Florida Public Service Commission native order document 10320-2024

FILED 12/20/2024
DOCUMENT NO. 10320-2024
FPSC - COMMISSION CLERK
BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION
In re: Petition for approval of 2023 true-up,
projected 2024 true-up, and 2025 revenue
requirements and surcharges associated with
cast iron/bare steel pipe replacement rider, by
Peo les Gas S stem, Inc.
DOCKET NO. 20240133-GU
ORDER NO. PSC-2024-0511-TRF-GU
ISSUED: December 20, 2024
The following Commissioners participated in the disposition of this matter:
BY THE COMMISSION:
MIKE LA ROSA, Chairman
ART GRAHAM
GARY F. CLARK
ANDREW GILES FAY
GABRIELLA PASSIDOMO SMITH
ORDER APPROVING TA RIFF
Background
On August 30, 2024, Peoples Gas System, Inc. (Peoples or utility) filed a petition fo r
approval of its final 2023 true-up, projected 2024 true-up, and 2025 revenue requirement and
surcharges associated with the cast iron/bare steel replacement rider (CT/BSR Rider or rider). The
rider was originally ap proved by Order No. PSC-12-0476-TRF-GU (2012 Order) to recover the
cost of accelerating the replacement of cast iron and bare steel pipes through a surcharge on
customers' bills. 1 In the 20 12 Order, we found that, " replacement of these types of pipelines is in
the public interest to improve the safety of Florida's natural gas infrastructure, and reduce the
possibility of loss of li fe and destruction of property should an incident occur." Peoples' current
surcharges were approved by Order No. PSC-2023-0363-TRF-GU. 2
In Order No. PSC-1 7-0066-AS-GU, we approved a comprehensive settlement agreement
between Peoples and the Office of Public Co unse l. 3 The settlement agreement, in part, added
problematic 	plastic pipe (PPP) 	in sta ll ed 	in 	the 	company's 	distribution 	system 	to 	e li gible
replacements 	under the 	rider beginning in 	2017 and continuing 	through 	2028. 	PPP was
1 Order No. PSC-12-0476-TRF-GU, issued Sept ember 18, 2012, in Docket No. 20110320-GU, In re: Petition/or
approval of Cast Iron/Bare Steel Pipe Replacement Rider (Rider CIIBSR), by Peoples Gas System.
2 Order No. PSC-2023-0363-TRF-GU, iss ued November 29, 2023, in Docket No. 20230098-GU, In re: Petition for
approval of 2022 true-up, pr oject ed 2023 tru e- up, and 2024 revenue requirements and surcharges associated with
cast iron/bare steel replacement rider, by Peoples Gas System.
3 Order No. PSC-17-0066-AS-GU, issued February 28, 2017, in Docket No. 20160 159-GU, In re: Petition for
approval of settlement agreement pertaining to Peoples Gas System's 2016 depreciation study, environmental
reserve account, problematic plastic pipe replacement, and authori::: ed ROE.

ORDER NO. PSC-2024-0511-TRF-GU
DOCKET NO.20240133-GU
PAGE2
manufactured before 1983 and has significant safety concerns. fn certain areas, the PPP is
interspersed with , or connected to, the cast iron/bare steel pipe that is being replaced under the
rider. As provided for in the settlement agreement, PPP replacements are included in the
calculation of the 2024 rider surcharges.
In December 2023, we approved Peoples' petition for rate increase, which contained two
provisions that would impact the CI/BSR Rider. 4 First, Peoples moved its CI/BSR investments as
of December 31, 2023, into rate base, as required by the 2012 Order approving the rider. 5 This
provision had the effect of resetting the CI/BSR Rider rates to zero.
Second, we approved Peoples' request for the Long Term Debt Cost Rate (LTDR) true-
up mechanism. The LTOR true-up mechanism allowed Peoples to make a one-time adjustment
to the estimated cost of long-tenn debt for the projected test year ending December 31, 2024. 6
The purpose of the LTDR true-up mechanism was to reflect the actual embedded costs of the
utility's inaugural long-tem1 debt issuance in its revenue requirement and rates. 7 This provision
was a result of Peoples being spun off from Tampa Electric Company, because Peoples no longer
obtains long-term debt capital from Tampa Electric Company and instead issues its own debt as
a separate entity.
We fmther ordered that if the impact to the incremental revenue requirement was greater
than $500,000 for the period between the implementation of the base rate increase and the
implementation of the LTOR true-up mechanism , then the incremental revenue requirement
would be recovered through the CI/BSR rider for 2025. 8 We approved the incremental revenue
requirement of $874,085 associated with the LTDR true-up mechanism in May 2024.9 The total
amount associated with the L TOR true-up mechanism to be recovered through the 2025 CI/BSR
rider is $476,034, as shown in Exhibit B to the petition, page 2 of 4, line No. 9a.
Currently, Peoples has an active petition for an expansion of the Cl/ BSR rider in Docket
No. 20240107-GU. 10 Peoples has proposed to re name the Cl /BSR rider to the Safety of Facilities
and 	Infrastructure 	Replacement 	Rider 	(SAFIR) 	and 	expand 	the 	categories 	of 	eligible
replacements under the rider. If the SAF lR program is approved, projected capital expenditures
would increase for 2025. In paragraph 16 of the in stant petition, Peoples stated that if the SA FIR
petition remains pending on November 30, 2024, the utility would not seek approval of the
revenue requirement and surcharge for the SAFIR modifications in the subject docket. We are
still in the process of reviewing the SA FIR petition; therefore, the SA FIR modifications were not
considered as part of our vote in this docket or this Order.
4 Order No. PSC-2023-0388-FOF-GU, issued December 27, 2023, in Docket No. 20230023-GU, In re . Petition/or
rate increase by Peoples Gas System, Inc.
5 See page 3 of Order No. PSC-12-0476-TRF-GU.
6 See pages 10 7- 109 of Order No. PSC-2023-0388-FOF-GU.
7 l ei.
8 See page 108 of Order No. PSC-2023-0388-FOF-GU.
9 Order No. PSC-2024-0170-TRF-GU, issued May 23, 2024, in Docket No. 20240028-GU, In re: Petition to
implement long-term debt cost true-up mechanism, by Peoples Gas System, In c.
10 In re: Petition for appr oval of modifications to cast iron/bare s1eel pipe replacement rider, by Peoples Gas
System, In c.

ORDER NO. PSC-2024-0511-TRF-GU
DOCKET NO. 20240133-GU
PAGE3
Ow· staff issued a data request to the utility, for which responses were received on
October 7 and October 9, 2024. By Order No. PSC-2024-0453-PCO-GU. issued October 17,
2024, the utility's petition was suspended to allow our staff a suflicient opportunity to gather and
evaluate all pertinent infonnation related to the tariff proposals in order to present us with an
informed recommendation.
Attachment A, attached hereto, to this Order contains Table l, which consolidates actual
and projected CI/BSR and PP P miles, replaced investment, and revenue requirements for each
year of the replacement program. 11 Additionally, Peoples provided tables that display the
replacement progress and forecasts for the CI/BSR Rider (Table 2) and for PPP (Table 3). 12
Attachment B, attached hereto, contains the proposed tariff. We have jurisdiction over this matter
pursuant to Section 366.03, 366.04, 366.05, and 366.06, Florida Statutes (F.S.).
Decision
The CI/ BSR Rider charges have been in effect since January 2013 and were projected to
be in effect for IO years with replacement projects completed by the end of 2022. In response to
our staffs first data request, Peoples stated that the COVID-19 pandemic environment greatly
contributed to replacement efforts going beyond the 	I 0-year period. 13 Contributing factors
include construction 	contractor labor shortages, consulting 	firm 	availability, 	supply chain
challenges, and extensive permitting challenges. Peoples stated that it expects to have 8.11 miles
of CI/BSR replacement remaining entering 2025.
In 2024, Peoples' cast iron/bare steel and PPP replacement activity focused in the areas
of Miami, Tampa, St. Pete, Orlando, Eustis, Jacksonville, Lakeland, Daytona, Avon Park, and
Ocala. In 2025, Peoples states it will focus on replacement projects in Miami, Tampa, St. Pete,
Orlando, Eustis, Jacksonvi ll e, Lakeland, Daytona, Jupiter. Panama City, and Ocala. A detailed
description of the projects, including their address, was provided in response to our staff's first
data request. 14
True-ups by Yea r
Peoples' calculation for the 2025 revenue requirement and surcharges includes a final
true-up for 2023, an actual/estimated true-up for 2024, and projected costs for 2025. Pursuant to
the 2012 Order, the capital expenditures fo r 2024 and 2025 exclude the first $1 million of facility
replacements each year because that amount is included in rate base. Peoples has included
depreciation expense savings as discussed in the 2012 Order; however, the utility has not
identified any operations and maintenance savings.
Final True- up f or 2023
Exhibit A of the petition shows that the revenues collected for 2023 were $8,215.491
compared to a revenue requirement of $7,531,346, resu lting in an over-recovery of $684,145.
11 ON 09444-2024, response No. 8.
12 Id.
13 DN 09444-2024, response No. 4.
14 fd

ORDER NO. PSC-2024-0511-TRF-GU
DOCKET NO. 20240133-GU
PAGE4
The final 2022 under-recovery of $787,888, 2023 over-recovery of $684,145, and interest
associated with any over- and under-recoveries, results in a final 	2023 	under-recovery of
$102,499.
Ac tual/Estimat ed 2024 Tr ue-up
In Exhibit B of the petition, Peoples provided actual revenues for January through July
and forecast revenues for August through December of 2024, totaling $883,056, compared to an
actual/estimated revenue requirement of $576,693, resulting in an over-recovery of $306,363.
Th e final 2023 under-recovery of $102,499, 2024 over-recovery of $306,363, 2024 LTOR true-
up mechanism adjustment of $476,034, and interest associated with any over- and under-
recoveries, resu lts in a total 2024 under-recovery of $276,028.
Proj ected 2025 Costs
Exhibit C. page 2 of 4, of the petition shows Peoples' project investments of $32,120,344
for the replacement of cast iron/bare steel infrastructure and PPP in 2025, exclud in g the $1
million adjustment to rate base. The return on investment, depreciation expense (less sav in gs),
and property tax expense associated with that investment are $3,402,010. After ad ding the total
2024 under-recovery of $276,028, the total 2025 revenue requirement is $3,678,038. Table 1
displays the 2025 revenue requirement ca lculation. In response to our staffs first data request,
Peoples provided updated investment and revenue requirement projections for Cl/BS R and PPP
which is con tain ed in Table I of Attachment A, attached hereto.
Table 1
2025 Reve nu e Rc ouiremcnt
2025 Projected Expenditures
Return on Investment
Depreciation Expense (less savings)
Property Tax Expense
2025 Revenue Requirement
Plus 2024 Under-recovery
Total 2025 Revenue R equ irement
Source: Page 2 of 4 in Exhibit C in petition (Docket No. 20240133-GU).
Propo sed Surcharges
$32,120,344
$2,767,833
$405,346
$228,830
$3,402,010
$276.028
$3,678,038
As established in the 2012 Order, the total 2025 revenue requirement is allocated to rate
classes using the same methodology that was used for the allocation of mains and services in the
cost of service study used in Peoples ' most recent approved rate case. After calculating the
percentage of total plant costs attributed to each rate class, the respective percentages were
multiplied by the 2025 revenue requirement resulting in the revenue requirement by rate class.
Divid in g each rate class 's revenue requirement by projected therm sales provides the rider
surcharge for each rate class.
If approved, the proposed 2025 1ider surcharge for residential customers wou ld be
$0.01391 per therm (compared to the current surcharge of $0.00322). The 2025 monthly bill
impact would be $0.28 for a residential customer who uses 20 thenns.

ORDER NO. PSC-2024-0511-TRF-GU
DOCKET NO. 20240133-GU
PAGES
Conclusion
We have reviewed Peoples' filings and supporting documentation and find that the
calculations are consistent with the methodology approved in the 2012 Order and are reasonable
and accw-ate. Therefore, we hereby approve Peoples' proposed CI/BSR Rider surcharges to be
effective for the first billing cycle of January through the last billing cycle of December 2025.
Based on the foregoing, it is
ORDERED by the 	Florida Public Service Commission that Peoples Gas System's
proposed CI/BSR Rider surcharges to be effective for the first billing cycle of January through
the last billing cycle of December 2025 is hereby approved. It is further
ORDERED that if a protest is filed within 2 I days of issuance of the Order, the tariff
shall remain in effect with any charges held subject to refund pending resolution of the protest.
It is further
ORDERED that if no timely protest is filed, this docket shall be closed upon the issuance
of a Consummating Order.
RPS
By ORDER of the Florida Public Service Commission this 20th day of December, 2024.
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 patt ies of record at the time of
issuance and, if applicable, interested persons.

ORDER NO. PSC-2024-051 1-TRF-GU
DOCKET NO. 20240133-GU
PAGE6
NOTICE OF FURTHER PROCEEDINGS
The Florida Public Service Commission is required 	by Section 120.569(1), Florida
Statutes, to noti fy 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.
Mediation may be available on a case-by-case basis. 	lf mediation is conducted, it does
not affect a substantially interested person's right to a hearing.
The Commission's decision on this tariff is interim in nature and will become final , unless
a person whose substantial interests are affected by the proposed action files a petition for a
forma l proceeding, in the form provided by Rule 28-106.201, Florida Administrative Code. This
petition must be received by the Office of Commission Clerk, 2540 Shumard Oak Boulevard,
Tallahassee, Florida 32399-0850, by the close of business on January I 0, 2025.
In the absence of such a petition, this Order shall become final and effective 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
spec ified protest period.

ORDER NO. PSC-2024-05 11-TRF-G U
DOCKET NO. 20240133-GU
PAGE 7
Table 1
P 	I 	' CI/BSR R 	I 	t P 	P	eo1:> es 	ep acemen 	rogram
Year 	CI/BS 	PPP Miles 	CVBS 	PPP
Miles 	Replaced a
Investment 	ln vestmentb
Replaced
2017 	51 	- 	$ 17,588,366 	$308,227
20 18 	62 	56 	$27,035.678 	$ I 8, l 13 , 104
2019 	52 	42 	$35.82 1, 371 	$15,349.847
2020 	55 	43 	$32.317, 184 	$9,209,668
2021 	14 	38 	$23,726,642 	$2 1,051 ,938
2022 	10.4 	29 	$13,079,280 	$6, 109,870
2023 	2.3 	44 	$5,815,954 	$26,827,191
2024* 	5 	31 	$4,698,860 	$ 14 ,646,431
2025* 	5 	65 	$2,906,616 	$29,2 13,728
2026* 	2 	75 	$ 1, 104,945 	$32, 951 ,727
2027* 	Jc 	90 	$874,752 	$35,028,300
202 8* 	I 	54 	$1,08 I, 1001 	$20, l 39,38Y
*Projected
a CVBS Investment includes remo val of initial $ 1M through 2025.
Attachment A
Pagel of 3
rogress
Cl/BS 	PPP
Revenue 	Revenue
Requirement 	Requirement
$6,868,302 	$74,02 1
$8,510,823 	$848,201
$11 ,075,229 	$2,706, 161
$ 14 ,8 17 ,804 	$4,358,010
$1,347,321 	$( I 60,452)
$3 , 154,597 	$1,921,940
$3,927,032 	$3,604,313
$2 17,94& 	$366,77&
$760,428 	$2,721,026
$1,043,083 	$6,227,488
$1 , 151 ,720 	$10, 103 ,2 81
$1,246,217 	$13,34 1,632
b PPP Investment includ es removal of initial $1 M each year start in g in 2026.
c 5-year construction moratoriums in effect in the City of Miami preventing completion before
2027.
d2028 investment includes rollover costs to occur in 2029.
eRevenue requirement based on current year investment only as investment for prior years rolled
into rate base pursuant to the 2023 Rate Case.

ORDER NO. PSC-2024-0511-TRF-GU
DOCKET NO. 20240133- GU
PAGE8
p eop es
Table 2
' CI/BSR R 	I	ep acement p roqress
Year 	Ma in Replacements
Replaced 	Replaced 	Remaining 	Remaining 	Total
Cast Iron 	Bare 	Cast Iron 	Bare Steel 	Miles
(miles) 	Steel 	at Year 	at Year 	Remaining
(miles) 	End 	End 	ofCI/BS
(miles) 	(miles) 	Mains
2012 	- 	- 	100 	354 	454
2013 	13 	38 	87 	316 	403
2014 	2 	15 	85 	298 	383
2015 	26 	60 	59 	238 	297
2016 	15 	35 	44 	203 	247
2017 	15 	36 	29 	178 	207
2018 	10 	52 	18 	126 	144
2019 	8 	44 	10 	8)' 	93
2020 	4 	5 1 	6 	3S1 	41
2021 	3.5 	10.5 	2 	24 	26
2022 	l.3 	9.1 	0.9 	14.61 	15 .5
2023 	0.3 	2.0 	0.6 	12.4' 	12.4
2024* 	<O 	5 	0.5 	8.& 	8.11
*Projected
a Additional miles of pipe added after reclassification of pipe type.
Attachment A
Page 2 of 3
Service Line
Reola cements
Nwnber 	Number of
of Bare 	Remaining
Steel 	Bare Steel
Service 	Service
Lines 	Lines
Replaced
- 	14,978
907 	14,071
7,964 	6,107
1,019 	5,088
1,050 	6,963
1,135 	4,279
1,970 	2,309
649 	1,660
423 	l ,237
191 	998
74 	941
40 	931
63 	799

ORDER NO. PSC-2024-0511-TRF-GU
DOCKET NO. 20240133-GU
PAGE9
Table 3
Peoples' PPP Replacement p
Attachment A
Page 3 of3
ro ,~ram Pro~ress
Year 	Replaced PPP 	Total Remaining 	Replaced 	Total Number of
(Mi les) 	PPP Mains
(Mi le s)
2016 	- 	551
2017 	- 	509
2018 	56 	461
2019 	42 	418
2020 	43 	370
2021 	38 	337
2022 	29 	306
2023 	44 	28 Ja
2024* 	31 	284'
2025* 	65 	219
2026* 	75 	144
2027* 	90 	54
2028* 	54 	-
*Projected
nAdditional service Iine s reclassified during the year.
bTh is will be determined during the replacement yea r.
Number of PPP 	Remaining PPP
Service Lines 	Service Lines
- 	28,237
1,396 	26,841
3,941 	24,741
2,349 	20,420
1,702 	18 ,7 18
882 	17 ,683
837 	17 ,229
883 	16 ,34&
500 	b
b 	b
b 	b
b 	b
b 	b

ORDER NO. PSC-2024-0511-TRF-GU
DOCKET NO. 20240133-GU
Attachment B
Page I of l
PAGE 10
Peopl es Gas System , Inc.
Original Volume No. 3
F8~rteentl'I Fifteenth Revised Sheet No. 7.806
Can cels Thirteenll'I Fourteenth Rev ised Sheet No. 7.806
CAST IRON/BARE STEEL REPLACEMENT RIDER
RIDER CI/BSR
The monthly bi ll for Gas SeMce in any Billing Period shall be increased by the CI/BSR Surcharge determined In
accordance wrth this Rider CI/BSR Surcharges approved by the Comm ission for bills rendered for meter readings taken
on or after January 1 ~~ are as follows with respect to Customers rece iving Gas Service under the following rate
schedules:
Rate Schedule
ReSJdent1aVResidential Standby Generator I
Residential Gas Heat Pump Service
Small General Service
General Service - 1/ Commercial standby
Generator Service /
Commercial Gas Heat Pump Service
General Service - 2
General Service - 3
General Service - 4
General Service - 5
Commercial Street Lighti ng
'Mlolesale
Small lnterrupbble Service
Interruptible Service
Interruptible Servi ce - Large Volume
Cl/BSR Surctiarqe
$ Q..003~ 	per therm
S ~ per therm
S 0.00.1440 00516 per t herm
$ ~ per therm
S ~ 00468 per therm
$ ~ 00333 per therm
S 0-000000 00228 per therm
S 0-00i040~ 	per therm
S ~ 00269 per t herm
S c..oooSQO 00 127 per therm
$ ~ 00030 per therm
S O00000 per therm
The CI/BSR Surcharges set forth above shall remain in effect until changed pursuarrt to an order of the Commission.
CI/BSR Surcharges shall be determined 1n accordance with the provisions of th is Rider set forth below
Definitions
For purposes of this Rider
· E11a1ble Replacements· means the foll01.V1ng Company plant investments that (1) do not increase revenues by directly
connecting new customers to the plant asset, (11) are in service and used and useful In providing ublrty service and
(iii) were not incl uded In the Company's rate base for purposes of determining the Company's base rates in its most
recent general base rate proceeding
Mains and service lines, as replacements for existing matenals recognized/identified by the PIpehne Safety
and Hazardous Materials Administration as being obsolete and that present a potential safety threat to
operations and the general public, including cast iron, wrought iron , bare steel, and specff1c
polyethylene/plastic fac1 lrt1es, and regulators and other pipeline system components the installation of which
1s required as a consequence of the replacement of the aforesaid facilities.
"CI/BSR Revenues· means the revenues produced through CIIBSR Surcharges, exclus111e of revenues from all other
rates and charges.
Issued Bv: Helen J. Weslev. President & CEO 	Effective : Januarv 1. ~2025