This week the House Energy and Utilities Subcommittee heard a presentation by Public Service Commissioner Julie Imanuel Brown regarding the Study Committee on Investor Owned Utilities. The issues and recommendations from the Study Committee Report are summarized as follows:
Issue: Inability of small utilities to take advantage of quantity discounts for equipment and materials.
- Legislative direction for DMS to authorize investor-owned utilities as eligible users under state purchasing contracts
- That Florida Rural Water Association develop an online exchange for new and/or used equipment, materials and supplies
Issue: Inability of small utilities to attract capital at reasonable cost to fund aging infrastructure replacements ad to comply with water quality standards.
- That Legislature opens the availability of the State Revolving Fund (SRF) to all investor-owned water utilities.
- That DEP investigate the possibility of streamlining the SRF process.
- That Legislature amends §367.081(4)(b) and the PSC amends its rules to allow pass-through of loan service fees related to loans for infrastructure needs for existing customers
- That the Legislature send a memorial to Congress encouraging action to relax restrictions on tax-exempt private activity bonds (PABs) for water and wastewater infrastructure projects, and to allow investor-owned utilities access to wastewater loan programs.
- Increase the allocation of PABs in Florida to increase allocation of water and wastewater projects.
Issue: Small investor-owned utilities do not have tax exemptions or incentives that government-owned or non-profit utilities enjoy.
- Extend ad valorem and property tax exemptions to investor-owned water and wastewater utilities
- Extend sales tax exemptions to investor-owned water and wastewater utilities
Issue: Since many resellers are exempt from regulation and cannot recover the cost of meter reading or billing, they are often reluctant to install meters or measure service.
- PSC-exempt resellers should be allowed to charge up to 9% to recover metter reader and billing costs, while retaining exempt status.
Issue: Availability of affordable and accessible financing
Recommendation: Statutory authorization for PSC rulemaking to create infrastructure repair and replacement reserve account.
Issue: Rate case expenses, amortized over a four-year term begin to “pancake” when a utility files more than one rate case in a four year period. All rate case expenses are recoverable, offering no incentive to control expenses.
- PSC prohibit recovery of rate case expenses in Staff Assisted Rare Cases (SARCs) prior to preliminary staff report.
- Prohibit recovery of rate case expenses for more than one case at a time.
- Prohibit recovery of rate case expenses in excess of approved increase minus rate case expense
- PSC revise noticing requirement to inform customers of the expense reduction and provide the rate comparison that appears in the final rate case order.