State of Florida		Public Service Commission Capital Circle Office Center ● 2540 Shumard Oak Boulevard Tallahassee, Florida 32399-0850 -M-E-M-O-R-A-N-D-U-M-
DATE:	May 20, 2026
TO:	Office of Commission Clerk (Teitzman)
FROM:	Office of the General Counsel (Augspurger, Bloom) SMC Division of Accounting and Finance (Vogel, Norris) MC Division of Economics (Guffey) EJD
RE:	Docket No. 20260022-WS – Proposed amendment of Rules 25-30.115, Uniform System of Accounts for Water and Wastewater Utilities; 25-30.033, Application for Original Certificate of Authorization and Initial Rates and Charges; 25-30.037, Application for Authority to Transfer; 25-30.0372, Alternative Procedure for Establishing Rate Base Value of Acquired Utility System; 25-30.110, Records and Reports, Annual Reports; 25-30.140, Depreciation; 25-30.433, Rate Case Proceedings; 25-30.444, Utility Reserve Fund; and 25-30.445, General Information and Instructions Required of Water and Wastewater Utilities in an Application for a Limited Proceeding.
AGENDA:	06/02/26 – Regular Agenda – Rule Proposal - Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			La Rosa
RULE STATUS:			Proposal May Be Deferred
CRITICAL DATES:			9/22/26 - Date by which rules must be proposed pursuant to Section 120.54(2)(a)2., F.S.
SPECIAL INSTRUCTIONS:			None

Case Background

Pursuant to Section 367.121(1)(b), Florida Statutes (F.S.), the Commission (PSC) has the power to prescribe a uniform system and classification of accounts for all utilities, including water and wastewater utilities. Rule 25-30.115, Florida Administrative Code (F.A.C.), directs regulated water and wastewater utilities to keep their accounts and records in conformance with the National Association of Regulatory Utility Commissioners (NARUC) Uniform System of Accounts (USOA). In addition to Rule 25‑30.115, F.A.C., the Commission has referred to or specifically incorporated by reference the existing USOA in multiple water and wastewater rules: Rules 25-30.033, 25-30.037, 25-30.110, 25-30.140, 25-30.0372, 25-30.433, 25-30.444, and 25-30.445, F.A.C. As part of the Commission’s 5-year review of all of its rules under Section 120.5435, F.S., the Commission determined that these rules needed to be amended to provide necessary updates and clarification.

The current iteration of Rule 25-30.115, F.A.C., requires utilities to follow the now obsolete 1996 version of NARUC’s Uniform System of Accounts for water and wastewater utilities. In 2024, NARUC adopted two new Uniform Systems of Accounts for water and wastewater utilities. NARUC’s “Uniform System of Accounts for Water Utilities” was adopted by the NARUC Board of Directors on November 13, 2024, with corrections issued on January 24, 2025. NARUC’s “Uniform System of Accounts for Wastewater Utilities” was also adopted on November 13, 2024, with corrections on April 4, 2025 and August 27, 2025. Together, these two updated systems of accounts will be referred to as the “NARUC USOA.”

Additionally, Rule 25-30.433, F.A.C., references 26 CFR Part 1, s. 1.46-6(b)(2)(i), (3) and (4)(ii), as issued May 22, 1986; however, that federal regulation has been updated and now carries an effective date of April 7, 2008.

Also, many of the rules, specifically Rule 30-30.0372, F.A.C., Alternative Procedure for Establishing Rate Base Value of Acquired Utility System, require clarifications and updates to reflect current Commission practices and procedures.

The Commission’s Notice of Development of Rulemaking was published in Volume 52, Number 59, of the Florida Administrative Register on March 26, 2026. No person or entity requested a workshop regarding the draft rule language, and no workshop was held.

This recommendation addresses whether the Commission should propose the amendment of Rules 25-30.115, 25-30.033, 25-30.037, 25-30.0372, 25-30.110, 25-30.140, 25-30.433, 25-30.444, and 25-30.445, F.A.C. The Commission has jurisdiction pursuant to Sections 350.115, 350.127(2), 367.031, 367.045, 367.071, 367.081, 367.081(2), 367.081(2)(c), 367.0811, 367.0812, 367.0812(1), 367.0814, 367.0822, 367.121, 367.121(1), 367.121(1)(a), 367.121(1)(b), 367.1213, 367.145(2), and 367.156(1), F.S.

Discussion of Issues

Issue 1:

 Should the Commission propose the amendment of Rule 25-30.115, F.A.C., Uniform System of Accounts for Water and Wastewater Utilities; Rule 25-30.033, F.A.C., Application for Original Certificate of Authorization and Initial Rates and Charges; Rule 25-30.037, F.A.C., Application for Authority to Transfer; Rule 25-30.0372, F.A.C., Alternative Procedure for Establishing Rate Base Value of Acquired Utility System; Rule 25-30.110, F.A.C., Records and Reports; Annual Reports; Rule 25-30.140, F.A.C., Depreciation; Rule 25-30.433, F.A.C., Rate Case Proceedings; Rule 25-30.444, F.A.C., Utility Reserve Fund; and Rule 25-30.445, F.A.C., General Information and Instructions Required of Water and Wastewater Utilities in an Application for a Limited Proceeding?

Recommendation: 

 Yes. The Commission should propose the amendment of Rules 25-30.115, 25-30.033, 25-30.037, 25-30.0372, 25-30.110, 25-30.140, 25-30.433, 25-30.444, and 25-30.445, F.A.C., as set forth in Attachments A and B. Pursuant to Section 120.695, F.S., the Commission should certify that Rules 25-30.115, 25-30.033, 25-30.037, 25-30.0372, 25-30.110, 25-30.140, 25-30.433, and 25-30.445, F.A.C., are rules for which a violation would constitute a minor violation. However, Rule 25-30.444 is a not a rule for which a violation would constitute a minor violation and therefore should not be certified as such. (Augspurger, Bloom, Vogel, Guffey)

Staff Analysis: 

 The purpose of this rulemaking is to amend Rule 25-30.115, F.A.C., to ensure alignment with the most recent NARUC USOA, to update the reference to a provision of the Code of Federal Regulations in Rule 25-30.433, and to otherwise update and clarify the rules per Section 120.5435, F.S., in particular Rule 25-30.0372, F.A.C. In addition, these amendments provide necessary updates to Commission forms referenced in the above-mentioned rules. Staff is recommending that the rules be amended as set forth in Attachment A and that the Commission forms be amended as set forth in Attachment B.

Updated NARUC USOA

Rule 25-30.115, F.A.C., currently requires regulated water and wastewater utilities to maintain their accounts and records in conformance with the 1996 USOA. In 2024, NARUC updated its USOA for both water and wastewater utilities. Staff’s proposed amendments to Rule 25-30.115, F.A.C., direct regulated water and wastewater utilities to maintain their books and records in conformity with the newly adopted NARUC USOA.

The NARUC USOA includes several significant account updates. The NARUC USOA removes accounts associated with technologies no longer in service, such as telegraph equipment, and adds new accounts that reflect modern utility operations. The NARUC USOA also updates the gross revenue thresholds for classifying utilities as either Class A (greater than $1,750,000), B ($350,000-$1,750,000), or C (less than $350,000). The updated NARUC USOA aligns more closely with U.S. Generally Accepted Accounting Principles, enabling utilities to more efficiently manage both regulatory and financial reporting requirements. In addition, the revised NARUC USOA promotes greater uniformity on a national level for regulatory commissions that receive reports from utilities of varying sizes. Overall, the update establishes a consistent baseline for all water and wastewater utility reporting. Staff believes it is best practice for the Commission to ensure that utilities it regulates maintain conformity with the most recent version of the Uniform Systems of Accounts adopted by NARUC.

References to USOA in Other Related Rules

Rules 25-30.033, 25-30.037, 25-30.0372, 25-30.110, 25-30.140, 25-30.433, 25-30.444, and 25-30.445, F.A.C., currently contain references to the 1996 USOA. As noted above, NARUC updated its Uniform System of Accounts for both water and wastewater utilities in 2024. Staff recommends amending these rules to replace references to the outdated USOA with references to the NARUC USOA, as identified and incorporated by reference in Rule 25-30.115, F.A.C. This approach centralizes the identification of the particular NARUC USOA version within Rule 25-30.115, F.A.C., thus improving regulatory consistency and efficiency. This approach also avoids multiple different rule amendments if NARUC updates its Uniform System of Accounts for water or wastewater utilities in the future as only Rule 25-30.115, F.A.C., will require amendment.

Updates to Rule 25-30.0372, F.A.C., Alternative Procedure for Establishing Rate Base Value of Acquired Utility System

Rule 25-30.0372, F.A.C., implements Section 367.0811, F.S., which concerns the Alternative Procedure for Establishing Rate Base Value for acquired water and wastewater utility systems. The rule defines who is considered a “Licensed Appraiser,” the procedure for conducting Appraisals, and the petition filing requirements under the statute. In addition to updating references to the NARUC USOA, staff recommends making additional substantive changes to this rule. Specifically, paragraph (1)(a) requires Licensed Appraisers to hold a certification from the Institute of Business Appraisers. That organization and its certification no longer exist, and therefore should be removed from paragraph (1)(a).

Also, staff recommends that paragraph (2)(b) should be further clarified to require that appraisers cannot be employed by the same entity. The Commission had originally intended that the selection of appraisers be fair to everyone involved, and staff believes using this criteria would further this goal.

Lastly, staff recommends that paragraph (2)(e) should also require that licensed appraisers email or mail the Commission the expiration dates of their certifications or designations required by paragraph (1)(a) of the rule.

Reference to the CFR in Rule 25-30.433, F.A.C., Rate Case Proceedings

Rule 25-30.433(14), F.A.C., addresses the imputing of interest on deferred income tax credits in cases covered by 26 CFR Part 1, s. 1.46-6(b)(2)(i), (3) and (4)(ii), as issued May 22, 1986, and incorporates that regulation by reference. The federal regulation has been updated and now has an effective date of April 7, 2008. Thus, staff recommends that Rule 25-30.433 should be amended to include by reference the current version of 26 CFR Part 1, s. 1.46-6(b)(2)(i), (3) and (4)(ii), with an effective date of April 7, 2008.

Reference to the USOA in Related Forms incorporated by reference in the Rules

Rules 25-30.115, 25-30.033, 25-30.037, 25-30.0372, and 25-30.445, F.A.C., refer to and incorporate various Commission forms that reference the prior USOA. These forms have been updated to maintain consistency in referring to the current NARUC USOA, incorporated in Rule 25-30.115. Additionally, two forms incorporated by reference in Rule 25-30.110, F.A.C., have been updated to reflect the new gross revenue threshold (greater than $350,000), per the updated NARUC USOA, for use of PSC Form 1032 for Class A and B utility annual report filings, and extending the use of PSC Form 1033 for Class C utility annual report filings of water and waste utilities below that threshold amount. All proposed updated forms are appended in Attachment B.

Minor Violation Rules Certification

Pursuant to Section 120.695, F.S., the agency head must certify for each rule filed for adoption whether any part of the rule is designated as a rule the violation of which would be a minor violation. Existing Rules 25-30.115, 25-30.033, 25-30.037, 25-30.0372, 25-30.110, 25-30.140, 25-30.433, and 25-30.445, F.A.C., are currently on the Commission’s list of minor violation rules because violation of the rules would not result in economic or physical harm to a person or have an adverse effect on the public health, safety or welfare or create a significant threat of such harm. The amendments to the rules would not change their status as a minor violation rule. If the Commission proposes the amendment of these rules, then pursuant to Section 120.695, F.S., the Commission should certify that Rules 25-30.115, 25-30.033, 25-30.037, 25-30.0372, 25-30.110, 25-30.140, 25-30.433, and 25-30.445, F.A.C., are rules for which a violation would constitute a minor violation.

However, Rule 25-30.444, F.A.C., Utility Reserve Fund, is not currently on the Commission’s minor violation list because violation of the rule would result in economic harm to a person, or would create a significant threat of such harm. Utility Reserve Funds draw money from customers for future infrastructure projects; therefore, any violation that results in mismanagement of these funds would be detrimental to customers. Thus, staff recommends that the Commission certify that Rule 25-30.444, F.A.C., is not a rule for which a violation would constitute a minor violation pursuant to Section 120.695, F.S., the amendments to that rule would not change the rule’s status as not being a minor violation rule, and therefore should not be certified as such.

Statements of Estimated Regulatory Cost

Pursuant to Section 120.54, F.S., agencies are encouraged to prepare a statement of estimated regulatory costs (SERC) before the adoption, amendment or repeal of any rule. Agencies are required to prepare a SERC for any rule that will have an adverse impact on small business or that is likely to directly or indirectly increase regulatory costs in excess of $200,000 in the aggregate within one year after implementation. The SERC analysis includes whether the rule will, within five years of implementation, have an adverse impact in excess of $1 million in the aggregate on economic factors such as economic growth, private sector job creation or employment, private sector investments, or business competitiveness, productivity or innovation. If expected adverse impacts or regulatory costs exceed any of the above criteria, a proposed rule may not take effect until it is ratified by the Legislature.

SERCs were prepared for each rule and are appended as Attachment C. Each SERC concludes that the rule will not have an adverse impact on small business and that the rule is not likely to directly or indirectly increase regulatory costs in excess of $200,000 in the aggregate within one year after implementation. Further, the SERCs conclude that the rules will not likely have an adverse impact on economic growth, private sector job creation or employment, private sector investment, or business competitiveness, productivity or innovation in excess of $1 million in the aggregate within five years of implementation. None of the adverse impact or regulatory cost criteria set forth in Section 120.541(2)(a), F.S., will be exceeded as a result of the recommended amendments to the rules and therefore legislative ratification pursuant to Section 120.541(3), F.S., is not required. In addition, the SERCs state that the rules will have no impact on small cities or counties and will not increase the cost to the Commission to implement and enforce the rules. No regulatory alternatives have been submitted pursuant to Section 120.541(1)(a), F.S.

Conclusion

Based on the foregoing, staff recommends that the Commission should propose the amendment of Rules 25-30.115, 25-30.033, 25-30.037, 25-30.0372, 25-30.110, 25-30.140, 25-30.433, 25-30.444, and 25-30.445, F.A.C., as set forth in Attachment A and that the Commission should propose the amendment of the Commission forms as set forth in Attachment B.

The Commission should also certify that Rules 25-30.115, 25-30.033, 25-30.037, 25-30.0372, 25-30.110, 25-30.140, 25-30.433, and 25-30.445, F.A.C., are rules for which a violation would constitute a minor violation. However, Rule 25-30.444 is not a rule for which a violation would constitute a minor violation and therefore should not be certified as such.

Issue 2:

 Should this docket be closed?

Recommendation: 

 Yes. If no requests for hearing are made, no comments from the Joint Administrative Procedures Committee (JAPC) are filed, and no proposals for lower cost regulatory alternatives are submitted pursuant to Section 120.541(1)(a), F.S., the rules should be filed for adoption with the Department of State, and the docket should be closed. (Augspurger, Bloom)

Staff Analysis: 

 If no request for hearing is made, no comments from JAPC are filed, and no proposals for a lower cost regulatory alternatives are submitted pursuant to Section 120.541(1)(a), F.S., the rules should be filed for adoption with the Department of State, and the docket should be closed.

DOCKET 20260022-WS

EXHIBIT A

TO

STAFF RECOMMENDATION

(PROPOSED AMENDED RULES)

25-30.115 Uniform System of Accounts for Water and Wastewater Utilities.

Water and wastewater utilities must shall, effective January 1, 2027, 1998, maintain their accounts and records in conformity with the 1996 NARUC National Association of Regulatory Utility Commissioners “Uniform System Systems of Accounts for Water Utilities” (adopted October 8, 2024; corrected January 24, 2025) and the “Uniform System of Accounts for Wastewater Utilities” (adopted November 13, 2024; corrected April 4, 2025 and August 27, 2025) (collectively, NARUC USOA), adopted by the National Association of Regulatory Utility Commissioners, which is incorporated by reference in this rule. All inquiries related to the interpretation of the NARUC USOA these uniform systems of accounts shall be submitted to the Commission’s Division of Accounting and Finance in writing. Note: The National Association of Regulatory Utility Commissioners published separate uniform systems of accounts for three classes of water and wastewater utilities: Class A (defined as those having annual water or wastewater operating revenues of $1,000,000 or more); Class B (defined as those having annual water or wastewater operating revenues of $200,000 or more but less than $1,000,000); Class C (defined as those having annual water or wastewater revenues of less than $200,000). Copies of the NARUC USOA may be inspected and examined at no cost at the Florida Public Service Commission, 2540 Shumard Oak Boulevard, Tallahassee, Florida 32399 or at the Florida Department of State, R.A. Gray Building, 500 South Bronough Street, Tallahassee, Florida 32399. Copies of the NARUC USOA these systems of accounts may also be purchased online from the NARUC Store at www.naruc.org.

the office of said Association, Publications, National Association of Regulatory Utility Commissioners, 1101 Vermont Avenue, N.W., Suite 200, Washington, D.C. 20005, at (202)898-2200, or at http://www.naruc.org/about.cfm?c=staff.

Rulemaking Authority 367.121(1)(b), (f) FS. Law Implemented 367.121(1)(b) FS. History–New 2-3-70, Amended 9-12-74, 1-2-79, 8-21-79, 9-25-85, Formerly 25-10.04, 25-10.004, Amended 8-17-96, __________.

25-30.033 Application for Original Certificate of Authorization and Initial Rates and Charges.

(1) Each applicant for an original certificate of authorization and initial rates and charges must shall file with the Commission Clerk the information set forth in paragraphs (a) through (q). Form PSC 1001 (06/26) (12/15), entitled “Application for Original Certificate of Authorization for a Proposed or Existing System Requesting Initial Rates and Charges,” which is incorporated by reference in this rule and is available at [hyperlink] http://www.flrules.org/Gateway/reference.asp?No=Ref-06237, is an example application that may be completed by the applicant and filed with the Office of Commission Clerk to comply with this subsection. This form is also available on the Commission’s website Web-site at ,www.floridapsc.com.

(a) A filing fee pursuant to paragraph 25-30.020(2)(a), F.A.C.;

(b) Proof of noticing pursuant to Rule 25-30.030, F.A.C.;

(c) The utility’s name, address, telephone number, Federal Employer Identification Number, authorized representative, and, if available, email address and fax number;

(d) The nature of the utility’s business organization, i.e., corporation, limited liability company, partnership, limited partnership, sole proprietorship, or association. The applicant must provide documentation from the Florida Department of State, Division of Corporations, showing:

1. The utility’s business name and registration/document number for the business, unless operating as a sole proprietor, and,

2. The utility’s fictitious name and registration number for the fictitious name, if operating under a fictitious name.;

(e) The name(s), address(es), and percentage of ownership of each entity or person that owns or will own more than 5 percent interest in the utility;

(f) The election the business has made under the Internal Revenue Code for taxation purposes;

(g) A statement indicating whether the application is for water, wastewater, or both. If the applicant is applying for water or wastewater only, the statement must shall include how the other service is provided;

(h) To demonstrate the necessary financial ability of the applicant to provide service to the proposed service area, the applicant must shall provide:

1. A detailed financial statement (balance sheet and income statement), audited if available, of the financial condition of the applicant, which shows all assets and liabilities of every kind and character. The financial statements must shall be for the preceding calendar or fiscal year. The financial statement must shall be prepared in accordance with Rule 25-30.115, F.A.C. If available, a statement of the sources and uses of funds must shall also be provided; and,

2. A list of all entities, including affiliates, upon which the applicant is relying to provide funding to the utility and an explanation of the manner and amount of such funding. The list need not include any person or entity holding less than 5 percent ownership interest in the utility. The applicant must shall provide copies of any financial agreements between the listed entities and the utility and proof of the listed entities’ ability to provide funding, such as financial statements;

(i) To demonstrate the technical ability of the applicant to provide service, the applicant must shall provide:

1. A statement of the applicant’s experience in the water or wastewater industry;

2. A copy of all current permits from the Department of Environmental Protection (DEP) and the water management district;

3. A copy of the most recent DEP and/or county health department sanitary survey, compliance inspection report, and secondary standards drinking water report; and,

4. A copy of all correspondence with the DEP, county health department, and water management district, including consent orders and warning letters, and the utility’s responses to the same, for the past five years;

(j) To describe the proposed service area, the applicant must shall provide:

1. A legal description of the proposed service area in the format described in Rule 25-30.029, F.A.C.;

2. A detailed system map showing the existing and proposed lines and treatment facilities, with the territory proposed to be served plotted thereon, consistent with the legal description provided in subparagraph (j)1. above. The map must shall be of sufficient scale and detail to enable correlation with the description of the territory proposed to be served; and,

3. An official county tax assessment map, or other map showing township, range, and section with a scale such as 1'' = 200' or 1'' = 400', with the proposed territory plotted thereon, consistent with the legal description provided in subparagraph (j)1. above;

(k) To demonstrate the need for service in the proposed area, the applicant must shall provide:

1. The number of customers currently being served and proposed to be served, by customer class and meter size, including a description of the types of customers currently being served and anticipated to be served, i.e., single family homes, mobile homes, duplexes, golf course clubhouse, or commercial. If the development will be in phases, this information must shall be separated by phase;

2. A copy of all requests for service from property owners or developers in areas not currently served;

3. The current land use designation of the proposed service territory as described in the local comprehensive plan at the time the application is filed. If the proposed development will require a revision to the comprehensive plan, describe the steps taken and to be taken to facilitate those changes, including changes needed to address the proposed need for service; and,

4. Any known land use restrictions, such as environmental restrictions imposed by governmental authorities;

(l) The date applicant began or plans to begin serving customers. If already serving customers, a description of when and under what circumstances the applicant began serving;

(m) Documentation of the utility’s right to access and continued use of the land upon which the utility treatment facilities are or will be located. Documentation of continued use must shall be in the form of a recorded warranty deed, recorded quit claim deed accompanied by title insurance, recorded lease (such as a 99-year lease), or recorded easement. To satisfy this requirement, the The applicant may submit an unrecorded copy of the instrument granting the utility’s right to access and continued use of the land upon which the utility treatment facilities are or will be located, provided the applicant files a recorded copy within the time required in the order granting the certificate;

(n) A description of the separate capacities of the existing and proposed lines and treatment facilities in terms of equivalent residential connections (ERCs) and gallons per day estimated demand per ERC for water and wastewater and the basis for such estimate. If the development will be in phases, this information must shall be separated by phase;

(o) A description of the type of water treatment, wastewater treatment, and method of effluent disposal;

(p) To support the proposed rates and charges, the applicant must shall provide:

1. The existing and projected cost of the system(s) and associated depreciation by year until design capacity is reached using the NARUC USOA National Association of Regulatory Utility Commissioners (NARUC) 1996 Uniform System of Accounts (USOA), which is incorporated by reference in Rule 25-30.115, F.A.C. The applicant must shall identify the year that 80 percent of design capacity is anticipated. If the utility will be built in phases, this applies shall apply only to the first phase;

2. The existing and projected annual contributions-in-aid-of-construction (CIAC) and associated amortization by year, including a description of the assumptions regarding customer-growth projections, using the same projections used in subparagraph (1)(k)1. above, for the proposed service area. The projected CIAC must shall identify cash and property contributions and amortization at 100 percent of design capacity and identify the year when 80 percent of design capacity is anticipated. The projected CIAC must shall be consistent with the service-availability policy and the charges in the proposed tariff provided in paragraph (q), below, the schedule provided in subparagraph (1)(p)6., below, and the CIAC guidelines in Rule 25-30.580, F.A.C. If the utility will be built in phases, this applies shall apply only to the first phase;

3. A schedule showing the projected capital structure including the methods of financing the construction and operation of the utility until the utility reaches 80 percent of the design capacity of the system. If the utility will be built in phases, this applies shall apply only to the first phase;

4. The current annual operating expenses and the projected annual operating expenses at 80 percent of design capacity using the NARUC USOA, incorporated by reference in Rule 25-30.115, F.A.C. If the utility will be built in phases, this applies shall apply only to the first phase;

5. A schedule showing how the proposed rates were developed;

6. A schedule showing how the proposed service availability policy and charges were developed, including meter installation, main extension, and plant capacity charges, and proposed donated property; and,

7. A schedule showing how the customer deposits and miscellaneous service charges were developed, including initial connection, normal reconnection, violation reconnection, and premises visit fees, consistent with Rules 25-30.311 and 25-30.460, F.A.C..; and,

(q) A tariff containing all rates, classifications, charges, rules, and regulations which must shall be consistent with Chapter 25-9, F.A.C. Form PSC 1010 (06/26) (12/15), entitled “Water Tariff,” which is incorporated by reference in this rule and is available at [hyperlink] http://www.flrules.org/Gateway/reference.asp?No=Ref-06247, and Form PSC 1011 (06/26) (12/15), entitled “Wastewater Tariff,” which is incorporated by reference in this rule and is available at [hyperlink] http://www.flrules.org/Gateway/reference.asp?No=Ref-06248, are example tariffs that may be completed by the applicant and included in the application. These forms may also be obtained from the Commission’s website at, www.floridapsc.com.

(2) The base facility and usage rate structure, (as defined in subsection 25-30.437(5), F.A.C.,) must shall be utilized for metered service, unless an alternative rate structure is supported by the applicant and authorized by the Commission.

(3) A return on common equity must shall be established using the current equity leverage formula established by order of this Commission pursuant to Section 367.081(4), F.S., unless there is competent substantial evidence supporting the use of a different return on common equity.

(4) Utilities obtaining original certificates of authorization pursuant to this rule are authorized to accrue allowance for funds used during construction (AFUDC) for projects found eligible pursuant to subsection 25-30.116(1), F.A.C.

(a) The applicable AFUDC rate will shall be determined as the utility’s projected weighted cost of capital as demonstrated in its application for original certificate and initial rates and charges.

(b) A discounted monthly AFUDC rate calculated in accordance with subsection 25-30.116(3), F.A.C., will shall be used to iensure that the annual AFUDC charged does not exceed authorized levels.

(c) The date the utility begins shall begin to charge the AFUDC rate must shall be the date the certificate of authorization is issued to the utility so that such rate can apply to the initial construction of the utility facilities.

Rulemaking Authority 350.127(2), 367.121, 367.1213 FS. Law Implemented 367.031, 367.045, 367.1213 FS. History–New 1-27-91, Amended 11-30-93, 1-4-16,. _____.

25-30.037 Application for Authority to Transfer.

(1) This rule applies to any application for the transfer of an existing water or wastewater utility, regardless of whether service is currently being provided. The application for transfer may result in the transfer or cancellation of the seller’s existing certificate, amendment of the buyer’s existing certificate or granting of an original certificate to the buyer, or a transfer of majority organizational control of the utility.

(a) If a transfer occurs prior to Commission approval, the utility must shall submit an application for authority to transfer no later than 90 days after the sale closing date.

(b) When a utility applies for any of the following transfer authorizations by the Commission, it must shall provide its application as prescribed in the appropriate subsection below:

1. A transfer of a regulated utility to another regulated utility must shall be pursuant to subsection (2), below;

2. A transfer of an exempt entity to a regulated utility must shall be pursuant to subsection (3), below;

3. A transfer of a utility in a nonjurisdictional county to a regulated utility that results in a system whose service transverses county boundaries must shall be pursuant to subsection (3), below;

4. A change of majority organizational control of a regulated utility must shall be pursuant to subsection (4), below; or

5. A transfer of a regulated utility to an exempt entity other than a governmental authority must shall be pursuant to subsection (5), below.

(c) Form PSC 1005 (06/26) (12/15), entitled “Application for Transfer of Certificates or Facilities from a Regulated Utility to Another Regulated Utility,” which is incorporated by reference in this rule and which is available at [hyperlink] http://www.flrules.org/Gateway/reference.asp?No=Ref-06242, Form PSC 1006 (06/26) (12/15), entitled “Application for Transfer of an Exempt Entity to a Regulated Utility or Transfer of a Utility in a Non-jurisdictional County to a Regulated Utility That Results in a System Whose Service Transverses County Boundaries,” which is incorporated by reference in this rule and which is available at [hyperlink] http://www.flrules.org/Gateway/reference.asp?No=Ref-06243, Form PSC 1007 (06/26) (12/15), entitled “Application for a Transfer of Majority Organizational Control of a Regulated Utility,” which is incorporated by reference in this rule and which is available at [hyperlink] http://www.flrules.org/Gateway/reference.asp?No=Ref-06244, and Form PSC 1008 (06/26) (12/15), entitled “Application for Transfer of Facilities from a Regulated Utility to an Exempt Entity Other Than a Governmental Authority,” which is incorporated by reference in this rule and which is available at [hyperlink] http://www.flrules.org/Gateway/reference.asp?No=Ref-06245, are example applications that may be completed by the applicant and filed with the Office of Commission Clerk to comply with subsection (2), (3), (4), or (5), below, respectively. These forms may also be obtained from the Commission’s website, at www.floridapsc.com.

(2) Transfer of a regulated utility to another regulated utility. Each applicant for transfer of certificate of authorization, facilities or any portion thereof from a regulated utility to another regulated utility must shall file with the Commission Clerk the information set forth in paragraphs (a) through (v), below.

(a) A filing fee pursuant to paragraph 25-30.020(2)(c), F.A.C.;

(b) Proof of noticing pursuant to Rule 25-30.030, F.A.C.;

(c) The certificated name, address, telephone number, certificate number(s), authorized representative, and, if available, the email address and fax number of the utility/seller;

(d) The complete name, address, telephone number, Federal Employer Identification Number, authorized representative and, if available, the email address and fax number of the buyer(s) and the new name of the utility if the buyer plans to operate under a different name;

(e) The name, address, telephone number, and if available, the email address and fax number of the person in possession of the books and records when the application is filed;

(f) The nature of the buyer’s business organization, i.e., corporation, limited liability company, partnership, limited partnership, sole proprietorship, or association. The buyer must provide documentation from the Florida Department of State, Division of Corporations, showing:

1. The utility’s/buyer’s business name and registration/document number for the business, unless operating as a sole proprietor, and,

2. The utility’s/buyer’s fictitious name and registration number for the fictitious name, if operating under a fictitious name;

(g) The name(s), address(es) and percentage of ownership of each entity or person that owns or will own more than a 5 percent interest in the utility;

(h) The date and state of incorporation or organization of the buyer;

(i) A copy of the contract for sale and all auxiliary or supplemental agreements. If the sale, assignment, or transfer occurs prior to Commission approval, the contract must shall include a provision stating that the contract is contingent upon Commission approval;

(j) The buyer must provide the following documentation of the terms of the transfer:

1. The date the closing occurred or will occur;

2. The purchase price and terms of payment;

3. A list of and the dollar amount of the assets purchased and liabilities assumed or not assumed, including those of nonregulated operations or entities;

4. A description of all consideration between the parties, including promised salaries, retainer fees, stock, stock options, and assumption of obligations;

5. Provisions for the disposition, where applicable, of customer deposits and interest thereon, guaranteed revenue contracts, developer agreements, customer advances, debt of the utility, and leases;

6. A statement that the buyer will fulfill the commitments, obligations and representations of the seller with regard to utility matters;

7. A statement that the buyer has or will obtain the books and records of the seller, including all supporting documentation for rate base additions since the last time rate base was established for the utility;

8. A statement that the utility’s books and records will be maintained using the NARUC USOA 1996 National Association of Regulatory Utilities Commissioners (NARUC) Uniform System of Accounts (USOA), incorporated by reference in Rule 25-30.115, F.A.C.; and,

9. A statement that the utility’s books and records will be maintained at the utility’s office(s) within Florida, or that the utility will comply with the requirements of paragraphs 25-30.110(1)(b) and (c), F.A.C., regarding maintenance of utility records at another location or out-of-state. If the records will be maintained at the utility’s office(s), the statement should include the location where the utility intends to maintain the books and records;

(k) A statement explaining why the transfer is in the public interest;

(l) To demonstrate the financial ability of the buyer to maintain and operate the acquired utility, the buyer must shall provide:

1. A detailed financial statement (balance sheet and income statement), audited if available, of the financial condition of the applicant, that shows all assets and liabilities of every kind and character. The financial statements must shall be for the preceding calendar or fiscal year. The financial statement must shall be prepared in accordance with Rule 25-30.115, F.A.C. If available, a statement of the sources and uses of funds must shall also be provided; and,

2. A list of all entities, including affiliates, upon which the buyer is relying to provide funding to the utility and an explanation of the manner and amount of such funding. The list need not include any person or entity holding less than 5 percent ownership interest in the utility. The applicant must shall provide copies of any financial agreements between the listed entities and the utility and proof of the listed entities’ ability to provide funding, such as financial statements;

(m) To demonstrate the technical ability of the buyer to provide service, the buyer must shall provide:

1. An explanation of the buyer’s experience in the water or wastewater industry; and,

2. The buyer’s plans for ensuring continued operation of the utility, such as retaining the existing plant operator(s) and office personnel, or contracting with outside entities;

(n) A legal description of the proposed service area in the format prescribed in Rule 25-30.029, F.A.C.;

(o) The proposed net book value of the system as of the date of the proposed transfer, and a statement setting out the reasons for the inclusion of an acquisition adjustment, if one is requested. If rate base has been established by this Commission, the buyer must provide the docket, and the order number and. In addition, provide a schedule of all subsequent changes to rate base;

(p) A statement from the buyer that it has obtained or will obtain copies of all of the federal income tax returns of the seller from the date the utility was first established or the rate base was last established by the Commission, whichever is later. If the tax returns have not been obtained, the buyer must provide a description of the steps taken to obtain the tax returns;

(q) A statement from the buyer that after reasonable investigation, the system being acquired appears to be in satisfactory condition and in compliance with all applicable standards set by the Department of Environmental Protection (DEP) or, if the system is in need of repair or improvement, has any outstanding Notice of Violation of any standard set by the DEP or any outstanding consent orders with the DEP, the buyer must shall provide a description of the repairs or improvements that have been identified, the governmental authority that required the repairs or improvements, if applicable, the approximate cost to complete the repairs or improvements, and any agreements between the seller and buyer regarding who will be responsible for any identified repairs or improvements;

(r) The applicant must shall provide the following documents:

1. A copy of the utility’s current permits from the DEP and the water management district;

2. A copy of the most recent DEP and/or county health department sanitary survey, compliance inspection report, and secondary standards drinking water report;

3. A copy of all of the utility’s correspondence with the DEP, county health department, and water management district, including consent orders and warning letters, and the utility’s responses to the same, for the past five years; and,

4. A copy of all customer complaints that the utility has received regarding DEP secondary water quality standards during the past five years;

(s) Documentation of the utility’s right to access and continued use of the land upon which the utility treatment facilities are located. Documentation of continued use must shall be in the form of a recorded warranty deed, recorded quit claim deed accompanied by title insurance, recorded lease such as a 99-year lease, or recorded easement. To comply with this requirement, tThe applicant may submit an unrecorded copy of the instrument granting the utility’s right to access and continued use of the land upon which the utility treatment facilities are or will be located, provided that the applicant files a recorded copy within the time required in the order granting the transfer;

(t) A statement regarding the disposition of outstanding regulatory assessment fees, fines, or refunds owed and which entity will be responsible for paying regulatory assessment fees and filing the annual report for the year of the transfer and subsequent years;

(u) Tariff sheets reflecting any changes resulting from the transfer. Form PSC 1010 (06/26) (12/15), entitled “Water Tariff,” and Form PSC 1011 (06/26) (12/15), entitled “Wastewater Tariff,” which are incorporated by reference in Rule 25-30.033, F.A.C., are example tariffs that may be completed by the applicant and included in the application. These forms are also available on the Commission’s website at, www.floridapsc.com; and,

(v) If the buyer owns other water or wastewater utilities that are regulated by the Commission, provide a schedule reflecting any economies of scale that are anticipated to be achieved within the next three years and the effect on rates for existing customers served by both the utility being purchased and the buyer’s other utilities.

(3) For tTransfer of an exempt entity to a regulated utility, or transfer of a utility in a nonjurisdictional county to a regulated utility that results in a system whose service transverses county boundaries,. eEach applicant must shall file with the Commission the information set forth in paragraphs (a) through (f), below:.

(a) A combined filing fee pursuant to paragraphs 25-30.020(2)(b) and (c), F.A.C.;

(b) Proof of noticing pursuant to Rule 25-30.030, F.A.C.;

(c) The requirements of paragraphs (2)(c), through (d), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p), (q), (r), (s), (t), (u), and (v), above;

(d) The requirements of paragraphs 25-30.036(2)(h) and (i), F.A.C.;

(e) An explanation of when and under what authority the current rates and charges of the exempt entity or utility in a nonjurisdictional county were established, if applicable; and,

(f) An explanation of how the seller is either exempt pursuant to Section 367.022, F.S., or is a utility in a nonjurisdictional county.

(4) A transfer of majority organizational control of a regulated utility. Each applicant for a transfer of majority organizational control must shall file with the Commission the information set forth in paragraphs (a) through (d), below:.

(a) A filing fee pursuant to paragraph 25-30.020(2)(c), F.A.C.;

(b) Proof of noticing pursuant to Rule 25-30.030, F.A.C.;

(c) The requirements of paragraphs (2)(c), (d), (f), (i), (j), (k), (l), (m), (q), (t) and (u), above; and,

(d) A description of the ownership transfer, including the date the transfer occurred or will occur and a description of the resulting ownership interests in the utility.

(5) A transfer of a regulated utility to an exempt entity other than a governmental authority. Each applicant for a transfer of ownership of a regulated utility to an exempt entity other than a governmental authority must shall file with the Commission Clerk the information set forth in paragraphs (a) through (e), below:.

(a) A filing fee pursuant to paragraph 25-30.020(2)(c), F.A.C.;

(b) Proof of noticing pursuant to Rule 25-30.030, F.A.C.;

(c) The requirements of paragraphs (2)(c), (d), (k), (l), (m), and (r), above;

(d) Documentation of the following terms of the transfer:

1. A copy of the contract for sale and all auxiliary or supplemental agreements. If the sale, assignment, or transfer occurs prior to Commission approval, the contract must shall include a provision stating that the contract is contingent upon Commission approval;

2. The closing date;

3. A statement regarding the disposition of customer deposits and interest thereon; and,

4. A statement regarding the disposition of any outstanding regulatory assessment fees, fines, refunds, or annual reports; and,

(e) An explanation of how the buyer is exempt pursuant to Section 367.022, F.S.

Rulemaking Authority 350.127(2), 367.121, 367.1213 FS. Law Implemented 367.071, 367.1213 FS. History–New 1-27-91, Amended 11-30-93, 1-4-16,. ________.

25-30.0372 Alternative Procedure for Establishing Rate Base Value of Acquired Utility System.

(1) Definition. For the purposes of this rule, “Licensed Appraiser,” as referenced in Section 367.0811(4)(a), F.S., means a person who meets all the following criteria:

(a) Has certification as an Accredited Senior Appraiser by the American Society of Appraisers (ASA), designation as a Certified Valuation Analyst by the National Association of Certified Valuators and Analysts (NACVA), designation as a Certified Business Appraiser by the Institute of Business Appraisers (IBA), or designation as Accredited in Business Valuation by the American Institute of Certified Public Accountants (AICPA), and

(b) Is in good standing with the ASA, NACVA, IBA, or AICPA.

(2) Appraisals.

(a) Each appraisal must assess the value of the utility system being acquired according to its intended use.

(b) The Executive Director of the Florida Public Service Commission, or their designee, will randomly select choose the three licensed appraisers from the list of licensed appraisers referenced in paragraph (2)(d) of this rule using computationally-generated random numbers. No two of the selected appraisers may be employed by the same entity.

(c) The licensed engineer who performs the engineering assessment required by Section 367.0811(4)(b), F.S., may not also serve as a licensed appraiser on the same acquisition transaction.

(d) The list of licensed appraisers required by Section 367.0811(4)(a), F.S., can be found at www.floridapsc.com/appraiserlist or obtained from the Office of the Commission Clerk, Florida Public Service Commission, 2540 Shumard Oak Boulevard, Tallahassee, Florida 32399-0850.

(e) A licensed appraiser will be included on the Commission’s list of approved licensed appraisers by submitting all of the following by email to appraiserlist@psc.state.fl.us or by mail to the Office of the Commission Clerk, Florida Public Service Commission, 2540 Shumard Oak Boulevard, Tallahassee, FL 32399-0850:

1. The licensed appraiser’s name, mailing address, telephone number, and email address;

2. The name of any company with which the licensed appraiser is employed or associated; and

3. Proof of the information required by subsection (1) above;. and

4. The expiration date of the certification or designation required by paragraph (1)(a) above.

(f) It is the responsibility of the licensed appraiser to ensure that correct and updated information remains on file with the Commission. The licensed appraiser must submit updated information by email to appraiserlist@psc.state.fl.us, or by mail to the Office of the Commission Clerk, Florida Public Service Commission, 2540 Shumard Oak Boulevard, Tallahassee, FL 32399-0850, within 30 days of any change of information. If the Commission determines that a person no longer meets the requirements to be a licensed appraiser on the Commission’s list, that person will be removed from the list. Upon request and upon providing proof that the requirements listed in subsection (1) above are met, a person will be added back to the list.

(g) The licensed appraiser can be removed from the list by submitting a request for removal in writing by email to appraiserlist@psc.state.fl.us or by mail to the Office of the Commission Clerk, Florida Public Service Commission, 2540 Shumard Oak Boulevard, Tallahassee, FL 32399-0850.

(3) Petition. Section 367.0811(5), F.S., sets forth the filing requirements a petition to establish the rate base value must contain.

(a) The petition may be filed concurrent with the application to transfer the certificate(s) of authorization, but must be filed no later than 6 months after the issuance of the final order approving the transfer of the certificate(s) of authorization or the closing date of the sale. Commission staff will review the petition and within 30 days of receipt of the petition will notify the acquiring utility whether the petition is complete or identify the information required by Section 367.0811(5), F.S., which is missing from the petition. If an amended petition is filed, Commission staff will review the amended petition and within 30 days of receipt of the amended petition will notify the acquiring utility whether the amended petition is complete or identify the information required by Section 367.0811(5), F.S., which is missing from the amended petition. This process will continue until Commission staff determines the petition satisfies the requirements of Section 367.0811(5), F.S. The date a petition is complete under Section 367.0811(6), F.S., is the date that all documents required by Section 367.0811(6), F.S. have been filed.

(b) If the assessment of tangible assets required by Section 367.0811(4)(b), F.S., identifies deficiencies, the 3-year plan required by Section 367.0811(5)(d), F.S., must include the following, if existing, regarding the system being acquired:

1. A copy of the most recent DEP and/or county health department sanitary survey, compliance inspection report, primary and secondary standards drinking water report; and

2. A copy of all correspondence with the DEP, county health department, and water management district, including consent orders and warning letters, and the utility’s responses to the same, for the past five years.

(c) Form PSC 1035 (03/24), entitled “Water and/or Wastewater Cumulative Present Value of the Revenue Requirements for Alternate Rate Base Worksheet” (CPVRR), which is incorporated by reference in this rule and available at may be obtained from http://www.flrules.org/Gateway/reference.asp?No=Ref-16589, must be included in the petition to show the 5-year projected rate impact required by Section 367.0811(5)(e), F.S. The form can also be found at www.floridapsc.com, or obtained from the Office of the Commission Clerk, Florida Public Service Commission, 2540 Shumard Oak Boulevard, Tallahassee, Florida 32399-0850.

(d) The 5-year rate impact required by Section 367.0811(5)(e), F.S., must also include the following for each year for residential and general service customers, and the CPVRR must support the projections for the following:

1. Base facility charge,

2. Gallonage charge, and

3. Billing determinants.

(e) The information filed under Section 367.0811(5)(e), F.S., must include the acquiring utility’s proposed journal entries anticipated to result from the acquisition, including tax entries and account numbers in conformance with the 1996 NARUC USOA Uniform System of Accounts, which is incorporated by reference in Rule 25-30.115, F.A.C.

(f) For purposes of determining whether the petition must include a rate stabilization plan under Section 367.0811(5)(h), F.S., “significant individual increase in rates” means a rate increase during any twelve consecutive months of the 5-year projected rate impact period that is in excess of 15 percent over the current rates of the utility system being acquired.

(4) General filing instruction. Prepared direct testimony and exhibits for each witness testifying on behalf of the acquiring utility must be filed at the time the petition is filed.

(5) Notice. At the time the petition is filed with the Commission, the acquiring utility must provide a draft notice for review by Commission staff. Commission staff will review the draft notice within 7 days. Once staff has approved the notice, the acquiring utility must provide notice by U.S. Mail regular mail to the Office of Public Counsel and by either U.S. Mail regular mail or personal service to each customer and owner of property located within the service area for both the acquiring utility and the utility being acquired, to the extent the utilities’ customers are within the Commission’s jurisdiction. The notice required by this rule may be combined with the notice of Application for Authority to Transfer issued pursuant to Rule 25-30.030, F.A.C., or for existing customers, the notice may be included in their next bill. The notice must contain:

(a) Title: Notice of Utility’s Petition to Establish Rate Base Value Using Alternative Procedure;

(b) A statement that the utility has filed a petition with the Commission to establish rate base value of acquired utility system using the alternative procedure set forth in Section 367.0811, F.S.;

(c) The date the petition was filed with the Commission;

(d) The docket number associated with the petition;

(e) A statement of the 5-year projected rate impact or the anticipated effect of the requested rate base on rates for the next five years;

(f) A statement that the utility’s petition is available on the Commission’s website;

(g) The acquiring utility’s address, telephone number, and business hours; and

(h) A statement that any customer substantially affected by the petition may file a motion to intervene in accordance with Rule 28-106.205, F.A.C.

Rulemaking Authority 367.0811(11), FS. Law Implemented 367.0811, FS. History–New 5-15-24, Amended ________.

25-30.110 Records and Reports; Annual Reports.

(1) Records.

(a) Each utility must preserve its records in accordance with the National Association of Regulatory Utility Commissioners “Regulations to Govern the Preservation of Records of Electric, Gas and Water Utilities” as issued by the National Association of Regulatory Utility Commissioners, as (revised October 2007), which is incorporated by reference into this rule. “Regulations to Govern the Preservation of Records of Electric, Gas and Water Utilities” is copyrighted and may be inspected and examined at no cost at the Florida Public Service Commission, 2540 Shumard Oak Boulevard, Tallahassee, Florida 32399-0850 or at the Florida Department of State, R.A. Gray Building, 500 South. Bronough Street, Tallahassee, Florida 32399. A copy may also be purchased obtained from the NARUC Store at www.naruc.org. National Association of Regulatory Utility Commissioners, 1101 Vermont Avenue, N.W., Suite 200, Washington, D.C. 20005.

1. Those utilities that choose to convert documents from their original media form must retain the original source documents as required by paragraph (1)(a) of this rule, for a minimum of three years, or for any lesser period of time specified for that type of record in the “Regulations to Govern the Preservation of Records of Electric, Gas and Water Utilities,” after the date the document was created or received by the utility. This paragraph does not require the utility to create paper copies of documents where the utility would not otherwise do so in the ordinary course of its business. Upon a showing by a utility that it employs a storage and retrieval system that consistently produces clear, readable copies that are substantially equivalent to the originals, and clearly reproduces handwritten notations on documents, the utility does not have to meet the requirement to retain documents in their original form.

2. The utility must maintain written procedures governing the conversion of source documents to a storage and retrieval system, which procedures ensure the authenticity of documents and the completeness of records. Records maintained in the storage and retrieval system must be easy to search and easy to read.

(b) Unless otherwise authorized by the Commission, each utility must maintain its records at the office or offices of the utility within this state and must keep those records open for inspection during business hours by Commission staff.

(c) Any utility that keeps its records outside the state must reimburse the Commission for the reasonable travel expense incurred by each Commission representative during any review of the out-of-state records of the utility or its affiliates. Reasonable travel expenses are those travel expenses that are equivalent to travel expenses paid by the Commission in the ordinary course of its business.

1. The utility must remit reimbursement for out-of-state travel expenses within 30 days from the date the Commission mails the invoice.

2. The reimbursement requirement in paragraph (1)(c) is not applicable for the following:

a. A utility that makes its out-of-state records available at the utility’s office located in Florida or at another mutually agreed upon location in Florida within 10 working days from the Commission’s initial request. If 10 working days is not reasonable because of the complexity and nature of the issues involved or the volume and type of material requested, the Commission will establish a different time frame for the utility to bring records into the state. For individual data requests made during an audit, the response time frame established in Rule 25-30.145, F.A.C., will control; or

b. A utility whose records are located within 50 miles of the Florida state line.

(2) In General. Each utility must furnish to the Commission the results of any required tests and summaries of any required records. The utility must also furnish the Commission with any information concerning the utility’s facilities or operation that the Commission requests and requires for determining rates or judging the practices of the utility. All such data, unless otherwise specified, must be consistent with and reconcilable with the utility’s annual report to the Commission.

(3) Annual Reports: Filing Extensions. Each utility must file with the Commission annual reports on the applicable form in subsection (4) of this rule. The obligation to file an annual report for any year will apply to any utility which is subject to this Commission’s jurisdiction as of December 31 of that year, whether or not the utility has actually applied for or been issued a certificate.

(a) The Commission will, by January 15 of each year, email a blank copy of the appropriate annual report form to each utility company. A utility may request a hard copy of the forms in subsection (4) of this rule from the Commission’s Division of Accounting and Finance. The failure of a utility to receive a report form will not excuse the utility from its obligation to timely file the annual report. The annual reports must be filed with the Commission, either by mail or by email, on or before March 31 for the preceding year ending December 31. Annual reports filed by email must be sent to AnnualReport@psc.state.fl.us. Annual reports filed by mail must be sent to the Florida Public Service Commission, Division of Accounting and Finance, 2540 Shumard Oak Boulevard, Tallahassee, FL 32399-0850. to the Commission’s Division of Accounting and Finance in Tallahassee.

(b) Annual reports are considered filed if they are properly addressed and emailed or mailed with sufficient postage and postmarked, by no later than the due date. For annual reports sent by registered mail, the date of the registration is the postmark date. For annual reports sent by certified mail, the date on the receipt is the postmark date. The postmark is evidence that an annual report was mailed delivered. However, Iif a utility’s annual report is not actually received by the Commission’s Division of Accounting and Finance in Tallahassee, that utility must resend it upon request, despite any prior presumption of delivery.

(c) A utility may file a written request for an extension of time to file its annual report with the Commission’s Division of Accounting and Finance no later than March 31. One extension of 30 days will be automatically granted upon request. A request for a longer extension must be accompanied by a statement of good cause, such as financial hardship, severe illness, or significant weather events such as hurricanes, but good cause does not include reasons such as management oversight or vacation time, and must specify the date by which the report will be filed.

(4) Annual Reports; Contents. The appropriate annual report form required from each utility will be determined by using the same three classes of utilities used by the National Association of Regulatory Utility Commissioners for publishing its system of accounts: Class A (those having annual water or wastewater operating revenues of $1,750,000 $1,000,000 or more); Class B (those having annual water or wastewater revenues of $350,000 $200,000, or more, but less than $1,750,000 $1,000,000); and Class C (those having annual water or wastewater revenues of less than $350,000 $200,000). The class to which a utility belongs will be determined by using the higher of the average of its annual water or wastewater operating revenues for each of the last three preceding years.

(a) Class A and B utilities must file the annual report on Commission Form PSC-1032 (06/26) (5/22), entitled “Class A or B Water and/or Wastewater Utilities (Gross Revenues of $350,000 $200,000 and more),” which is incorporated by reference into this rule and available at may be obtained from [hyperlink] http://www.flrules.org/Gateway/reference.asp?No=Ref-15172.

(b) Class C utilities must file the annual report on Commission Form PSC 1033 (06/26) (5/22), entitled “Class C Water and/or Wastewater Utilities (Gross Revenues of less than $350,000 $200,000 each),” which is incorporated by reference into this rule and available at may be obtained from [hyperlink] http://www.flrules.org/Gateway/reference.asp?No=Ref-15174.

(c) The foregoing forms can be obtained from the Commission’s Division of Accounting and Finance.

(5) As part of the annual report, each utility must verify the following in writing by the utility’s chief executive officer and chief financial officer:

(a) Whether the utility is in substantial compliance with the NARUC USOA, Uniform System of Accounts as prescribed by incorporated by reference in Rule 25-30.115, F.A.C.;

(b) Whether the utility is in substantial compliance with all applicable rules and orders of the Florida Public Service Commission;

(c) Whether there have been any written communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices that could have a material effect on the financial statements;

(d) Whether the financial statements and related schedules fairly present the financial condition and results of operations for the period presented and whether other information and statements presented as to the business affairs of the respondent are true, correct, and complete for the period which they represent.

(6) Delinquent Reports.

(a) Any utility that fails to file its annual report or extension on or before March 31, or within the time specified by any extension approved in writing by the Commission’s Division of Accounting and Finance, will be subject to a penalty. The penalty will be based on the number of calendar days elapsed from March 31, or from an approved extended filing date, until the date of filing. The date of filing will be included in the days elapsed.

(b) The penalty for delinquent reports will accrue based on the utility’s classification established under subsection (4) of this rule, in the following manner for each day the report is delinquent:

1. $25.00 per day for Class A utilities;

2. $13.50 per day for Class B utilities; and,

3. $3.00 per day for Class C utilities.

(c) If a utility does not timely file its annual report, in addition to the penalty determined by paragraph (6)(b) of this rule, interest on the penalty will also be assessed from the date the annual report was due, up to and including the date the penalty is paid. Such interest is based on the AA non-financial 30-day commercial paper rate published by the Board of Governors of the Federal Reserve System on its website. Interest will be compounded monthly.

(7) Incomplete Reports.

(a) The Commission’s Division of Accounting and Finance will provide written notification to a utility if its report does not contain information required by subsection (4) of this rule. The utility must file the missing information no later than 30 days after the date on the face of the notification. If the utility fails to file the information within that period, the report will be deemed delinquent and the utility will be subject to a penalty as provided under paragraphs (6)(a) and (b) of this rule, except that the penalty will be based on the number of days elapsed from the date the information is due to the date it is actually filed. The date of filing will be included in the elapsed days.

(b) A report is incomplete if any of the schedules required by the following forms of this rule are not completed:

1. Form PSC 1032 (06/26) (5/22) for Class A and B utilities;

2. Form PSC 1033 (06/26) (5/22) for Class C utilities.

(c) An incomplete report will remain incomplete until the missing information is filed with the Commission’s Division of Accounting and Finance on the appropriate Commission form.

(8) Incorrect Filing. If a utility files an incorrect annual report it will be considered delinquent and subject to a penalty on the same basis as a utility that fails to timely file an annual report. The classification determining the applicable penalty, as prescribed by paragraphs (6)(a) and (b) of this rule, will be determined by the latest annual revenue figures available for the utility. The failure of a utility to receive a report form for the correct class of utility will not excuse the utility from its obligation to timely file the annual report for the correct class of utility.

Rulemaking Authority 350.127(2), 367.121 FS. Law Implemented 367.121, 367.156(1), 367.161 FS. History–New 9-12-74, Amended 1-18-83, 2-25-85, 10-27-85, Formerly 25-10.25, 25-10.025, Amended 11-10-86, 12-22-86, 3-11-91, 11-13-95, 5-1-96, 12-14-99, 2-15-23, ____.

25-30.140 Depreciation.

(1) For the purpose of the rule, the following definitions apply:

(a) Account – Water and wastewater plant accounts are defined in the NARUC USOA, Uniform System of Accounts adopted by which are incorporated by reference in Rule 25-30.115, F.A.C.

(b) Amortization – The gradual extinguishment of an amount in an account by distributing such amount over a fixed period.

(c) Asset – Any owned physical object (tangible) or right (intangible) having economic value to its owner.

(d) Average Remaining Life – The future expected service in years of the surviving plant at a given age.

(e) Average Service Life – The period of service that can be reasonably expected from the plant type in question. It is measured by the period of time the subject plant and its associated investment is included on the company’s books as in service to the public. The average service life will typically be less than the potential physical life due to factors such as governmental requirements, growth or adverse operating conditions.

(f) Average Service Life Depreciation Rate ‑ The depreciation rate based on the expected average service to be experienced by the investment or account in question.

A.S.L. Rate = 100% ‒ Average Net Salvage %

Average Service Life

(g) Capitalization – Measures of the propriety of capitalization versus expensing as follows:

1. The addition of any retirement unit, or

2. Any replacement with a retirement unit that materially enhances the value, use, life expectancy, strength or capacity of the asset prior to replacement must shall be capitalized.

3. The cost of incidental repairs that neither materially add to the value of the property nor appreciably prolong its life and that were made to keep the property in an ordinary efficient operating condition must shall be accounted for as a maintenance expense.

(h) Cost of removal – The cost of demolishing, dismantling, tearing down or otherwise removing utility plant, including the cost of transportation and handling incidental thereto.

(i) Continuing Property Record (CPR) – A perpetual collection of records required by the NARUC USOA, incorporated by reference in Rule 25-30.115, F.A.C., Uniform System of Accounts showing the detailed original costs, quantities, and locations of plant in service. Generally, a CPR should contain 1) an inventory of property record units which can be readily checked for proof of physical existence, 2) the association of costs with such property record units to ensure accurate accounting for retirements, and 3) the dates of installation and removal of plant to provide data for use in connection with depreciation studies.

(j) Depreciation – As applied to depreciable utility plant, the loss in service value not restored by current maintenance incurred in connection with the consumption or prospective retirement of utility plant in the course of service from causes that are known to be in current operation and against which the utility is not protected by insurance. Among the causes to be given consideration are wear and tear, decay, action of the elements, inadequacy, obsolescence, changes in the art, changes in demand and requirements of public authorities. The intent of depreciation per this rule is to provide for recovery of invested capital and to match this recovery as nearly as possible to the useful life of the depreciable investment.

(k) Depreciation Accounting – The process of charging the book cost of depreciable property, adjusted for net salvage, to operations over the associated useful life.

(l) Depreciation Expense – The periodic charge to expense to allocate the original cost of a depreciable group of assets over the life of those assets.

(m) Depreciable Group – A homogeneous grouping of assets expected to experience similar life and salvage patterns. Unless otherwise ordered by the Commission, depreciable groups are the accounts defined in the NARUC USOA, Uniform System of Accounts adopted by incorporated by reference in Rule 25-30.115, F.A.C.

Water	Wastewater
Source of Supply	Collection Plant
(Accounts 304 to 311 and 339)	(Accounts 354, 355 and 360 to 367)
	Pumping Plant
	(Accounts 354, 355, 370, 371)
Water Treatment Plant	Treatment & Disposal Plant
(Accounts 304, 310, 311, 320, and 339)	(Accounts 354 and 380 to 389)
	Reclaimed Water Treatment Plant
Transmission & Distribution Plant	(Accounts 354, 355, 371, 374, 380, 381, 389)
(Accounts 304, 310, 311 and 330 to 339) General Plant	Reclaimed Water Distribution Plant (Accounts 354, 355, 366, 367, 371, 375, 389)
(Accounts 304 and 340 to 348)	General Plant
	(Accounts 354 and 390 to 398)

(n) Function – defined as follows:

(o) Group Depreciation – An accounting procedure under which depreciation charges are accrued on the basis of the original cost of all property included in each depreciable group. Under the group concept, no attempt is made to keep track of the accumulated provision for depreciation applicable to individual assets of property, in view of the many items making up a utility system. The group approach recognizes that some assets within the group may live longer or shorter than the average life of the group but the group is expected to live the average service life. Every item in the group is assumed to be fully depreciated at retirement.

(p) Mortality Data – See plant activity data.

(q) Net Salvage – The salvage value of property retired less the cost of removal. This is expressed as a percent of retirements in the depreciation rate formula.

(r) Original Cost – The cost of acquiring an asset and placing it into service for first utility use. This includes the direct costs of acquiring the asset and the cost of labor, materials, and associated costs of installation to prepare the asset for first utility use. The cost is used in the computation of depreciation expense. In the event that an asset is acquired that is already in public service, the original historic cost of the asset should be recorded in plant in service, and the historic accumulated depreciation should be charged to the accumulated depreciation account. In the event the historic cost of an asset that is already in utility service cannot be determined, an independent engineer’s evaluation based on an original cost study may be used.

(s) Plant Activity Data – Annual additions, retirements, adjustments or transfers, sales or purchases, and investment balances at end of year.

(t) Property Retired – As applied to utility plant, property that has been removed, sold, abandoned, destroyed or which has been withdrawn from service for any cause.

(u) Remaining Life Depreciation Rate – The depreciation rate based on the average remaining portion of the service life expected to be experienced by the investment or account in question and on the net unrecovered capital for that investment or account.

R.L. Rate = 100% ‒ Accumulated Reserve % ‒ Future Net Salvage %

Average Remaining Life

The average remaining life for an account or sub-account is a function of known planned retirement or of the average age of that account and its appropriate mortality table.

(v) Replacing or Replacement – The construction or installation of utility plant in place of property retired, together with the removal of the property retired.

(w) Reserve – The accumulated provision for depreciation. The accumulated depreciation reserve is the net of depreciation accruals (expenses) and retired investment with related gross salvage and cost of removal as well as any appropriate adjustments or transfers.

(x) Reserve Activity Data – Annual depreciation expense, retirements, transfers or adjustments, gross salvage realized, cost of removal, and end of year balance for the accumulated provision for depreciation.

(y) Retirement Units – Those items of utility plant which, when retired with or without replacement, are accounted for by crediting the book cost to the utility plant account in which it is included.

(z) Salvage Value – The amount received for property retired, less any expenses incurred in connection with the sale or in preparing the property for sale or, if retained, the amount at which the material recoverable is chargeable to materials and supplies or other appropriate account.

(aa) Straight-Line Method – A depreciation method by which the service value of a depreciable group is charged to depreciation expense (or a clearing account) and credited to the accumulated provision for depreciation account through equal annual charges over the service life of the group.

(bb) Unit Depreciation – An accounting procedure under which the original cost, depreciation expense, and accumulated provision for depreciation, and all associated activity are maintained for each individual asset. Service life and salvage parameters are estimated for each individual asset with a depreciation rate designed to recover each asset’s original cost over its related life. If the asset lives longer than its expected life, depreciation expense stops accruing when the asset is fully recovered. If the asset retires earlier than its expected service life, the associated unrecovered amount is immediately written-off as a loss.

(cc) Unrecovered Amount – Original cost less the accumulated provision for depreciation less expected net salvage.

(2) The average service life and salvage components for each class of utility are as follows:

(a) Water System Guideline Average Service Lives.

		Large	Small	Small
		Utility	Utility	Utility
		(Class	(Class	Function	Net
Account	Description	A&B)	C)	Composite^3	Salvage %^4
1. Intangible Plant
351	Organization	40	40
352	Franchise Cost	40^5	40^5
2. Source of Supply				28
304	Structures & Improvements	32^1	27^1
	Wood	28	25
	Masonry	30	27
	Reinforced Concrete	40	37
	Steel Building	40	35
	Tanks or Sheds	25	20
	Fiberglass	20	18
305	Collecting and Impounding Reservoirs	50	40
306	Lake, River and Other Intakes	40	40
307	Wells and Springs
	Drilled & Cased Well	30	27
	(Floridan or Non-Corrosive)
	Shallow Well (Sand	20	18
	Aquifer or Corrosive
	Water)
308	Infiltration Galleries
	and Tunnels	40	N/A
309	Supply Mains	35	32
310	Power Generation Equipment	20	17
311	Pumping Equipment	20^1	17^1
	Pumping Equipment Electric	20	15
	Pumping Equipment Chemical	8	6
339	Other Miscellaneous Equipment	18	15
3. Water Treatment Plant				21
304	Structures and
	Improvements (see
	“Source of Supply”
	for subcategory lives)	32^1	27^1
310	Power Generation Equipment	20	17
311	Pumping Equipment	20^1	17^1
	Pumping Equipment-Electric	20	15
	Pumping Equipment-Chemical	8	6
320	Water Treatment Equipment	22^1	17^1
	Chlorination Equipment	10	7
	Membrane Elements	5	5
	Other Mechanical Equipment	25	20
339	Other Miscellaneous Equipment	18	15
4.Transmission & Distribution Plant				36
304	Structures &
	Improvements (See
	“Source of Supply”
	for subcategory lives)	32^1	27^1
310	Power Generation Equipment	20	17
311	Pumping Equipment	20^1	17^1
	Pumping Equipment – Electric	20	15
	Pumping Equipment – Chemical	8	6
330	Distribution
	Reservoirs & Stand
	Pipes	37^1	33^1
	Steel Pneumatic Tank	35	30
	Concrete Ground
	Storage Reservoir	40	37
331	Transmission & Distribution Mains	43^1	38^1
	Galvanized Steel pipe & Fittings	35	33
	Black Steel Pipe	20	18
	Plastic Pipe^2	45	40
	Asbestos – Cement	40	35
	Cast Iron or Ductile Iron	40	35
	Valves & Valve Boxes	25	20
	Fire Mains	33	30
333	Services^2	40	35
334	Meters and Meter Installations	20	17
335	Hydrants	45	40
336	Backflow Prevention Devices	15	10
339	Other Plant and Miscellaneous Equipment	25	20
5. General Plant
304	Structures & Improvements	40^1	35^1
	Wood Building	35	30
	Masonry Building	40	35
	Reinforced Concrete Building	40	37
	Steel Building	40	35
	Tanks or Sheds	25	20
340	Office Furniture & Equipment	15	15
	Computers	6	6
341	Transportation Equipment	6	6		10
342	Stores Equipment	18	N/A	14 (composite of 342-348)
343	Tools, Shop & Garage Equipment	16	15
344	Laboratory Equipment	15	N/A
345	Power Operated Equipment	12	10		5
346	Communication Equipment	10	N/A		10
347	Miscellaneous Equipment	15	N/A
348	Other Tangible Plant	10	10

(b) Wastewater System Guideline Average Services Lives.

		Large	Small	Small
		Utility	Utility	Utility
		(Class	(Class	Function	Net
Account	Description	A&B)	C)	Composite^3	Salvage %^4
1. Intangible Plant
351	Organization	40	40
352	Franchise Cost	40^5	40^5
2. Collection System				35
354	Structures &
	Improvements Above
	Grade	32^1	27^1
	Wood	28	25
	Masonry	30	27
	Reinforced Concrete	38	35
	Steel Below Grade	25	22
	Concrete	35	32
	Steel	22	20
	Lift Stations	25	22
355	Power Generation Equipment	20	17
360	Collection Sewers-Force^2	30^1	27^1
361	Collection Sewers-Gravity^2	45	40
	Manholes	30	27
362	Special Collecting	40	37
	Structures
363	Services to Customers^2	38	35
364	Flow Measuring Devices	5	5
365	Flow Measuring Installations	38	35
389	Other Miscellaneous Equipment	18	15
3. Pumping Plant				18
354	Structures & Improvements	32^1	27^1
355	Power Generating Equipment	20	17
370	Receiving Wells	30	25
371	Pumping Equipment	18	15
	Pumping Equipment – Electric	18	15
	Pumping Equipment – Chemical	7	5
389	Other Miscellaneous Equipment	18	15
4. Treatment and Disposal Plant				18
354	Structures &
	Improvements (see
	“Collection System”
	for subcategory lives)	32^1	27^1
355	Power Generating Equipment	20	17
371	Pumping Equipment	18^1	15^1
	Pumping Equipment – Electric	18	15
	Pumping Equipment – Chemical	7	5
380	Treatment & Disposal Equipment	18^1	15^1
	Blowers, Motors,
	Pumps Electric
	Controls	15	12
	Chlorination Equipment	10	7
	Other Mechanical Equipment	23	18
381	Plant Sewers	35	32
382	Outfall Sewer Lines	30	30
389	Other Plant and Miscellaneous Equipment	18	15
5. ReclaimedWater Treatment Plant				21
354	Structures & Improvements (see “Collection System” for subcategory lives)	32^1	27^1
355	Power Generating Equipment	20	17
371	Pumping Equipment	18^1	15^1
	Pumping Equipment – Electric	18	15
	Pumping Equipment – Chemical	7	5
374	Reuse Distribution
	Reservoirs	37^1	33^1
	Steel Pneumatic Tank	35	30
	Concrete Ground Storage Reservoir	40	37
380	Treatment & Disposal Equipment	18^1	15^1
	Blowers, Motors, Pumps, Electric Controls	15	12
	Chlorination Equipment	10	7
	Other Mechanical Equipment	23	18
381	Plant Sewers	35	32
389	Other Plant and Miscellaneous Equipment	18	15
6. Reclaimed Water Distribution Plant				36
354	Structures & Improvements (see “Collection System” for subcategory lives)	32^1	27^1
355	Power Generating Equipment	20	17
366	Reuse Services	40	35
367	Reuse Meters and Meter Installation	20	17
371	Pumping Equipment	18^1	15^1
	Pumping Equipment – Electric	18^1	15
	Pumping Equipment – Chemical	7	5
375	Reuse Transmission & Distribution System	43^1	38^1
	Plastic Pipe^2	45	40
	Valves & Valve Boxes	25	20
	Fire Mains	33	30
389	Other Plant and Miscellaneous Equipment	18	15
7. General Plant
354	Structures & Improvements	40^1	35^1
	Reinforced Concrete Building	45	40
	Masonry Building	40	35
	Wood Building	35	30
	Steel Building	40	35
	Tanks or Sheds	25	20
390	Office Furniture & Equipment	15	15
	Computers	6	6
391	Transportation Equipment	6	6		10
392	Stores Equipment	18	N/A	14 (composite
				of 392-398)
393	Tools, Shop & Garage Equipment	16	15
394	Laboratory Equipment	15	N/A
395	Power Operated Equipment	12	10		5
396	Communication Equipment	10	N/A		10
397	Miscellaneous Equipment	15	N/A
398	Other Tangible Plant	10	10

(c) For the purposes of paragraphs (2)(a) and (b), the following apply:

1. ¹ Denotes composite life.

2. ² Plastic pipe footnote – assumes use of AWWA standard pipe only. Assumes AWWA DR18 used for all mains of 6'' or more.

3. ³ To be used only when acceptable company plant balances are not available for developing composites using account lives.

4. ⁴ Net Salvage zero except as indicated.

5. ⁵ Franchise costs must shall be amortized over a period of 40 years unless a specific time period is designated in the utility franchise agreement.

(3)(a) Average service life depreciation rates based on guideline lives and salvages must shall be used in any Commission proceeding in which depreciation rates are addressed, except for those utilities using depreciation rates in accordance with the requirements listed in subsections (6) and (7) of this rule. A utility must shall also implement the applicable guideline rates for any new plant to be placed in service.

(b) A utility may implement applicable guideline rates without specific approval by the Commission. Guideline rates, if implemented for any account, must be implemented for all accounts. If a utility implements applicable guideline rates outside of a rate proceeding, the utility must shall provide written notification to the Director of Economics within 30 days of such implementation.

(c) If guideline depreciation rates have been implemented, the rates must shall not be changed unless approved by the Commission.

(4)(a) All Class A and B utilities must shall maintain depreciation rates and reserve activity data by account as prescribed by this Commission.

(b) All Class C utilities must shall maintain depreciation rates and reserve activity data by total depreciable plant, function or account as prescribed by this Commission.

(5) Computation of depreciation expense. Regulatory book depreciation expense must shall be computed on a monthly basis in conformity with group depreciation accounting procedures.

(6)(a) At the time a utility applies for a change in its revenue rates and charges, it may also petition for average service life depreciation rates different from those in the above schedule if it can justify the service lives that the utility is proposing in lieu of the guideline lives. That justification should be in the form of historic data, technical information or utility planning for the affected accounts or sub-accounts. Common causes of need for different depreciation rates include composition of account, adverse environmental conditions, high growth or regulatory changes.

(b) A utility filing for such a revision of depreciation rates must shall submit six copies of the filing to the office of the Office of Commission Clerk.

(c) For each account or function of depreciable plant addressed in the filing, the following must shall be included:

1. A comparison of current and proposed depreciation rates and service lives. The proposed effective date of the new rates must shall be identified.

2. A comparison of depreciation expenses resulting from current rates with those produced by the proposed rates. Plant balances used in this calculation must shall be those as of the effective date of the proposed rates.

3. A general narrative defining the service environment of the applicant utility and the factors (e.g., composition of account, growth, environmental conditions, regulatory changes) leading to the present application for a revision in rates in the affected accounts.

4. Any statistics, data, analyses or calculations used in the development of the proposed average service lives.

(7)(a) A Class A, B, or C utility may apply for guidelines for a proposal for implementation of remaining life depreciation rates if the utility has maintained both plant activity data by account and accumulated provision for depreciation (reserve) data by account, function or total depreciable plant generally in accord with the Uniform System of Accounts for either at least ten years or since the inception of the utility, whichever is less.

(b) To provide time for study development, any application for remaining life guidelines should be submitted at least six months before the filing for a test year in connection with a request for a revenue rate increase.

(8) Prior to the date of retirement of major installations, the Commission may approve capital recovery schedules to correct associated calculated deficiencies in recovery where a utility demonstrates that retirement of the installation or group of installations is prudent and the associated investment will not be recovered by the time of retirement through the normal depreciation process.

(9)(a) Beginning with the year ending December 31, 2003, all Class A and B utilities must shall maintain separate sub-accounts for: (1) each type of Contributions-in-Aid-of-Construction (CIAC) charge collected including, but not limited to, plant capacity, meter installation, main extension or system capacity; (2) contributed plant; (3) contributed lines; and (4) other contributed plant not mentioned previously. Establishing balances for each new sub-account may require an allocation based upon historical balances. Each CIAC sub-account must shall be amortized in the same manner that the related contributed plant is depreciated. Separate sub-accounts for accumulated amortization of CIAC must shall be maintained to correspond to each sub-account for CIAC.

(b) Beginning with the year ending December 31, 2003, for Class C utilities, where adequate CIAC records are maintained in sub-accounts, by type of charge or contributed plant, CIAC amortization rates must shall be applied separately to each sub-account. Where CIAC records are not kept by sub-account, a composite depreciation rate for total plant, excluding general plant, must shall be applied to the entire CIAC account.

(c) Any composite rate used must shall be recalculated each year based on the applicable plant balances and depreciation rates.

Rulemaking Authority 350.127(2), 367.121(1) FS. Law Implemented 350.115, 367.081(2), 367.121(1) FS. History–New 3-22-84, Formerly 25-10.32, 25-10.032, Amended 11-10-86, 5-8-88, 11-21-95, 12-4-03, 5-29-08, ______.

25-30.433 Rate Case Proceedings.

In a rate case proceeding, the following provisions shall apply:.

(1) The Commission in every rate case will shall make a determination of the quality of service provided by the utility by evaluating the quality of utility’s product (water) and the utility’s attempt to address customer satisfaction (water and wastewater). In making this determination, the Commission will shall consider:

(a) The most recent chemical analyses for each water system as described in paragraph 25-30.437(3)(c), F.A.C.;

(b) Any Department of Environmental Protection (DEP) and county health department citations, violations and provisions of consent orders that relate to quality of service;

(c) Any DEP and county health department officials’ testimony concerning quality of service;

(d) Any testimony, complaints and comments of the utility’s customers and others with knowledge of the utility’s quality of service; and

(e) Any utility testimony and responses to the information provided in paragraphs (1)(a)-(d), above.

(2) In order to ensure safe, efficient, and sufficient service to utility customers, the Commission will shall consider whether the infrastructure and operational conditions of the plant and facilities are in compliance with Rule 25-30.225, F.A.C. In making this determination, the Commission will shall consider:

(a) Any testimony of DEP and county health department officials;

(b) Inspections, including sanitary surveys for water systems and compliance evaluation inspections for wastewater systems,; and citations, violations and consent orders issued to the utility;

(c) Any testimony, complaints and comments of the utility’s customers and others with knowledge of the infrastructure and operational conditions of the utility’s plant and facilities; and,

(d) Any utility testimony and responses to the information provided in paragraphs (2)(a)-(c), above.

(3) Working capital for Class A utilities must shall be calculated using the balance sheet approach. Working capital for Class B and C utilities must shall be calculated using the formula method (one-eighth of operation and maintenance expenses).

(4) Used and useful debit deferred taxes must shall be offset against used and useful credit deferred taxes in the capital structure. Any resulting net debit deferred taxes must shall be included as a separate line item in the rate base calculation. Any resulting net credit deferred taxes must shall be included in the capital structure calculation. No other deferred debits must shall be considered in rate base when the formula method of working capital is used.

(5) The averaging method used by the Commission to calculate rate base and cost of capital will shall be a 13-month average for Class A utilities and the simple beginning and end-of-year average for Class B and C utilities.

(6) Non-used and useful adjustments will shall be applied to the applicable depreciation expense. Property tax expense on non-used and useful plant will shall not be allowed.

(7) Charitable contributions will shall not be recovered through rates.

(8) Income tax expense will shall not be allowed for subchapter S corporations, partnerships or sole proprietorships.

(9) Non-recurring expenses will shall be amortized over a 5-year period unless a shorter or longer period of time can be justified.

(10) The amortization period for forced abandonment or the prudent retirement, in accordance with the NARUC USOA, incorporated by reference in Rule 25-30.115, F.A.C., National Association of Regulatory Utility Commissioners Uniform System of Accounts, of plant assets prior to the end of their depreciable life will shall be calculated by taking the ratio of the net loss (original cost less accumulated depreciation and contributions-in-aid-of-construction (CIAC) plus accumulated amortization of CIAC plus any costs incurred to remove the asset less any salvage value) to the sum of the annual depreciation expense, net of amortization of CIAC, plus an amount equal to the rate of return that would have been allowed on the net invested plant that would have been included in rate base before the abandonment or retirement. This formula will shall be used unless the specific circumstances surrounding the abandonment or retirement demonstrate a more appropriate amortization period.

(11) A utility is required to have the right of access and continued use of the land upon which the utility treatment facilities are located. Documentation of continued use must shall be in the form of a recorded warranty deed, recorded quit claim deed accompanied by title insurance, recorded lease such as a 99-year lease, or recorded easement.

(12) In establishing an authorized rate of return on common equity, a utility, in lieu of presenting evidence, may use the current leverage formula adopted by Commission order. The equity return established must shall be based on the equity leverage order in effect at the time the Commission decides the case.

(13) Nonutility investment should be removed directly from equity when reconciling the capital structure to rate base unless the utility can show, through competent evidence, that to do otherwise would result in a more equitable determination of the cost of capital for regulatory purposes.

(14) Interest expense to be included in the calculation of income tax expense must shall be the amount derived by multiplying the amount of the debt components of the reconciled capital structure times the average weighted cost of the respective debt components. Interest expense must shall include an amount for the parent debt adjustment in those cases covered by Rule 25-14.004, F.A.C. Interest must shall also be imputed on deferred investment tax credits in those cases covered by 26 CFR Part 1, s. 1.46-6(b)(2)(i), (3) and (4)(ii) issued (April 7, 2008), May 22, 1986, incorporated by reference herein and which may be accessed at [hyperlink], and effective for property constructed or acquired on or after August 15, 1971.

Rulemaking Authority 350.127(2), 367.0812(5), 367.0814, 367.121, 367.1213 FS. Law Implemented 367.081, 367.0812(1), 367.0814, 367.0822, 367.1213 FS. History–New 11-30-93, Amended 12-14-93, 7-11-18, ______.

25-30.444 Utility Reserve Fund.

(1) PROJECT ELIGIBILITY. The following considerations must shall be applied in determining whether a future infrastructure repair or replacement project of existing distribution and collection infrastructure that is nearing the end of its useful life or is detrimental to water quality or reliability of service is eligible for advance funding through a utility reserve fund and whether a utility reserve fund is the most appropriate methodology to address the requested project.

(a) The following projects are shall be eligible for a utility reserve fund:

1. Projects to repair or replace existing utility infrastructure that is nearing the end of its useful life or is detrimental to water quality or reliability of service that is recorded in the National Association of Regulatory Utility Commissioners (NARUC) Uniform System of Accounts (NARUC USOA), water utility plant account numbers 304, 305, 306, 307, 308, 309, 310, 311, 320, 330, 331, 333, 334, 335, 336, and 339, and wastewater utility plant account numbers 354, 355, 360, 361, 362, 363, 364, 365, 366, 367, 370, 371, 374, 375, 380, 381, 382, and 389, incorporated by reference in Rule 25-30.115, F.A.C.;,

2. Future expenditures related to land or land rights recorded in NARUC USOA water utility plant account number 303 or wastewater utility plant account number 353, incorporated by reference in Rule 25-30.115, F.A.C., if the expenditure is necessary to the successful completion of an eligible repair or replacement project;,

3. Upgrades or enhancements of existing facilities if it can be demonstrated that the upgrade or enhancement is necessary to comply with federal, state, or local regulatory requirements, or provides a more cost-effective or more reliable alternative than an identical replacement, and that the upgrade or enhancement is not designed solely to address future customer growth;,

4. Repair projects that may be expensed rather than capitalized, as prescribed by subparagraph 25-30.140(1)(g)3., F.A.C., if it can be demonstrated that the repair expense is not already reflected in the utility’s current rates as an annual or amortized annual expense, or that the annual repair and maintenance expense allowance reflected in the utility’s current rates is insufficient to cover the projected costs of the proposed repair project, or

5. If a project includes both the repair or replacement of existing infrastructure and the expansion or improvement of facilities to meet future customer growth, the portion of the project that is related to the repair and replacement of existing infrastructure is eligible if those costs can be identified and segregated from the portion of the project related to the expansion or improvements designed to meet future customer growth.

(b) The following projects are shall not be eligible for a utility reserve fund:

1. Projects to repair or replace general plant that is not directly associated with the physical operation of the utility’s water or wastewater systems that are recorded in NARUC USOA water utility plant account numbers 340, 341, 342, 343, 344, 345, 346, 347, and 348, and wastewater utility plant account numbers 390, 391, 392, 393, 394, 395, 396, 397, and 398, incorporated by reference in Rule 25-30.115, F.A.C.;,

2. Expenditures related to NARUC USOA water utility plant accounts 301 and 302, and wastewater utility plant accounts 351 and 352, incorporated by reference in Rule 25-30.115, F.A.C., which cover organization and franchise related expenditures;,

3. Expenditures related to land or land rights recorded in NARUC USOA water utility plant account number 303 or wastewater utility plant account number 353, incorporated by reference in Rule 25-30.115, F.A.C., if the expenditure is necessary solely to meet future customer growth;, or

4. Capital improvement projects to expand existing facilities or construct new facilities solely to meet future customer growth.

(c) When evaluating whether the utility’s request to create a utility reserve fund is the most appropriate methodology to address the utility’s eligible future infrastructure repair and replacement projects, the following additional factors will be considered:

1. Whether the anticipated completion date of the project allows sufficient time to accumulate the funds necessary to fund the project;,

2. Whether the anticipated completion date is within 24 months of the end of the historic test year used in a jointly filed rate application, if applicable, thereby making the project eligible for consideration as a pro forma project in the rate proceeding pursuant to Section 367.081(2)(a)2., F.S.;,

3. Whether the contributions-in-aid-of-construction that will result from the utility reserve fund will cause the utility to exceed the service availability policy guidelines provided in Rule 25-30.580, F.A.C.;,

4. Whether any of the eligible projects included in the utility reserve fund will result in the complete elimination of either the water or wastewater treatment process;,

5. Whether it has been more than seven years since the utility’s last rate case, if the request is filed as a stand-alone application or in conjunction with a limited proceeding;, or

6. Whether the total increase resulting from implementation of the utility reserve fund surcharge will exceed the utility’s annual revenues for the most recent 12-month period or test year by more than 30 percent.

(2) UTILITY RESERVE FUND FILING REQUIREMENTS. Each applicant that requests approval to create a utility reserve fund must shall provide the following information to the Commission. The request may be filed as a stand-alone application or in conjunction with an application for rate increase filed pursuant to Section 367.081(2)(a), 367.0814, or 367.0822, F.S. If the request is filed in conjunction with an application for rate increase that also requires the applicant’s general information, paragraphs (2)(a), (b), and (c), may be omitted from the utility reserve fund portion of the joint application. A utility that qualifies for staff assistance as provided by subsection 25-30.455(1), F.A.C., may also request assistance with the utility reserve fund process.

(a) The utility’s name as it appears on the utility’s certificate, address, telephone number, and, if available, email address and fax number.

(b) The name(s), address(es), and telephone number(s) of the person(s) that should be contacted regarding this application.

(c) The address within the service area where the application is available for customer inspection during the time the rate application is pending.

(d) A statement of the reason(s) why the utility is requesting approval of a utility reserve fund.

(e) A capital improvement plan that includes: a general description of the age and condition of the utility’s facilities; a description of all infrastructure repair or replacement projects that the utility anticipates will be necessary within the next five years, at a minimum, even if some projects will not be included in the utility reserve fund; and the following information for each infrastructure repair or replacement project that the utility requests be included in the utility reserve fund:

1. A description of each plant asset that will be repaired or replaced, including the NARUC USOA account number for each asset, incorporated by reference in Rule 25-30.115, F.A.C.;,

2. The date each asset was originally placed into service or an estimate of the age of the plant asset(s) as reflected in the utility’s depreciation records if the original service date is unknown;,

3. A detailed description of the reason(s) each repair or replacement project is necessary to maintain or improve the quality or reliability of the water or wastewater service, including whether any asset will be replaced prior to the end of its average service life as provided by Rule 25-30.140, F.A.C.;,

4. If the repair or replacement project is required by a governmental or regulatory agency, include a copy of the rule, regulation, order, or other regulatory directive that requires the repair or replacement;,

5. The projected cost to repair or replace each asset, and documentation that supports the utility’s calculation of the projected cost. The utility must shall make all reasonable efforts to obtain at least three comparative cost estimates for each requested project. Acceptable forms of projected cost documentation are: an estimate by a professional engineer or other person knowledgeable in design and construction of water and wastewater plants; a bid from a vendor or service provider that includes a description of all work to be completed and an itemized list of all costs associated with the project; vendor information regarding the purchase price of plant components that will be purchased directly by the utility and labor estimates for work that will be performed on the project by a utility employee or contractual service provider, along with a statement that confirms that the employee’s or contractual service provider’s work on the project is not included in their normal duties; or other information that shows a detailed and verifiable estimate of the projected cost. If the utility is unable to obtain three cost estimates for each project, the utility must shall provide a statement explaining what steps the utility took to obtain the estimates, why the utility was unable to obtain three estimates, and any responses received from any contractors solicited;,

6. Detailed specifications for each asset that can be used to verify the projected repair or replacement cost, such as type, size, quantity, or quality of the materials used to complete the repair or replacement of the asset. If the type, size, quantity, or quality of the components used to make the repair or replacement will be materially different than the plant asset(s) being repaired or replaced, describe the specific differences and why the change is either necessary or provides a better resolution for the repair or replacement;,

7. If the repair or replacement will change the design of the system, include a statement explaining how the design of the system will change and why the change is either necessary or will provide a better resolution for the repair or replacement;,

8. A description of any alternatives to the proposed infrastructure repair or replacement project that the utility considered, such as new technologies or interconnection with another utility system, and why the proposed project was determined to be the most cost-effective option or will provide a better resolution for the repair or replacement;,

9. If the infrastructure that is being replaced was subject to a non-used and useful adjustment in the utility’s last rate proceeding, include a statement explaining whether the utility considered reducing the size of the replacement infrastructure to better match the utility’s capacity needs and the results of that analysis;,

10. A description of any expense increases or decreases that the utility anticipates will occur following completion of the infrastructure repair or replacement project; and,

11. The projected timeline and anticipated completion date for the repair or replacement project, including a detailed description of any target dates and significant milestones if the project will be completed in multiple phases. If the repair or replacement project is required by a governmental or regulatory agency, include any specific deadlines that have been imposed by that agency, and describe any penalties that will be incurred by the utility if the deadlines are not met.

(f) A description of any other funding sources that may be used for the project, including a breakdown of the estimated project costs that will be funded with the utility reserve fund, utility investment, and each available external funding source, such as a bank loan, government loan, or government grant, as applicable.

(g) A schedule showing the calculation of the annualized revenues for the most recent 12-month period using the rates in effect at the time the utility files its application for approval to create a utility reserve fund, broken down by customer class and meter size. This schedule may be omitted from the utility reserve fund portion of the application if filed in conjunction with an application for a rate proceeding that also requires an annualized revenue calculation.

(h) A schedule showing the calculation of the proposed utility reserve fund surcharge based on the number of bills by customer class and meter size for the most recent 12-month period, or test year if filed in conjunction with an application for a rate proceeding.

(i) Revised tariff sheets incorporating the utility reserve fund surcharge into the tariff. The utility must shall show the utility reserve fund surcharge as a separate charge in its tariff and on its customer bills.

(j) A statement indicating whether the applicant will secure the utility reserve fund through an interest-bearing escrow account or an irrevocable letter of credit. If the utility’s request to create a utility reserve account is approved by the Commission, the utility will be required to provide documentation showing that the escrow account has been established or the irrevocable letter of credit has been obtained prior to implementation of the utility reserve fund surcharge.

(k) A description of the procedures that the utility will implement to segregate the monies collected from the utility reserve fund surcharge on the utility’s books and records. Separate accounting records must be maintained to record all transactions associated with the collection, deposit, and use of monies designated for the utility reserve fund. A separate bank account may be used to segregate the utility reserve fund monies that are secured through an irrevocable letter of credit but is not required.

(l) A statement signed by an officer of the utility that the utility will comply with the noticing requirements in Rule 25-30.4445, F.A.C., if the request is filed as a stand-alone application, Rule 25-22.0407, F.A.C., if the request is filed in conjunction with an application for a rate increase filed pursuant to Section 367.081(2)(a) or 367.0814, F.S., or Rule 25-30.446, F.A.C., if the request if filed in conjunction with a limited proceeding filed pursuant to Section 367.0822, F.S.

(m) An Asset Management Plan prepared by the Florida Rural Water Association may be provided in lieu of a capital improvement plan in paragraph (2)(e).

(3) Reporting Requirements. Any utility that receives approval from or is required by the Commission to create a utility reserve fund must keep an accurate and detailed account of all monies and report to the Commission all monies it receives from the utility reserve fund surcharge. The reporting requirement must shall begin when the utility’s reserve fund surcharge tariff becomes effective. The utility must file periodic reports as follows:

(a) The utility must shall file a report with the Commission Clerk’s office no later than the 20th of every month indicating the monthly and total amount of money deposited into, and monthly and total amount of disbursements made from the utility reserve fund as of the end of the preceding month. If the utility bills its customers less frequently than once a month, this reporting requirement may be modified to match the utility’s normal billing frequency. A copy of a bank statement that separately identifies the utility reserve fund deposits and disbursements may serve as the monthly report.

(b) At least once every six months, the utility must shall also report the status of all eligible projects included in the utility reserve fund for which work was performed during the last six months, including the actual start date, the estimated or actual completion date, the costs incurred during the last six months, and the total cost for any projects completed during the last six months.

(c) The reports must shall continue as long as the utility reserve fund is in effect and until all funds have been disbursed either to pay for completed eligible projects or as refunds to customers.

(d) A request for disbursement from the utility reserve fund escrow account or authorization to use funds secured by an irrevocable letter of credit may be filed in conjunction with the utility’s monthly or quarterly reports.

(e) The utility must shall also separately identify the utility reserve fund in its annual report filed with the Commission each year pursuant to Rule 25-30.110, F.A.C.

(f) The utility must shall file an updated capital improvement plan with the Commission at least once every three years for as long as the utility reserve fund remains active.

(4) DISBURSEMENT OF FUNDS. A utility requesting disbursement of funds from an escrow account or authorization to use funds secured by an irrevocable letter of credit must shall file the following information and supporting documentation:

(a) A statement explaining why the disbursement is needed, including a description of the completed project, or if a partial disbursement of funds is necessary prior to completion of the full project, a description of the completed phase of the project, purchase of materials, payments to contractors or vendors, or construction draws, as applicable;

(b) The date the project or phase of the project was completed and the replacement asset(s) was placed in service, as applicable;

(c) Documentation supporting the amount of the requested disbursement. Acceptable forms of documentation are: invoices, receipts, contractor application and request for payment forms, loan documents, documents showing proof of payment, and other information that shows detailed and verifiable project costs and payments;

(d) Documentation showing that the completed work was inspected or approved by the governmental or regulatory authority that required the repair or replacement project, if applicable; and,

(e) Other documentation that demonstrates the project was completed, such as photographs of the completed work, may be submitted, but is not required.

(f) A utility may request the disbursement of funds from a utility reserve fund to assist with making an emergency repair or replacement of existing distribution and collection infrastructure that is nearing the end of its useful life or is detrimental to water quality or reliability of service that is critical to the operation of the utility facilities and resulted from events that were out of the utility’s control, such as weather related damage, accidents, or defective parts. The utility’s request for an emergency disbursement must include the following information:

1. The information required in paragraphs (4)(a) through (e), above,

2. A description of any future funding sources that may be available to assist the utility with the emergency repair or replacement costs, such as government assistance for weather damage, insurance benefits, or manufacturer warranties for defective parts,

3. A statement explaining how the utility will reimburse the utility reserve fund for the emergency disbursement through future funding sources, such as, government assistance, insurance benefits, manufacturer warranties, bank loans, or utility investment. If no funding sources will be available for reimbursement of the utility reserve fund, the utility must shall either provide a statement describing how the utility reserve fund project(s) or timeline may be modified to address the project funding needs without modifying the amount of the utility reserve fund surcharge, or provide the information required in subsection (5), below, to request a modification of the utility reserve fund surcharge.

(5) UTILITY RESERVE FUND MODIFICATIONS. A utility that must undertake a project that was not anticipated when the utility reserve fund was created or that must make significant modifications to a previously approved project may request a modification of the utility reserve fund at any time following creation of the fund or in the utility’s next rate proceeding by filing the following information:

(a) A statement describing why the new project or modification of a previously approved project is necessary, and whether the utility is requesting a change in the utility reserve fund surcharge or only acknowledgement of the project modifications. If the new project or project modification is required by a governmental or regulatory agency, include a copy of the rule, regulation, order, or other regulatory directive that requires the new project or project modification; and,

(b) The information required in paragraph (2)(e) or (m), and paragraphs (f), (g), (h), and (i), if the utility is requesting a change in the utility reserve fund surcharge. Also, if the utility reserve fund is secured through an irrevocable letter of credit, the utility must shall provide an updated irrevocable letter of credit prior to implementation of the utility reserve fund surcharge increase.

(6) FINAL DISPOSITION OF UTILITY RESERVE FUND.

(a) The utility reserve fund surcharge must shall be discontinued after all approved eligible projects(s) have been completed, sufficient funds have been collected in the utility reserve fund to cover the cost of the approved eligible project(s), and the final disbursement has been made from the utility reserve fund. During the utility’s next rate proceeding, the utility’s rate base, capital structure, operating expenses, and rates must shall be adjusted as needed to reflect the completed projects. The amount of the new plant assets that are funded through a utility reserve fund must shall be offset with an equal addition to contributions-in-aid-of-construction.

(b) Any monies that remain in the utility reserve fund following the last disbursement for the completed eligible project(s) must shall be refunded to the customers with interest in accordance with Rule 25-30.360, F.A.C.

(c) All monies collected and held in the utility reserve fund should remain with the utility regardless of any changes in utility ownership. If a utility’s ownership changes through a transfer or abandonment, the Commission will shall determine whether the utility reserve fund should be continued as follows:

1. In the event that the utility’s ownership changes through a transfer as provided in Rule 25-30.037, F.A.C., the transfer agreement must shall include provisions that state: that the utility reserve fund will shall remain with the utility following the close of the sale; that the seller must shall provide copies of all documents related to the utility reserve fund to the buyer, including the approved capital improvement plan, financial records, and status reports; whether the buyer requests to continue the utility reserve fund following the transfer; and whether the buyer will assume responsibility for the escrow account or obtain an irrevocable letter of credit to secure the utility reserve fund. If the buyer does not request to continue the utility reserve fund or does not provide sufficient documentation to guarantee the continued security of the utility reserve fund and compliance with the provisions set forth in this rule, all monies held in the utility reserve fund must shall be refunded to the customers with interest in accordance with Rule 25-30.360, F.A.C., and the utility reserve fund surcharge and utility reserve fund must shall be discontinued. However, if the transfer of ownership is requested pursuant to subsection 25-30.037(5), F.A.C., and will result in the transfer of ownership to an exempt entity other than a governmental utility, the buyer will shall not be required to obtain an escrow account or an irrevocable letter of credit.

2. In the event that the utility is abandoned as provided in Rule 25-30.090, F.A.C., all monies held in the utility reserve fund and all documents related to the utility reserve fund must shall remain with the utility and be turned over to the court-appointed receiver. If the utility remains under Commission jurisdiction following the abandonment, the court-appointed receiver must shall be responsible for managing the utility reserve fund in accordance with this rule and all applicable Commission Orders.

(d) If the utility fails to follow through with the eligible project(s) covered by the utility reserve fund or comply with the security, fund maintenance, or reporting requirements set forth in this rule, the Commission will shall initiate a review of the utility reserve fund and surcharge to determine whether the utility reserve fund and surcharge should be discontinued and whether all monies in the reserve fund should be refunded to the customers with interest in accordance with Rule 25-30.360, F.A.C.

Rulemaking Authority 350.127(2), 367.081(2)(c), 367.121 FS. Law Implemented 367.081(2)(c) FS. History–New 6-20-17, Amended _______.

25-30.445 General Information and Instructions Required of Water and Wastewater Utilities in an Application for a Limited Proceeding.

(1) Each applicant for a limited proceeding must provide the following general information to the Commission:

(a) The name of the applicant as it appears on the applicant’s certificate and the address of the applicant’s principal place of business;.

(b) The type of business organization under which the applicant’s operations are conducted; if the applicant is a corporation, the date of incorporation; the names and addresses of all persons who own 5 percent or more of the applicant’s stock; or the names and addresses of the owners of the business;.

(c) The number(s) of the Commission order(s), if any, in which the Commission most recently considered the applicant’s rates for the system(s) involved;.

(d) The address within the service area where the application is available for customer inspection during the time the rate application is pending;. and

(e) A statement signed by an officer of the utility that the utility will comply with the noticing requirements in Rule 25-30.446, F.A.C.

(2) In a limited proceeding application:

(a) Each schedule must be cross-referenced to identify related schedules;.

(b) Except for handwritten official company records, all data in the petition and application must be typed;. and

(c) The original and three copies must be filed with the Office of Commission Clerk. The copies must be clearly labeled “COPY.” If the application is e-filed, the utility must provide the required number of paper copies, clearly labeled “COPY,” to the Office of Commission Clerk within seven calendar days after electronic filing.

(3) A filing fee as required in Rule 25-30.020, F.A.C., must be submitted at the time of application.

(4) The following minimum filing requirements must be filed with the utility’s application for limited proceeding for a Class A or B water or wastewater utility:

(a) A detailed statement of the reason(s) why the limited proceeding has been requested.

(b) If the limited proceeding is being requested to recover costs required by a governmental or regulatory agency, provide the following:

1. A copy of any rule, regulation, order or other regulatory directive that has required or will require the applicant to make the improvement or the investment for which the applicant seeks recovery.

2. An estimate by a professional engineer, or other person, knowledgeable in design and construction of water and wastewater plants, to establish the projected cost of the applicant's investment and the period of time required for completion of construction.

(c) A schedule that provides the specific rate base components for which the utility seeks recovery. Supporting detail must be provided for each item requested, including:

1. The actual or projected cost(s);

2. The date the item will be or is projected to be placed in service;

3. Any corresponding adjustments that are required as a result of adding or removing the requested component(s) from rate base, which may include retirement entries; and,

4. Any other relevant supporting information.

(d) If the utility’s application includes a request for recovery of plant in service, accumulated depreciation and depreciation expense, supporting detail must be provided by primary account as defined by the NARUC USOA Uniform System of Accounts, which are incorporated by reference in accordance with Rule 25-30.115 25-30.110, F.A.C.

(e) A calculation of the weighted average cost of capital must be provided for the most recent 12-month period, using the mid-point of the range of the last authorized rate of return on equity, the current embedded cost of fixed-rate capital, the actual cost of short-term debt, the actual cost of variable-cost debt, and the actual cost of other sources of capital which were used in the last individual rate proceeding of the utility. If the utility does not have an authorized rate of return on equity, the utility must use the current leverage formula pursuant to Section 367.081(4)(f), F.S.

(f) If the utility is requesting recovery of operating expenses, the following information must be provided:

1. A detailed description of the expense(s) requested;

2. The total cost by primary account pursuant to the NARUC USOA Uniform System of Accounts, incorporated by reference in Rule 25-30.115, F.A.C.;

3. Supporting documentation or calculations; and,

4. Any allocations that are made between systems, affiliates or related parties. If allocations are made, submit full detail that shows the total amount allocated, a description of the basis of the allocation methodology, the allocation percentage applied to each allocated cost, and the workpapers supporting the calculation of the allocation percentages.

(g) Calculations for all items that will create cost savings or revenue impacts from the implementation of the requested cost recovery items.

(h) If the utility includes any other items where calculations are required, supporting documentation must be filed that reflects the calculations or assumptions made.

(i) A calculation of the revenue increase including regulatory assessment fees and income taxes, if appropriate.

(j) Annualized revenues for the most recent 12-month period using the rates in effect at the time the utility files its application for limited proceeding and a schedule reflecting this calculation by customer class and meter size.

(k) A schedule of current and proposed rates for all classes of customers.

(l) Schedules for the most recent 12-month period showing that, without any increased rates, the utility will earn below its authorized rate of return in accordance with Section 367.082, F.S. The schedules must consist of a rate base, net operating income and cost of capital schedule with adjustments to reflect those consistent with the utility’s last rate proceeding.

(m) If the limited proceeding is being requested to change the current rate structure, provide a copy of all workpapers and calculations used to calculate requested rates and allocations between each customer class. The test year must be the most recent 12-month period. In addition, the following schedules from Form PSC 1028 (12/20), entitled “Class A Water and/or Wastewater Utilities Financial, Rate and Engineering Minimum Filing Requirements,” which is incorporated by reference in Rule 25-30.437, F.A.C., must be provided:.

1. Schedule E-2, entitled “Revenue Schedule at Present and Proposed Rates.”

2. Schedule E-14, entitled “Billing Analysis Schedules.” Only an original and one copy is required.

(n) Revised tariff sheets should not be filed with the application.

(o) A water utility’s application for limited proceeding must also include:

1. A copy of all customer complaints that the utility has received regarding DEP secondary water quality standards during the past five years; and,

2. A copy of the utility’s most recent secondary water quality standards test results.

(5) In addition to the requirements stated in subsections (1) through (3), the following minimum filing requirements must be filed with the utility’s application for limited proceeding for a Class C water or wastewater utility:

(a) A detailed statement of the reason(s) why the limited proceeding has been requested.

(b) If the limited proceeding is being requested to recover costs required by a governmental or regulatory agency, provide a copy of any rule, regulation, order or other regulatory directive that has required or will require the applicant to make the improvement or the investment for which the applicant seeks recovery.

(c) A schedule that provides the specific rate base components for which the utility seeks recovery, if known. Supporting detail must be provided for each item requested, including:

1. The actual or projected cost(s);

2. The date the item will be or is projected to be placed in service;

3. Any corresponding adjustments, if known, that are required as a result of adding or removing the requested component(s) from rate base, which may include retirement entries; and,

4. Any other relevant supporting information, if known.

(d) If the utility is requesting recovery of operating expenses, provide an itemized description of the expense(s), including the cost and any available supporting documentation or calculations.

(e) Provide a description of any known items that will create cost savings or revenue impacts from the implementation of the requested cost recovery items.

(f) A calculation of the revenue increase including regulatory assessment fees and income taxes, if applicable.

(g) Annualized revenues for the most recent 12-month period using the rates in effect at the time the utility files its application for limited proceeding and a schedule reflecting this calculation by customer class and meter size.

(h) A Class C water utility’s application for limited proceeding must also include:

1. A copy of all customer complaints that the utility has received regarding DEP secondary water quality standards during the past five years; and,

2. A copy of the utility’s most recent secondary water quality standards test results.

(6) 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.

(7) The utility must provide a statement in its filing to the Commission that addresses whether the utility’s rate base has declined or whether any expense recovery sought by the utility is offset by customer growth since its most recent rate proceeding or will be offset by future customer growth expected to occur within one year of the date new rates are implemented.

Rulemaking Authority 350.127(2), 367.121(1)(a) FS. Law Implemented 367.081, 367.0812, 367.0822, 367.121(1)(a), 367.145(2) FS. History–New 3-1-04, Amended 5-30-17, 5-16-22, ________

DOCKET 20260022-WS

EXHIBIT B

TO

STAFF RECOMMENDATION

(PROPOSED AMENDED FORMS)