royal argued that

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PAGE 15
OPC’s suggested salary of $6,244 and $7,551 is unrealistic and would make it impossible to hire
a qualified President like Mr. Deremer.
OPC suggested that any recommended salary amount be allocated “based on the number
of customers or ERCs of Royal and its sister jurisdictional and non-jurisdictional companies.” In
response to Staff’s Fourth Data Request, the Utility stated the total number of ERCs under U.S.
Water ownership is 12,643. This amount reflects both jurisdictional (11,280.5) and non-
jurisdictional (1,362.5) companies. Royal is the largest of all U.S. Water-affiliated companies,
either jurisdictional or non-jurisdictional, and makes up 18.95 percent of the total ERCs. Of that,
59.83 percent are allocated to water, and 40.17 percent are allocated to wastewater.
To ensure consistency with prior approvals of salaries for U.S. Water-affiliated systems,
we look to the most recent U.S. Water-affiliated rate case, which involved LP Waterworks, Inc.
(LP), for guidance.9 In that rate case, where only the water system was included, we approved an
owner’s salary of $6,300. The water system for LP makes up 56.27 percent of the entire utility.
Therefore, we calculate an owner’s total salary for LP – including both water and wastewater –
of $11,196 ($6,300 ÷ 56.27 percent). According to the Utility’s response to Staff’s Fourth Data
Request, LP comprises 7.04 percent of all U.S. Water-affiliated companies.
To calculate a total amount of owner’s salary for all U.S. Water-affiliated systems, we set
7.04 percent of the amount at $11,196. This calculation provided an owner’s salary for all U.S.
Water-affiliated systems of $159,034 ($11,196 ÷ 7.04 percent). As stated earlier, Royal
represents 18.95 percent of U.S. Water, calculating to an owner’s salary for Royal of $30,137
($159,034 x 18.95 percent). Split between water (59.83 percent) and wastewater (40.17 percent),
we find that the appropriate owner’s salary is $18,031 for water and $12,106 for wastewater.
These amounts result in a decrease of $11,969 for water, and a decrease of $15,894 for
wastewater.
B. 	Contractual Services – Accounting (632/732)
In its filing, the Utility recorded contractual services – accounting expenses of $450 for
water and $450 for wastewater. Audit Finding 1 contains a determination from Commission staff
the Utility had duplicative charges in the amount of $200 for each system. Based on this Finding,
we decrease contractual services – accounting by $200 for water, and $200 for wastewater. The
appropriate expense amounts for contractual services – accounting are $250 for water and $250
for wastewater.
C. 	Contractual Services – Legal (633/733)
In its filing, the Utility recorded contractual services – legal expenses of $350 for water
and $350 for wastewater. Audit Finding 1 contains a determination from Commission staff that
the Utility had duplicative charges in the amount of $200 for each system. Based on this Finding,
9ORDER NO. PSC-2024-0046-PAA-WSPSC-2023-0101-PAA-WS, issued February 28, 2023, in Docket No.
20220099-WS, In re: Application for staff-assisted rate case in Highlands County by LP Waterworks, Inc.

ORDER NO. PSC-2024-0046-PAA-WS
DOCKET NO. 20230081-WS
PAGE 16
we decrease contractual services – legal by $200 for water, and $200 for wastewater. The
appropriate expense amounts for contractual services – legal are $150 for water and $150 for
wastewater.
D. 	Contractual Services – Other (636/736)
In its filing, the Utility recorded contractual services – other expenses of $396,688 for
water and $213,700 for wastewater. Audit Finding 1 contains a determination from Commission
staff that $26 was erroneously recorded in water, when it should have been recorded to
wastewater. Accordingly, contractual services – other shall be decreased by $26 for water and
increased by $26 for wastewater.
E. 	Insurance Expense (657/757)
In its filing, the utility recorded insurance expenses of $7,796 for water and $7,796 for
wastewater. Audit Finding 1 contains a determination from Commission staff that the Utility’s
recorded amount was understated by $358 for each system. An expense of $336 for storage tank
insurance was erroneously recorded for wastewater, when it should have been recorded to water.
Additionally, as discussed in Section VII, the Utility recorded $3,117 during the test year for a
wastewater insurance premium increase. This amount shall be recorded as a pro forma expense.
Therefore, O&M Account 758 shall be decreased by $3,117 during the test year and reclassified
as pro forma. In total, insurance expense shall be increased by $694 ($358 + $336) for water and
decreased by $3,095 ($358 - $336 - $3,117) for wastewater.
F. 	Test Year O&M Adjustments
As described above and summarized in Table 5, the Utility shall adjust test year O&M by
decreasing $11,701 for water, and $19,363 for wastewater.
Table 5
Commission Adjustments to O&M
Account 	Water 	Wastewater
Salaries & Wages – Officers 	($11,969) 	($15,894)
Contractual Services – Accounting 	(200) 	(200)
Contractual Services – Legal 	(200) 	(200)
Contractual Services – Other 	(26) 	26
Insurance Expense 	694 	(3,095)
Total Test Year O&M Adjustments 	($11,701) 	($19,363)
G. 	Pro Forma O&M Expenses
As discussed in Section V, the Utility shall adjust pro forma O&M expenses by
decreasing those expenses by $25,443 for water, and increasing them by $3,086 for wastewater.

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DOCKET NO. 20230081-WS
PAGE 17
H. 	Conclusion
Based on the above adjustments, the Utility shall decrease O&M by $37,144 ($11,701 +
$25,443) for water and $16,277 ($19,363 - $3,086) for wastewater.
XI. 	Other Adjustments to the Utility’s Operating Expenses
We find that several adjustments to the Utility’s operating expenses are appropriate.
A. 	Net Depreciation Expense
In its filing, the Utility recorded test year net depreciation expense of $71,194 for water
and $45,560 for wastewater.10 This amount shall be increased by $91 for water and $1,371 for
wastewater to reflect the appropriate test year depreciation expense. As discussed in Section V,
an increase in depreciation expense by $469 for water and decrease in depreciation expense by
$799 for wastewater are necessary to reflect the appropriate depreciation expense associated with
pro forma additions. Therefore, net depreciation expense shall be increased by $560 ($91 +
$469) for water and $572 ($1,371 - $799) for wastewater.
B. 	Taxes Other Than Income
In MFR Schedule B-15, the Utility recorded property taxes of $28,272 for water and
$31,656 for wastewater. These amounts included property taxes associated with pro forma. As
discussed in Section V, property taxes associated with pro forma have been decreased by $553
for water and $5,189 for wastewater. In addition to property taxes, the Utility recorded
Regulatory Assessment Fees (RAFs) on test year revenues of $34,664 for water and $33,837 for
wastewater. As discussed in Section IX, test year revenues are being decreased by $59 for water.
RAFs on the test year revenues are reduced by $3 to reflect this decrease. No adjustment to
wastewater revenues is necessary. These adjustments resulted in a net decrease of $556 ($553 +
$3) for water, and $5,189 for wastewater.
Additionally, as discussed in Section XIII, revenues are increased by $29,099 for water
and $29,778 for wastewater in order to reflect the change in revenue required to cover expenses
and allow an opportunity to earn the approved rate of return. As a result, TOTI is increased by
$1,309 for water and $1,340 for wastewater to reflect RAFs of 4.5 percent on the change in
revenues.
C. 	Conclusion
Based on the adjustments above, the Utility’s test year operating expenses shall be
increased by $1,313 ($560 - $556 + $1,309) for water and operating expenses shall be decreased
by $3,277 ($572 - $5,189 + $1,340) for wastewater.
10 Net depreciation expense for the water system included $71,266 for depreciation and ($72) for amortization of
Contribution-in-Aid of Construction (CIAC).

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PAGE 18
XII. 	Appropriate Operating Expenses for the Test Year ended May 31, 2023
In its MFRs, the Utility recorded operating expenses of $761,150 for water and $768,533
for wastewater. Based on the adjustments described above, the appropriate operating expenses
for the test year ended May 31, 2023, are $725,319 for water and $748,979 for wastewater.
Water 	and 	wastewater 	operating 	expenses 	are 	shown 	on 	Schedule 	Nos. 	3-A 	and 	3-B,
respectively. Adjustments to operating expenses are shown on Schedule No. 3-C.
XIII. 	Appropriate Revenue Requirements for the Test Year ended May 31, 2023
In its filing, the Utility requested an annual revenue requirement of $837,140 for water
and $805,685 for wastewater. These requested revenues represent an increase of $66,835 (or
8.68 percent) for water and $53,757 (or 7.15 percent) for wastewater. Consistent with our
findings regarding rate base, cost of capital, and operating income sections, we find a revenue
requirement of $799,345 for water and $781,706 for wastewater to be appropriate.
Table 6
Commission Approved Revenue Requirement – Water
Test Year 	Revenue
Revenue 	$ Increase 	Requirement 	% Increase
$770,246 	$29,099 	$799,345 	3.78%
Table 7
Commission Approved Revenue Requirement – Wastewater
Test Year 	Revenue
Revenue 	$ Increase 	Requirement 	% Increase
$751,928 	$29,778 	$781,706 	3.96%
XIV. 	Appropriate Rate Structures and Rates
A. 	Water Rates
Royal Waterworks is located in Broward County within the South Florida Water
Management District. The Utility provides water service to 410 residential customers with 400 of
the customers having a separate meter for irrigation. There are 111 general service customers,
which consists of multi-family customers, gas stations, banks, restaurants, beauty parlors,
dentists, and other various businesses. According to the billing data, approximately 29 percent of
the residential customer bills during the test year had zero gallons, indicating a seasonal
customer base. The average residential water demand is 5,210 gallons. The average residential
water demand excluding zero gallon bills is 7,369 gallons per month. Currently, the Utility’s
water rate structure for the residential and general service classes consist of a traditional monthly

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PAGE 19
base facility charge (BFC) and uniform gallonage charge. In addition, the Utility has private fire
protection rates.
We analyzed the Utility’s billing in order to evaluate the appropriate rate structure for the
residential water customers. The goal of the evaluation was to select the rate design parameters
that: (1) produce the approved revenue requirement; (2) equitably distribute cost recovery among
the Utility’s customers; (3) establish the appropriate non-discretionary usage threshold for
restricting repression; and (4) implement, where appropriate, water conserving rate structures
consistent with Commission practice.
For this case, we find that 35 percent of the water revenues shall be generated from the
BFC, which will provide sufficient revenues to design gallonage charges that send the
appropriate pricing signals to the customers using above the non-discretionary level. The average
number of people per household served by the water system is 2.6. 11 Based on the number of
people per household, a 50 gallon per person daily consumption estimate, and the number of
days per month, the non-discretionary usage threshold is 4,000 gallons per month. Our review of
the billing data indicates that discretionary usage above 4,000 gallons represents approximately
34 percent of the bills, which account for approximately 56 percent of water demand. This
indicates that there is a significant amount of discretionary usage above 4,000 gallons.
In its MFRs, the Utility proposed a continuation of the monthly BFC and uniform
gallonage charge for its residential and general service classes. As set forth in Section XIII, the
appropriate 	revenue 	requirement 	increase 	is 	3.78 	percent. 	Typically, 	when 	the 	revenue
requirement is less than 20 percent, we approve an across-the-board increase to the existing rates.
However, in this case, we find it appropriate to redesign the rates because Royal’s meter
equivalents are incorrect. The meter equivalents for Royal’s existing rates are not based on the
American Water Works Association (AWWA) meter equivalents, which are contained in Rule
25-30.055, F.A.C., and used by us when designing rates. The Utility’s proposed final water rates
are consistent with the AWWA meter equivalents.
The meter equivalents assign the demand on a system as well as cost recovery by meter
size in terms of equivalent residential connections (ERCs). In comparison to the AWWA meter
equivalents, Royal’s meter equivalents for larger meter sizes are significantly higher than the
AWWA. Redesigning rates based on the AWWA meter equivalents distributes the cost recovery
to the appropriate meter sizes. If this proceeding were a revenue-neutral rate restructuring to fix
the meter equivalents, using the Utility’s existing BFC and gallonage revenue recovery
percentages would result in a BFC of $22.06 for the 5/8 inch x 3/4 inch meter size (compared to
the existing BFC of $13.29). Absent this correction to the meter equivalents, the customers at the
larger meter sizes would continue to subsidize the customers at the 5/8 inch x 3/4 inch meter
size. Although the overall revenue increase is 3.78 percent, correcting the meter equivalents
creates a higher percentage increase to the overall bill for customers with 5/8 inch x 3/4 inch
11 Average person per household was obtained from website: www.census.gov/quickfacts/Browardcountyflorida, last
checked 01/24.

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meter sizes. Table 8 below shows a comparison of the AWWA meter equivalents to Royal’s
existing meter equivalents.
Table 8
Comparison of ERCs
Meter Sizes 	AWWA 	Royal
5/8” x 3/4” 	1 	1
1” 	2.5 	6.8
1-1/2” 	5 	13.6
2” 	8 	21.8
3” 	15 	43.6
In addition to correcting the meter equivalents, we evaluated designing an inclining block
rate structure due to high discretionary usage. We assumed that a three-tier inclining block was
appropriate. However, a three-tier inclining block rate structure resulted in lower percentage
price increases at discretionary levels of consumption, which is contrary to our rate design goals
due to the low revenue requirement increase. For this reason, we find a two-tier inclining block
rate structure, which includes separate gallonage charges for non-discretionary and discretionary
usage for residential water rates, to be appropriate. The rate blocks are: (1) 0 - 4,000 gallons; and
(2) all usage in excess of 4,000 gallons per month. This rate structure will target those customers
with higher levels of consumption. General service customers shall continue to be billed a BFC
and uniform gallonage charge. Under Rule 25-30.465, F.A.C., private fire protection customers
are to be billed one-twelfth of the BFC for the respective meter size.
Based a revenue increase of 3.8 percent, which excludes miscellaneous revenues,12 the
residential consumption can be expected to decline by 3,156 gallons resulting in an anticipated
average residential demand of 4,884 gallons per month. We find that a 6.3 percent reduction in
test year residential gallons is appropriate for ratesetting purposes. As a result, the corresponding
reductions for purchased power expense is $1,158, $1,948 for chemicals expense, and $146 for
RAFs 	to 	reflect 	the 	anticipated 	repression, 	which 	results 	in 	a 	post-repression 	revenue
requirement of $788,910.
B. 	Wastewater Rates
The Utility provides wastewater service to 410 residential customers and 111 general
service customers. As mentioned earlier, the general service customers consists of various types
of businesses. Currently, the residential wastewater rate structure consists of a uniform BFC for
all meter sizes and a gallonage charge with a 10,000 gallon cap. The general service rate
structure consists of a uniform BFC for all meter sizes and a gallonage charge that is 1.2 times
higher than the residential gallonage charge.
12 For ratesetting purposes, we have increased miscellaneous revenues to reflect the approved change to
miscellaneous service charges in Section XVII.

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We analyzed the Utility’s billing data to evaluate various BFC cost recovery percentages
and gallonage caps for the residential customers. The goal of our evaluation was to select the rate
design parameters that: (1) produce the approved revenue requirement; (2) equitably distribute
cost recovery among the Utility’s customers; and (3) if appropriate, implement a gallonage cap
that considers approximately the amount of water that may return to the wastewater system.
Similarly to the water rates, Royal’s meter equivalents are not based on the AWWA
meter equivalents for the wastewater rates. If this proceeding were a revenue neutral-rate
restructuring to fix the meter equivalents, using the Utility’s existing BFC and gallonage revenue
recovery percentages would result in a BFC of $26.33 for the 5/8 inch x 3/4 inch meter size
(compared to its existing $13.45). Therefore, we redesigned the wastewater rates to be consistent
with the AWWA meter equivalents. The Utility’s proposed final wastewater rates are consistent
with the AWWA meter equivalents.
Consistent with our practice, we allocate 50 percent of the wastewater revenue to the
BFC due to the capital-intensive nature of wastewater plants. The Utility’s current wastewater
gallonage cap is set at 10,000 gallons per month. The wastewater gallonage cap recognizes that
not all water used by the residential customers is returned to the wastewater system. Our practice
is to set the wastewater cap at approximately 80 percent of residential water sold, which typically
results in gallonage caps of 6,000, 8,000, or 10,000. Based on our review of the billing analysis,
85 percent of the gallons are captured at the 8,000-gallon consumption level. Therefore, we find
that the gallonage cap for residential customers shall be reduced to 8,000 gallons. The general
service gallonage charge shall continue to be 1.2 times greater than the residential gallonage
charge, which is consistent with our practice.
In addition, wastewater rates are calculated on customers’ water demand. If those
customers’ water demand is expected to decline due to repression, then the billing determinants
used to calculate wastewater rates should be adjusted accordingly. In determining the number of
wastewater gallons subject to repression, we use the gallons between the non-discretionary
threshold and the wastewater gallonage cap and apply the percentage reduction in water gallons.
In this case, the result is a .29 percent reduction to the wastewater gallons for ratesetting
purposes, which is de minimis.
C. 	Conclusion
The Utility shall implement the rate structures and monthly water and wastewater rates
shown on Schedule Nos. 4-A and 4-B, attached hereto. The Utility shall file revised tariff sheets
and a proposed customer notice to reflect these approved rates. The approved rates shall be
effective for service rendered on or after the stamped approval date on the tariff sheet pursuant to
Rule 25-30.475(1), F.A.C. In addition, the approved rates may not be implemented until staff has
approved the proposed customer notice and the notice has been received by the customers. The
Utility shall provide proof of the date notice was given within 10 days of the date of the notice.

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XV. 	Appropriate Initial Customer Deposits
Rule 25-30.311, F.A.C., provides the criteria for collecting, administering, and refunding
customer deposits. Customer deposits are designed to minimize the exposure of bad debt expense
for the Utility and, ultimately, the general body of ratepayers. An initial customer deposit ensures
that the cost of providing service is recovered from the cost causer. Historically, we have set
initial customer deposits equal to two times the average estimated bill. Currently, the Utility’s
initial customer deposit for the 5/8 inch x 3/4 inch meter size is $62.26 for water and $79.08 for
wastewater. However, these amounts do not cover two months’ average bills based on the rates
as approved in this Order. The Utility’s anticipated post-repression average monthly residential
usage is 4,884 gallons per customer. Applying the rates we are approving in this Order, the
average residential monthly bill will be approximately $38.22 for water and $55.54 for
wastewater service.
Therefore, the appropriate initial customer deposits for the residential 5/8 inch x 3/4 inch
meter size shall be $76 for water and $111 for wastewater. The initial customer deposits for all
other residential meter sizes and all general service meter sizes shall be two times the average
estimated bill. The approved initial customer deposits shall be effective for services rendered or
connections made on or after the stamped approval date on the tariff sheets pursuant to Rule 25-
30.475, F.A.C. The Utility is required to collect the approved deposits until we authorize a
change in a subsequent proceeding.
XVI. 	Guaranteed Revenue Charge
According to its tariff, Royal currently has a guaranteed revenue charge, which was
approved prior to 1983. A guaranteed revenue charge is designed to help the Utility recover a
portion of its cost from the time capacity is reserved until a customer begins to pay monthly
service charges. Because the service area is built out, the charge is obsolete. Accordingly, the
Utility shall discontinue this charge.
XVII. 	Miscellaneous Service Charges
Effective June 24, 2021, Rule 25-30.460, F.A.C., was amended to remove initial
connection and normal reconnection charges.13 The definitions for initial connection charges and
normal reconnection charges were subsumed in the definition of the premises visit charge. The
Utility’s existing miscellaneous service charges consist of initial connection and normal
reconnection charges.14 The normal reconnection charge is more than the premises visit charge.
Since the premises visit entails a broader range of tasks, the premises visit shall reflect the
amount of the normal reconnection charge of $60.50 for normal hours. Therefore, the Utility
13 ORDER NO. PSC-2024-0046-PAA-WSPSC-2021-0201-FOF-WS, issued June 4, 2021, in Docket No. 20200240-
WS, In re: Proposed amendment of Rule 25-30.460, F.A.C., Application for Miscellaneous Service Charges.
14 Per the Utility’s current tariff, the after-hours miscellaneous service charges for the water system are incorrect due
to scrivener’s error. The after-hour charges shown in Table 9 have been updated to reflect the correct amounts.

ORDER NO. PSC-2024-0046-PAA-WS
DOCKET NO. 20230081-WS
PAGE 23
shall remove the initial connection and normal reconnection charges, revise the premises visit to
$60.50 for normal hours, and update the definition for the premises visit charge to comply with
amended Rule 25-30.460, F.A.C. This change to miscellaneous service charges results in an
increase in miscellaneous revenues of $936 on a prospective basis, which results in total
miscellaneous revenues of $7,184. The Utility’s existing and our approved miscellaneous service
charges are shown below in Tables 9 and 10.
Table 9
Utility’s Existing Miscellaneous Service Charges
Normal Hours 	After Hours
Initial Connection Charge 	$32.96 	$38.36
Normal Reconnection Charge 	$60.50 	$68.56
Violation Reconnection Charge - Water 	$60.50 	$68.56
Violation Reconnection Charge - Wastewater 	Actual Cost 	Actual Cost
Premises Visit Charge
(in lieu of disconnection) $32.96 	$38.36
Table 10
Commission Approved Miscellaneous Service Charges
Normal Hours 	After Hours
Violation Reconnection Charge - Water 	$60.50 	$68.56
Violation Reconnection Charge - Wastewater 	Actual Cost 	Actual Cost
Premise Visit Charge 	$60.50 	$68.56
Based on the above, the miscellaneous service charges shall be revised to conform to the
recent amendment to Rule 25-30.460, F.A.C. The tariff shall be revised to reflect the removal of
initial connection and normal reconnection charges. The Utility shall file a proposed customer
notice to reflect the Commission-approved charges. The approved charges shall be effective on
or after the stamped approval date on the tariff sheet pursuant to Rule 25-30.475(1), F.A.C. In
addition, the approved charges shall not be implemented until Commission staff has approved
the proposed customer notice and the notice has been received by customers. The Utility shall
provide proof of the date notice was given within 10 days of the date of the notice. The Utility
shall charge the approved miscellaneous service charges until we authorize a change in a
subsequent proceeding.
XVIII. Rate Reduction for the Removal of Amortized Rate Case Expense
The water and wastewater rates shall be reduced, as shown in Schedule Nos. 4-A and 4-B
respectively, to remove the annual amortization of rate case expense grossed-up for RAFs. The
decrease in rates shall become effective immediately following the expiration of the rate case
expense recovery period. Royal shall file revised tariffs and a proposed customer notice setting
forth the lower rates and the reason for the reduction no later than one month prior to the actual

ORDER NO. PSC-2024-0046-PAA-WS
DOCKET NO. 20230081-WS
PAGE 24
date of the required rate reduction. If the Utility files this reduction in conjunction with a price
index or pass-through rate adjustment, separate data must be filed for the price index and/or pass
through increase or decrease and the reduction in the rates due to the amortized rate case
expense.
XIX. 	Refund of the Interim Revenue Increases
No interim revenue increases were granted in this rate case. On August 22, 2023, the
Utility withdrew its request for interim rate relief. Therefore, no refund of interim rates is
appropriate.
XX. 	Utility Notice of Book Adjustments
The Utility shall notify us, in writing, that it has adjusted its books in accordance with our
decision. Royal shall submit a letter within 90 days of the final order of this docket, confirming
that the adjustments to all the applicable NARUC USOA accounts have been made to the
Utility’s books and records. In the event the Utility needs additional time to complete the
adjustments, notice must be provided within seven days prior to the deadline. Staff is granted
administrative authority to grant an extension of up to 60 days for good cause shown.
Based on the foregoing, it is
ORDERED by the Florida Public Service Commission that the Application for increased
water and wastewater rates in Broward County by Royal Waterworks, Inc. is granted in part as
set forth in the body of this order. It is further
ORDERED that all matters contained in the schedules appended to this Order are
incorporated herein by reference. It is further
ORDERED that the Utility’s miscellaneous service charges shall be revised as set forth in
the body of this order. The tariff shall be revised to reflect the removal of initial connection and
normal reconnection charges. Royal shall file a proposed customer notice to reflect the approved
charges. The approved charges shall be effective on or after the stamped approval date on the
tariff sheet pursuant to Rule 25-30.475(1), F.A.C. In addition, the approved charge shall not be
implemented until our staff has approved the proposed customer notice and the notice has been
received by customers. The Utility shall provide proof of the date notice was given no less than
10 days after the date of the notice. Royal shall charge the approved miscellaneous service
charge until we authorize a change in a subsequent proceeding. It is further
ORDERED that the Utility’s water and wastewater rates shall be reduced, as shown on
Schedules 4-A and 4-B, respectively, to remove the annual amortization of rate case expense
grossed-up for RAFs. The decrease in rates shall become effective immediately following the
expiration of the rate case expense recovery period, pursuant to Section 367.081(8), F.S. Royal

ORDER NO. PSC-2024-0046-PAA-WS
DOCKET NO. 20230081-WS
PAGE25
shall file revised tariffs and a proposed customer notice setting forth the lower rates and the
reason for the reduction no later than one month prior to the actual date of the required rate
reduction. If the Ut ility files this reduction in conjunction with a price index or pass-through rate
adjustment, separate data shall be filed for the price index and/or pass through increase or
decrease and the reduction in the rates due to the amortized rate case expense. It is further
ORDERED that the Utility is authorized to charge the new rates and charges as set forth
in the body of this order and the attachments and schedules attached hereto. The approved rates
shall remain in effect until we authorize a change in a subsequent proceeding. It is further
ORDERED that the provisions of this Order, issued as proposed agency action, shall
become final and effective upon the issuance of a Consummating Order unless an appropriate
petition, in the form provided by Rule 28-106.20 l, Florida Administrative Code, is received by
the Commission Clerk, 2540 Shumard Oak Boulevard, Tallahassee, Florida 32399-0850, by the
close of business on the date set forth in the "Not ice of Further Proceedings" attached hereto. 	It
is further
SPS
ORDERED that in the event this Order becomes final, this docket shall be closed.
By ORDER of the Florida Public Service Commission this 22nd day of February. 2024.
Commiss
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.

ORDER NO. PSC-2024-0046-PAA-WS
DOCKET NO. 20230081-WS
PAGE 26
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.
As identified in the body of this order, our action herein, except with regard to the
reduction of water rates to reflect removal of amortized rate case expense, the confirmation of no
interim refund, and the requirement of proof of adjustments, is preliminary in nature. 	Any
person whose substantial interests are affected by the action proposed by this order may file a
petition 	for 	a 	formal 	proceeding, 	in 	the 	form 	provided 	by 	Rule 	28-106.201, 	Florida
Administrative Code. This petition must be received by the Office of Commission Clerk, at 2540
Shumard Oak Boulevard, Tallahassee, Florida 32399-0850, by the close of business on March
14, 2024. 	If such a petition is filed, mediation may be available on a case-by-case basis. 	If
mediation is conducted, it does not affect a substantially interested person's right to a hearing. In
the absence of such a petition, this order shall become effective and final upon the issuance of a
Consummating Order.
Any objection or protest filed in this docket before the issuance date of this order is
considered abandoned unless it satisfies the foregoing conditions and is renewed within the
specified protest period.
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, 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 or 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.

ORDER NO. PSC-2024-0046-PAA-WS 	Schedule No. 1-A
DOCKET NO. 20230081-WS 	Page 1 of 1
PAGE 27
ROYAL WATERWORKS, INC. 	SCHEDULE NO. 1-A
TEST YEAR ENDED MAY 31, 2023 	DOCKET NO. 20230081-WS
SCHEDULE OF WATER RATE BASE
Test Year 	Pro Forma 	Total 	Comm’n 	Comm’n 	Total
Per 	Per 	Per 	Adj. to 	Adj. to 	Per
Description 	Utility 	Utility 	Utility 	Test Year 	Pro Forma 	Comm’n
1. 	UTILITY PLANT IN SERVICE 	$3,591,705 	$85,451 	$3,677,156 	$0 	$19,981 	$3,697,137
2. 	LAND AND LAND RIGHTS 	76,123 	0 	76,123 	0 	0 	76,123
3. 	NON-USED AND USEFUL 	0 	0 	0 	0 	0 	0
4. 	ACCUMULATED DEPRECIATION 	(2,743,508) 	(1,765) 	(2,745,273) 	0 	(469) 	(2,745,742)
5. 	CIAC 	(575,123) 	0 	(575,123) 	0 	0 	(575,123)
6.
ACCUMULATED AMORTIZATION OF
CIAC 	571,853 	0 	571,853 	0 	0 	571,853
7. 	WORKING CAPITAL ALLOWANCE 	75,159 	3,219 	78,378 	(1,463) 	(3,354) 	73,561
8. 	TOTAL WATER RATE BASE 	$996,209 	$86,905 	$1,083,114 	($1,463) 	$16,159 	$1,097,810

ORDER NO. PSC-2024-0046-PAA-WS 	Schedule No. 1-B
DOCKET NO. 20230081-WS 	Page 1 of 1
PAGE 28
ROYAL WATERWORKS, INC. 	SCHEDULE NO. 1-B
TEST YEAR ENDED MAY 31, 2023 	DOCKET NO. 20230081-WS
SCHEDULE OF WASTEWATER RATE BASE
Test Year 	Pro Forma 	Total 	Comm’n 	Comm’n 	Total
Per 	Per 	Per 	Adj. to 	Adj. to 	Per
Description 	Utility 	Utility 	Utility 	Test Year 	Pro Forma 	Comm’n
1. 	UTILITY PLANT IN SERVICE 	$1,919,789 	$69,065 	$1,988,854 	$0 	($28,798) 	$1,960,056
2. 	LAND AND LAND RIGHTS 	71,802 	0 	71,802 	0 	0 	71,802
3. 	NON-USED AND USEFUL 	0 	0 	0 	0 	0 	0
4. 	ACCUMULATED DEPRECIATION 	(1,625,442) 	(1,918) 	(1,627,360) 	0 	799 	(1,626,561)
5. 	CIAC 	(238,921) 	0 	(238,921) 	0 	0 	(238,921)
6. 	ACCUMULATED AMORTIZATION OF CIAC 	238,921 	0 	238,921 	0 	0 	238,921
7. 	WORKING CAPITAL ALLOWANCE 	72,206 	9,980 	82,185 	(2,420) 	287 	80,052
8. 	TOTAL WASTEWATER RATE BASE 	$438,355 	$77,127 	$515,481 	($2,420) 	($27,712) 	$485,348

ORDER NO. PSC-2024-0046-PAA-WS 	Schedule No. 1-C
DOCKET NO. 20230081-WS 	Page 1 of 1
PAGE 29
ROYAL WATERWORKS, INC. 	SCHEDULE NO. 1-C
TEST YEAR ENDED MAY 31, 2023 	DOCKET NO. 20230081-WS
SCHEDULE OF ADJUSTMENTS TO RATE BASE
Water 	Wastewater
UTILITY PLANT IN SERVICE
To reflect appropriate pro forma additions. 	$58,492 	($28,798)
To reflect appropriate pro forma retirements. 	(38,511) 	0
Subtotal 	$19,981 	($28,798)
ACCUMULATED DEPRECIATION
To reflect appropriate pro forma additions. 	($469) 	$799
WORKING CAPITAL ALLOWANCE
To reflect 1/8 test year O&M expense less RCE. 	($1,463) 	($2,420)
To reflect 1/8 pro forma O&M expense less RCE. 	(3,354) 	287
Subtotal 	($4,816) 	($2,133)
TOTAL ADJUSTMENTS TO RATE BASE 	$14,696 	($30,133)

ORDER NO. PSC-2024-0046-PAA-WS 	Schedule No. 2
DOCKET NO. 20230081-WS 	Page 1 of 1
PAGE 30
ROYAL WATERWORKS, INC. 	SCHEDULE NO. 2
TEST YEAR ENDED MAY 31, 2023 	DOCKET NO. 20230081-WS
SCHEDULE OF CAPITAL STRUCTURE
Specific 	Balance 	Pro Rata 	Capital 	Percent
Total 	Adjust- 	After 	Adjust- 	Reconciled 	Of 	Weighted
Capital Component 	Capital 	ments 	Adjustments 	ments 	To Rate Base 	Total 	Cost 	Cost
PER UTILITY
1. 	LONG-TERM DEBT 	$1,118,106 	$0 	$1,118,106 	($389,816) 	$728,290 	45.56% 	3.25% 	1.48%
2. 	COMMON EQUITY 	1,327,999 	0 	1,327,999 	(462,993) 	865,006 	54.11% 	9.70% 	5.25%
3. 	CUSTOMER DEPOSITS 	8,129 	0 	8,129 	(2,834) 	5,295 	0.33% 	2.00% 	0.01%
4. 	TOTAL CAPITAL 	$2,454,234 	$0 	$2,454,234 	($855,643) 	$1,598,591 	100.00% 	6.74%
PER STAFF
1. 	LONG-TERM DEBT 	$1,118,106 	$0 	$1,118,106 	($396,847) 	$721,259 	45.56% 	3.25% 	1.48%
2. 	COMMON EQUITY 	1,327,999 	0 	1,327,999 	(471,344) 	856,655 	54.11% 	9.71% 	5.26%
3. 	CUSTOMER DEPOSITS 	8,129 	0 	8,129 	(2,885) 	5,244 	0.33% 	2.00% 	0.01%
4. 	TOTAL CAPITAL 	$2,454,234 	$0 	$2,454,234 	($871,076) 	$1,583,158 	100.00% 	6.74%
RANGE OF REASONABLENESS 	LOW 	HIGH
RETURN ON EQUITY 	8.71% 	10.71%
OVERALL RATE OF RETURN 	6.20% 	7.28%

ORDER NO. PSC-2024-0046-PAA-WS 	Schedule No. 3-A
DOCKET NO. 20230081-WS 	Page 1 of 1
PAGE 31
ROYAL WATERWORKS, INC. 	SCHEDULE NO. 3-A
TEST YEAR ENDED MAY 31, 2023 	DOCKET NO. 20230081-WS
SCHEDULE OF WATER OPERATING INCOME
Adjusted 	Comm’n 	Comm’n
Test Year 	Adjust- 	Adjusted 	Revenue 	Revenue
Per Utility 	ments 	Test Year 	Increase 	Requirement
1. 	Operating Revenues 	$770,305 	($59) 	$770,246 	$29,099 	$799,345
3.78%
2. 	Operating Expenses
Operation & Maintenance 	$627,020 	($37,144) 	$589,876 	$0 	$589,876
Net Depreciation Expense 	71,194 	560 	71,754 	0 	71,754
Taxes Other Than Income 	62,936 	(556) 	62,380 	1,309 	63,689
Income Taxes 	0 	0 	0 	0 	0
3. 	Total Operating Expense 	$761,150 	($37,140) 	$724,010 	$1,309 	$725,319
4. 	Operating Income 	$9,155 	$46,236 	$74,025
5. 	Rate Base 	$1,083,114 	$1,097,810
6. 	Rate of Return 	6.74%

ORDER NO. PSC-2024-0046-PAA-WS 	Schedule No. 3-B
DOCKET NO. 20230081-WS 	Page 1 of 1
PAGE 32
ROYAL WATERWORKS, INC. 	SCHEDULE NO. 3-B
TEST YEAR ENDED MAY 31, 2023 	DOCKET NO. 20230081-WS
SCHEDULE OF WASTEWATER OPERATING INCOME
Adjusted 	Comm’n 	Comm’n
Test Year 	Adjust- 	Adjusted 	Revenue 	Revenue
Per Utility 	ments 	Test Year 	Increase 	Requirement
1. 	Operating Revenues 	$751,928 	$0 	$751,928 	$29,778 	$781,706
3.96%
2. 	Operating Expenses
Operation & Maintenance 	$657,480 	($16,277) 	$641,203 	$0 	$641,203
Net Depreciation Expense 	45,560 	572 	46,132 	0 	46,132
Taxes Other Than Income 	65,493 	(5,189) 	60,304 	1,340 	61,644
Income Taxes 	0 	0 	0 	0 	0
3. 	Total Operating Expense 	$768,533 	($20,894) 	$747,639 	$1,340 	$748,979
4. 	Operating Income 	($16,605) 	$4,289 	$32,727
5. 	Rate Base 	$515,481 	$485,348
6. 	Rate of Return 	6.74%

ORDER NO. PSC-2024-0046-PAA-WS 	Schedule No. 3-C
DOCKET NO. 20230081-WS 	Page 2 of 2
PAGE 33
ROYAL WATERWORKS, INC. 	SCHEDULE NO. 3-C
TEST YEAR ENDED MAY 31, 2023 	DOCKET NO. 20230081-WS
ADJUSTMENTS TO NET OPERATING INCOME 	PAGE 1 OF 2
Water 	Wastewater
OPERATING REVENUES
To reflect an adjustment to service revenues. 	$328 	$0
To reflect an adjustment to miscellaneous revenues. 	(387) 	0
Total 	($59) 	$0
OPERATION & MAINTENANCE EXPENSE
Salaries and Wages - Officers (603/703)
To reflect salaries based on allocated ERC's. 	($11,969) 	($15,894)
Contractual Services - Accounting (632/732)
To remove duplicative charges per Audit Finding 1. 	($200) 	($200)
Contractual Services - Legal (633/733)
To remove duplicative charges per Audit Finding 1. 	($200) 	($200)
Contractual Services - Other (636/736)
To reclassify expense from water to wastewater. 	($26) 	$26
Insurance Expense (657/757)
a. To remove pro forma expense from test year. 	$0 	($3,117)
b. To reflect appropriate insurance expense per Audit Finding 1. 	358 	358
c. To reclassify expense from wastewater to water. 	336 	(336)
d. To reclassify expense from test year to pro forma. 	0 	3,117
Subtotal 	$694 	$22
Rate Case Expense (666/766)
To reflect appropriate rate case expense amortized over 4 years. 	$526 	($31)
Miscellaneous Expense (675/775)
To reflect cost of lime removal amortized over 2 years. 	($25,969) 	$0
TOTAL OPERATION & MAINTENANCE EXPENSE 	($37,144) 	($16,277)

ORDER NO. PSC-2024-0046-PAA-WS 	Schedule No. 3-C
DOCKET NO. 20230081-WS 	Page 2 of 2
PAGE 34
ROYAL WATERWORKS, INC. 	SCHEDULE NO. 3-C
TEST YEAR ENDED MAY 31, 2023 	DOCKET NO. 20230081-WS
ADJUSTMENTS TO NET OPERATING INCOME 	PAGE 2 OF 2
Water 	Wastewater
DEPRECIATION EXPENSE
a. To reflect appropriate test year depreciation expense. 	$91 	$1,371
b. To reflect appropriate pro forma depreciation expense. 	469 	(799)
Total 	$560 	$572
TAXES OTHER THAN INCOME
a. To reflect property taxes associated with pro forma projects. 	($553) 	($5,189)
b. To reflect appropriate test year TOTI. 	(3) 	0
Total 	($556) 	($5,189)
TOTAL ADJUSTMENTS TO OPERATING EXPENSES 	($37,140) 	($20,894)

ORDER NO. PSC-2024-0046-PAA-WS 	Schedule No. 3-D
DOCKET NO. 20230081-WS 	Page 1 of 1
PAGE 35
ROYAL WATERWORKS, INC. 	SCHEDULE NO. 3-D
TEST YEAR ENDED MAY 31, 2023 	DOCKET NO. 20230081-WS
SCHEDULE OF WATER O&M EXPENSE
Test Year 	Pro Forma 	Total 	Comm’n 	Comm’n 	Total
Per 	Per 	Per 	Adj. to 	Adj. to 	Per
Acct. 	Description 	Utility 	Utility 	Utility 	Test Year 	Pro Forma 	Comm’n
603 	Salaries & Wages - Officers 	$30,000 	$0 	$30,000 	($11,969) 	$0 	$18,031
615 	Purchased Power 	43,117 	0 	43,117 	0 	0 	43,117
618 	Chemicals 	72,541 	0 	72,541 	0 	0 	72,541
632 	Contractual Services - Accounting 	450 	0 	450 	(200) 	0 	250
633 	Contractual Services - Legal 	350 	0 	350 	(200) 	0 	150
636 	Contractual Services - Other 	374,916 	21,773 	396,689 	(26) 	0 	396,663
657 	Insurance 	4,679 	3,117 	7,796 	694 	0 	8,490
666 	Rate Case Expense 	0 	861 	861 	0 	526 	1,387
670 	Bad Debt Expense 	0 	0 	0 	0 	0 	0
675 	Miscellaneous Expense 	75,218 	0 	75,218 	0 	(25,969) 	49,249
Total Water O&M Expense 	$601,271 	$25,751 	$627,022 	($11,701) 	($25,443) 	$589,878
Working Capital is 1/8 O&M Expense less RCE 	$73,561

ORDER NO. PSC-2024-0046-PAA-WS 	Schedule No. 3-E
DOCKET NO. 20230081-WS 	Page 1 of 1
PAGE 36
ROYAL WATERWORKS, INC. 	SCHEDULE NO. 3-E
TEST YEAR ENDED MAY 31, 2023 	DOCKET NO. 20230081-WS
SCHEDULE OF WASTEWATER O&M EXPENSE
Test Year 	Pro Forma 	Total 	Comm’n 	Comm’n 	Total
Per 	Per 	Per 	Adj. to 	Adj. to 	Per
Acct. 	Description 	Utility 	Utility 	Utility 	Test Year 	Pro Forma 	Comm’n
703 	Salaries & Wages - Officers 	$28,000 	$0 	$28,000 	($15,894) 	$0 	$12,106
710 	Purchased Sewage Treatment 	326,403 	67,260 	393,663 	0 	0 	393,663
715 	Purchased Power 	9,831 	0 	9,831 	0 	0 	9,831
732 	Contractual Services - Accounting 	450 	0 	450 	(200) 	0 	250
733 	Contractual Services - Legal 	350 	0 	350 	(200) 	0 	150
736 	Contractual Services - Other 	201,944 	11,756 	213,700 	26 	0 	213,726
757 	Insurance 	7,796 	0 	7,796 	(3,095) 	3,117 	7,818
766 	Rate Case Expense 	0 	820 	820 	0 	(31) 	789
770 	Bad Debt Expense 	0 	0 	0 	0 	0 	0
775 	Miscellaneous Expense 	2,870 	0 	2,870 	0 	0 	2,870
Total Wastewater O&M Expense 	$577,644 	$79,836 	$657,480 	($19,363) 	$3,086 	$641,203
Working Capital is 1/8 O&M Expense less RCE 	$80,052

ORDER NO. PSC-2024-0046-PAA-WS 	Schedule No. 4-A
DOCKET NO. 20230081-WS 	Page 1 of 1
PAGE 37
ROYAL WATERWORKS, INC.
TEST YEAR ENDED MAY 31, 2023
MONTHLY WATER RATES
SCHEDULE NO. 4-A
DOCKET NO. 20230081-WS
UTILITY'S
EXISTING
RATES
UTILITY'S
PROPOSED
RATES
COMM’N
APPROVED
RATES
4 YEAR
RATE
REDUCTION
Residential Service and General Service
Base Facility Charge by Meter Size
5/8" x 3/4" 	$13.29 	$25.31 	$16.83 	$0.02
3/4" 	N/A 	$37.97 	$25.25 	$0.03
1" 	$90.54 	$63.28 	$42.08 	$0.05
1-1/2" 	$180.95 	$126.55 	$84.15 	$0.10
2" 	$290.04 	$202.48 	$134.64 	$0.15
3" 	$579.10 	$404.96 	$269.28 	$0.31
4" 	N/A 	$632.75 	$420.75 	$0.48
6" 	N/A 	$1,265.50 	$841.50 	$0.96
8" 	N/A 	$2,024.80 	$1,346.40 	$1.54
10" 	N/A 	$2,910.65 	$1,935.45 	$2.21
Charge per 1,000 gallons - Residential Service and General Service 	$3.42 	$3.54 	N/A 	N/A
Charge per 1,000 gallons - Residential Service
0-4,000 gallons 	N/A 	N/A 	$4.38 	$0.01
Over 4,000 gallons 	N/A 	N/A 	$4.57 	$0.01
Charge per 1,000 gallons - General Service 	N/A 	N/A 	$4.48 	$0.01
Private Fire Protection
2" 	N/A 	$16.87 	$11.22 	$0.01
3" 	N/A 	$33.75 	$22.44 	$0.03
4" 	$27.69 	$52.73 	$35.06 	$0.04
6" 	$55.37 	$105.46 	$70.13 	$0.08
8" 	N/A 	$168.73 	$112.20 	$0.13
10" 	N/A 	$242.55 	$161.29 	$0.18
Typical Residential 5/8" x 3/4" Meter Bill Comparison
2,000 Gallons 	$20.13 	$32.39 	$25.59
5,000 Gallons 	$30.39 	$43.01 	$38.92
10,000 Gallons 	$47.49 	$60.71 	$61.77

ORDER NO. PSC-2024-0046-PAA-WS 	Schedule No. 4-B
DOCKET NO. 20230081-WS 	Page 1 of 1
PAGE 38
ROYAL WATERWORKS, INC.
TEST YEAR ENDED MAY 31, 2023
MONTHLY WASTEWATER RATES
SCHEDULE NO. 4-B
DOCKET NO. 20230081-WS
UTILITY'S
EXISTING
RATES
UTILITY'S
PROPOSED
RATES
COMM’N
APPROVED
RATES
4 YEAR
RATE
REDUCTION
Residential
Base Facility Charge - All Meter Sizes 	$13.45 	$53.31 	$37.03 	$0.04
Charge Per 1,000 gallons
10,000 gallon cap 	$5.21 	$2.32 	N/A 	N/A
Charge Per 1,000 gallons
8,000 gallon cap 	N/A 	N/A 	$3.80 	$0.00
General Service
5/8" x 3/4" 	$13.45 	$53.31 	$37.03 	$0.04
3/4" 	N/A 	$79.96 	$55.55 	$0.06
1" 	$95.69 	$133.26 	$92.58 	$0.10
1-1/2" 	$191.56 	$266.53 	$185.15 	$0.20
2" 	$306.19 	$426.44 	$296.24 	$0.31
3" 	$612.48 	$852.88 	$592.48 	$0.63
4" 	N/A 	$1,332.63 	$925.75 	$0.98
6" 	N/A 	$2,665.26 	$1,851.50 	$1.96
8" 	N/A 	$4,264.42 	$2,962.40 	$3.13
10" 	N/A 	$6,130.10 	$4,258.45 	$4.50
Charge per 1,000 gallons - General Service 	$5.22 	$2.78 	$4.56 	$0.00
Typical Residential 5/8" x 3/4" Meter Bill Comparison
2,000 Gallons 	$23.87 	$57.95 	$44.63
6,000 Gallons 	$44.71 	$67.23 	$59.83
8,000 Gallons 	$55.13 	$71.87 	$67.43