Florida Public Service Commission native order document 02389-2023

FILED 3/24/2023
DOCUMENT NO. 02389-2023
FPSC - COMMISSION CLERK
BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION
In re: Request by Florida Community Water
Systems, Inc. for a revenue-neutral rate
restructuring in Brevard, Lake, and Sumter
Counties.
DOCKET NO. 20220201-WS
ORDER NO.PSC-2023-0113-PAA-WS
ISSUED: March 24, 2023
The following Commissioners participated in the disposition of this matter:
ANDREW GILES FAY, Chairman
ARTGRAHAM
GARYF.CLARK
MIKE LAROSA
GABRIELLA P ASSIDOMO
NOTICE OF PROPOSED AGENCY ACTION
ORDER GRANTING W AIYER OF RULE 25-40.335(6)
BY THE COMMISSION:
NOTICE is hereby given by the Florida Public Service Commission that the action
discussed herein 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
On November 14, 2022, Florida Community Water Systems, Inc. (FCWS) filed an
application for a revenue-neutral rate restructuring limited proceeding for the fourteen water and
wastewater systems it owns in Brevard, Lake, and Sumter counties. FCWS is seeking a rule
waiver to use the limited proceeding rule, Rule 25-30.445, F.A.C., to consolidate these systems
for ratemaking purposes.
The ten water systems at issue here are Black Bear Waterworks, Inc. (Black Bear);
Brendenwood Waterworks, Inc.; Brevard Waterworks, Inc.; Harbor Waterworks, Inc. (Harbor);
Jumper Creek Utility Company (Jumper Creek); Lake Idlewild Utility Company; Lakeside
Waterworks, Inc. (Lakeside); Pine Harbour Waterworks, Inc.; Raintree Waterworks, Inc.; and
The Woods Utility Company. Four of these systems also have wastewater system s: Harbor,
Jumper Creek, Lakeside, and The Woods Utility Company. By Order No. PSC-2022-0095-FOF-
WS, we acknowledged the corporate reorganization and name change of these systems to
FCWS. 1 The corporate reorganization resulted in no change in the ownership or control of the
1 Issued February 21 , 2022, in Docket No. 20210192-WS, In re: Joint application for acknowledgment of corporate
reorganization and approval of name chang es on Certificate No. 654-W in Lake County from Black Bear

ORDER NO. PSC-2023-0113-PAA-WS
DOCKET NO. 20220201-WS
PAGE 2
utilities, and each FCWS system continues to charge its own respective Commission-approved
rates and charges.
In its November 14, 2022, petition for limited proceeding, FCWS seeks uniform rates for
these systems. FCWS states that the various rates charged by each system are widely disparate.
Uniform rates, if granted, would result in a reduction in typical residential bills, except for
Lakeside wastewater customers and all Harbor customers, and would provide significant relief to
the customers in the financially distressed systems.
We have broad authority to conduct limited proceedings under Section 367.0822(1),
Florida Statutes (F.S.). Rule 25-30.445, F.A.C., which we adopted to implement Section
367.0822, F.S., restricts the ability of water and wastewater systems to use the limited
proceeding process. Rule 25-30.445(6), F.A.C., provides that a limited proceeding will not be
allowed if:
(a) The utility’s filing includes more than six separate projects for which recovery
is sought. Corresponding adjustments for a given project are not subject to the
above limitation;
(b) The requested rate increase exceeds 30 percent;
(c) The utility has not had a rate case within seven years of the date the petition
for limited proceeding is filed with the Commission; or
(d) The limited proceeding is filed as the result of the complete elimination of
either the water or wastewater treatment process.
FCWS argues that Rule 25-30.445, F.A.C., seems to contemplate a petition for limited
proceeding is predicated upon a rate increase. However, FCWS is requesting a revenue-neutral
rate restructuring based upon existing historical revenues, not a revenue increase. Further, FCWS
recognizes that not all of its systems meet the seven-year rate case requirement of Rule 25-
30.445(6)(c), F.A.C. Consequently, on December 5, 2022, FCWS filed a request for a partial
variance from, or waiver of, the requirements of the rule governing limited proceedings.
Florida law allows agencies to waive or provide other relief (variances) to persons subject
to regulation where the strict application of uniformly applicable rule requirements leads to
“unreasonable, unfair, and unintended results in particular instances.” Section 120.542(1), F.S.
Variances and waivers shall be granted when the person subject to the rule demonstrates that the
purpose of the underlying statute will be or has been achieved by other means by the person and
when application of a rule would create a substantial hardship or would violate principles of
fairness. Section 120.542(2), F.S.
Waterworks, Inc., Certificate No. 339-W in Lake County from Brendenwood Waterworks, Inc., Certificate No. 002-
W in Brevard County from Brevard Waterworks, Inc., Certificate Nos. 522-W and 565-S in Lake County from
Harbor Waterworks, Inc., Certificate Nos. 667-W and 507-S in Sumter County from Jumper Creek Utility Company,
Certificate No. 531-W in Lake County from Lake Idlewild Utility Company, Certificate Nos. 567-W and 494-S in
Lake County from Lakeside Waterworks, Inc., Certificate No. 450-W in Lake County from Pine Harbour
Waterworks, Inc., Certificate No. 539-W in Lake County from Raintree Waterworks, Inc., Certificate Nos. 507-W
and 441-S in Sumter County from The Woods Utility Company to Florida Community Water Systems, Inc.

ORDER NO. PSC-2023-0113-PAA-WS
DOCKET NO. 20220201-WS
PAGE 3
On 	December 	8, 	2022, 	our 	staff 	filed 	a 	Florida 	Administrative 	Register 	notice
acknowledging receipt of FCWS’s rule waiver petition. The time for filing comments, provided
by Rule 28-104.003, F.A.C., expired on December 23, 2022; no comments as to FCWS’s rule
waiver petition were received. On January 5, 2023, FCWS waived the 90-day deadline for us to
grant or deny its petition, pursuant to Section 120.542(8), F.S., through the March 7, 2023,
Commission Agenda Conference. Thereafter, on January 6, 2023, FCWS filed a supplement to
its application and petition for waiver.
This order addresses FCWS’s petition for rule waiver only. We have jurisdiction under
Sections 120.542, 367.0822, and 367.121, F.S.
DECISION
In its November 14, 2022, petition for limited proceeding, FCWS states that the various
rates reflect a wide disparity among its systems. Several systems have had multiple rate cases
before us due to increased capital requirements, increased operating expenses, and declining
consumption. Others – Harbor and Black Bear – have never had a rate case before us. FCWS
contends that the implementation of uniform rates would be more efficient and result in a more
equitable disbursement of operating costs among the customers of the FCWS systems. FCWS
contends that the uniform rates, if granted, would result in a reduction in typical residential water
bills, with the exception of Harbor, and would provide significant relief to the customers in the
financially distressed systems.
FCWS’s application seeks to achieve a revenue-neutral rate restructuring through a
limited proceeding instead of through a full rate case, which, because of rate case expense, it
contends would negate the savings to customers and may counterproductively result in a rate
decrease for Harbor. FCWS acknowledges that neither Harbor nor Black Bear have had a full
rate case, and it has been 8 years since we set rates for Brevard Waterworks, Inc. and Jumper
Creek.2
One system in particular, Harbor, would benefit from conservation rates. Harbor has
relatively low rates and has consumed water beyond the limit of the utility’s consumptive use
permit. The utility has begun working with the local water management district and has retained
a conservation expert for irrigation audits. Despite these efforts, the customers of the utility
continue to use excessive amounts of water. According to FCWS, numerous customers in Harbor
are regularly using over 100,000 and 200,000 gallons of water per month.
2 See Order No. PSC-11-0478-PAA-WU, issued October 24, 2011, in Docket No. 100085-WU, In re: Application
for certificate to operate water utility in Lake County by Black Bear Reserve Water Corporation; Order No. PSC-
12-0580-PAA-SU, issued October 26, 2012, in Docket No. 120158-SU, In re: Application for original certificate for
an existing wastewater system, requesting initial rates and charges in Lake County by Harbor Waterworks, Inc.;
PSC-15-0335-PAA-WS, issued August 20, 2015, in Docket No. 20140147-WS, In re: Application for staff-assisted
rate case in Sumter County by Jumper Creek Utility Company; and Order No. PSC-16-0421-PAA-WU, issued
October 3, 2016, in Docket No. 20140186-WU, In re: Application for staff-assisted rate case in Brevard County by
Brevard Waterworks, Inc.

ORDER NO. PSC-2023-0113-PAA-WS
DOCKET NO. 20220201-WS
PAGE 4
Another system, Black Bear, would likewise benefit from conservation rates. For Black
Bear, the base facility charge includes the first 5,000 gallons of water usage. FCWS asserts that
including water as part of the base facility charge is contrary to Florida’s conservation efforts.
Additionally, FCWS believes it would be more efficient to have a uniform rate structure for all
of its systems.
FCWS seeks an inclining block rate structure on all ten of its water systems. As a result
of the requested rate restructuring, FCWS projects that residential water bills would be reduced
at all levels for eight of the ten systems. The only systems that would see a rate increase are the
Harbor system, where FCWS expects a repression of usage from the new conservation rates, and
the Lakeside wastewater customers. Per FCWS’s projections, the customers of some systems
could see their monthly water bills drop by as much as $134.21. Harbor’s bills, however, would
only increase by $9.92 at the 10,000-gallon level for water, by $12.43 at the 10,000-gallon level
for wastewater, and by even less at lower consumption levels. Lakeside’s wastewater bill would
increase by $5.53 at the 3,000-gallon level and would actually result in $0.83 in savings at the
10,000-gallon level. However, rate changes to certain classes and meter sizes for both of the
Harbor systems and Lakeside’s wastewater system exceed the 30 percent limitation set by Rule
25-30.445(6)(b). Therefore, parts (b) and (c) would both have to be waived.
FCWS contends that the purpose of the statute is to afford us broad discretion as to
matters that are appropriate for a limited proceeding in order to alleviate the time and expense of
full rate proceedings. As to the requirement that a utility can avail itself to a limited proceeding
only if it has had a rate case within the last seven years, FCWS states that although there is
“nothing magic” about seven years, it was intended to assure that when a limited proceeding rate
increase was considered, the utility’s overall financial information had been vetted in recent
years by this Commission. FCWS argues that when the limited proceeding doesn’t seek a
revenue increase (other than for rate case expense), that vetting is not necessary. Further, FCWS
believes the underlying purpose of the statute would be achieved if a waiver or variance is
granted because we would retain our right to obtain information required to achieve the
appropriate rate consolidation, including conducting an audit, if necessary.
Requirements of Section 120.542, F.S.
Section 120.542(2), F.S., provides a two-pronged test for determining when waivers of
and variances from agency rules shall be granted:
. . . when the person subject to the rule demonstrates that the purpose of the
underlying statute will be or has been achieved by other means by the person and
when application of the rule would create a substantial hardship or would violate
principles of fairness. For purposes of this section, “substantial hardship” means
demonstrated economic, technological, legal or other type of hardship to the
person requesting the variance or waiver. For purposes of this section, “principles
of fairness” are violated when the literal application of a rule affects a particular
person in a manner significantly different from the way it affects other similarly
situated persons who are subject to the rule.

ORDER NO. PSC-2023-0113-PAA-WS
DOCKET NO. 20220201-WS
PAGE 5
Purpose of the Underlying Statute
Rule 25-30.445, F.A.C., primarily implements Section 367.0822, F.S.,3 which authorizes
us to conduct limited proceedings to consider, and act upon, any matter within our jurisdiction.
Rule 25-30.445(6), F.A.C., serves to limit the matters that we may take up via a limited
proceeding. We have previously opined as to the underlying purpose of Section 367.0822, F.S.:
We believe that the purpose of the Legislature in enacting Section 367.0822,
Florida Statutes (1985), was to provide a narrow exception to Section 367.081,
Florida Statutes (1985), which requires the Commission to consider a broad range
of ratemaking components. The purpose of a limited proceeding is to permit
review of generally singular topics, or a few well-defined issues, to the exclusion
of all others. The limited applicability of such a proceeding mandates that the
burden must rest on the utility to prove that Section 367.0822, Florida Statutes
(1985) should, in fact, be utilized with regard to a specific case. 4
While we have approved prior rate consolidations in the context of full rate case
proceedings,5 there is no statutory requirement that rate consolidations must be conducted under
Section 367.081, F.S., versus a Section 367.0822, F.S., proceeding. Further, we have allowed
revenue-neutral rate restructuring through a limited proceeding on prior occasions.6
The limitations set out under Rule 25-30.445, F.A.C., are unique to the water and
wastewater industry. Section 366.076, F.S., provides for petitions for limited proceedings by
electric and gas companies, and its associated Rule 25-6.0431, F.A.C., does not contain the same
limiting provisions as Rule 25-30.455, F.A.C. The purpose of Section 367.0822, F.S. – to allow
us to review the singular issue of a revenue-neutral consolidation of the FCWS systems’ rates –
is met if Rule 25-30.445(6), F.A.C., is waived. As acknowledged by FCWS, we would retain our
authority to solicit any information needed to process the requested rate consolidation, including
conducting an audit if necessary, as well as continue regulatory oversight and earnings’
surveillance through FCWS’s annual reports. Therefore, we find that FCWS has demonstrated
that the purpose of the underlying statute would be achieved if the requirements of Rule 25-
30.445(6), F.A.C., are waived.
3 Rule 25-30.445, F.A.C., also implements Sections 367.081, 367.0812, 367.121(1)(a), and 367.145(2), F.S.
4 Order No. 16670, issued October 2, 1986, in Docket No. 861056-SU, In re: Petition of Betmar Utilities for Limited
Proceeding for Adjustment in Sewer Rate Base in Pasco County and PSC-2010-0219-PAA-WS.
5 See, e.g., Order No. PSC-2017-0361-FOF-WS, issued September 25, 2017, in Docket No. 20160101-WS, In re:
Application for increase in water and wastewater rates in Charlotte, Highlands, Lake, Lee, Marion, Orange, Pasco,
Pinellas, Polk, and Seminole Counties by Utilities, Inc. of Florida.
6 Order Nos. PSC-95-0967-FOF-SU, issued August 8, 1995, in Docket No. 19941270-SU, In re: Application for
revenue neutral wastewater rate restructuring in Lee county by Forest Utilities, Inc. and PSC-10-0219-PAA-WS,
issued April 6, 2010, in Docket No. 20080295-WS, In re: Request by Sun Communities Finance, LLC d/b/a Water
Oak Utility for a revenue-neutral rate restructuring to implement conservation rates in Lake County.

ORDER NO. PSC-2023-0113-PAA-WS
DOCKET NO. 20220201-WS
PAGE 6
Substantial Hardship or Principles of Fairness
The second prong of the rule waiver test is met if strict application of the rule either (1)
creates a substantial hardship or (2) would violate the principles of fundamental fairness. The
utility may meet the second prong through either path and is not required to show both.
In its petition, FCWS argues that denying the rule waiver would result in an economic
hardship as it would require FCWS to file for a full rate case in order to achieve consolidation of
its systems’ rates. A full rate case would involve compiling and filing ten separate sets of
Minimum Filing Requirements and retaining outside legal counsel, the costs of which would
reduce or obviate any customer savings as a result of the rate restructuring. While the costs of a
full rate proceeding may be substantial, we are not persuaded that such costs per se constitute an
“economic hardship” to the utility sufficient to support waiver of the rule. While customers
might pay substantially more for rate consolidation effected under a Section 367.081, F.S., rate
proceeding, subsection 367.081(7), F.S., permits the utility to recover its reasonable rate case
expense through rates paid by its customers.
However, the second prong of the rule waiver statute may also be met when application
of the rule would violate principles of fairness. “Principles of fairness” are violated when the
literal application of a rule affects a particular person in a manner significantly different from the
way it affects other similarly situated persons who are subject to the rule. Section 120.542(2),
F.S.
In its January 6, 2023, supplemental filing, FCWS states that we have a long-standing
policy of encouraging the consolidation of smaller systems, and that the natural progression from
the consolidation of systems is the consolidation of rates. Further, we have previously noted the
benefits of rate consolidation to both utilities and their customers.7 Specifically, in Order No.
PSC-2010-0219-PAA-WS 	for 	Betmar 	Utilities, 	we 	stated 	that 	“a 	revenue 	neutral 	rate
restructuring for a Class B utility is tantamount to a limited proceeding rate case with no revenue
increase.” In that case, we considered the need for a conservation-oriented rate structure in
making our decision.
FCWS is uniquely affected by the strict application of the rule. Because Black Bear and
Harbor’s existing rates were grandfathered in at the time they were certificated, those systems
have never had a full rate case before us. However, Harbor continues to consume significant
amounts of water, with numerous customers consistently using up to 200,000 gallons per month.
This is in conflict with Florida’s water conservation efforts, and the St. Johns River Water
Management District (SJRWMD) has worked with Harbor to address the exceedance of Harbor’s
consumptive use permit. Harbor and the SJRWMD have attended meetings of the Harbor
7 We have found that consolidated, uniform rates provide the customers with greater control over their water bill and
provides the utility with a less complicated and expensive billing procedure. See Order No. 13014, issued February
20, 1984, in Docket No. 810386-WU, In re: Request of Sunshine Utilities, Inc. for Staff Assistance on a Rate
Increase to Customers in Marion County, Florida, at p. 3 and Order No. PSC-2017-0361-FOF-WS, issued
September 25, 2017, in Docket No. 20160101-WS, In re: Application for increase in water and wastewater rates in
Charlotte, Highlands, Lake, Lee, Marion, Orange, Pasco, Pinellas, Polk, and Seminole Counties by Utilities, Inc. of
Florida, at p. 189.

ORDER NO. PSC-2023-0113-PAA-WS
DOCKET NO. 20220201-WS
PAGE 7
homeowners’ association, and FCWS retained a conservation expert to conduct on-site irrigation
audits at the customers’ residences. In spite of these efforts, the usage of customers served by
Harbor remains excessive, and the low rates do not send appropriate conservation signals to
Harbor’s customers. FCWS has also been unable to implement conservation rates due to
Harbor’s relatively low revenue requirement.
Allowing FCWS to pursue a revenue-neutral rate restructuring and consolidate its
systems’ rates through a limited proceeding is expected to allow the majority of FCWS’s
customers to benefit from lower rates, send more appropriate conservation-oriented price signals
to Harbor’s customers, simplify FCWS’s tariffs, and create regulatory efficiencies that benefit
the FCWS systems and its customers alike. Requiring FCWS to pursue these goals through a full
base rate proceeding would unfairly minimize or obviate the benefits of consolidation by adding
the additional time and rate case expense required to process an application pursuant to Section
367.081, F.S.
A limited proceeding will allow us to maintain appropriate regulatory oversight of the
proposed rate consolidation, to the benefit of the utility and its customers. Under the unique
circumstances of this case, the potential benefits to the utility and its customers stand to be lost if
FCWS is not permitted to pursue the proposed revenue-neutral rate restructuring as a limited
proceeding. Therefore, we find that strict application of the rule would violate the principles of
fairness.
Section 120.542(1), F.S., acknowledges that strict application of uniformly applicable
rule requirements can lead to unreasonable, unfair, and unintended results in particular instances.
We must waive a rule if the utility can show both that the purpose of the underlying statute is
achieved by other means, and that the principles of fairness are violated if the rule is strictly
applied. This case presents a unique situation wherein the strict application of the rule affects
FCWS significantly differently than it would another utility, and the petition meets both prongs
of the test. Therefore, we grant the petition for waiver of Rule 25-30.445(6), F.A.C.
Based on the foregoing, it is
ORDERED by the Florida Public Service Commission that Florida Community Water
Systems, Inc.’s petition is granted and Rule 25-30.445(6) is waived for the limited purpose
requested in the petition. 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 28-106.201, 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 “Notice of Further Proceedings” attached hereto. It
is further
ORDERED that this docket shall remain open pending our final resolution of Florida
Community Water System, Inc.’s limited proceeding.

ORDER NO. PSC-2023-0113-PAA -W S
DO CKET NO. 2022020 1-W S
PAGES
By ORDER of th e Fl o rid a Publi c Service Co mmi ssion this 24th day of March, 2023.
MRT
j)
ADAM J. T
Com mi ssion
Florida Public Service Comm iss ion
2540 Shuma rd Oak Boulevard
Ta ll a ha ssee, Florida 32399
(850) 41 3-6770
www. fl oridapsc.com
Co pi es furnished: 	A copy of th is document is
provided to the parties of record at the tim e of
issuance and, if applic ab le, interested perso ns.

ORDER NO. PSC-2023-0113-PAA-WS
DOCKET NO. 20220201-WS
PAGE 9
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 that is available under Section 120.57,
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 will be granted or result in the relief
sought.
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.
The action proposed herein 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, 2540 Shumard Oak Boulevard,
Tallahassee, Florida 32399-0850, by the close of business on April 14, 2023.
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/these docket(s) before the issuance date of this order
is considered abandoned unless it satisfies the foregoing conditions and is renewed within the
specified protest period.