Recommendation

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 (Sapoznikoff) SMC Division of Economics (Bruce, Guffey, Hampson, Hudson) EJD Division of Engineering (King) TB
RE:	Docket No. 20260040-OT – Proposed amendment of Rules 25-6.003, Definitions; 25-30.255, Measurement of Service for Water Utilities; and 25-30.434, FAC, Application for Allowance for Funds Prudently Invested (AFPI) Charges; and proposed repeal of Rules 25-9.020, Front Cover; 25-9.060, Front Cover; 25-9.071, Back Cover; and 25-30.010, F.A.C., Rules for General Application
AGENDA:	06/02/26 – Regular Agenda – Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Ortega
CRITICAL DATES:			09/21/26 (Rule must be proposed by this date pursuant to Section 120.54(2)(a)2., F.S.)
RULE STATUS:			Proposal May Be Deferred
SPECIAL INSTRUCTIONS:			None

Case Background

In 2025, the Legislature amended Chapter 120, Florida Statutes, to require each agency to review all of its rules over a five-year period. This recommendation addresses the following rules that were identified in the Commission’s rule review as part of the rules needing amendment or repeal:

Rules Identified as Needing to be Amended

· Rule 25-6.003, F.A.C., Definitions

· Rule 25-30.255, F.A.C., Measurement of Service for Water Utilities

· Rule 25-30.434, F.A.C., Application for Allowance for Funds Prudently Invested (AFPI) Charges.

Rules Identified as Needing to be Repealed

· Rule 25-9.020, F.A.C., Front Cover

· Rule 25-9.060, F.A.C., Front Cover

· Rule 25-9.071, F.A.C., Back Cover

· Rule 25-30.010, F.A.C., Rules for General Application

The Commission’s Notices of Development of Rulemaking were published in Volume 52, Number 57, of the Florida Administrative Register on March 24, 2026. OPC requested a workshop regarding Rule 25-30.434, F.A.C. However, OPC later submitted written comments in lieu of holding a workshop, which comments are incorporated in the draft amendments.

This recommendation addresses whether the Commission should propose the amendment of Rules 25-6.003, 25-30.255, and 25-30.434, F.A.C., and the repeal of Rules 25-9.020, 25-9.060, 25-9.071, and 25-30.010, F.A.C. The Commission has jurisdiction pursuant to Section 120.54, 350.127(2), 366.05(1), and 367.121, Florida Statutes.

Discussion of Issues

Issue 1:

Should the Commission propose the amendment of Rules 25-6.003, 25-30.255, and 25-30.434, F.A.C., and the repeal of Rules 25-9.020, 25-9.060, 25-9.071, and 25-30.010, F.A.C.?

Recommendation:

Yes. The Commission should propose the amendment of Rules 25-6.003, 25-30.255, and 25-30.434, F.A.C., and the repeal of Rules 25-9.020, 25-9.060, 25-9.071, and 25-30.010, F.A.C., as set forth in Attachment A. The Commission should also certify the rules as minor violation rules. (Sapoznikoff, Hampson, King, Bruce, Guffey)

Staff Analysis:

The purpose of this rulemaking is to amend Rules 25-6.003, 25-30.255, and 25-30.434, F.A.C., to update and clarify the rules to reflect current practice and use, and to repeal Rules 25-9.020, 25-9.060, 25-9.071, and 25-30.010, F.A.C., because those rules do not reflect current procedure, or are unnecessary or repetitive. Staff recommends the Commission should propose the amendment of Rules 25-6.003, 25-30.255, and 25-30.434, F.A.C., and repeal Rules 25-9.020, 25-9.060, 25-9.071, and 25-30.010, F.A.C., as set forth in Attachment A.

Of particular note, for Rules 25-6.003 and 25-30.255, F.A.C., staff determined that the materials incorporated by reference were no longer relevant and, thus, not necessary. The recommended amendments to those rules delete references to the listed materials, and update and clarify the rule language.

In addition, for Rule 25-30.434, F.A.C., which addresses AFPI charges, staff determined that the existing form did not provide all of the information needed and a new form was developed. The recommended amendments delete use of and reference to the old form, incorporate by reference the new form, and update and clarify the rule language to reflect Commission practice.

Minor Violation Rule Certification

Pursuant to Section 120.695, F.S., for each rule filed for adoption, the agency head shall certify whether any part of a rule is designated as a rule the violation of which would be a minor violation. Under Section 120.695(2)(b), F.S., a violation of a rule is minor if it does not result in economic or physical harm to a person or adversely affect the public health, safety, or welfare or create a significant threat of such harm. Rules 25-6.003, 25-30.255, and 25-30.434, F.A.C., are all currently listed as minor violation rules, and staff recommends that all should remain listed as minor violation rules by the Commission. These rules are minor violation rules because the violation of any of them would not result in economic or physical harm to a person, cause an adverse effect on the public health, safety, or welfare, or create a significant threat of such harm. Therefore, for the purposes of filing the rules for adoption with the Department of State, staff recommends that the Commission certify Rules 25-6.003, 25-30.255, and 25-30.434, F.A.C., as minor violation rules. Staff notes that Rules 25-9.020, 25-9.060, 25-9.071, and 25-30.010, F.A.C., were on the Commission’s list of minor violation rules. Staff recommends that the Commission certify that Rules 25-9.020, 25-9.060, 25-9.071, and 25-30.010, F.A.C., were minor violation rules. Once those rules are repealed, they should be removed from the list of minor violation rules.

Statement of Estimated Regulatory Costs

Section 120.54(3)(b)1., F.S., encourages agencies to prepare a Statement of Estimated Regulatory Costs (SERC) before the adoption, amendment, or repeal of any rule. A SERC was prepared for each rule in this rulemaking and they are appended as Attachment B. As required by Section 120.541(2)(a)1., F.S., the SERC analysis includes whether the rule amendments or repeals are individually likely to have an adverse impact on economic growth, private sector job creation or employment, or private sector investment in excess of $1 million in the aggregate within five years after implementation.

The SERCs conclude that neither the amendment nor the repeal of any of the rules will likely directly or indirectly increase regulatory costs in excess of $200,000 in the aggregate in Florida within one year after implementation. Further, the SERCs conclude that neither the rule amendments nor rule repeals will likely increase regulatory costs, including any transactional costs, or have an adverse impact on business competitiveness, productivity, or innovation, in excess of $1 million in the aggregate within five years of implementation. Thus, pursuant to Section 120.541(3), F.S., none of the rules require legislative ratification.

In addition, the SERCs indicate that neither the amendment nor repeal of any of the rules would have an adverse impact on small businesses, would have any implementation or enforcement costs on the Commission or any other state or local government entity, or would have any impact on small cities or small counties. The SERCs state that there will be no transactional costs likely to be incurred by individuals and entities required to comply with the requirements. None of the impact/cost criteria established in Section 120.541(2)(a), F.S., will be exceeded as a result of any of the rules. Finally, the SERCs indicate that there are no market impacts likely to result from compliance with the proposed rules.

Conclusion

Based on the foregoing, staff recommends that the Commission should propose the amendment of Rules 25-6.003, 25-30.255, and 25-30.434, F.A.C., and repeal Rules 25-9.020, 25-9.060, 25-9.071, and 25-30.010, F.A.C., as set forth in Attachment A. Staff also recommends the Commission certify Rules 25-6.003, 25-30.255, and 25-30.434, F.A.C., as minor violation rules. Once Rules 25-9.020, 25-9.060, 25-9.071, and 25-30.010, F.A.C., are repealed, staff recommends they should be removed from the list of minor violation rules.

Issue 2:

Should this docket be closed?

Recommendation:

Yes. If no requests for hearing are made or 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., then Rules 25-6.003, 25-30.255, and 25-30.434, F.A.C., should be filed with the Department of State for adoption, Rules 25-9.020, 25-9.060, 25-9.071, and 25-30.010, F.A.C., should be filed for repeal with the Department of State, and the docket should be closed. (Sapoznikoff)

Staff Analysis:

If no request for hearing is made or 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., then Rules 25-6.003, 25-30.255, and 25-30.434, F.A.C., should be filed with the Department of State for adoption, Rules 25-9.020, 25-9.060, 25-9.071, and 25-30.010, F.A.C., should be filed for repeal with the Department of State, and the docket should be closed.

25-6.003 Definitions.

(1) Definitions of general applicability. The definitions of terms used in this chapter are as shall be stated in the Authoritative Dictionary of IEEE Standard Terms, 7th edition, published in December 2000, incorporated herein by reference, except to the extent and for the purposes that the terms are defined elsewhere in this chapter. The definitions in subsection (2) shall be used for all purposes in this chapter.

~~(2) Definitions of terms.~~

(1)~~(a)~~ “Commission.” Unless a different intent clearly appears from the context, the word “Commission” means ~~shall be construed to mean~~ the Florida Public Service Commission.

(2)~~(b)~~ “Customer.” Any person, firm, partnership, company, corporation, association, governmental agency or similar organization, that ~~who~~ makes application for and is supplied with electric service by the utility for its ultimate use and not for use by, to, or through any other person or entity unless specifically authorized by the Commission.

(3)~~(c)~~ “Meter.” The word “meter,” when used in these rules without other qualification, means ~~shall be construed to mean~~ any device used for the purpose of measuring the service rendered to a customer by a utility.

(4)~~(d)~~ “Point of Delivery.” The first point of connection between the facilities of the serving utility and the premises wiring.

(5)~~(e)~~ “Service.” The supply of electricity by the utility to the customer, including the readiness to serve and availability of electrical energy at the customer’s point of delivery at the standard available voltage and frequency whether or not utilized by the customer.

(6)~~(f)~~ “Service Drop.” The overhead service conductors from the last pole or other aerial support to and including the splices, if any, connecting to the service entrance conductors at the building or other structure.

(7)~~(g)~~ “Service Lateral.” The underground conductors between the transformer(s) or transformer secondary, including any risers at a pole or other structure, and the point of delivery.

(8)~~(h)~~ “Utility.” Unless a different intent clearly appears from the context, the word or words “utility” or “electric utility” as used in these has ~~shall have~~ the same meaning as “public utility” as defined in ~~set out for~~ Section 366.02, F.S., and includes ~~shall include~~ all such utilities subject to Commission jurisdiction.

Rulemaking Authority 366.05(1) FS. Law Implemented 366.05(1) FS. History–New 7-29-69, Amended 4-13-80, Formerly 25-6.03, Amended 12-4-03, .

25-30.434 Application for Allowance for Funds Prudently Invested (AFPI) Charges.

(1) An Allowance for Funds Prudently Invested (AFPI) charge is a mechanism that ~~which~~ allows a utility the opportunity to earn a fair rate of return on prudently constructed plant held for future use from the future customers to be served by that plant in the form of a charge paid by those customers.

(2) Each application for AFPI charges must ~~shall~~ comply with the notice requirements specified in Rule 25-30.4345, F.A.C.

(3) Each application for AFPI charges must ~~shall~~ provide the following information. If any of the following items do not apply to the applicant, the applicant must ~~shall~~ state the reason it does not apply.

(a) The applicant’s name and address.

(b) A statement describing how the noticing requirements have been complied with, including a copy of the actual notice(s).

1. Previously established customer rates for the applicant either in a rate case or a reverse make-whole proceeding; and

2. Established AFPI charges for the applicant.

(d) The charge must ~~shall~~ be calculated for one equivalent residential connection (ERC) on a monthly basis up to the time the utility reaches the designed capacity of the plant for which the charge applies. The charges ~~shall~~ cease when the plant has reached its designed capacity or if the plant is abandoned or retired. Further, the AFPI charge ceases if the Commission subsequently approves a 100% used and useful for the associated plant.

(e) A statement explaining the basis for the requested charges and conditions.

(f) The dollar amount of the non-used and useful plant, ~~and the~~ accumulated depreciation, contribution in aid of construction (CIAC), the accumulated amortization of CIAC, and the methodology used to determine these amounts. The net of these four ~~two~~ amounts must ~~shall~~ be considered the cost of qualifying assets. Separate balances for plant, ~~and for~~ accumulated depreciation, CIAC, and accumulated amortization of CIAC must ~~shall~~ be reported for the water treatment plant, wastewater treatment plant, water transmission and distribution system and wastewater collection system.

(g) The plant capacity related to each of the systems in (f) above and the methodology used to determine the amount.

(h) The number of future customers in number of ERCs related to the non-used and useful plant by system.

(i) The amount of depreciation expense, CIAC amortization expense, and composite depreciation rate related to the non-used and useful plant by system.

(j) The overall rate of return requested for the AFPI charge and the workpapers supporting the calculation.

(k) The last authorized rate of return on equity and references to the docket number of the last rate case and the resulting order.

(l) The state and federal income tax rates requested for calculating the AFPI charge.

(m) All other costs such as non-used and useful property taxes and operation and maintenance expenses removed in the last rate case.

(n) The test year to be used in the calculation, the month that the utility expects the charge to go into effect and the number of years the utility expects to collect the charge. Applicants must pProvide a detailed explanation of why the number of years to collect the charge represents a reasonable and prudent management decision in the construction of plant.

(o) The workpapers and calculations used to develop the proposed AFPI charge. Commission Form PSC 1036 (06/26), entitled “Allowance for Funds Prudently Invested,” ~~The utility can may obtain a diskette that~~ outlines the required calculations and is comprised of the following ~~schedules to be used by calling or writing the Division of Accounting and Finance, (850) 413-6410. The~~ required ~~schedules that shall be submitted are~~ “AFPI Filing Schedules:”, ~~Commission Form PSC/AFD 26 (11/93), incorporated by reference into this rule, and are as follows:~~

Schedule 1 – List of Information Imputed Into Calculation

Schedule 2 – Calculation of Of Carrying Costs Per ERC

Schedule 3 – Calculation of Of Carrying Costs Per ERC Per Year

Schedule 4 – Calculation of Of Carrying Costs Per ERC Per Month

PSC 1036 (06/26) is incorporated by reference and available at https://flrules.org/Gateway/reference.asp?No=Ref-19609 . ~~The form may be obtained from the Commission’s Division of Accounting and Finance, 2540https://flrules.org/Gateway/reference.asp?No=Ref-19609 Shumard Oak Boulevard, Tallahassee, Florida 32399-0850.~~ All calculations and schedules must be provided in Microsoft Excel format, with formulas intact and unlocked; must be provided via USB drive, CD, DVD, or other media; and may not be submitted by e-mail. PSC 1036 (06/26) is also available on the Commission website at www.floridapsc.com.

(p) The revised or original tariff sheets necessary to incorporate the AFPI charge into the tariff.

(4) The beginning date for accruing the AFPI charge must ~~shall~~ agree with the month following the end of the test year that was used to establish the amount of non-used and useful plant. If any connections have been made between the beginning date and the effective date of the charge, no AFPI will be collected from those connections.

(5) Unless the utility demonstrates that the 5-year period is inappropriate, it is prudent for a utility to have an investment in future use plant for a period of no longer than 5 years beyond the test year.

(6) For utilities that have non-used and useful plant to be held for periods longer than what is determined to be prudent, the AFPI charge will cease accruing charges and will remain constant after the accrual period, established by the Commission, has expired. The utility can continue to collect the constant charge until all ERCs projected in the calculation have been added.

Rulemaking Authority 350.127(2), 367.121 FS. Law Implemented 367.081, 367.121 FS. History–New 11-30-93, Amended _____.