Order No. PSC-2024-0504-TRF-GU•Florida Public Service Commission native order document 10262-2024
Florida Public Service Commission native order document 10262-2024
Order No. PSC-2024-0504-TRF-GUFlapubserv
Texto completo
FILED 12/17/2024 DOCUMENT NO. 10262-2024 FPSC - COMMISSION CLERK BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION In re: Petition for approval of GUARD cost recovery factors, by Florida Public Utilities Com an . --~~--------------~ DOCKET NO. 20240137-GU ORDER NO. PSC-2024-0504-TRF-GU ISSUED: December 17, 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 SMITH ORDER APPROVING GUARD COST RECOVERY FACTORS BY THE COMMISSION: BACKGROUND On September 3, 2024, Florida Public Utilities Company (FPUC or Company) filed a petition for approval of its Gas Utility Access and Replacement Directive (GUARD program) cost recovery factors for January through December 2025. The petition includes the direct testimony and Exhibits SKL-1 and SKL-2 of Stacey K. Laster providing the calculations of the proposed factors and Second Revised Sheet No. 7.403. In Order No. PSC-2023-0235-PAA-GU (GUARD Order), the Commission approved FPUC's 10-year GUARD program consisting of two components: (1) replacement of problematic pipes and facilities a nd (2) relocation of mains and service lines located in rear easement and other difficult to access areas to the front lot easements. 1 As established in the GUARD Order, FPUC is able to recover the revenue requirements of expedited programs to replace problematic pipes and facilities and to relocate certain facilities in rear easements and other difficult to access areas in order to enhance the safety of portions of FPUC's natural gas distribution system through a monthly surcharge on customers' bills. The GUARD Order further established the methodology for annually setting the GUARD surcharge to recover the costs of the program. The methodology to calculate the GUARD program surcharges is the same that was approved for FPUC' s concluded Gas Replacement and Infrastructure Program (GRIP).2 The GUARD cost recovery procedure requires an annual filing with three components, similar as those approved in the 2012 GRIP Order: 1 Order No. PSC-2023-0235-PAA-GU, i ss ued August 15 , 2023, amended by Order No. PSC-2023-0235A-PAA-GU, issued August 18, 2023, in Docket No. 20230029-GU, In re: Petition for approval of ga s utility access and replacement directi ve, by Florida Public Utilities Company. 2 Order No. PSC-2012-0490-TRF, issued September 24, 2021, in Docket No.20120036-GU, In re: Joint p etition for approval of Ga s Reliability Infrastructure Program (GRIP) by Florida Public Utilities Company and th e Florida Division of Ch esapeake Utiliti es Corporation.
ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU PAGE 2 1. A final true-up showing the actual replacement costs, actual surcharge revenues, and over- or under-recovery amount for the 12-month historical period from January 1 through December 31 of the year prior to FPUC’s annual GUARD petition. 2. An actual/estimated true-up showing seven months of actual and five months of projected replacement costs, surcharge revenues, and over- or under-recovery amount. 3. A revenue requirement projection showing 12 months of projected GUARD revenue requirement for the period beginning January 1 following FPUC’s annual GUARD petition filing. In the GUARD Order, we directed FPUC to file its annual GUARD program petition to revise the surcharge on or before September 1 of each year, to implement the revised surcharge effective January 1 through December 31 of the following year. We further ordered FPUC to: (1) include all calculations to show a final true-up, actual- estimated true-up, projected year investments, and associated revenue requirements, and the calculations of the GUARD factors by rate class; (2) provide a report including the location, date, description, and associated costs of all replacement projects completed and all projects scheduled for the following year; and (3) include any remaining GRIP over- or under-recovery in the 2024 GUARD cost recovery. FPUC has complied with the GUARD Order directives stated above. Included in this order are Attachment A - a list of GUARD projects for 2023-2025 Actual/Forecast; Attachment B - Second Revised Sheet No. 7.403 legislative version; and Attachment C - Second Revised Sheet No. 7.403 clean version. During the review process, a data request was issued to FPUC on September 23, 2024, for which the responses were received on October 8, 2024. Order No. PSC-2024-0440-PCO- GU, issued on October 14, 2024, suspended the proposed tariffs. We have jurisdiction over this matter pursuant to Sections 366.04, 366.05, and 366.06, Florida Statutes (F.S.). DECISION The GUARD program is driven by risks identified under FPUC’s Distribution Integrity Management Program (DIMP) and risk assessments performed by an independent contractor.3 As stated by witness Laster, the GUARD projects are based upon the assessment of an independent contractor. Projects in high consequence areas and those of high risk continue to be a priority. The prioritized projects for 2024 and 2025 are included in Attachment A to this order. Attachment A indicates that FPUC currently has six projects in-progress which will relocate 30.7 miles of pipes from rear lots to the street front in Palm Beach and Seminole counties for an estimated investment cost of $18.7M during the third and fourth quarters of 2024. An additional five projects are scheduled for the fourth quarter of 2024, for an estimated investment cost of $3.9M which includes replacing 10.77 miles of obsolete/Aldyl-A, rear-to-front, shallow, span, 3 Pursuant to Chapter 49, Section 192.1005 Code of Federal Regulations (2023), a gas distribution operator must develop and implement an integrity management program that includes a written integrity management plan.
ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU PAGE 3 and under building pipes, and replacing 176 services. For 2025, 18 projects are listed for an estimated investment cost of $25M which include replacing obsolete/Aldyl-A pipes, span pipes, and relocation of pipes from rear lot easements to the front lot easements for 36.19 miles and 2,203 services in Palm Beach, Seminole, and Volusia counties. FPUC’s True-Ups by Year FPUC’s calculation for the 2025 GUARD revenue requirement and surcharges includes a final true-up for 2023, an actual/estimated true-up for 2024, and projected costs for 2025. In its 2022 rate case, FPUC was authorized to recover $19.8M of annual bare steel replacement expenses in base rates.4 Therefore, the $19.8M recovered from base rates is excluded from the GUARD true-up calculations for 2022 and 2023. Final 2023 GUARD True-Up Company witness Laster states that the January through December 2023 true-up resulted in an over-recovery of $571,835, inclusive of interest and remaining true-up of the concluded GRIP. As shown in Schedule C-1 of the petition, the 2022 ending balance was an over-recovery of $315,465. Combined with the 2023 over-recovery of $248,063, and monthly interest of $8,307 associated with any over- and under-recoveries results in a final 2023 over-recovery of $571,835. Actual/Estimated 2024 GUARD True-Up The January through December 2023 GUARD investment and associated revenue requirement amounts are shown on Exhibit SKL-1, page 2 of 6. In 2023, the actual beginning balance was an over-recovery of $571,835. The 2024 actual (January through July) and forecasted (August through December) GUARD true-up is an under-recovery of $1,257,430 (inclusive of interest), resulting in an under-recovery of $685,595. As shown in Table 1 below, the under-recovery is being applied to the 2025 GUARD revenue requirement, resulting in a higher revenue requirement to be recovered from customers in 2025. Projected 2025 GUARD Revenue Requirement For 2025, FPUC plans to invest $25,000,205 ($16,167,834 for mains and $8,832,371 for services), resulting in a total projected 2025 investment of $75,739,119 (including the year-end 2024 investment). The GUARD program revenue requirement includes a return on investment, depreciation expense, extending customer-owned fuel lines (to connect to meters which require to be relocated due to safety issues), customer notification expense, and property taxes. All expenses are dependent upon the level of investment costs. After adding the 2024 under- recovery true-up amount of $685,595, the 2025 GUARD revenue requirement to be recovered through the proposed surcharges is $7,013,251. 4 Order No. PSC-2023-0103-FOF-GU, issued March 15, 2023, in Docket No. 20220067-GU, In re: Petition for rate increase by Florida Public Utilities Company, Florida Division of Chesapeake Utilities Corporation, Florida Public Utilities Company - Fort Meade, and Florida Public Utilities Company - Indiantown Division.
ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU PAGE 4 Table 1 2025 GUARD Revenue Requirement Calculation 2025 Projected Investment $75,739,119 2025 Return on Investment $4,325,414 Depreciation Expense $1,023,258 Fuel Line Expense 8,400 Property/Ad Valorem Tax Expense $928,584 Customer Notification Expense $42,000 2025 GUARD Revenue Requirement $6,327,656 Plus 2024 Under-Recovery $685,595 2025 Total Revenue Requirement $7,013,251 Source: Witness Laster’s Testimony Exhibit SKL-1, Schedule C-2, Page 4 of 7. Proposed GUARD Surcharges As approved in the GUARD Order, the total 2025 revenue requirement is allocated to the rate classes using the same methodology used for the allocation of mains and services in the cost of service study used in the Company’s most recent rate case. The respective percentages were multiplied by the 2025 revenue requirements and divided by each rate class’s projected therm sales to provide the GUARD surcharge for each rate class. This methodology was originally established by the 2012 Order approving FPUC’s GRIP program. In 2024, the monthly bill impact was $0.65 for a residential customer using 20 therms per month or $7.80 per year. The proposed 2025 GUARD surcharge for FPUC’s residential customers who use 20 therms a month (240 therms annually) on the Residential Service tariff (RES-2) would pay $0.11116 per therm compared to the 2024 GUARD surcharge of $0.03263 per therm. The monthly bill impact for 2025 would be $2.22 for a residential customer using 20 therms per month or $26.64 per year. The proposed GUARD surcharges are shown in Attachment B, in Second Revised Sheet No. 7.403. For the reasons stated above, we hereby approve FPUC's 2025 GUARD cost recovery factors and associated Second Revised Sheet No. 7.403, as stated on Attachment B to this order, to be effective for the first billing cycle of January through the last billing cycle of December 2025. The GUARD surcharge will allow FPUC to replace problematic pipes and facilities and relocate certain facilities located in rear easements to the front easements, and recover the project costs on an expedited basis. Based on the foregoing, it is ORDERED by the Florida Public Service Commission that Florida Public Utilities Company’s petition for approval of GUARD cost recovery factors is hereby approved. It is further ORDERED that Florida Public Utilities Company’s 2025 GUARD cost recovery factors and associated Second Revised Sheet No. 7.403, included in Attachment B to this order, to be effective for the first billing cycle of January through the last billing cycle of December 2025 is hereby approved. It is further
ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU PAGES ORDERED that ifa protest is filed within 21 days of the issuance of this order, the tariffs shall remain in effect, with any revenues held subject to refund, pending resolution of the protest. If no timely protest is filed, this docket shall be closed upon the issuance of a consummating order. By ORDER of the Florida Public Service Commission this 17th day of December, 2024. SBr Commission Clerk 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. NOTICE OF FURTHER PROCEEDINGS 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. 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 Commission's decision on thjs tariff is interim in nature and will become final, wtless a person whose substantial interests are affected by the proposed action tiles 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 January 7. 2025. ln the absence of such a petition, this Order shall become final and effective upon the issuance of a Consummating Order.
ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU PAGE 6 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.
ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU Attachment A PAGE 7 GUARD Projects 2023 ‐2025 Actual/ForecastExhibit_______ Florida Public Utilities Company Stacey K. Laster (SKL ‐2) Page 1 of 1 Construction Construction Project
Location
Location
Program
Program
Estimate
Estimate
Project
Actual/Forecasted
Actual/Forecasted
Actual/Forecasted
Actual/Forecasted Name
City/Town
County
Category
Sub ‐Category
Start Qtr
Completed Qtr Status
Investment Cost
Footages
Miles
Services Industrial Drive ‐ Station
Problematic
Station
2023 ‐ Q4 2023 ‐ Q4 Completed
542,406.52 $ Lake Park ‐ North
Lake Park
Palm Beach
Accessiblity
Rear ‐to‐Front
2023 ‐ Q2 2024 ‐ Q1 Completed
5,085,540.33 $ 43,996
8.33
298 Indiantown ‐ North Ph.1
Indiantown
Martin
Problematic
Obsolete/Aldyl ‐A 2023 ‐ Q3 2024 ‐ Q1 Completed
3,336,411.51 $ 27,905
5.29
340 Lake Park ‐ South
Lake Park
Palm Beach
Accessiblity
Rear ‐to‐Front
2023 ‐ Q3 2024 ‐ Q1 Completed
1,728,971.80 $ 19,144
3.63
70 Turnpike and Belvedere
West Palm Beach
Palm Beach
Problematic
Span
2023 ‐ Q3 2024 ‐ Q1 Completed
736,291.39 $ 2,532
0.48
‐ Turnpike and Jog
West Palm Beach
Palm Beach
Problematic
Span
2023 ‐ Q3 2024 ‐ Q1 Completed
675,570.55 $ 1,167
0.22
‐ Mercer Ave
West Palm Beach
Palm Beach
Problematic
Span
2023 ‐ Q4 2024 ‐ Q1 Completed
316,899.82 $ 670
0.13
‐ Winter Springs Ph.1
Winter Springs
Seminole
Accessiblity
Rear ‐to‐Front
2023 ‐ Q2 2024 ‐ Q2 Completed
1,647,219.68 $ 19,952
3.78
216 Indiantown ‐ South ‐ Ph.3
Indiantown
Martin
Problematic
Obsolete/Aldyl ‐A 2023 ‐ Q4 2024 ‐ Q2 Completed
3,128,738.12 $ 28,166
5.33
241 Indiantown ‐ North Ph.2
Indiantown
Martin
Problematic
Obsolete/Aldyl ‐A 2024 ‐ Q1 2024 ‐ Q2 Completed
1,508,049.31 $ 15,950
3.02
98 Forest Hill Villages
West Palm Beach
Palm Beach
Accessiblity
Rear ‐to‐Front
2023 ‐ Q4 2024 ‐ Q3 In‐Progress
5,707,811.43 $ 36,054
6.83
439 Sanford Ph.1
Sanford
Seminole
Accessiblity
Rear ‐to‐Front
2024 ‐ Q1 2024 ‐ Q3 In‐Progress
746,233.57 $ 9,080
1.72
105 Seacrest West
Boynton Beach
Palm Beach
Accessiblity
Rear ‐to‐Front
2024 ‐ Q2 2024 ‐ Q3 In‐Progress
2,266,012.00 $ 25,263
4.78
143 Grammercy Park
Riviera Beach
Palm Beach
Accessiblity
Rear ‐to‐Front
2024 ‐ Q1 2024 ‐ Q4 In‐Progress
2,660,600.00 $ 26,130
4.95
205 Park Manor
Riviera Beach
Palm Beach
Accessiblity
Rear ‐to‐Front
2024 ‐ Q2 2024 ‐ Q4 In‐Progress
4,212,216.00 $ 43,096
8.16
268 Winter Springs Ph.2
Winter Springs
Seminole
Accessiblity
Rear ‐to‐Front
2024 ‐ Q2 2024 ‐ Q4 In‐Progress
3,177,020.00 $ 22,479
4.26
358 Le Chalet
Boynton Beach
Palm Beach
Problematic
Obsolete/Aldyl ‐A 2024 ‐ Q3 2024 ‐ Q4 Future Project
1,272,535.00 $ 11,805
2.24
111 Seacrest East
Boynton Beach
Palm Beach
Accessiblity
Rear ‐to‐Front
2024 ‐ Q3 2024 ‐ Q4 Future Project
1,346,140.00 $ 19,534
3.70
58 Sanford Airport
Sanford
Seminole
Problematic
Shallow
2024 ‐ Q3 2024 ‐ Q4 Future Project
1,021,350.00 $ 20,500
3.88
7 American Superior
Winter Haven
Polk
Problematic
Span
2024 ‐ Q3 2024 ‐ Q4 Future Project
230,500.00 $ 4,700
0.89
‐ Caribbean Distillers
Lake Alfred
Polk
Problematic
Under Building
2024 ‐ Q4 2024 ‐ Q4 Future Project
68,750.00 $ 300
0.06
‐ Edgecliff Estates
Lantana
Palm Beach
Accessiblity
Rear ‐to‐Front
2024 ‐ Q4 2025 ‐ Q3 Future Project
1,993,839.00 $ 7,927
1.50
177 Lantana Lee Estates
Lantana
Palm Beach
Accessiblity
Rear Easement
Qtr 1 ‐ 2025
Qtr 2 ‐ 2025
Future Project
1,935,698 $ 11,327
2.15
257 Monroe Heights
Riviera Beach
Palm Beach
Accessiblity
Rear Easement
Qtr 1 ‐ 2025
Qtr 2 ‐ 2025
Future Project
1,636,112 $ 15,944
3.02
83 Sanford San Lanta
Sanford
Seminole
Accessiblity
Rear Easement
Qtr 1 ‐ 2025
Qtr 2 ‐ 2025
Future Project
799,190 $ 13,243
2.51
40 900 S. Ocean Blvd. ‐ BR Boca Raton
Palm Beach
Problematic
Obsolete/Aldyl ‐A Qtr 2 ‐ 2025
Qtr 3 ‐ 2025
Future Project
140,000 $ 995
0.19
6 Cherry Lane Townhomes
West Palm Beach
Palm Beach
Problematic
Obsolete/Aldyl ‐A Qtr 2 ‐ 2025
Qtr 4 ‐ 2025
Future Project
726,688 $ 3,690
0.70
92 Southside
West Palm Beach
Palm Beach
Accessiblity
Rear Easement
Qtr 2 ‐ 2025
Qtr 4 ‐ 2025
Future Project
3,188,004 $ 25,189
4.77
279 Whispering Palms
Lake Worth Beach
Palm Beach
Accessiblity
Rear Easement
Qtr 2 ‐ 2025
Qtr 3 ‐ 2025
Future Project
1,961,663 $ 18,695
3.54
68 302 Lake Shore Dr ‐ Lake Park
Lake Park
Palm Beach
Problematic
Span
Qtr 2 ‐ 2025
Qtr 3 ‐ 2025
Future Project
218,110 $ 400
0.08
‐ Jungle Rd ‐ Temple St New Smyrna Beach Volusia
Problematic
Span
Qtr 2 ‐ 2025
Qtr 3 ‐ 2025
Future Project
300,000 $ 218
0.04
‐ Woodlands
Palm Springs
Palm Beach
Problematic
Obsolete/Aldyl ‐A Qtr 3 ‐ 2025
Qtr 4 ‐ 2025
Future Project
1,298,661 $ 6,535
1.24
195 Edgewater ‐ Meadow Lake
Edgewater
Volusia
Problematic
Obsolete/Steel Tubing Qtr 3 ‐ 2025
Qtr 4 ‐ 2025
Future Project
406,873 $ 5,000
‐ 40 Federal Gardens
Riviera Beach
Palm Beach
Accessiblity
Rear Easement
Qtr 3 ‐ 2025
Qtr 4 ‐ 2025
Future Project
1,129,113 $ 7,787
1.47
119 Heights
Riviera Beach
Palm Beach
Accessiblity
Rear Easement
Qtr 3 ‐ 2025
Qtr 4 ‐ 2025
Future Project
2,307,135 $ 19,755
3.74
144 Pickwick Park
Greenacres
Palm Beach
Accessiblity
Rear Easement
Qtr 3 ‐ 2025
Qtr 4 ‐ 2025
Future Project
967,142 $ 10,285
1.95
30 Highlands ‐Elgin Dr Winter Springs
Seminole
Accessiblity
Rear Easement
Qtr 3 ‐ 2025
Qtr 4 ‐ 2025
Future Project
1,502,238 $ 15,460
2.93
217 Edgecliff ‐ 2025
Lantana
Palm Beach
Accessiblity
Rear Easement
Qtr 4 ‐ 2024
Qtr 3 ‐ 2025
Future Project
4,413,467 $ 23,781
4.50
530 NE 32nd Street
Boca Raton
Palm Beach
Accessiblity
Rear Easement
Qtr 4 ‐ 2025
Qtr 4 ‐ 2025
Future Project
1,670,112 $ 16,815
3.18
103 N. Shore Dr at C‐17 WPB
West Palm Beach
Palm Beach
Problematic
Span
Qtr 4 ‐ 2025
Qtr 4 ‐ 2025
Future Project
400,000 $ 967
0.18
‐ 68,409,311.53 $ 582,436
109.36
5,337
ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU Attachment B PAGE 8
ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU Attachment C PAGE 9
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FILED 12/17/2024 DOCUMENT NO. 10262-2024 FPSC - COMMISSION CLERK BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION In re: Petition for approval of GUARD cost DOCKET NO. 20240137-GU recovery factors, by Florida Public Utilities ORDER NO. PSC-2024-0504-TRF-GU Company. ISSUED: December 17, 2024 The following Commissioners participated in the disposition of this matter: MIKE LA ROSA, Chairman ART GRAHAM GARY F. CLARK ANDREW GILES FAY GABRIELLA PASSIDOMO SMITH ORDER APPROVING GUARD COST RECOVERY FACTORS BY THE COMMISSION: BACKGROUND On September 3, 2024, Florida Public Utilities Company (FPUC or Company) filed a petition for approval of its Gas Utility Access and Replacement Directive (GUARD program) cost recovery factors for January through December 2025. The petition includes the direct testimony and Exhibits SKL-1 and SKL-2 of Stacey K. Laster providing the calculations of the proposed factors and Second Revised Sheet No. 7.403. In Order No. PSC-2023-0235-PAA-GU (GUARD Order), the Commission approved FPUC’s 10-year GUARD program consisting of two components: (1) replacement of problematic pipes and facilities and (2) relocation of mains and service lines located in rear easement and other difficult to access areas to the front lot easements.! As established in the GUARD Order, FPUC is able to recover the revenue requirements of expedited programs to replace problematic pipes and facilities and to relocate certain facilities in rear easements and other difficult to access areas in order to enhance the safety of portions of FPUC’s natural gas distribution system through a monthly surcharge on customers’ bills. The GUARD Order further established the methodology for annually setting the GUARD surcharge to recover the costs of the program. The methodology to calculate the GUARD program surcharges is the same that was approved for FPUC’s concluded Gas Replacement and Infrastructure Program (GRIP).* The GUARD cost recovery procedure requires an annual filing with three components, similar as those approved in the 2012 GRIP Order: ' Order No. PSC-2023-0235-PAA-GU, issued August 15, 2023, amended by Order No. PSC-2023-0235A-PAA-GU, issued August 18, 2023, in Docket No. 20230029-GU, In re: Petition for approval of gas utility access and replacement directive, by Florida Public Utilities Company. ? Order No. PSC-2012-0490-TRF, issued September 24, 2021, in Docket No. 20120036-GU, Jn re: Joint petition for approval of Gas Reliability Infrastructure Program (GRIP) by Florida Public Utilities Company and the Florida Division of Chesapeake Utilities Corporation. ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU PAGE 2 1. A final true-up showing the actual replacement costs, actual surcharge revenues, and over- or under-recovery amount for the 12-month historical period from January 1 through December 31 of the year prior to FPUC’s annual GUARD petition. 2. An actual/estimated true-up showing seven months of actual and five months of projected replacement costs, surcharge revenues, and over- or under-recovery amount. 3. A revenue requirement projection showing 12 months of projected GUARD revenue requirement for the period beginning January 1 following FPUC’s annual GUARD petition filing. In the GUARD Order, we directed FPUC to file its annual GUARD program petition to revise the surcharge on or before September 1 of each year, to implement the revised surcharge effective January 1 through December 31 of the following year. We further ordered FPUC to: (1) include all calculations to show a final true-up, actual- estimated true-up, projected year investments, and associated revenue requirements, and the calculations of the GUARD factors by rate class; (2) provide a report including the location, date, description, and associated costs of all replacement projects completed and all projects scheduled for the following year; and (3) include any remaining GRIP over- or under-recovery in the 2024 GUARD cost recovery. FPUC has complied with the GUARD Order directives stated above. Included in this order are Attachment A - a list of GUARD projects for 2023-2025 Actual/Forecast; Attachment B - Second Revised Sheet No. 7.403 legislative version; and Attachment C - Second Revised Sheet No. 7.403 clean version. During the review process, a data request was issued to FPUC on September 23, 2024, for which the responses were received on October 8, 2024. Order No. PSC-2024-0440-PCO- GU, issued on October 14, 2024, suspended the proposed tariffs. We have jurisdiction over this matter pursuant to Sections 366.04, 366.05, and 366.06, Florida Statutes (F.S.). DECISION The GUARD program is driven by risks identified under FPUC’s Distribution Integrity Management Program (DIMP) and risk assessments performed by an independent contractor.3 As stated by witness Laster, the GUARD projects are based upon the assessment of an independent contractor. Projects in high consequence areas and those of high risk continue to be a priority. The prioritized projects for 2024 and 2025 are included in Attachment A to this order. Attachment A indicates that FPUC currently has six projects in-progress which will relocate 30.7 miles of pipes from rear lots to the street front in Palm Beach and Seminole counties for an estimated investment cost of $18.7M during the third and fourth quarters of 2024. An additional five projects are scheduled for the fourth quarter of 2024, for an estimated investment cost of $3.9M which includes replacing 10.77 miles of obsolete/Aldyl-A, rear-to-front, shallow, span, 3 Pursuant to Chapter 49, Section 192.1005 Code of Federal Regulations (2023), a gas distribution operator must develop and implement an integrity management program that includes a written integrity management plan. ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU PAGE 3 and under building pipes, and replacing 176 services. For 2025, 18 projects are listed for an estimated investment cost of $25M which include replacing obsolete/Aldyl-A pipes, span pipes, and relocation of pipes from rear lot easements to the front lot easements for 36.19 miles and 2,203 services in Palm Beach, Seminole, and Volusia counties. FPUC’s True-Ups by Year FPUC’s calculation for the 2025 GUARD revenue requirement and surcharges includes a final true-up for 2023, an actual/estimated true-up for 2024, and projected costs for 2025. In its 2022 rate case, FPUC was authorized to recover $19.8M of annual bare steel replacement expenses in base rates.4 Therefore, the $19.8M recovered from base rates is excluded from the GUARD true-up calculations for 2022 and 2023. Final 2023 GUARD True-Up Company witness Laster states that the January through December 2023 true-up resulted in an over-recovery of $571,835, inclusive of interest and remaining true-up of the concluded GRIP. As shown in Schedule C-1 of the petition, the 2022 ending balance was an over-recovery of $315,465. Combined with the 2023 over-recovery of $248,063, and monthly interest of $8,307 associated with any over- and under-recoveries results in a final 2023 over-recovery of $571,835. Actual/Estimated 2024 GUARD True-Up The January through December 2023 GUARD investment and associated revenue requirement amounts are shown on Exhibit SKL-1, page 2 of 6. In 2023, the actual beginning balance was an over-recovery of $571,835. The 2024 actual (January through July) and forecasted (August through December) GUARD true-up is an under-recovery of $1,257,430 (inclusive of interest), resulting in an under-recovery of $685,595. As shown in Table 1 below, the under-recovery is being applied to the 2025 GUARD revenue requirement, resulting in a higher revenue requirement to be recovered from customers in 2025. Projected 2025 GUARD Revenue Requirement For 2025, FPUC plans to invest $25,000,205 ($16,167,834 for mains and $8,832,371 for services), resulting in a total projected 2025 investment of $75,739,119 (including the year-end 2024 investment). The GUARD program revenue requirement includes a return on investment, depreciation expense, extending customer-owned fuel lines (to connect to meters which require to be relocated due to safety issues), customer notification expense, and property taxes. All expenses are dependent upon the level of investment costs. After adding the 2024 under- recovery true-up amount of $685,595, the 2025 GUARD revenue requirement to be recovered through the proposed surcharges is $7,013,251. 4 Order No. PSC-2023-0103-FOF-GU, issued March 15, 2023, in Docket No. 20220067-GU, In re: Petition for rate increase by Florida Public Utilities Company, Florida Division of Chesapeake Utilities Corporation, Florida Public Utilities Company - Fort Meade, and Florida Public Utilities Company - Indiantown Division. ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU PAGE 4 Table 1 2025 GUARD Revenue Requirement Calculation 2025 Projected Investment $75,739,119 2025 Return on Investment $4,325,414 Depreciation Expense $1,023,258 Fuel Line Expense 8,400 Property/Ad Valorem Tax Expense $928,584 Customer Notification Expense $42,000 2025 GUARD Revenue Requirement $6,327,656 Plus 2024 Under-Recovery $685,595 2025 Total Revenue Requirement $7,013,251 Source: Witness Laster’s Testimony Exhibit SKL-1, Schedule C-2, Page 4 of 7. Proposed GUARD Surcharges As approved in the GUARD Order, the total 2025 revenue requirement is allocated to the rate classes using the same methodology used for the allocation of mains and services in the cost of service study used in the Company’s most recent rate case. The respective percentages were multiplied by the 2025 revenue requirements and divided by each rate class’s projected therm sales to provide the GUARD surcharge for each rate class. This methodology was originally established by the 2012 Order approving FPUC’s GRIP program. In 2024, the monthly bill impact was $0.65 for a residential customer using 20 therms per month or $7.80 per year. The proposed 2025 GUARD surcharge for FPUC’s residential customers who use 20 therms a month (240 therms annually) on the Residential Service tariff (RES-2) would pay $0.11116 per therm compared to the 2024 GUARD surcharge of $0.03263 per therm. The monthly bill impact for 2025 would be $2.22 for a residential customer using 20 therms per month or $26.64 per year. The proposed GUARD surcharges are shown in Attachment B, in Second Revised Sheet No. 7.403. For the reasons stated above, we hereby approve FPUC's 2025 GUARD cost recovery factors and associated Second Revised Sheet No. 7.403, as stated on Attachment B to this order, to be effective for the first billing cycle of January through the last billing cycle of December 2025. The GUARD surcharge will allow FPUC to replace problematic pipes and facilities and relocate certain facilities located in rear easements to the front easements, and recover the project costs on an expedited basis. Based on the foregoing, it is ORDERED by the Florida Public Service Commission that Florida Public Utilities Company’s petition for approval of GUARD cost recovery factors is hereby approved. It is further ORDERED that Florida Public Utilities Company’s 2025 GUARD cost recovery factors and associated Second Revised Sheet No. 7.403, included in Attachment B to this order, to be effective for the first billing cycle of January through the last billing cycle of December 2025 is hereby approved. It is further ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU PAGES ORDERED that ifa protest is filed within 21 days of the issuance of this order, the tariffs shall remain in effect, with any revenues held subject to refund, pending resolution of the protest. If no timely protest is filed, this docket shall be closed upon the issuance of a consummating order. By ORDER of the Florida Public Service Commission this 17th day of December, 2024. SBr Commission Clerk 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. NOTICE OF FURTHER PROCEEDINGS 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. 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 Commission's decision on thjs tariff is interim in nature and will become final, wtless a person whose substantial interests are affected by the proposed action tiles 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 January 7. 2025. ln the absence of such a petition, this Order shall become final and effective upon the issuance of a Consummating Order. ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU PAGE 6 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. ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU Attachment A PAGE 7 GUARD Projects 2023 ‐2025 Actual/Forecast Exhibit_______ Florida Public Utilities Company Stacey K. Laster (SKL ‐2) Page 1 of 1 Construction Construction Project Location Location Program Program Estimate Estimate Project Actual/Forecasted Actual/Forecasted Actual/Forecasted Actual/Forecasted Name City/Town County Category Sub ‐Category Start Qtr Completed Qtr Status Investment Cost Footages Miles Services Industrial Drive ‐ Station Problematic Station 2023 ‐ Q4 2023 ‐ Q4 Completed 542,406.52 $ Lake Park ‐ North Lake Park Palm Beach Accessiblity Rear ‐to‐Front 2023 ‐ Q2 2024 ‐ Q1 Completed 5,085,540.33 $ 43,996 8.33 298 Indiantown ‐ North Ph.1 Indiantown Martin Problematic Obsolete/Aldyl ‐A 2023 ‐ Q3 2024 ‐ Q1 Completed 3,336,411.51 $ 27,905 5.29 340 Lake Park ‐ South Lake Park Palm Beach Accessiblity Rear ‐to‐Front 2023 ‐ Q3 2024 ‐ Q1 Completed 1,728,971.80 $ 19,144 3.63 70 Turnpike and Belvedere West Palm Beach Palm Beach Problematic Span 2023 ‐ Q3 2024 ‐ Q1 Completed 736,291.39 $ 2,532 0.48 ‐ Turnpike and Jog West Palm Beach Palm Beach Problematic Span 2023 ‐ Q3 2024 ‐ Q1 Completed 675,570.55 $ 1,167 0.22 ‐ Mercer Ave West Palm Beach Palm Beach Problematic Span 2023 ‐ Q4 2024 ‐ Q1 Completed 316,899.82 $ 670 0.13 ‐ Winter Springs Ph.1 Winter Springs Seminole Accessiblity Rear ‐to‐Front 2023 ‐ Q2 2024 ‐ Q2 Completed 1,647,219.68 $ 19,952 3.78 216 Indiantown ‐ South ‐ Ph.3 Indiantown Martin Problematic Obsolete/Aldyl ‐A 2023 ‐ Q4 2024 ‐ Q2 Completed 3,128,738.12 $ 28,166 5.33 241 Indiantown ‐ North Ph.2 Indiantown Martin Problematic Obsolete/Aldyl ‐A 2024 ‐ Q1 2024 ‐ Q2 Completed 1,508,049.31 $ 15,950 3.02 98 Forest Hill Villages West Palm Beach Palm Beach Accessiblity Rear ‐to‐Front 2023 ‐ Q4 2024 ‐ Q3 In‐Progress 5,707,811.43 $ 36,054 6.83 439 Sanford Ph.1 Sanford Seminole Accessiblity Rear ‐to‐Front 2024 ‐ Q1 2024 ‐ Q3 In‐Progress 746,233.57 $ 9,080 1.72 105 Seacrest West Boynton Beach Palm Beach Accessiblity Rear ‐to‐Front 2024 ‐ Q2 2024 ‐ Q3 In‐Progress 2,266,012.00 $ 25,263 4.78 143 Grammercy Park Riviera Beach Palm Beach Accessiblity Rear ‐to‐Front 2024 ‐ Q1 2024 ‐ Q4 In‐Progress 2,660,600.00 $ 26,130 4.95 205 Park Manor Riviera Beach Palm Beach Accessiblity Rear ‐to‐Front 2024 ‐ Q2 2024 ‐ Q4 In‐Progress 4,212,216.00 $ 43,096 8.16 268 Winter Springs Ph.2 Winter Springs Seminole Accessiblity Rear ‐to‐Front 2024 ‐ Q2 2024 ‐ Q4 In‐Progress 3,177,020.00 $ 22,479 4.26 358 Le Chalet Boynton Beach Palm Beach Problematic Obsolete/Aldyl ‐A 2024 ‐ Q3 2024 ‐ Q4 Future Project 1,272,535.00 $ 11,805 2.24 111 Seacrest East Boynton Beach Palm Beach Accessiblity Rear ‐to‐Front 2024 ‐ Q3 2024 ‐ Q4 Future Project 1,346,140.00 $ 19,534 3.70 58 Sanford Airport Sanford Seminole Problematic Shallow 2024 ‐ Q3 2024 ‐ Q4 Future Project 1,021,350.00 $ 20,500 3.88 7 American Superior Winter Haven Polk Problematic Span 2024 ‐ Q3 2024 ‐ Q4 Future Project 230,500.00 $ 4,700 0.89 ‐ Caribbean Distillers Lake Alfred Polk Problematic Under Building 2024 ‐ Q4 2024 ‐ Q4 Future Project 68,750.00 $ 300 0.06 ‐ Edgecliff Estates Lantana Palm Beach Accessiblity Rear ‐to‐Front 2024 ‐ Q4 2025 ‐ Q3 Future Project 1,993,839.00 $ 7,927 1.50 177 Lantana Lee Estates Lantana Palm Beach Accessiblity Rear Easement Qtr 1 ‐ 2025 Qtr 2 ‐ 2025 Future Project 1,935,698 $ 11,327 2.15 257 Monroe Heights Riviera Beach Palm Beach Accessiblity Rear Easement Qtr 1 ‐ 2025 Qtr 2 ‐ 2025 Future Project 1,636,112 $ 15,944 3.02 83 Sanford San Lanta Sanford Seminole Accessiblity Rear Easement Qtr 1 ‐ 2025 Qtr 2 ‐ 2025 Future Project 799,190 $ 13,243 2.51 40 900 S. Ocean Blvd. ‐ BR Boca Raton Palm Beach Problematic Obsolete/Aldyl ‐A Qtr 2 ‐ 2025 Qtr 3 ‐ 2025 Future Project 140,000 $ 995 0.19 6 Cherry Lane Townhomes West Palm Beach Palm Beach Problematic Obsolete/Aldyl ‐A Qtr 2 ‐ 2025 Qtr 4 ‐ 2025 Future Project 726,688 $ 3,690 0.70 92 Southside West Palm Beach Palm Beach Accessiblity Rear Easement Qtr 2 ‐ 2025 Qtr 4 ‐ 2025 Future Project 3,188,004 $ 25,189 4.77 279 Whispering Palms Lake Worth Beach Palm Beach Accessiblity Rear Easement Qtr 2 ‐ 2025 Qtr 3 ‐ 2025 Future Project 1,961,663 $ 18,695 3.54 68 302 Lake Shore Dr ‐ Lake Park Lake Park Palm Beach Problematic Span Qtr 2 ‐ 2025 Qtr 3 ‐ 2025 Future Project 218,110 $ 400 0.08 ‐ Jungle Rd ‐ Temple St New Smyrna Beach Volusia Problematic Span Qtr 2 ‐ 2025 Qtr 3 ‐ 2025 Future Project 300,000 $ 218 0.04 ‐ Woodlands Palm Springs Palm Beach Problematic Obsolete/Aldyl ‐A Qtr 3 ‐ 2025 Qtr 4 ‐ 2025 Future Project 1,298,661 $ 6,535 1.24 195 Edgewater ‐ Meadow Lake Edgewater Volusia Problematic Obsolete/Steel Tubing Qtr 3 ‐ 2025 Qtr 4 ‐ 2025 Future Project 406,873 $ 5,000 ‐ 40 Federal Gardens Riviera Beach Palm Beach Accessiblity Rear Easement Qtr 3 ‐ 2025 Qtr 4 ‐ 2025 Future Project 1,129,113 $ 7,787 1.47 119 Heights Riviera Beach Palm Beach Accessiblity Rear Easement Qtr 3 ‐ 2025 Qtr 4 ‐ 2025 Future Project 2,307,135 $ 19,755 3.74 144 Pickwick Park Greenacres Palm Beach Accessiblity Rear Easement Qtr 3 ‐ 2025 Qtr 4 ‐ 2025 Future Project 967,142 $ 10,285 1.95 30 Highlands ‐Elgin Dr Winter Springs Seminole Accessiblity Rear Easement Qtr 3 ‐ 2025 Qtr 4 ‐ 2025 Future Project 1,502,238 $ 15,460 2.93 217 Edgecliff ‐ 2025 Lantana Palm Beach Accessiblity Rear Easement Qtr 4 ‐ 2024 Qtr 3 ‐ 2025 Future Project 4,413,467 $ 23,781 4.50 530 NE 32nd Street Boca Raton Palm Beach Accessiblity Rear Easement Qtr 4 ‐ 2025 Qtr 4 ‐ 2025 Future Project 1,670,112 $ 16,815 3.18 103 N. Shore Dr at C‐17 WPB West Palm Beach Palm Beach Problematic Span Qtr 4 ‐ 2025 Qtr 4 ‐ 2025 Future Project 400,000 $ 967 0.18 ‐ 68,409,311.53 $ 582,436 109.36 5,337 ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU PAGE 8 Florida Public Utilities Company | FPSC Tariff No. 7.403 | Original Volume No, 2 Attachment B First Second Revised Sheet Replaces Original First Sheet No, 7.403 GAS UTILITY ACCESS AND REPLACEMENT DIRECTIVE (GUARD) Applicability: The bill for Regulated Gas Sales Service or Transportation Service, as applicable, supplied to a Customer in any Billing Period shall be adjusted as follows: Rate Schedule Rates per Therm RES-1 and REST-1 RES-2 and REST-2 RES-3 and REST-3 RES-SG and SGT GS-1 and GTS-1 GS-2 and GTS-2 GS-3 and GTS-3 GS-4 and GTS4 GS-5 and GTS-5 GS-6 and GTS-6 GS-7 and GTS-7 GS-8A and GTS-8A GS-8B and GTS-8B GS-8C and GTS-8C GS-8D and GTS-8D COM-INT and COM-INTT COM-NGYV and COM-NGVT COM-OL and COM-OLT COM-SG and COM-SGT $0.0588717916 $0.0326311116 $0.0155704864 $0.0452313610 $0.0265406642 $0.0182405544 $0.0168605140 $0,0162105069 $0.0145404247 $0,0135604119 $0.0424903767 $0,0455904150 $0.0455904150 $0,0455904150 $0.0155904150 $0,0074002144 $0.0H6403810 $0,0209208779 $0,0501016219 The GUARD factors for the period from the first billing cycle for January 2024-2025 through the last billing cycle for December 2024-2025 are as follows: Issued by: Jeffrey Sylvester, Chief Operating Officer Florida Public Utilities Company Effective: January 2024 ORDER NO. PSC-2024-0504-TRF-GU DOCKET NO. 20240137-GU Attachment C PAGE 9 Florida Public Utilities Company FPSC Tariff Second Revised Sheet No. 7.403 Original Volume No, 2 Replaces First Sheet No, 7.403 GAS UTILITY ACCESS AND REPLACEMENT DIRECTIVE (GUARD) Applicability: The bill for Regulated Gas Sales Service or Transportation Service, as applicable, supplied to a Customer in any Billing Period shall be adjusted as follows: The GUARD factors for the period from the first billing cycle for January 2025 through the last billing cycle for December 2025 are as follows: Rate Schedule Rates per Therm RES-1 and REST-1 $0.17916 RES-2 and REST-2 SO.11116 RES-3 and REST-3 $0.04864 RES-SG and SGT $0.13610 GS-1 and GTS-1 $0.06642 GS-2 and GTS-2 $0.05544 GS-3 and GTS-3 $0.05140 GS-4 and GTS4 $0.05069 GS-5 and GTS-5 $0.04247 GS-6 and GTS-6 $0.04119 GS-7 and GTS-7 $0.03767 GS-8A and GTS-8A $0.04150 GS-8B and GTS-8B $0.04150 G5-8C and GTS-8C $0.04150 GS-8D and GTS-8D $0.04150 COM-INT and COM-INTT $0.02 144 COM-NGYV and COM-NGVT $0.03810 COM-OL and COM-OLT $0.08779 COM-SG and COM-SGT $0.16219 Issued by: Jeffrey Sylvester, Chief Operating Officer Effective: Florida Public Utilities Company
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