NOTE: This is not an official transcript, but rather a detailed summary of the discussion held at the Conference of the Florida Public Service Commission (FPSC) on Tuesday, January 5, 2021 related to Agenda Item 3, Docket 20200226 – the Application for Certificate to provide wastewater service in Charlotte County, by Environmental Utilities, LLC [EU].
Present from the FPSC were: Commissioner Gary F. Clark (Chairman), Commissioner Julie I. Brown, Commissioner Art Graham, Commissioner Andrew G. Fay, Commissioner Mike LaRosa, Mary Anne Helton (Deputy General Counsel). Jennifer Crawford (Attorney Supervisor) was present on the phone.
On Tuesday, January 5th the Florida Public Service Commission (FPSC) met for a Commission Conference where item 3 on the Agenda was Docket 20200226, the Application for certificate to provide wastewater service in Charlotte County, by Environmental Utilities, LLC [EU}.
Before the Commission was a Motion to Bifurcate and Temporary Rule Waiver which would allow the applicant, EU, to separate the rate-making component (project costs, estimated connection fees and maintenance rates) from the certification of the service area.
The discussion began with a summary of the item by Mary Anne Helton, Deputy General Counsel for the FPSC. She indicated that staff recommends the Commissioners approve the temporary rule waiver on the grounds that strict application of the rule would result in financial hardship to the utility.
Ms. Helton then noted that about 144 customers sent emails over the weekend, a majority of them objecting, and that more had come in overnight, also objecting to the waiver. She summarized the objections given in the emails as follows:
Chairman Gary L. Clark then called for registered “interested parties” to speak. Linda Cotherman spoke first, representing both herself as an individual, and as a Board member of the Palm Island Estates Association. Her arguments in front of the commission included:
Next Barbara Dwyer from Little Gasparilla Island Property Owners Association spoke. “How can you rule to bifurcate from the plan before certificate is issued? You are essentially saying that the certificate will pass before the consumer has had adequate time to review and announce their concerns.”
Chairman Clark then called for questions.
Commissioner Fay pointed out the large number of emails on the docket. “Staff had mentioned the correspondence that came in yesterday afternoon and last night, and um, it seems a little bit unusual to me that when I’m looking at the numbers starting from the filings yesterday there’s hundreds of those.” ”Did we receive all of them yesterday or were they just put into the system yesterday? It seems significant that we would need to take these into account.”
Deputy General Counsel Helton replied “It’s my understanding from my clerk that they came in over the weekend.”
Martin Friedman, Attorney for Environmental Utilities then spoke. He gave a brief background of the 2017 Sewer Master Plan, which he said was referenced in the Bulk Wastewater Treatment Agreement between Charlotte County and EU). He made the following points:
Commissioner Julie Brown questioned Mr. Friedman, asking “I’m assuming you have to have some kind of construction documents, right?”
Mr. Friedman responded “We do have a preliminary engineering study that sets forth several alternatives, but whatever we build has got to be consistent with County standards.”
Commissioner Brown returned, “But you have to have some type of preliminary budget in support of your preliminary construction?”
Mr. Friedman replied “No. Not necessarily.” He went on to say “not anything near what you’d be required to complete the financial documentation for the commission to grant rates & charges. "That’s why the numbers out there, 10-20 thousand dollars, are just guesses until it’s permitted.” He continued by saying EU believes they can put together a plan to sewer these areas that is financially feasible. And they don’t want to make a substantial investment in something that doesn’t happen.
Commissioner Brown cut him off, noting “So no cost estimates until 2022?” Brown also said that Environmental Utilities had the burden to prove substantial financial hardship.
Commissioner Brown then asked Staffer Mary Anne Helton if bifurcation is the norm. Miss Helton deferred to Jennifer Crawford (on the phone), who said she has not done a rigorous search for “true originals” where there is no pre-existing utility and no plant-on-the-ground. Bifurcation is usually done for existing plants. She explained some preexisting companies ask for bifurcation, and said she was guessing that a ballpark of 30% of true originals (completely new start-ups) have been given bifurcation.
Commissioner Brown noted she was worried about the “volume of concern” from potential customers, and asked Ms. Crawford “What is the recourse of the customers who have genuine concerns?” She replied that with the certificate, the customer has opportunity to protest the certificate and request an administrative hearing. If bifurcation is allowed, when rates are set later customers will have the opportunity to protest the rates.
Commissioner Brown replied “I hope the customers are hearing that. I don’t think waivers should be the norm, and I think the burden of a substantial hardship … is on the utility. If we continue, this will be the standard going forward.”
Commission Chair Gary Clark asked “What is our obligation from that point on in regards to approving the new rates? What latitude do we have?” He was concerned about the rates being too burdensome when they are finally supplied. For example, if the rates provided were $20,000 or more for the connection fees, how do they grapple with the cost of the project vs. what is fair, just and reasonable rates for the utility? Ms. Helton suggested that if the customer takes issue with the rates provided by EU based on their costs, then they or the Office of Public Counsel can request a hearing to challenge the rates.
“If we see a legitimate cost-based rate that is not fair and reasonable, we begin to have an issue there” Commission Chair Gary Clark said. “I don’t want there to be any misconception that this is a green light to proceed and you’re coming back with $20,000.00 in connection charges, this commission will set you back on your heels.” He was assured by Ms. Helton that allowing the waiver was not a green light for the project to go forward. More discussion followed about the responsibility of the PSC to set rates that are based on cost but are also fair and reasonable.
Commissioner Fay turned the discussion back to the legal components required by the waiver and if granted, does it become the norm. Commissioner Fay concluded with “Legally applying the waiver requires substantial hardship to be demonstrated and I’m not sure this is done here.” More discussion followed about setting precedent with this waiver. Ms. Crawford was asked if it was probable that they would be seeing similarly situated utilities in the future. She responded that “for true originals, yes, I would expect that we would see more of these in the future. We don’t get but so many true originals from year to year” indicating that is a fairly novel issue.
It was mentioned that if the waiver wasn’t granted it would essentially delay the process. Mr. Friedman was asked how long it might take to begin service. “Hopefully we would begin providing as early as 2022” he responded.
The attorney from the Office of Public Counsel (OPC) was asked if they have been contacted by many of these customers. OPC said that they had. She thanked them for their involvement and comments at the hearing but had no comment with respect to the bifurcation.
Chairman Clark called for a motion, and it was moved to accept the staff recommendation and vote yes for the waiver. At that point, the Chairman called for a second. No one would second and the motion to grant the waiver died for lack of a second.
It was then suggested that a deferral would be appropriate. It nearly ended there but Deputy General Counsel Helton reminded the commissioners there was a deadline to generate a vote. According to the staff recommendation, the Commission has a limited window of 90 days to either grant or deny the waiver. The 90-day period expires on January 12, 2021 so the Commission could not defer the matter but instead had to make a final ruling on the request for a waiver.
A motion was then made to deny the request, and there was a second. The motion carried with 4 commissioners assenting and 1 dissenting. The bifurcation waiver would not be granted.
[CLICK HERE to view PSC DOCUMENT_Motion Denied]
What Happens Next?
The denial of the Motion to Bifurcate and Temporary Rule Waiver does not close the application to provide central sewer on the Island, nor does it end the process. It simply requires that EU file their anticipated rates and connection fees along to complete their application prior to the Commission vote on certification. According to reliable sources at the County, EU plans to continue with its application for a wastewater certificate.
The 30-day period from the date that EU's notice of mailing was posted on the PSC docket expires on January 16th, 2021. This is the deadline to submit a formal letter of objection to EU's application and to request a public hearing. We will notify you if any date changes appear on the docket. PIE received approval from its membership at the Annual Meeting on January 2nd to use the legal fund to hire an attorney to represent Island stakeholders for the purpose of becoming an "intervenor" in the process and at the administrative hearing.
The PIE Board meets again on Monday January 11th, where further discussion will be held. More involvement of the membership may be necessary if EU does not withdraw its application.
P.I.E. e-bombs Florida PSC
The motion was submitted by attorney Martin Friedman to allow EU to go forward with the application for certification of the Island service area without providing the estimated costs and anticipated rates for connection and maintenance of service.
The sheer volume of incoming responses overwhelmed the FPSC staff.
Just before 9:00 AM on Monday 1/4, there were 114 documents posted on the PSC Docket. At 9:00 AM the email uploads to the docket began, ticking up in batches each time the screen was refreshed. By 8:00 PM, the last batch of uploads, without their attachments, appeared. When it was over, the total count of entries in the docket was 437.
Not only did the PIE members activate in record numbers, they networked neighbor to neighbor and posted on social media. The sample letter that appeared in the “Call to Action” email made its way down to Little Gasparilla, with common language appearing in letters of objection from LGI.
On Tuesday morning 1/5/20, the PSC staff noted the large number of emails that had been sent by customers objecting to the waiver, which was in turn noted by the Commission.
As of today, 1/6/21, the docket stands at 457 entries. The vast majority of these entries are titled “CORRESPONDENCE–Consumers & Representatives” (letters and emails) or “CORRESPONDENCE–Parties & Interested Persons” (requests to be persons of interest). There are 112 “Interested Persons” registered on the Docket.
Congratulations and thanks are due to all the PIE members/stakeholders who wrote letters to the FPSC expressing their opinions and concerns.
At the 2021 PIE Annual Membership Meeting held on Saturday January 2, 2021, the membership, in a nearly unanimous vote, approved having PIE represent its membership by opposing the application by a private utility (Environmental Utilities, LLC) for a central sewer system on the Island.
Included in the discussion was:
(1) sending a letter from PIE (as an organization) to the PSC by the January 4th deadline, requesting that EU’s Motion to Bifurcate and Temporary Rule Waiver be denied, and
(2) writing a letter from PIE opposing EU’s application for certification by the 30-day deadline to respond to notice.
Using the legal fund to hire an attorney to represent the membership in objecting to the application was also discussed as part of the motion approved.
It was reiterated several times that the position that PIE will represent on behalf of the membership does not oppose central sewer in general, but specifically opposes central sewer constructed and maintained by a private utility.
Call to Action
You may have recently received legal notice (CLICK HERE to view Notice) from Environmental Utilities, LLC (EU) alerting you to their application to the Public Service Commission (PSC) for the installation of central sewer on the Islands. Normally, when a utility company applies for authorization to provide central sewer, they must include the monthly rates, the connection fees and the type of system to be installed.
However, EU is asking for a waiver to the rule requiring that this information be submitted at the time of the initial application. (CLICK HERE to view Motion to Bifurcate and For Temporary Rule Waiver) On Tuesday January 5th, 2021 the PSC will consider allowing EU to proceed with the application for certification without providing the rates, connection fees and the additional information about the sewer system.
An objection to this waiver is essentially a request for transparency. If you want to know what the rates will be and wish to know what type of system will be installed then you need to file an objection to this rule waiver NOW.
Email the PSC by noon [12:00 PM] Monday, January 4th, 2021. Object to the proposal and ask the PSC to deny the Motion to Bifurcate and Temporary Rule Waiver.
Every email counts so please urge your spouses to write as well.
SUBJECT: Docket #20200226-SU
To Whom It May Concern,
My name is [insert name]. I am a property owner on [identify Island]. My property is within the service area contained in the application from Environmental Utilities, LLC [EU] for central sewer.
I am writing specifically to object to EU’s request to bifurcate the certificate and rate-making proceedings. I also object to the granting of a temporary waiver of Rules 25-30.033(1)(p) and (q).
Property owners in the proposed service area have a deadline of January 16, 2021 to present their objections. In bifurcating the application, no information regarding estimated rates and connection fees for this project will be available until the Spring of 2022.
As future consumers, we have been asked to present our objections to a proposal for which we have no idea what the associated costs will be nor the type of system we will be paying for. All of which has been timed to take place during a tumultuous holiday season within a global pandemic.
I object to all of this, plus the applicant’s lack of experience as an owner/operator of a wastewater utility and the inadequate information regarding the applicant’s financial strength. Therefore, I formally request that EU’s Motion to Bifurcate and Temporary Rule Waiver be denied.
[Name and email address]