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F L O R I D A
2000
P U B L I C
S E R V I C E
C O M M I S S I O N
ANNUAL REPORT
TELECOMMUNICATIONS
ELECTRIC
NATURAL GAS
WATER AND WASTEWATER
F L O R I D A
2000
P U B L I C
S E R V I C E
C O M M I S S I O N
ANNUAL REPORT
Reflects Calendar Year 2000
Edited by
Division of Consumer Affairs
2540 Shumard Oak Boulevard
Tallahassee, Florida 32399-0850
Table of Contents
I. Introduction
Information Directory
PSC Organizational Chart
The Commissioners
NARUC Committee and Subcommittee Memberships
Florida Public Service Commissioner History
Maintaining the Balance
Executive Director
Deputy Executive Directors
General Counsel
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1
2
3
8
9
10
11
12
13
II. Highlights of the PSC’s Regulatory Efforts for Calendar Year 2000
Electric Industry
Electric Reliability
Electric Utility Mergers
Electric Utility Refunds
Environmental Cost Recovery Clause
Florida Energy 2020 Study Commission
Jurisdictional Issues
Merchant Plants
Need Determination for Florida Power Corporation
Regional Transmission Organization
Natural Gas Industry
Unbundling of Natural Gas Services
Telecommunications Industry
Area Code Activity in Florida
Interconnection Agreements
Lifeline Assistance Program/Link-Up Florida
Pricing of Unbundled Network Elements
Quality-of-Service Rules
Reciprocal Compensation
Section 706 Joint Conference
Testing of BellSouth’s Operations Support Systems
Truth In Billing
Water and Wastewater Industries
‘Black’ Water
Copper Pipe Corrosion Project
Interagency Memoranda of Understanding
Mediation Efforts
Reuse
Additional Projects
Electronic Filings Task Force
Integrated Financial Management System Prototype
Internet Home Page
Mentoring Program
Seventy-Two-Hour Rule
Transfer Connect
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24
25
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III. Defining the PSC’s Role
Competitive Market Oversight
Rate Base/Economic Regulation
Safety, Reliability, and Service Issues
Additional Regulatory Activities
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33
IV. Agency Organization
Division of Administration
Division of Appeals
Division of Competitive Services
Division of Consumer Affairs
Division of Economic Regulation
Division of Legal Services
Division of Policy Analysis and Intergovernmental Liaison
Division of Records and Reporting
Division of Regulatory Oversight
Division of Safety and Electric Reliability
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I. Introduction
Information Directory
As a government agency whose operations directly affect the public, the Florida Public
Service Commission welcomes your requests for information on matters in which you
have a concern. Inquiries may be made in writing to the address below or by telephone,
e-mail, or toll-free fax.
Florida Public Service Commission
2540 Shumard Oak Blvd.
Tallahassee, Florida 32399-0850
E. Leon Jacobs, Jr., Chairman
(850) 413-6046
J. Terry Deason, Commissioner
413-6038
Lila A. Jaber, Commissioner
413-6044
Braulio L. Baez, Commissioner
413-6042
Michael A. Palecki, Commissioner
413-6040
Executive Director
413-6055
Deputy Executive Director/Administrative
413-6071
Deputy Executive Director/Technical
413-6068
General Counsel
413-7286
Division of Appeals
413-6245
Division of Legal Services
413-6199
Division of Administration
413-6330
Division of Competitive Services
413-6600
Division of Consumer Affairs
413-6100
Toll-Free Number: 1-800-342-3552 (Nationwide)
Toll-Free Fax: 1-800-511-0809 (Florida)
Division of Economic Regulation
413-6900
Division of Policy Analysis & Intergovernmental Liaison
413-6800
Division of Records and Reporting
413-6770
Division of Regulatory Oversight
413-6480
Division of Safety & Electric Reliability
413-6700
Inspector General
413-6338
E-mail address: [email protected]
Internet home page: http://www.floridapsc.com
District Offices
Miami
3625 N.W. 82nd Ave.
Suite 400
Miami, Florida 33166-7602
(305) 470-5600
Orlando
Hurston North Tower
Suite N512
400 W. Robinson St.
Orlando, Florida 32801-1775
(407) 245-0846
1
Tampa
4950 W. Kennedy Blvd.
Suite 310
Tampa, Florida 33609
(813) 356-1444
PSC Organizational Chart
Braulio L. Baez
J. Terry Deason
Appointed through 01/07/02
Appointed through 01/06/03
E. Leon Jacobs, Jr.,
Chairman
Lila A. Jaber
Michael A. Palecki
Appointed through 01/03/05
Appointed through 01/06/03
Appointed through 01/07/02
General Counsel
Harold McLean
Executive Director
William D. Talbott
DIVISION
OF
DIVISION
Appeals
David Smith
OF
Legal Services
Noreen Davis
BUREAUS
Communications
Electric & Gas
Water & Wastewater
Deputy Executive
Director / Tech.
Mary A. Bane
Deputy Executive
Director / Adm.
James A. Ward
BUREAUS
DIVISION
OF
Administration
Steve Tribble
DIVISION
OF
Consumer Affairs
Bev DeMello
Fiscal Services
General Support Services
Information Processing
Personnel
Integrated Financial
Management System
DIVISION
Competitive Services *
Walter D'Haeseleer
DIVISION
BUREAUS
Complaint Resolution
Consumer Information
and Conservation
Education
OF
Records and Reporting
Blanca Bayó
BUREAUS
OF
Economic Regulation
Timothy Devlin
DIVISION
DIVISION
OF
DIVISION
OF
Regulatory Oversight *
Daniel M. Hoppe
Inspector General
John Grayson
The Inspector
General reports
directly to the
Chairman's Office.
DIVISION
2
BUREAUS
Intergovernmental Liaison
Policy Analysis
BUREAUS
Auditing Services
Certification
Regulatory Review
OF
Safety and Electric
Reliability *
Joseph Jenkins
* Supervises
BUREAUS
Economics, Finance and Rates
Surveillance/Accounting
Rate Cases
OF
Policy Analysis and
Intergovernmental Liaison
Charles Hill
Records
Reporting
BUREAUS
Competitive Safeguards
Market Development
Service Quality
BUREAUS
Electric Reliability and Cost Recovery
Safety
personnel in district offices: Tallahassee, Orlando, Miami and Tampa
The Commissioners
C H A I R M AN
E. Leon Jacobs, Jr.
Chairman Jacobs was appointed by the late Governor Lawton Chiles to
a four-year term beginning in January 1998, and is currently serving a
two-year term as Chairman of the Commission. Prior to his appointment, he was a staff attorney for the House Committees on Tourism and
Economic Development, Insurance, and Financial Services in the
Florida House of Representatives. There, he authored reforms to the
state’s minority business enterprise programs, as well as managing
health insurance and workers’ compensation issues. He also was staff
counsel to the Florida Senate Committee on Reapportionment,
addressing redistricting issues, which involved support of court appeals
of the political districts up through the U.S. Supreme Court. In addition,
he was an attorney with the Florida Public Service Commission, where
he served as counsel to Commission staff and litigator of administrative
proceedings.
He is Chairman of the National Association of Regulatory Utility Commissioners’ (NARUC) Committee on Consumer Affairs and a member
of NARUC’s Committee on Electricity. Chairman Jacobs also served as
a member of the Distributed Energy Advisory Committee of the Consumer Energy Council of America Research Foundation, and served as
a member of the National Drinking Water Advisory Council Small
Systems Implementation Working Group. He is also a volunteer
guardian in the Guardian Ad Litem Program in the Second Judicial
Circuit. Additionally, Chairman Jacobs formerly chaired NARUC’s Ad
Hoc Task Force on Y2K Readiness, and formerly served as President
of the Board of Directors of the Tallahassee affiliate of Habitat for
Humanity.
Chairman Jacobs is a member of the Florida Bar. He received a
bachelor of technology/science degree, with honors, in data processing
from Florida A&M University, and received his juris doctorate from the
College of Law at Florida State University. Chairman Jacobs is married
with two children.
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COMMISSIONER
J. Terry Deason
Commissioner Deason was first appointed to the Commission by the
Florida Public Service Commission Nominating Council in January 1991
for a term ending in January 1995. He was subsequently reappointed
by the late Governor Lawton Chiles for a term ending in January 1999.
Commissioner Deason was then reappointed by Governor Jeb Bush to
his current term, which ends in January 2003. Commissioner Deason
has served as Chairman of the Commission on two occasions, from
January 1993 to January 1995, and from July 2000 to January 2001.
Commissioner Deason is an active member of the National Association
of Regulatory Utility Commissioners (NARUC). He currently serves on
NARUC’s Board of Directors, its Finance and Technology Committee,
and its Utility Association Oversight Committee.
Prior to his appointment, he served as Chief Regulatory Analyst in the
Office of Public Counsel. In that capacity, he was responsible for the
coordination of accounting and financial analysis used by the Public
Counsel in cases before the Public Service Commission, presented
testimony as an expert witness, and consulted with the Public Counsel
on technical issues and ratemaking policies concerning regulated
utilities in the State of Florida.
From 1981 to 1987, Commissioner Deason served as Executive Assistant to PSC Commissioner Gerald L. Gunter, during which time he
reviewed and analyzed staff recommendations and advised the Commissioner on those recommendations and other pertinent policy determinations. From 1977 to 1981, he served as a Legislative Analyst with
the Office of Public Counsel.
He attended the U.S. Military Academy at West Point, and in 1975
received his bachelor of science degree in accounting, summa cum
laude, from Florida State University. He also received his master of
accounting degree from FSU in 1989.
4
COMMISSIONER
Lila A. Jaber
Commissioner Jaber was appointed to the Commission by Governor
Jeb Bush in February 2000 to complete a term ending in January 2001.
She was reappointed by Governor Bush for a term ending in January
2005.
From April 1999 to November 1999, she served as Assistant to Public
Service Commissioner Julia L. Johnson. From 1994 to 1999, Commissioner Jaber served as a Bureau Chief with the PSC’s Division of Legal
Services, Bureau of Water and Wastewater, implementing law and
policies on the regulation of more than 1,500 water and wastewater
facilities throughout the state of Florida. She also served as an attorney
with the Division of Legal Services from 1991 to 1994.
Commissioner Jaber is a court-certified mediator and a member of the
Florida Bar and the National Bar Association. She serves on the
National Association of Regulatory Utility Commissioners’ Committee
on Telecommunications and the Committee on Consumer Affairs.
Commissioner Jaber also serves as co-chair of the eInfrastructure
Subcommittee for the Information Service Technology Development
Task Force. In November 2000, she was appointed by the Federal
Communications Commission to the Federal-State Joint Conference on
Advanced Services. She received a bachelor of arts degree in political
science and business from Stetson University in DeLand, and received
a juris doctorate from the Stetson University College of Law in St.
Petersburg.
5
COMMISSIONER
Braulio L. Baez
Commissioner Baez was appointed on August 23, 2000, to the Commission by Governor Jeb Bush to complete a term ending in January 2002.
Prior to his appointment, Commissioner Baez was an attorney in Miami
with a statewide practice representing municipal and county governments in telecommunications, cable franchising and other regulatory
matters. He served as Executive Assistant to Public Service Commissioner Joe Garcia from 1994 to 1998.
A native of South Florida, Commissioner Baez received his undergraduate degree from Florida International University in 1988, and his
juris doctorate from Nova University, Shepard Broad Law Center, in
1993.
Commissioner Baez serves on the National Association of Regulatory
Utility Commissioners’ Committees on Electricity and International
Relations and is a member of the Southeastern Association of Regulatory Utility Commissioners. A current member of the Florida Bar, the
American Bar Association, the Federal Communications Bar Association, the International Municipal Lawyers Association and the National
Association of Telecommunications Officers and Administrators, he
also served as a Director of the Hispanic Bar Association, 2nd Judicial
District.
6
COMMISSIONER
Michael A. Palecki
Commissioner Palecki was appointed to the Commission by Governor
Jeb Bush on November 20, 2000, to complete a term ending in January
2003.
From 1995 until his appointment, Commissioner Palecki was Manager
of Regulatory Affairs for NUI Corporation, where he practiced before the
New York, Pennsylvania, Maryland, North Carolina and Florida Public
Service Commissions. He also served as Secretary of the Associated
Gas Distributors of Florida, and was on the Board of Directors of the
Florida Natural Gas Association.
From 1989 to 1995, Commissioner Palecki was an attorney for the
Florida Public Service Commission, and was promoted to Chief of the
Electric and Gas Bureau in the Legal Division in 1990.
Prior to that, he was an attorney for the State Fire Marshal’s Office, where
he prosecuted arsons and fire-related murders statewide. He also
worked with a major law firm, where he represented 23 insurance
companies in over 100 arson and fraud cases. He became president of
the Florida Advisory Committee on Arson Prevention, and was a founding partner of FireDogs, a company that pioneered the training and use
of canines to “sniff” for evidence of arson at fire scenes.
Commissioner Palecki also worked for the State Attorney’s Office in Polk
County, and for the Florida Attorney General’s Office, where he argued
and won over 300 criminal cases, including the U.S. Supreme Court case
of Tibbs v. State, preserving Florida’s right to retry defendants after
appellate reversal of conviction.
Commissioner Palecki is a 1976 graduate of the Stetson University
College of Law. He is a member of the Florida Bar and is admitted to
practice in several federal courts, including the U.S. Supreme Court.
7
National Association of Regulatory Utility Commissioners
Committee and Subcommittee Memberships
E. Leon Jacobs, Jr.
Committee on Consumer Affairs
Committee on Water
J. Terry Deason
Board of Directors
Committee on Finance and Technology
Committee on Utility Association Oversight
Lila A. Jaber
Committee on Consumer Affairs
Committee on Telecommunications
Representative, Federal-State Joint Conference on Advanced Services
Braulio L. Baez
Committee on International Relations
Committee on Electricity
Michael A. Palecki
Committee on Water
William D. Talbott
Staff Subcommittee on Executive Management
James A. Ward
Staff Subcommittee on Education
Cheryl Bulecza-Banks
Staff Subcommittee on Gas
Noreen Davis
Staff Subcommittee on International Relations
James W. Dean
Staff Subcommittee on Electricity
Beverlee S. DeMello
CHAIR - Staff Subcommittee on Consumer Affairs
Staff Subcommittee on Public Information
Timothy J. Devlin
Staff Subcommittee on Accounting and Finance
Margaret Feaster
Staff Subcommittee on Information Services
Gregory Fogleman
Staff Subcommittee on Telecommunications
Mark Futrell
VICE CHAIR - Staff Subcommittee on Electric Reliability
Lisa Harvey
Staff Subcommittee on Competition and Performance Analysis
Charles H. Hill
Staff Subcommittee on Water
Patricia Lee
CHAIR - Staff Subcommittee on Depreciation and Technology
John Mann
Staff Subcommittee on Telecommunications
Jim Ruehl
Staff Subcommittee on Electric Reliability
John D. Williams
Staff Subcommittee on Water
8
Florida Public Service Commissioner History
Commissioner
George G. McWhorter
E.J. Vann
William Himes
Years Served
08/17/1887 - 06/13/1891
08/17/1887 - 06/13/1891
08/17/1887 - 06/13/1891
Replaced by
Appointed by Gov.
The Commission was abolished by the Legislature in 1891, and recreated in 1897
R. H. M Davidson
07/01/1897 - 01/03/1899
John L. Morgan
John M. Bryan
07/01/1897 - 01/06/1903
Jefferson B. Brown
Henry E. Day
07/01/1897 - 10/01/1902
R. Hudson Burr
John L. Morgan
01/03/1899 - 01/08/1907
Royal C. Dunn
R. Hudson Burr
10/01/02 - 01/04/27
R. L. Eaton
Jefferson B. Brown
01/06/03 - 01/08/07
Newton A. Blitch
Newton A. Blitch
01/08/07 - 10/30/21
A. D. Campbell
Royal C. Dunn
01/04/09 - 01/04/21
A. S. Wells
A. S. Wells
01/04/21 - 12/16/30
L. D. Reagin
A. D. Campbell
11/12/22 - 02/10/24
E. S. Mathews
E. S. Mathews
02/25/24 - 01/16/46
Wilbur C. King
R. L. Eaton
01/04/27 - 02/27/27
Mrs. R. L. Eaton-Greene
Mrs. R. L. Eaton-Greene
02/27/27 - 01/08/35
Jerry W. Carter
L. D. Reagin
12/16/30 - 07/06/31
Tucker Savage
Tucker Savage
07/06/31 - 01/03/33
W. B. Douglass
W. B. Douglass
01/03/33 - 08/04/47
Richard A. Mack
Jerry W. Carter
01/08/35 - 01/05/71
William H. Bevis
Wilbur C. King
01/08/47 - 07/18/64
William T. Mayo
Richard A. Mack
09/15/47 - 01/05/55
Alan S. Boyd
Alan S. Boyd
01/05/55 - 12/01/59
Edwin L. Mason
Edwin L. Mason
12/01/59 - 01/06/69
Jess Yarborough
William T. Mayo
09/01/64 - 12/31/80
Katie Nichols
Graham*
Jess Yarborough
01/06/69 - 01/02/73
Paula F. Hawkins
William H. Bevis
01/05/71 - 01/03/78
Robert T. Mann
Paula F. Hawkins
01/02/73 - 03/21/79
John R. Marks, III
Robert T. Mann***
01/04/78 - 01/03/81
Susan Leisner
Graham**
The Commission became appointive January 1, 1979
01/02/79 - 12/31/85
John T. Herndon
01/02/79 - 06/12/91
Susan F. Clark
PSC
John R. Marks, III***
03/22/79 - 03/02/87
Thomas M. Beard
Katie Nichols***
01/02/81 - 01/03/89
Betty Easley
Susan Leisner
02/16/81 - 04/02/85
Michael McK. Wilson
Michael McK. Wilson***
07/12/85 - 11/22/91
Luis J. Lauredo
John T. Herndon
01/07/86 - 04/17/90
Frank S. Messersmith
Thomas M. Beard***
03/03/87 - 08/13/93
Diane K. Kiesling
Betty Easley
01/03/89 - 01/05/93
Julia L. Johnson
Frank S. Messersmith
06/19/90 - 02/05/91
J. Terry Deason
J. Terry Deason***
02/06/91 - 01/06/03
PSC
Joseph P. Cresse***
Gerald L. Gunter***
Susan F. Clark***
Luis J. Lauredo
Julia L. Johnson***
Diane K. Kiesling
Jose “Joe” Garcia***
E. Leon Jacobs, Jr.***
Lila A. Jaber
Braulio L. Baez
Michael A. Palecki
* 2-year initial term
08/15/91
01/23/92
01/05/93
12/07/93
08/19/94
01/06/98
02/29/00
09/01/00
12/19/00
-
07/31/00
05/16/94
11/15/99
01/05/98
06/30/00
01/07/02
01/03/05
01/07/02
01/06/03
Michael A. Palecki
Jose “Joe” Garcia
Lila A. Jaber
E. Leon Jacobs, Jr.
Braulio L. Baez
** 3-year initial term
Askew/Graham
Askew/Graham
Nominating Council
Graham**
Graham
Graham
Graham/Martinez
Graham
Martinez
Martinez
Martinez
Nominating Council
Chiles/Bush
Chiles/Bush
Chiles
Chiles
Chiles
Chiles/Bush
Chiles
Bush
Bush
Bush
*** Served as Chairman
9
Maintaining the Balance
The work of the Florida Public Service Commission (PSC) is a balancing act. The PSC must balance
the needs of each utility and its shareholders with the needs of consumers. Traditionally, the PSC
achieved this goal by establishing exclusive utility service territories, regulating the rates and profits
of each utility, and placing an affirmative obligation on the utility to provide service to all who
requested it. For electric and water customers in the state, many of the PSC’s traditional methods
for achieving the balance continue today. Legislative action during the 1995 session to open up the
local telephone market to increased competition, however, has required the PSC to facilitate entry
of new firms into the local telephone market, while at the same time ensuring that neither the new
entrant nor the incumbent local exchange company is unfairly advantaged or disadvantaged. Thus,
the PSC’s role in the increasingly competitive telephone industry remains one of balance.
The Florida Public Service Commission consists of five members selected for their knowledge and
experience in one or more fields substantially related to the duties and functions of the Commission.
These fields include economics, accounting, engineering, finance, natural resource conservation,
energy, public affairs and law.
The Governor appoints Commissioners from nominees selected by the Public Service Commission
Nominating Council. Commissioners also must be confirmed by the Florida Senate. Each
Commissioner serves a four-year term unless he or she is appointed to replace a departing
Commissioner, in which case the new Commissioner will serve out that term. Should the Governor
fail to appoint a new Commissioner by the 60th day following receipt of the slate of nominees, the
PSC Nominating Council is empowered to appoint, by majority vote, one of the nominees it submitted
to the Governor.
The PSC has quasi-legislative and judicial responsibilities, as well as some executive powers and
duties. In its legislative capacity, the PSC makes rules governing utility operations. In a judicial
manner, the PSC hears and decides complaints, issues written orders similar to court orders, and
may have its decisions appealed to the 1st District Court of Appeal and the Florida Supreme Court.
As an executive agency, the PSC enforces state laws affecting the utility industries.
During 2000, the PSC regulated five investor-owned electric companies, eight investor-owned
natural gas utilities, and 331 investor-owned water/wastewater facilities comprising 1,275 systems.
Additionally, the PSC had regulatory authority and competitive market oversight for 10 incumbent
local exchange telephone companies, 424 alternative local exchange telephone companies, 621
long distance (interexchange) telephone companies, 691 competitive pay telephone service providers, 27 shared tenant service providers and 36 alternative access vendors.
While the PSC does not regulate publicly owned, municipal or cooperative utilities, it does have
jurisdiction, with regard to rate structure, territorial boundaries, bulk power supply operations and
planning, over 33 municipally owned electric systems and 18 rural electric cooperatives. The PSC
also has jurisdiction, with regard to territorial boundaries and safety, over 27 municipally owned
natural gas utilities, and exercises safety authority over all electric and natural gas systems operating
in the state.
In 2000, the PSC received and processed 16,632 numbered documents, which was an increase of
577 documents over the 1999 total of 16,055. The PSC opened 1,838 dockets, reopened 20 dockets,
and closed 1,962.
The PSC had 399 authorized positions and an annual budget of about $27.75 million for fiscal year
2000-2001.
10
EXECUTIVE DIRECTOR
William D. Talbott
The Executive Director is, essentially, the chief of staff of the
Commission, with general responsibility over technical and
administrative operations. He acts as an interagency liaison and
consults with and advises the Commission on economic and
governmental matters. The Office of the Executive Director
includes two Deputy Executive Directors. This division of executive
duties helps to facilitate the flow and efficiency of the Commission's
workload, and provides the proper direction and leadership for the
staff. The Office coordinates the activities of the divisions, is
responsible for the implementation of Commission policies, makes
recommendations for the development and implementation of
internal management and budget policies, and acts as legislative
liaison.
11
DEPUTY EXECUTIVE DIRECTOR/
TECHNICAL
Mary A. Bane
Mary Bane is Deputy Executive Director over the Divisions of
Competitive Services, Economic Regulation, Policy Analysis and
Intergovernmental Liaison, Regulatory Oversight, and Safety and
Electric Reliability. She also acts as legislative liaison.
DEPUTY EXECUTIVE DIRECTOR /
ADMINISTRATIVE
James A. Ward
James Ward is Deputy Executive Director over the Divisions of
Administration, Consumer Affairs, and Records and Reporting.
12
GENERAL
COUNSEL
Harold McLean
The General Counsel is the Florida Public Service Commission’s
chief legal counsel. He supervises the PSC’s legal personnel and
is charged with the administration of, and the delegation of
responsibilities to, the Division of Legal Services and the Division
of Appeals. The General Counsel also is responsible for advising
the PSC on its regulatory responsibilities, representing the agency
before federal agencies, providing counsel to the Office of the
Executive Director, and assisting in interagency liaison activities.
13
2000
ANNUAL
REPORT
II. Highlights of the PSC’s
Regulatory Efforts for Calendar Year 2000
A number of regulatory issues presented significant challenges for the Florida Public Service
Commission (PSC) in 2000. What follows is a summary of the most significant issues to arise during
the year, as well as a description of how the PSC dealt with each.
ELECTRIC INDUSTRY
Electric Reliability
The PSC initiated a rulemaking rulemaking proceeding in 2000 to reevaluate the current distribution
reliability indices. More-accurate and meaningful measures will be adopted, along with new penalty
provisions.
Also, to follow up on the 1997 Review of Electric Distribution Service Quality at Florida’s four largest
investor-owned electric utilities, the PSC conducted a review of distribution service quality at Florida
Power & Light Company (FPL) and Florida Power Corporation (FPC). (Both companies were found
to have deficiencies in the 1997 review.) The November 2000 report, Review of Electric Service
Quality and Reliability at Florida Power & Light Company and Florida Power Corporation, documents
substantial improvement in reliability indicators that resulted from both companies’ investments in
improvement programs triggered by the PSC’s 1997 review.
Electric Utility Mergers
Florida Power Corporation Merger
Florida Progress Corp. (parent of Florida Power Corporation) completed its merger with CP&L
Energy, Inc. (parent of Carolina Power and Light Company) in December 2000. The merger creates
a company that is one of the ten largest U.S. utilities. The company is called Progress Energy.
The PSC prepared summaries of the filing, conducted discovery, and drafted comments for the
Federal Energy Regulatory Commission (FERC). In addition, the PSC is monitoring the effects of
the merger on Florida Power’s ratepayers.
Florida Power & Light Company Merger
FPL Group, Inc., the parent company of Florida Power & Light Company (FPL), announced a
proposed merger with Entergy Corporation on July 31, 2000. Entergy has utility operations in
Arkansas, Louisiana, Mississippi, and Texas. This merger, which would have created the largest
electric power company in the United States, was pending at the FERC at the end of 2000. However,
on April 2, 2001, the companies called off the $9-billion merger.
During late 2000, however, while the merger was ongoing, the PSC reviewed the filing, intervened
for monitoring purposes, and conducted discovery. In addition, the PSC monitored the potential
effects of the merger on FPL’s ratepayers.
Electric Utility Refunds
During 2000, FPL was required to refund $22,774,000 based on its revenue sharing plan, which
extends to April 2002. Tampa Electric Company (TECO) was required to refund $13 million for 1998’s
earnings and $6,102,126 for 1999’s earnings as a result of its revenue sharing plan. Florida Public
14
2000
ANNUAL
REPORT
Utilities Company (FPUC) was required to place extra revenue of $213,231 into its Storm Damage
Reserve due to excess 1999 earnings. Finally, Gulf Power Company will make refunds of $7,203,024
in February 2001 as a result of its revenue sharing plan.
Environmental Cost Recovery Clause
The PSC denied Gulf Power’s request to recover the costs of environmental requirements incidental
to the construction of its new generating facility at Plant Smith through the environmental cost
recovery clause (ECRC). The PSC determined that recovery of prudently incurred expenses
associated with the construction of new facilities is appropriate through base rates, rather than
through the ECRC. Gulf Power protested the PSC’s decision, and a hearing is pending.
Florida Energy 2020 Study Commission
In the spring of 2000, Governor Jeb Bush established by Executive Order the Florida Energy 2020
Study Commission to determine what Florida’s electric energy needs will be over the next 20 years
and how best to supply those needs. PSC staff members are attending the 2020 Commission’s
meetings, are providing staff assistance, and have made presentations on request. The PSC also
has assisted the 2020 Commission in developing an issues list of concerns, a differential matrix of
the stakeholder restructuring proposals, and flowcharts of permitting processes.
The PSC will continue to monitor the meetings of the 2020 Commission and provide any requested
assistance.
Jurisdictional Issues
In 2000, the PSC considered the extent of its jurisdiction with respect to wholesale transactions made
by Florida’s electric cooperatives. Lee County Electric Cooperative, Inc., filed a complaint with the
PSC, alleging that the wholesale rate structure of Seminole Electric Cooperative, Inc., was unduly
discriminatory and inconsistent with the PSC’s responsibility to encourage conservation. The PSC
concluded that it did not have jurisdiction to consider Lee County’s complaint. An appeal to the
Florida Supreme Court is pending.
Merchant Plants
Perhaps the most significant utility issue dealt with in Florida courts in 2000 was the ability of electric
power companies to build so-called “merchant plants” in Florida. (A merchant power plant is one with
no existing rate base and no captive retail customers.)
In January 1999, the PSC had issued an order granting a determination of need for a proposed 530megawatt generating facility that Duke-New Smyrna Beach sought to build in Volusia County. In
doing so, the PSC had found that the proposed merchant plant provided direct and indirect benefit
to the electric customers of the City of New Smyrna Beach and would tend to lower wholesale
electricity prices in Florida. Florida’s incumbent investor-owned electric utilities subsequently
appealed the PSC’s decision to the Florida Supreme Court.
On April 20, 2000, the court agreed with the challengers and concluded that Florida law did not allow
the certification of a power plant whose capacity was not fully committed to serving retail customers
(Tampa Electric Co. v. Garcia, 2000). Until the Legislature enacts “express statutory criteria” granting
authority to determine need for such plants, the court said, the PSC is powerless to act. The court’s
decision effectively closed the door for merchant plants in Florida, forcing a legislative remedy if
wholesale competition is to come to the state.
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On September 29, 2000, the Florida Supreme Court denied a request for rehearing. Afterward, the
City of New Smyrna Beach requested that the U.S. Supreme Court review the Florida Supreme
Court’s decision. As a result of these pending legal actions, the PSC held several other merchant
plant applications in abeyance.
However, since the Florida Supreme Court rendered its opinion, the PSC has on two occasions
interpreted the requirement that a proposed unit be “fully committed” to serve Florida’s retail
customers. The PSC determined that both FPC’s Hines 2 Unit and Calpine Eastern’s Osprey Energy
Center (under contract to Seminole Electric Cooperative, Inc.) are fully committed.
Need Determination for Florida Power Corporation
During 2000, a significant case in the area of economic regulation for the electric industry was FPC’s
filing of a petition requesting a determination of need for its Hines Unit 2 plant. PSC staff testified
regarding the policy issue of obligating ratepayers on a long-term basis for a plant that could become
uneconomical during its useful life. A petition of need for the 530-megawatt plant was ultimately
approved in a vote by PSC Commissioners on December 19, 2000.
Regional Transmission Organization
In June 2000, FPL and FPC obligated themselves to form a regional transmission organization (RTO)
called GridFlorida. Weekly workshops were held with all electric utilities to craft a proposal. PSC
staff attended these meetings and offered suggestions when given the opportunity. The RTO filing
was filed with the FERC on December 15, 2000. PSC staff filed comments and concerns with the
FERC in early January 2001. FERC granted GridFlorida conditional approval on March 28, 2001.
NATURAL
GAS
INDUSTRY
Unbundling of Natural Gas Services
In 1996, the PSC opened a docket (Docket No. 960725-GU) to analyze the effect of natural gas
utilities providing transportation service to their customers. Since that time, the PSC has conducted
multiple workshops, obtained and evaluated comments from the parties and interested persons, and
issued a model unbundling tariff.
As a result, a consensus draft rule that would require natural gas utilities to offer transportation
service to all non-residential customers was proposed on December 30, 1999, and was subsequently
approved by the PSC on February 15, 2000.
The rule required all investor-owned natural gas utilities in Florida to file by July 1, 2000,
transportation tariffs that would allow all non-residential customers the option to contract for the
transportation of natural gas. The PSC reviewed each transportation tariff filing to ensure the
provisions contained in the tariff were fair and reasonable.
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TELECOMMUNICATIONS
INDUSTRY
Area Code Activity in Florida
Prior to 1995, Florida had four area codes in place. Today, the area code count is 14. The need for
additional area codes has been the result of an ever-increasing demand for numbering resources
due to the increase in Florida’s population, along with new number-utilizing technologies such as fax
machines, computers, pagers, cellular phones, and other wireless technology.
During 2000, the PSC addressed proposals for area code relief for the 904 area code, the 561 area
code, the 954 area code, and the 305/786 area codes. All of these area codes were deemed to be
“in jeopardy.” (The North American Numbering Plan Administration [NANPA], the organization that
oversees the nation’s area code system, considers an area code to be in jeopardy when the demand
for new telephone numbers is projected to exceed the known supply of numbers prior to the area
code’s estimated exhaust date.)
As part of the processing of these area code relief cases, the PSC held customer service hearings
in cities located in each of the four area codes. The purpose of the hearings was to solicit input from
customers, businesses, governmental entities, and city, state, and county officials. On September
29, 2000, the PSC selected relief proposals for each of the four area codes. The relief measures
included several number conservation measures designed to slow the rate at which phone numbers
are expended in those parts of the state. Order No. PSC-00-1937-PAA-TL was issued on October
20, 2000, and was appealed to the Florida Supreme Court by several telecommunications companies on November 20, 2000. On January 2, 2001, the court relinquished jurisdiction of the case,
allowing the PSC 90 days to reconsider Order No. PSC-00-1937-PAA-TL on its own motion.
Interconnection Agreements
The year 2000 saw the end of many of the original interconnection agreements entered into by
various companies after the enactment of the Telecommunications Act of 1996. Therefore, several
new dockets were opened by the PSC to process requests for arbitration of new agreements. A
number of those dockets progressed through the hearing phase during 2000.
Lifeline Assistance Program/Link-Up Florida
The Lifeline Assistance Program and Link-Up Florida are a pair of programs that are designed to
make local, residential telephone service affordable for all consumers, particularly those with low or
fixed incomes. To that end, the PSC initiated several efforts in 2000 to increase public awareness
and the enrollment levels of these programs.
Most significantly, the PSC established a joint partnership with the Florida Department of Children
and Families (DCF). Under this joint partnership, PSC staff created a postcard-sized flier to be sent
to eligible Florida consumers using the DCF’s mailing lists and mail system. Approximately 35,000
of the fliers, which were written in English on one side and Spanish on the other, were mailed to
consumers in 2000.
The PSC also produced a “Consumer Bulletin” about the Lifeline and Link-Up programs in February
2000. The “Consumer Bulletin” is a monthly article on utility issues that is sent to a number of
newspapers statewide, especially those with predominantly African-American readerships. The
Bulletin pertaining to Lifeline and Link-Up was also placed on the PSC’s Web site, and can be viewed
at www.psc.state.fl.us/general/publications/jc02-00.pdf.
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In addition, the PSC produced a PowerPoint presentation for Commissioners to use when promoting
the programs to city, county, and legislative leaders around the state. Finally, a public service
announcement was produced, and is currently airing on television and radio stations statewide.
Pricing of Unbundled Network Elements
Under the Telecommunications Act of 1996, incumbent local exchange companies (ILECs) were
required to make parts of their networks available to alternative local exchange companies (ALECs)
for use in providing local telephone service. The separated components of the existing local phone
network were called “unbundled network elements” (UNEs).
Since pricing of UNEs is integral to the economic viability of ALECs and is a recurring issue in
arbitration requests, the PSC established a generic proceeding (Docket No. 990649-TP) to set UNE
rates for Florida’s three major ILECs: BellSouth Telecommunications, Inc., Sprint-Florida, Incorporated, and GTE Florida, Inc. A hearing on BellSouth’s rates was held on September 19-21, 2000,
and the PSC is expected to set rates for more than 1,400 BellSouth network elements in April 2001.
There is contention over the appropriate assumptions for calculating the long-run incremental costs
of providing UNEs. There is general agreement that such cost studies should be based on forwardlooking technologies; however, the parties disagree on whether an existing network configuration or
a hypothetical, forward-looking one should be used.
Quality-of-Service Rules
The PSC began enforcement proceedings against the three largest ILECs (BellSouth Telecommunications, Inc., Sprint-Florida, Incorporated, and Verizon Florida Inc.) in 1999 for failure to meet the
PSC’s quality-of-service rules. Sprint-Florida entered into a settlement agreement, which was
approved by the PSC in 2000. The settlement provides that Sprint be granted a limited waiver of the
service rules as long as it provides automatic credits to customers whose service is affected by
delayed installations or delayed repair. Sprint further will contribute money to a Community Service
Fund for use to promote Lifeline service if it fails the PSC’s answer time requirements when a
customer calls Sprint’s business or repair offices. Sprint also paid a settlement in the amount of
$75,000 to the State of Florida’s General Revenue Fund.
The remaining two enforcement proceedings, against Verizon (which was formed by the merger of
GTE and Bell Atlantic) and BellSouth, are pending hearings in 2001.
Reciprocal Compensation
A number of complaints between telecommunications carriers were processed by the PSC in 2000.
One of the most common issues in such complaints was reciprocal compensation for traffic delivered
to Internet service providers (ISPs).
Reciprocal compensation is basically a payment mechanism mandated by the FCC, by which phone
companies are to be compensated for terminating local telephone traffic that originates on the
network of another company. For example, when a customer of an incumbent local exchange
company (ILEC) dials an ISP that is served by an alternative local exchange company (ALEC), the
call begins on the ILEC’s network and is handed off for completion on the ALEC’s network. Under
reciprocal compensation, the ILEC would then compensate the ALEC for the termination of that call.
This potentially means a great deal of money flowing from ILECs to those ALECs that have ISPs as
customers. ILECs are claiming, however, that calls to an ISP are long distance calls that do not
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terminate at the ISP but continue on to distant Web sites. If the call is long distance, reciprocal
compensation does not apply. For this reason, many ILECs are refusing to pay ALECs reciprocal
compensation for ISP-bound calls. Given that many ALECs are start-ups with a substantial focus on
serving ISPs, this could mean a significant hit to already-thin profit margins.
The issue of reciprocal compensation continues to be a hot topic at both the state and federal levels.
As a result of this recurring problem, the PSC opened a generic docket in January 2000 to investigate
the appropriate methods to compensate telecommunications carriers for exchange of traffic subject
to Section 251 of the Telecommunications Act of 1996. A considerable amount of time has been
devoted to this docket, which is ongoing.
As part of the generic docket, PSC staff has provided testimony discussing the regulatory treatment
of ISP-bound traffic; summarized the PSC’s, the Federal Communications Commission’s (FCC), and
other states’ relevant decisions on reciprocal compensation; and recommended that the PSC modify
its policy on reciprocal compensation to more accurately reflect how costs are incurred.
Section 706 Joint Conference
The deployment and provision of advanced telecommunications services is a banner issue in the
telecommunications arena. Under Section 706 of the Telecommunications Act of 1996, the FCC was
given the authority to cut through regulatory red tape in order to encourage widespread deployment
of broadband technologies. In its efforts to comply with the requirements of Section 706, the FCC
convened a federal-state joint conference and named Florida to host the June 9, 2000, regional
hearing in Miami Beach. The conference attracted attendees from throughout the South and drew
approximately 14,000 hits to its Internet Webcast. Experts in the field of advanced telecommunications services spoke at the conference. Panels addressed the topics of fixed wireless technology,
deployment to rural and urban multicultural communities, and public/private partnerships.
The conference was coordinated by the PSC, which arranged speakers and coordinated a field trip
for attending dignitaries. PSC staff also researched and compiled relevant Florida demographic and
background material to be presented to the FCC to assist in achieving the goals and objectives of
the hearing. In addition, the PSC was responsible for researching, compiling, and assembling a
comprehensive fact book on deployment of these services in Florida, and assembled information
from the other co-hosting states to be included in the fact book. Finally, the PSC assisted in the
coordination of a Webcast of the hearing, making it the first FCC field hearing to do so.
Testing of BellSouth’s Operations Support Systems
Section 271 of the Telecommunications Act of 1996 grants the FCC enforcement authority to ensure
that the Bell Operating Companies continue to comply with market-opening requirements after the
FCC has approved their applications to provide long distance service in their home regions. In
accordance with Section 271, the PSC oversaw the third-party testing of BellSouth’s operations
support systems (OSS) by KPMG Consulting during 2000.
The results of this testing will provide the basis for the PSC’s recommendation to the FCC regarding
whether BellSouth is providing non-discriminatory access to its OSS functions to alternative local
exchange companies (ALECs). The OSS tests, in conjunction with PSC Docket No. 960786-TL, will
assess the adequacy of the systems BellSouth provides to ALECs, and will ascertain whether those
systems provide the ALECs with a meaningful opportunity to compete. The testing is scheduled for
completion in late summer 2001. The PSC has closely monitored interaction between BellSouth, the
KPMG test team, and the ALECs to ensure that the tests are vigorous, fair and open.
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In a related docket (Docket No. 000121-TP), the PSC proceeded with the development of a
performance assessment plan initially for BellSouth, followed by separate proceedings for Verizon
and Sprint. The intent of the development of a performance assessment plan is to further
competition, ensure quality of service, and effectively drive process improvements to deliver
improved telecommunication services throughout Florida. During 2000, the PSC held several
workshops and drafted a staff performance assessment plan proposal for BellSouth to be used
during further proceedings.
Truth In Billing
In March 2000, the National Association of Regulatory Utility Commissioners’ (NARUC) Committee
on Consumer Affairs created a working group, headed by Florida Public Service Commissioner E.
Leon Jacobs, Jr., to address the growing problem of confusing and misleading telephone billing
practices. The work group’s goal was to develop a model telecommunications billing rule for
presentation and discussion at the 2000 NARUC Summer Meeting. Under Commissioner Jacobs’
direction, the PSC coordinated with other state utility commissions in drafting the model rule, which
was presented by PSC staff at the NARUC Summer Meeting.
After NARUC adopted the rule, PSC staff developed questions and surveyed other states to find out
their reactions to the model rule. Commissioner Jacobs provided an update on state reactions to the
model rule at a subsequent NARUC meeting. After considering whether the PSC needed to take any
action to implement the model rule, the PSC decided that the billing formats and procedures used
by Florida companies essentially follow the model rule and should be given a chance to operate.
WATER
AND
WASTEWATER
INDUSTRIES
‘Black’ Water
At the June 20, 2000, PSC Agenda Conference, a panel of PSC Commissioners voted on Docket No.
960545-WS (Investigation of Utility Rates of Aloha Utilities, Inc., in Pasco County). The major issue
in the case was the water quality provided by the utility. The Commissioners found that although the
quality of the water as it enters the customers’ homes meets all federal and state health and safety
standards, some customers still complained of “black” water.
The black water problem occurs when hydrogen sulfide in the source water reacts with copper pipes
to create copper sulfide, a form of copper corrosion. This form of copper corrosion can result in gray
to black water in the customers’ homes, pinhole leaks in the pipes, and eventually, failure of the
copper pipes. In the Aloha Utilities case, the company was ordered to initiate a pilot project using
the best available treatment alternative to enhance the company’s water quality and diminish the
black water problem. PSC staff, through monthly reports and on-site visits, is monitoring the progress
of this pilot project.
The PSC also is investigating Aloha’s customer relations, management performance, and operating
procedures. A report on these issues is expected to be published in March 2001.
Copper Pipe Corrosion Project
The PSC initiated an Interagency Copper Pipe Corrosion Project with the Florida Department of
Community Affairs and the Florida Department of Environmental Protection (DEP). These agencies
were joined by representatives from the Florida Building Commission, the Florida Department of
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Health, the St. Johns River Water Management District, the Southwest Florida Water Management
District, the Florida Rural Water Association, and other government agencies, associations,
universities and private businesses.
The goal of the interagency project was to find a consolidated solution to copper pipe corrosion.
Three work groups were formed. The Sulfide Source Water Issues Work Group’s task was to explore
possible water treatment options to remove hydrogen sulfide and possible revisions to DEP rules.
The Building Codes/County Ordinance/Education Work Group’s task was to explore new, or changes
to existing, building codes or county ordinances regarding the type of material used for water pipes
in affected areas and how best to educate affected parties about the changes. The task of the Existing
Corroded Copper Pipe Repair/Replacement and Education Work Group was to explore options to
assist homeowners who are currently experiencing copper pipe corrosion in their homes.
The final report of the interagency project is to be published in May 2001.
Interagency Memoranda of Understanding
In an attempt to formulate a statewide water quality and conservation plan, the PSC has signed
Memoranda of Understanding with the DEP and the five Water Management Districts. The current
Memorandum of Understanding between the PSC and the DEP was signed in 1992. In 2000,
Commissioner Lila A. Jaber of the PSC and Secretary David Struhs of the DEP met and agreed that
the current Memorandum of Understanding should be updated regarding water, wastewater,
reclaimed water, and interactions between the agencies. PSC staff met with DEP staff to begin the
process. The DEP provided a first draft of an updated Memorandum of Understanding, which was
circulated to PSC staff for comments. The next steps will be to go over the changes with DEP staff,
and then submit a revised Memorandum of Understanding for review to senior management at both
agencies. It then will be submitted to the agency heads for formal approval and signatures.
The current Memorandum of Understanding between the PSC and the Water Management Districts
was signed in 1991. PSC staff discussed updating the Memorandum of Understanding with various
staff from the three largest Water Management Districts, and it was agreed that the agreement
needed to be updated. PSC staff will begin working with staff at the Water Management Districts
when work has been completed on the Memorandum of Understanding with the DEP.
The PSC staff actively work with the DEP and Water Management Districts in advancing statewide
water quality and conservation goals. Both agencies are frequently called upon to testify on water
quality and conservation issues in rate cases before this PSC. Whenever feasible, the PSC allows
utilities to recover expenses related to conservation programs, and establishes conservation rates
to reduce water consumption. For example, in a rate case completed in 2000, the PSC worked with
one of the Water Management Districts to design an innovative and aggressive conservation
program for a utility with extremely high residential usage. The elements of this program included
residential irrigation audits; xeriscape consulting and rebates; distribution of low-flow shower kits;
installation of moisture sensors for irrigation; and low-flow toilet rebates.
In 2000, PSC staff members also participated in the DEP’s Capacity Development Citizens Advisory
Group to develop a stategy for improving the viability of existing water systems. This strategy centers
on providing technical assistance to water systems that demonstrate potential or actual compliance
problems.
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Finally, in May 2000, the PSC entered into a new Memorandum of Understanding with the Florida
Department of Community Affairs. Under this memorandum, both agencies agreed to establish
guidelines for working together in PSC certificate cases in order to facilitate the intent of Chapters
163 and 367, Florida Statutes, with respect to the regulation of investor-owned water and wastewater
utilities and local comprehensive planning.
Mediation Efforts
The PSC made a concerted effort to employ mediation efforts to resolve several utility-related
disputes in 2000. In perhaps the most notable one, the PSC helped resolve a contentious transfer
docket that nearly led to the disconnections of hundreds of wastewater customers in Lee County
(Docket No. 981781-SU — Application for Amendment of Certificate No. 247-S to Extend Service
Area by the Transfer of Buccaneer Estates in Lee County to North Fort Myers Utility, Inc.). Numerous
residents of the Buccaneer Estates community had refused to pay charges of approximately $50 to
$60 that were being assessed by North Fort Myers Utility, and the company was threatening to
disconnect the wastewater service of those customers who didn’t pay. The disconnections were
ultimately averted through the successful use of mediation.
Reuse
Reuse is the deliberate application of reclaimed water for a beneficial use. (Reclaimed water is
treated water that is reused after flowing out of a domestic wastewater treatment facility.) Such uses
include landscape and agricultural irrigation, fire protection and industrial uses. As an economic
regulator, the PSC sets rates to allow regulated water and wastewater utilities to recover the costs
of reuse projects.
Section 367.0817, Florida Statutes, provides that reuse benefits the water, wastewater and reuse
customers, and allows the PSC to recover the costs of reuse from any of those groups of customers.
In implementing that statute, the PSC must balance the interests of each group of customers. We
attempt to set reuse rates such that some of the costs of reuse can be recovered from the end user,
while still encouraging its use in place of water from the aquifer.
The encouragement of reuse by the DEP and the Water Management Districts has raised issues
related to the provision of reuse service that are becoming more frequent in water and wastewater
cases before the PSC. These issues include the identification of reuse territory, the definition of
reuse as it relates to the provision of reuse service and its subsequent used-and-useful ratemaking
treatment, and revenue requirements and rates for reuse. PSC staff members monitor reuse
activities in Florida to determine if there is a need for future legislative changes to address these
issues and better encourage reuse.
The PSC also participates in quarterly interagency meetings dealing with reuse and conservation.
Staff members from the PSC, the DEP, the Water Management Districts and the Department of
Health attend these meetings and discuss reuse issues, including any proposed agency rulemaking
and legislation, and reuse projects that are planned or in progress.
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PROJECTS
Electronic Filings Task Force
The PSC’s Executive Director established a task force in April 2000 to develop and implement an
electronic filings and document management system at the PSC. This project has three parts:
1) to make all filings made with the PSC’s Division of Records and Reporting available on the
Internet and to staff in electronic form;
2) to allow utilities and consumers to submit their filings electronically to the Division of Records
and Reporting, rather than in paper form; and
3) to identify all of the documents that the PSC produces/receives/uses so that they can be
examined for their appropriateness for the Internet, and then make those available electronically
on the Internet.
During 2000, progress was made on all three fronts, with actual implementation of Part 1 starting
January 1, 2001. All filings now made with the Division of Records and Reporting immediately kick
off the following actions:
(a) The filing is scanned to PDF format;
(b) the PDF is automatically posted on the PSC’s local area network (LAN), and is also
immediately made available on the Internet;
(c) the PDF is automatically entered into the PSC’s LAN database, the Case Management
System; and
(d) PSC staff assigned to the docket are sent an automatic e-mail by the Case Management
System to let them know the filing is available.
This process was made possible by an unrelated upgrade to the PSC’s Docutech copier system,
which has a high-speed scanner that produces PDF format files. The PDF images are perfect copies
of the originals, including signatures, stamps, and other post-printing markups. They are also
enhanced by Optical Character Recognition (OCR), which allows word searches in the documents
and allows text from them to be copied and pasted into other documents, significantly enhancing the
speed with which PSC staff and the regulated utilities can prepare new docket-related materials
based on previously filed materials.
On Part 2, during 2000, the task force also prepared for the first of two pilots allowing utilities and
consumers to submit their filings electronically over the Internet rather than in paper form, so that no
paper is required at all. Proposed guidelines were prepared, and the first pilot will take place in 2001.
The remaining part of the project (Part 3), making all other appropriate PSC documents (internal and
external) available on the Internet, will go forward in 2001. This includes some technological
advances being made at the state level, such as the ability to submit forms to the PSC that involve
collection of fees over the Internet.
Integrated Financial Management System Prototype
In 1999, the Legislature authorized funding to develop a prototype of an integrated financial
management system (IFMS) for the State of Florida. The PSC was selected as the prototype agency
to demonstrate how commercial enterprise resource planning (ERP) software can be implemented
using the State’s rules, business practices, and data requirements. A consulting firm, SAP, Inc., was
contracted to work with the PSC’s project team in developing and demonstrating the prototype.
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From July 1, 1999, through June 30, 2000, PSC staff devoted approximately 4,000 hours in support
of the IFMS Project. During January and February 2000, staff demonstrated the prototype to staff
of the Governor’s Office, Legislative committees, and other State agencies. As a result of the
success of the prototype and other initiatives, the 2000 Legislature appropriated approximately
$15 million for fiscal year 2000-2001 to begin the statewide implementation of an IFMS system.
Internet Home Page
The PSC's Web site (http://www.floridapsc.com) attracted 335,496 visitors and gained national
attention in 2000. In May 2000, Energy E-com’s study on state utility commission Web sites ranked
the Florida PSC’s Web site No.1 in the nation. In an effort to continue that growth, the PSC has added
and enhanced a number of pages with a concentration on some of the most popular features, such
as online dockets, consumer assistance, regulated industry pages, online audio/video events, and
PSC publications.
The online docket pages, which are the most frequently visited, have been configured so that
docketed information filed with the PSC is accessible to Web site visitors almost instantaneously
after it is logged in to the Case Management System. These pages have received valuable feedback
from industry professionals and general consumers, which resulted in ideas for additional enhancements to be implemented in 2001.
On the PSC Web site, the “Consumer Assistance” page has been reorganized and enhanced so that
consumers may effortlessly find the information they seek. The PSC Call Center complaint analysts
compiled a list of most commonly asked questions by consumers who call the PSC’s toll-free
telephone number (1-800-342-3552). These questions and answers were converted into a
“Frequently Asked Questions” page, with information on issues ranging from area codes to utility
rates. The PSC has also expanded its outreach to Spanish-speaking consumers by adding a
“Spanish Brochures” page, where a number of informational brochures on utility issues have been
translated into Spanish and placed online.
Another popular feature on the Web site is online complaint forms, which consumers can use to
electronically register concerns or complaints with the PSC regarding their utility services. This page
is being redesigned so that the PSC and its regulated companies may resolve customer complaints
even more effectively.
The pages devoted to specific utility industries also generate a great deal of traffic from visitors to
the PSC Web site. Evidence suggests that both industry professionals and general consumers use
these pages to find important information on individual companies.
In an effort to make even more useful information available via the Internet, the PSC formed a Web
team in 2000 that is composed of representatives from each of the PSC’s divisions. Industry
application packages, pages dedicated to “hot topics” (the Lifeline Assistance Program and Link-up
Florida, changes to Florida’s area codes, BellSouth’s OSS testing, etc.), and a variety of industry
reports (Competition in Telecommunication Markets in Florida, Comparative Rate Statistics, Tariff
Summary Reports, Electric Utilities’ 10 Year Site Plans, etc.) are only a few of the items added as
a result.
Other additions to the site during 2000 include video Webcasts of PSC Agenda Conferences, the Call
Center Web Cam, the Chairman’s Real Audio welcome message, 21 new/updated informational
brochures, and 21 new video public service announcements.
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Mentoring Program
The PSC participated in the Governor’s Mentoring Initiative during 2000 by partnering with
Tallahassee’s Oak Ridge Elementary School, as well as other community volunteering programs.
Agency employees are currently involved in a “Reading Buddies” program, in which they spend an
hour per week with an assigned third-grade pupil to assist the pupil with selected reading
assignments. These mentors volunteer and donate their time to be role models, encourage students
to set goals, and stress the importance of education. Participating mentors have acknowledged that
this program is beneficial to them as well as to the children.
Seventy-Two-Hour Rule
In 2000, the PSC implemented a “Seventy-Two-Hour Rule” in which regulated utilities subscribing
to the Transfer Connect telephone system may resolve customer complaints within three days in the
following manner:
(a) The PSC staff member handling the complaint will forward a description of the complaint to
the company for response and resolution. The three-day period will begin at 5 p.m. Eastern
time on the day the information is sent to the company and end at 5 p.m. on the third day,
excluding weekends and holidays. If the company satisfactorily resolves the complaint, the
company shall notify the staff member of the resolution.
(b) The PSC will contact the customer to confirm that the complaint has been resolved. If the
customer confirms that the complaint has been resolved, the complaint will not be reported
in the total number of complaints shown for that company in the Commission Consumer
Complaint Activity Report. However, the PSC will retain the information for use in
enforcement proceedings, or for any other purpose necessary to perform its regulatory
obligations.
(c) If the customer informs the PSC staff member that the complaint has not been resolved, the
PSC will notify the company and require a full report.
(d) A complaint is considered “resolved” if the company and the customer indicate that the
problem has been corrected, or the company and the customer indicate that they have
agreed to a plan to correct the problem.
There are 16 utilities participating in the Transfer Connect option. The 72-hour rule took effect on
June 22, 2000. From that date until December 31, 2000, there were 794 cases resolved using the
new 72-hour process.
Transfer Connect
The PSC utilizes the AT&T “Transfer Connect” option in working to resolve many consumer
complaints as quickly and efficiently as possible. When a Florida resident calls the PSC’s toll-free
telephone number (1-800-342-3552) with a question or complaint regarding utility services, PSC staff
can transfer the call directly to the utility for handling if that company has an AT&T 800 number. The
utility then pays for the call from the point of transfer until completion.
Consumers benefit when they can have all of their needs met with a single toll-free call. The Transfer
Connect option also enables PSC staff to consult with a utility representative and pass on information
about the caller without the caller needing to repeat the information.
Each company subject to regulation by the PSC may provide a Transfer Connect, or “warm transfer,”
telephone number by which the PSC can directly transfer a customer to that company’s customer
service personnel. Each company that subscribes to the Transfer Connect system must provide
customer service personnel to handle transferred calls during the company’s normal business hours,
and at a minimum from Monday through Friday, 9 a.m. to 4 p.m. Eastern time, excluding all holidays
observed by the company.
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III. Defining the PSC’s Role
The Florida Public Service Commission (PSC) is committed to making sure that Florida’s consumers
receive some of their most essential services — electric, natural gas, telephone, water, and
wastewater — in a safe, affordable, and reliable manner. In doing so, the PSC exercises regulatory
authority over utilities in three key areas: competitive market oversight; rate base/economic
regulation; and monitoring of safety, reliability, and service issues. Those areas are briefly described
as follows:
Competitive market oversight entails monitoring the development of competitive
markets and all issues associated with them.
Rate base/economic regulation involves analyzing requested rate changes and
conducting earnings surveillance to ensure that regulated utilities are not exceeding their authorized rates of return.
Monitoring of safety, reliability, and service issues involves ensuring the
uninterrupted provision of utility services in a manner that presents minimal risks
to the general public, and confirming that such services are provided in a
reasonable and timely manner.
A more detailed description of the PSC’s role in these three key areas follows.
COMPETITIVE
MARKET
OVERSIGHT
The PSC is addressing competitive market structure and ratemaking issues in industries that have
traditionally been considered monopolies, yet are now transitioning into a competitive market. New
technologies and large customers are two of the catalysts for the change to competition. The advent
of new technologies allows new market entrants and new opportunities for established utilities. In
addition, large customers may benefit with increased competition by having more options as to
whose services they use. Each of these changes shifts the dynamics of the market and requires the
PSC to reevaluate the current pricing, regulations, and constraints currently in place. This
reevaluation activity does not just occur when major industry changes occur. Instead, competitive
issues frequently arise in conjunction with the other two major regulatory roles of the PSC:
establishing rates and monitoring service issues.
Electric
The electric industry in Florida is on the verge of major changes. The creation of GridFlorida will
require changes in the way existing utilities do business. In addition, the Governor’s Energy 2020
Study Commission is looking at expanding wholesale competition and considering retail competition.
Either of these changes will effect the competitive nature of the electric market and the customers
they serve.
The PSC has been monitoring the development of the GridFlorida proposal to form a regional
transmission organization (RTO) in the state. The Federal Energy Regulatory Commission (FERC)
believes that having electric transmission operated by independent entities will facilitate competition
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in the wholesale electric market. The FERC hopes that this will lead to lower retail prices in the long
term. While the PSC does not have jurisdiction to establish wholesale transmission rates, the
potential effect on retail consumers of this effort to develop a competitive wholesale market is
considerable. Thus, the PSC has faithfully attended the formation meetings and provided comments
to the FERC.
During the year 2000, Florida experienced increasing pressure to expand its wholesale power
market. This occurred due to Duke Energy’s attempts to gain permission to build a merchant plant
in the state, and Florida’s general concern as to whether there are sufficient power resources in light
of California’s power outages. The PSC is exploring the potential effects on wholesale competition
of having a greater amount of Florida’s power generated by producers other than the traditional
utilities. In addition, the traditional utilities are considering “spinning off” their existing generation
facilities into separate affiliates and then purchasing power back from those affiliates. That action
would break up the traditional, vertically integrated electric industry. While competition for retail
electric customers currently is not part of the regulatory framework in Florida, competitive implications and considerations are very much a part of the PSC’s work.
The PSC also monitors electric utility mergers to ensure that ratepayers will not be unduly burdened.
In 2000, the PSC monitored two major mergers. The first, between Florida Progress Corp. (parent
of Florida Power Corporation) and CP&L Energy, Inc. (parent of Carolina Power & Light), promises
significant changes for the electric industry. PSC staff prepared summaries of the filing and drafted
comments for the FERC. The second merger, between Florida Power & Light Company (FPL) and
Entergy, would have created the largest electric utility in the United States. At the end of 2000, this
merger was pending at the FERC. (However, on April 2, 2001, the companies called off plans for the
$9-billion merger.) During 2000, however, the PSC reviewed that filing as well, and intervened for
monitoring purposes.
The PSC also has had to consider competitive issues regarding the utilities’ customers. In order to
give the utilities the flexibility to preserve their customer base, the PSC approved economic
development and/or load retention tariffs for the state’s four largest investor-owned electric utilities.
One pending case concerns a challenge to the propriety of offering different rates to two manufacturers served by the same utility, and whether such an offering constitutes “undue discrimination.”
Natural Gas
In overseeing the natural gas industry, the PSC has processed tariffs for “unbundling” services
provided by natural gas utilities. A recently adopted PSC rule allows all non-residential natural gas
customers in Florida to purchase their gas from the competitive market, and to have the associated
transportation/distribution provided by the monopoly investor-owned utility.
The PSC also reviews special contracts and proposed tariff changes of natural gas utilities to ensure
that the provisions are reasonable and non-discriminatory.
Telecommunications
In the telecommunications industry, a key focus of the PSC has been facilitating the development of
competition in the local telephone market by arbitrating agreements between incumbent local
exchange companies (ILECs) and alternative local exchange companies (ALECs) when negotiations fail. The PSC also is active in monitoring and assessing the status of local competition,
processing negotiated agreements, interpreting agreements and tariffs, providing input on legislative and Federal Communications Commission (FCC) initiatives, and conduction generic proceedings to implement approved initiatives.
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The PSC has numerous other responsibilities related to competitive market oversight in the
telecommunications industry. Reviews of industry practices are regularly conducted to determine
whether entities are engaging in anti-competitive practices that could dampen the development of
competition. Another major area involves the processing of area code relief cases and providing
oversight of numbering resources.
Also in the area of telecommunications, the PSC has been reviewing both existing and emerging
Internet access technology and backbone infrastructure. In doing so, the PSC recognizes the
blurring of distribution between the traditional telephone network and the data transmission
networks. The PSC has worked to identify the different technologies involved, assess the direction
of those technologies, analyze pricing differences between voice and data networks, and determine
what, if any, policy actions the PSC should consider.
Another significant telecommunications issue being monitored by the PSC is “truth in billing” (as
previously discussed on page 20). In March 2000, the National Association of Regulatory Utility
Commissioners’ (NARUC) Committee on Consumer Affairs created a working group, headed by PSC
Commissioner E. Leon Jacobs, Jr., to address the growing problem of confusing and misleading
telephone practices. The group’s goal was to develop a model telecommunications billing rule for
presentation and discussion at the 2000 NARUC Summer Meeting. Under Commissioner Jacobs’
direction, the PSC coordinated its efforts with those of other state utility commissions in drafting a
model truth-in-billing rule, which was presented at the NARUC Summer Meeting. After NARUC
adopted the rule, the PSC surveyed other states to find out their reactions to it. Commissioner Jacobs
provided an update on state reactions to the model rule at a subsequent NARUC meeting. After
considering whether the PSC needed to take any action to implement the model rule in Florida, the
PSC decided that the billing formats and procedures used by Florida companies essentially follow
the model rule and should be given a chance to operate.
The pricing of unbundled network elements (UNEs), previously discussed on page 18, has emerged
as another significant competitive issue in the telecommunications industry. In May 1999, in
response to a petition from a group of competitive carriers, the PSC granted a request to open a
generic UNE pricing docket (docket No. 990649-TP) for the three major incumbent local exchange
providers, BellSouth Telecommunications, Inc., Sprint-Florida, Incorporated, and GTE Florida, Inc.
Accordingly, the UNE pricing docket was opened to address the deaveraged pricing of UNEs, as well
as the pricing of UNE combinations and nonrecurring charges. Due to the critical impact of these
issues on competition in the telecommunications industry, PSC staff spend extensive time analyzing
the data and preparing for the hearings in July and September 2000.
In addition, the issue of reciprocal compensation is one that has grown in prominence in recent years.
On January 21, 2000, the PSC established a docket to investigate the appropriate methods to
compensate telecommunications carriers for exchange of traffic subject to Section 271 of the
Telecommunications Act of 1996. PSC staff provided testimony analyzing the regulatory treatment
of traffic bound for Internet service providers (ISPs); summarizing the PSC’s, the FCC’s, and other
relevant state decisions relating to reciprocal compensation; and recommending that the PSC modify
its policy of how reciprocal compensation is structured to more accurately reflect how costs are
incurred.
Another critical aspect of competitive market oversight in the telecommunications industry is the
certification process. All telecommunications companies doing business in Florida must be
certificated by the PSC. The PSC staff creates and reviews the telecommunications companies’
certification requests prior to the requests being voted on by the commissioners. Traditionally there
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is a high volume of certification requests. Particularly, during the year 2000 the investment market
swung widely from generously investing in new telecommunications providers in the beginning of the
year to completely drying up at the end of the year. As a result there was a significant fluctuation in
companies entering the market at the beginning of the year and existing the market at the end of the
year.
Water and Wastewater
Within the water and wastewater industries, the issue of wastewater reuse is becoming a significant
competitive market policy area for the PSC. The State of Florida’s policy is to encourage the use of
treated wastewater for irrigation and in manufacturing processes instead of using potable water that
could otherwise be used for drinking, cooking, and bathing. Establishing the rates for the use of
treated wastewater requires consideration of several factors. The reuse of treated wastewater is a
relatively new concept and one that requires public education in order to encourage a demand for
reuse wastewater. Rates have to be designed in such a way that they give consideration both to cost
and to competing customer options. If the rates are set too high, customers may choose to use
private wells or to simply not use reuse water and instead use drinking water, thereby diminishing the
water supply.
Also in the water and wastewater industries, the PSC creates and reviews certification requests for
all utilities that fall under the economic jurisdiction of the PSC. Those certification requests are voted
on by the Commissioners. Staff then prepares the orders resulting from those votes and regularly
monitors the utilities for compliance with their certificates.
RATE
BASE/ECONOMIC
REGULATION
The PSC establishes and monitors earnings levels for regulated electric, natural gas, water, and
wastewater companies. In addition, there is one remaining telephone company under rate-of-return
regulation. Whenever a company believes that its earnings are below a reasonable level, it can
petition the PSC for a change in rates. The PSC conducts an extensive review of the company’s
earnings and determines what fair levels of rates and earnings are for the company. The review
consist of an analysis of the company’s books and records, as well as a determination of what a
reasonable return is for the company. The review also includes an analysis of the actual rates
charged by the company, allocates revenue requirements between classes of customers, and
develops appropriate rate structures within rate classes.
In addition to reviewing a company’s request for a rate increase, the PSC also monitors each
company’s earnings levels to reduce the likelihood that any company receives excessive earnings.
Each company files an annual report, which is reviewed to determine its level of earnings for the prior
year. If, based on prior year earnings, it appears that a company’s earnings will be excessive in the
following year, the PSC will fully analyze that company’s books and records and, when appropriate,
reduce its rates. During that overearnings review, the PSC may place earnings subject to refund if
the review indicates the company is overearning.
Electric
In addition to annual reviews, the larger electric and natural gas companies also file earnings
information on a more frequent basis, with some companies filing quarterly, semi-annually or
monthly, depending upon their size. These more frequent filings allow the PSC to take quicker action
if it appears that a company may be overearning, and allow consumers’ rates to be reset to reflect
that review.
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While three of Florida’s four largest investor-owned electric utilities have agreements in place that
freeze base rates, the PSC devotes considerable resources to various tariff, rate, and other economic
issues. Reviews of fuel, capacity, conservation, environmental costs considered in cost-recoveryclause dockets, special contracts, new tariff offerings, conservation program approvals, and revision,
depreciation, amortization, and decommissioning studies are just some of the many aspects of
economic regulation involving electric and natural gas utilities that are regularly pending before the
PSC.
During 2000, a significant case in the area of economic regulation for the electric industry was Florida
Power Corporation’s filing of a petition requesting a determination of need for its Hines Unit 2 plant.
PSC staff testified regarding the policy issue of obligating rate payer on a long-term basis for a plant
that could become uneconomical during its useful life. A petition of need for the 530-megawatt plant
ultimately was approved in a vote by PSC Commissioners on December 19, 2000.
Natural Gas
In the natural gas industry, the PSC is responsible for the economic regulation of utilities with regard
to the purchased gas cost recovery clause and the conservation cost recovery clause. These clauses
allow each natural gas company to recover the costs incurred by that company from ratepayers, on
a dollar-per dollar basis. Analyses are conducted by PSC staff to ensure that only reasonable and
prudent costs are recovered.
Water and Wastewater
In the water and wastewater industries, there were approximately 40 significant cases processed by
the PSC during 2000. The majority of these cases involved rate increases or limited-proceeding
increases arising from increased costs of providing service. A smaller number of cases involved
overearnings investigations in which the PSC determined whether it was necessary to reduce rates.
The PSC’s duties included participating in customer meetings, staff-assisted rate cases, limited
proceedings, prehearings and hearings, as scheduled; writing recommendations based on information gathered by staff; answering Commissioners’ legal and technical questions at PSC Agenda
Conferences; voting on the issues raised in the recommendations; and drafting orders memorializing
the Commissioners’ decisions in each case.
As stated earlier, the issue of reuse — using effluent water for a beneficial purpose, such as irrigation
— is a growing one for the PSC in terms of competitive market oversight. However, reuse also has
significant implications in the area of rate base/economic regulation. The Legislature has recognized
the benefit of reuse to Florida, and has enacted provisions in the governing statutes for the Florida
Department of Environmental Protection (DEP), the five Water Management Districts and wastewater utilities to employ reuse as the chosen means of effluent disposal and as a method of water
conservation. The PSC has clearly been given direction from the Legislature that reuse should be
considered a public good and should be implemented by utilities wherever feasible. The PSC’s
charge is to identify reuse issues related to its jurisdiction and to establish policies that are consistent
with these statewide goals, while mitigating the effect on water and wastewater rates. In meeting this
charge, PSC staff participates on a Reuse Coordinating Committee along with staff from the DEP,
the Water Management Districts, and the Florida Department of Health. The Reuse Coordinating
Committee meets quarterly and discusses reuse issues, including any relevant proposed agency
rulemaking and legislation. PSC staff also participates in three different quarterly meeting with the
St. Johns River Water Management District to discuss reuse, conservation, and water allocation
issues within the District.
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Water conservation is another area with major economic implication. As an economic regulator, the
PSC is actively involved in demand-side water conservation through rate level and rate structure.
Rates and rate structure have a direct bearing on water usage and, therefore, water resource
allocation. Through participation in quarterly meeting of the Reuse Coordinating Committee, PSC
staff has developed a good working relationship with the agencies having primacy over water supply
issues and has stayed abreast of emerging issues that may affect utilities under the PSC’s
jurisdiction. The PSC has entered into a Memorandum of Understanding (MOU) with the five WMDs
in order to coordinate efforts to meet statewide conservation goals. PSC staff is in the process of
reviewing this MOU.
Consumer Assistance
A final aspect of economic regulation relates to customer issues such as billing. The PSC often
assists consumers with understanding their utility bills and verifying the accuracy of charges.
SAFETY,
RELIABILITY,
AND
SERVICE
ISSUES
Through performance and operations investigation, the PSC provides information on reliability,
service quality, and service availability issues for review and enforcement.
Electric
In the electric industry, the PSC reviews regulated utilities’ ten-year site plans to assess the utilities’
abilities to meet Florida’s energy needs over a ten-year planning horizon. The PSC also considers
petitions for determination of need for electric power plants and transmission lines as a way of
ensuring that the state’s power needs are being met. The level of activity in this area has increased
significantly over the past two years.
Also in the electric industry, the PSC has received numerous inquiries from local governments about
“undergrounding” electric utility facilities. One of the primary concerns raised by local governments
is how they can pay contributions in aid of construction (CIAC) to utilities for placing facilities
underground. One option is the use of local community surcharges on electric bills to pay for
undergrounding of new or existing electric facilities where undergrounding is required by local
governments. Such an approach would help local communities recoup the cost of undergrounding
facilities from all of the electric customers in the community. PSC staff has been meeting with
representatives of various communities to discuss possible options for the recovery of undergrounding
costs.
The PSC also participated in formal and informal proceedings relating to long-range electric-utility
bulk power supply operations and planning; power plant and transmission line siting, including the
siting of power plants owned by non-traditional generating entities; electric and natural gas safety and
service quality, including complaints; electric utility conservation goals and programs; and emergencies due to operational events or weather.
Natural Gas
In the natural gas industry, the PSC evaluates projections of natural gas needs of the state to
determine whether sufficient pipeline capacity will be available to fuel future electric generating
needs, as well as end user requirements.
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Telecommunications
In the telecommunications industry, the PSC monitors telephone safety through inspection of the
local telephone companies’ central offices and outside facilities for compliance with the Nation
Electric Safety Code and the National Electric Code. This is done to ensure the safety of the
companies’ workers as well as customers. Network reliability is monitored through service outage
reports from the local telephone companies and call completion tests. Service quality is monitored
through inspections of the local telephone companies’ installation and repair records, billing
accuracy tests, and pay telephone inspections. During pay telephone evaluations, access to 911 and
the accuracy of the pay telephone address are verified.
Water and Wastewater
In the water and wastewater industries, the PSC oversees quality-of-service issues such as water
pressure and capacity. Sometimes these issues are addressed in response to consumer complaints.
The PSC will assign an engineer to investigate the complaint. The engineer works with the consumer
and utility personnel to determine the cause of the consumer’s problem.
There were approximately 70 water and wastewater cases processed within the area of certification
in 2000. The majority of these cases involved the transfer or amendment of certificates of
authorization. A smaller number of cases involved the original certification of a new utility. Two cases
involved whether portions of a utility’s certificated territory should be deleted for failure to provide
adequate service. The PSC’s role included preparing recommendations as they arose, including the
following: processing numerous show-cause issues for failure to file annual reports and/or pay
regulatory assessment fees; answering Commissioner’ questions at Agenda Conferences; drafting
orders resolving motions in dockets scheduled for hearing; representing the PSC at prehearings and
hearing; voting on safety, reliability, and service issues; and drafting orders memorializing the
decisions made by Commissioner in each case.
Finally, service quality issues often arise when a utility files an application for a rate change. The PSC
frequently conducts customer hearings as a part of the rate case process. While hearing consumer
comments at the rate case hearing, service quality issues often are brought up. Again, a staff
member is assigned to review complaints and work with the utility to resolve the issue. In some cases,
a complaint may result from possible violations of public health rules of the DEP; in those cases, PSC
staff will work with the DEP to resolve the issue.
Consumer Assistance
In addition, the PSC handles complaints and inquiries related to such issues as service reliability,
slamming, cramming, tariffed telephone services, and water and wastewater certification. In 2000,
the PSC received more than 215 complaints from consumers against regulated electric utilities for
momentary electricity outages. The PSC also received more than 335 complaints regarding
telephone service outages. Each of these complaints was investigated by PSC staff, who weighed
the evidence to determine whether it appeared there were violations of applicable rules, orders or
statutes.
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REGULATORY
ACTIVITIES
All orders of the PSC, whether they pertain to competitive market oversight, rate base/economic
regulation, or monitoring of safety, reliability, and service functions, are subject to judicial review.
Orders affecting the rates and service of electric, natural gas, and telecommunications companies
are reviewable by direct appeal to the Florida Supreme Court. The PSC is unique in that respect,
since orders of all other state agencies may be appealed only to the District Courts of Appeal. If those
orders reach the Florida Supreme Court, it is by way of discretionary review on writ of certiorari.
Orders of the PSC affecting water and wastewater utilities may be appealed to the 1st District Court
of Appeal. Finally, under the unique provisions of the Telecommunications Act of 1996, PSC orders
approving interconnection agreements between competitive telecommunications companies, and
orders relating to enforcement of these agreements, are reviewable in the U.S. district courts.
In addition to defending its orders on direct review, the PSC may initiate or intervene in court
proceedings that impinge upon its jurisdiction. The PSC also participates as amicus curiae, or
“friends of the court,” in court proceedings at the local and national levels in which matters of
regulatory interest are at issue.
At the end of the year 2000, PSC actions were being challenged in 16 pending state court
proceedings and 10 federal court proceedings. The PSC was participating in five other cases as
amicus curiae.
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IV. Agency Organization
DIVISION
OF
Administration
The Division of Administration has responsibility for all
areas of internal administrative services, including budgeting, planning, internal accounting, information processing, personnel, and general support services.
D I R E C TO R
Steve Tribble
The responsibilities of the Division of Administration are further detailed under its component
bureaus:
The Bureau of General Support Services is responsible for purchasing all commodities and
services required for the Florida Public Service Commission’s (PSC) operations; managing the
Print Shop, mail services, and the office supply room; selecting and maintaining convenience
copiers that are placed throughout the PSC for walk-up use by employees; managing telephone
systems, the PSC’s fleet of motor vehicles, and the disposal of surplus property; and coordinating
facility maintenance, safety, and security issues.
The Bureau of Personnel is responsible for the administration of all human resources programs,
which include recruitment, selection, classification and pay, attendance and leave, performance
evaluations, training and staff development, variable workweek schedules, employee relations,
payroll, insurance, and other employee benefit programs. The Bureau maintains files/records
required by the PSC’s Administrative Procedures and by State Personnel Rules and Regulations.
Additional responsibilities entail monitoring Equal Employment Opportunity/Affirmative Action
compliance; coordinating the agency’s Sick Leave Pool and Sick Leave Transfer Plan, Employee
Assistance Program, Telecommuting Program, and Financial Disclosure; managing the Student
Trainee Program; and developing/revising internal personnel policies and procedures.
The Bureau of Fiscal Services is responsible for providing support to the PSC in the areas of
preparation of the Legislative Budget Request, depositing of all revenues, payment of all bills, and
maintenance of centralized accounting and financial records. The Bureau’s staff also inputs and
maintains the Purchase Order Tracking System (POTS), the regulatory assessment fee (RAF)
system, and the FLAIR/LASPBS budget system. One of its newest responsibilities is the
coordination and maintaining of the performance measures and outputs for the PSC’s LongRange Program Plan. Other duties include review, approval, and payment of all travel vouchers
for in-state and out-of-state travel; maintenance of the petty cash fund; distribution of payroll
warrants; and the mailing of RAF notices.
The Bureau of Information Processing is responsible for monitoring and evaluating the
information processing needs of the PSC, proposing enhancements to information processing
resources to management, and providing technical support services for the PSC. The Bureau is
divided into two sections: Systems Programming and Hardware Maintenance and Support. The
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services provided by both sections fall into several categories: Local Area Network (LAN) system,
hardware, software, programming, and user support; microcomputer hardware, software, and
programming support; outside mainframe services access and programming support; training;
security; and hardware/software evaluation, purchase, and implementation support.
The Bureau is also responsible for preparing the Annual Technology Report and the data
processing portion of the annual Legislative Budget Request.
DIVISION
OF
Appeals
The Division of Appeals represents and defends the
PSC’s actions in all state and federal courts and at the
Division of Administrative Hearings as cases arise. The
Division has primary responsibility for declaratory statements and all rulemaking activities, from conducting workshops and informal rule hearings to defending rule challenges.
D I R E C TO R
David Smith
The Division also provides legal advice to the Commissioners and staff as requested, and represents the PSC in
personnel and contract matters, as well as a variety of
peripheral legal matters affecting the agency.
DIVISION
OF
Competitive Servuces
D I R E C TO R
Walter
D'Haeseleer
The Division of Competitive Services monitors the development of competitive markets and has responsibility for
the issues associated with emerging competitive markets.
The Division participates in informal and formal proceedings involving appropriate area code relief and number
conservation plans and establishes policies and procedures governing intercompany contracts, arbitration of
terms of intercompany contracts, and resolution of issues
of contractual interpretation. The Division also resolves
conflicts arising from changes in service providers. In
addition, it evaluates the quality of service provided by
telecommunications companies and conducts periodic
on-site inspections of telecommunications facilities.
Issues involving conservation, tariff filings and territorial
disputes in the natural gas industry are also the responsibility of this Division. Investigations are conducted to
ensure compliance with applicable rules, tariffs, procedures, and laws and to provide competitive safeguards.
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The responsibilities of the Division of Competitive Services are further detailed under its component
bureaus:
The Competitive Safeguards Bureau consists of the Competitive Review Section and the
Competitive Industry Practices Section.
The Competitive Review Section is responsible for conducting reviews related to telephone
numbering practices, business operating practices, regulatory assessment fee (RAF) filings,
purchased gas filings, and consumer complaints. Staff members perform on-site reviews, as
well as desk reviews, to determine if submitted filings are mathematically and factually
accurate, and whether allegations of inappropriate business practices can be substantiated.
The Competitive Industry Practices Section is responsible for processing area code cases;
reclaiming numbering resources from carriers that have failed to activate central office codes;
processing tariff filings of natural gas utilities; determining natural gas capacity requirements
for electric need determination cases and ten-year planning reviews; reviewing natural gas
conservation programs and cost recovery filings; developing policies to discourage anticompetitive business practices; and processing cases involving anti-competitive business
practices.
The Market Development Bureau consists of the Market Assessment Section and the Carrier
Services Section.
The Market Assessment Section is primarily responsible for setting prices for wholesale
offerings (i.e., unbundled network elements and resale agreements), whether in the context of
an arbitration or a generic proceeding. In addition, this Section prepares an annual Competition in Telecommunications Markets in Florida report for the Legislature, provides input on
legislative and Federal Communications Commission (FCC) initiatives in such areas as
universal service support and access charge reform, and coordinates PSC activities necessary to implement approved initiatives. Finally, this Section resolves tariff issues that may arise
in the context of a tariff filing or a complaint, particularly in situations where the tariff may be
anti-competitive or subject to interpretation.
The Carrier Services Section resolves operational issues that surface in negotiations between
incumbent local exchange companies (ILECs) and alternative local exchange companies
(ALECs) that cannot be resolved by the parties and must be arbitrated. In addition, this Section
processes all negotiated agreements, and resolves complaints of an operational nature that
pertain to existing agreements.
To the extent that there are recurring themes in the operational issues that are presented in
arbitration cases, the Carrier Services Section establishes generic proceedings. While the
Market Assessment Section is the group primarily responsible for setting prices, the Carrier
Services Section determines the applicability of prices.
The Service Quality Bureau consists of the Service Quality Section and the Compliance Section.
The Service Quality Section is responsible for completing field evaluations of the local
telephone companies regarding service quality. During the field evaluations, call completion
tests are done to ensure network reliability and to evaluate the billing accuracy of long distance
companies. This Section also inspects pay telephones for compliance with PSC rules.
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The Compliance Section is responsible for recommending enforcement action to the PSC
against all types of telecommunications companies for violations of PSC rules and orders or
Florida statutes. This Section also sends apparent violation notices to pay telephone providers
as the result of the inspections completed by the Service Quality Section. Call aggregator
locations (hotel and motels) receive another type of apparent-violation notice, which is sent as
the result of inspections completed by the Florida Department of Business and Professional
Regulation.
DIVISION
OF
Consumer Affairs
D I R E C TO R
Bev DeMello
The Division of Consumer Affairs has the PSC’s primary
responsibility for handling utility complaints and preparing
statistical summaries on consumer complaint activity. The
Division compiles and relays information about the PSC’s
regulatory decisions to utility customers, consumer groups,
media representatives, and local, state, and federal governmental agencies. The Division also is responsible for
handling consumer information, media relations, and consumer education.
The responsibilities of the Division of Consumer Affairs are further detailed under its component
bureaus:
The Bureau of Complaint Resolution is responsible for handling consumer complaints,
preparing statistical summaries on consumer complaint activity, preparing testimony for rate
cases on complaint activity, and participating in or initiating dockets on utility matters related to
consumers. This Bureau is the PSC’s main in-bound conduit for communication with the public
and is often where consumers form their first impressions of the agency.
Within the Bureau are three sections: Complaint Intake, Complaint Resolution, and Quality
Assurance.
The Complaint Intake Section is responsible for handling consumer inquiries/complaints via
the PSC’s toll-free number (1-800-342-3552). This Section receives, reviews, handles, and
processes consumer inquiries/complaints filed by utility customers via telephone, e-mail, fax,
mail, and the PSC’s Internet Web site. The Complaint Intake Section also receives opinions
and inquiries from the public and provides explanations and information about the PSC and its
activities. Analysts have a thorough knowledge of PSC rules and procedures.
The Complaint Resolution Section serves as an intermediary in seeking to resolve consumer
problems. This Section makes decisions on complaints based on findings, applicable laws,
and PSC rules, regulations, and tariffs. This Section also proposes resolutions of complaints
to consumers, and schedules and conducts informal conferences.
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The Quality Assurance Section handles customer contacts directed to the Division of
Consumer Affairs by public officials, including PSC Commissioners. This Section attempts to
resolve disputes between customers and utilities in order to preclude a need for an informal
conference.
The Quality Assurance Section also assesses the timeliness and quality of company
responses to PSC complaints, and reviews cases to pinpoint new complaint trends. Finally, this
Section compiles statistical data and prepares PSC reports documenting its findings.
The Bureau of Consumer Information and Conservation Education is responsible for helping
Florida’s consumers understand how to make wise decisions in an increasingly complex utility
marketplace. The Bureau has several operational goals, including, but not limited to, the
following:
1) disseminating consumer information about regulatory matters to the news media;
2) establishing the PSC’s presence and increasing its visibility as a consumer education
agent; and
3) maintaining an outreach plan for PSC hearings and workshops held across the state.
A significant portion of the Bureau’s recent consumer education efforts have involved the
production of public service announcements for television and radio. These have been very
effective at conveying utility- and conservation-related information to the widest possible
audience.
Another focus of the Bureau’s efforts has been the PSC’s Web site. The site, located at
http://www.floridapsc.com, has been expanded and redesigned by the Bureau to supply
consumers with greater amounts of information about the industries regulated by the PSC, and
about specific issues before the PSC. Press releases, videos of public service announcements, and electronic versions of most PSC brochures and publications are among the items
that can be accessed there. Consumers are also able to file online complaints regarding their
utility services via the PSC home page.
In addition, Bureau staff members attend customer hearings and meetings held throughout the
state in conjunction with utility cases before the PSC. They are also the primary contact for
media representatives seeking information on regulatory matters.
The Bureau has produced a number of brochures and fliers designed to help consumers
become more knowledgeable about their rights and options as users of utility services. (Many
of these brochures also have been translated into Spanish to assist Florida’s Hispanic
consumers.) All of the brochures are made available to consumers who contact the PSC and
request a copy. Many are also distributed at those PSC hearings and meetings that are open
to the public.
Finally, the Bureau is responsible for providing all artistic services, including design, layout and
printing coordination for the entire agency; for maintaining the audio/video equipment used to
conduct public meetings such as PSC Agenda Conferences and customer meetings; and for
broadcasting many meetings live on the PSC Web site and/or via satellite, when available.
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The two bureaus of the Division of Consumer Affairs work collaboratively. For instance, the Bureau
of Consumer Information and Conservation Education closely monitors and builds educational
campaigns around trends in consumer inquiries received by the Bureau of Complaint Resolution.
The Bureau of Complaint Resolution, meanwhile, often utilizes informational brochures, press
releases and other materials prepared by the Bureau of Consumer Information and Conservation
Education to provide utility information to consumers.
DIVISION
OF
Economic Regulation
The Division of Economic Regulation participates in informal and formal proceedings relating to the rates and
earnings of rate-base-regulated companies in the electric, natural gas, water, wastewater, and telecommunications industries. The Division has primary responsibility
for processing rate changes and for conducting earnings
surveillance to ensure that regulated utilities are not
exceeding their authorized rates of return. The Division
receives and maintains copies of annual financial reports
and periodic surveillance reports for rate-base regulated
companies.
D I R E C TO R
Tim Devlin
The Division also participates in proceedings concerning
economics/forecasting, cost of capital, taxes, and capital
recovery. In addition, the Division works to resolve consumer complaints concerning billing issues in the electric,
natural gas, water and wastewater industry and consumer
complaints concerning water quality issues such as pressure and capacity.
The responsibilities of the Division of Economic Regulation are further detailed under its component
bureaus:
The Bureau of Rate Cases has the responsibility to process rate filings and complex consumer
complaints, and to investigate overearnings of water and wastewater utilities. This work is
accomplished through the Bureau’s File and Suspend Cases Section, Staff Assisted Cases
Section, and Engineering Section.
The File and Suspend Cases Section has the responsibility of processing filings by Classes
“A” and “B” water and wastewater utilities. The types of filings handled are file and suspend,
limited proceedings, overearnings investigations, applications of allowance for funds used
during construction (AFUDC), applications of allowance for funds prudently invested (AFPI),
service availability applications, rule proceedings, and complex complaints that cannot be
handled by the PSC’s Division of Consumer Affairs. The processing of the Section’s workload
involves holding customer meetings; participating in formal and informal proceedings before
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the PSC; analyzing filings, expert testimony and exhibits; developing cross-examination
questions; presenting direct testimony; coordinating with staff outside of the Bureau; and
preparing and presenting recommendations concerning the disposition of these types of cases
before the PSC.
The Staff Assisted Cases Section has the responsibility of processing filings by Class “C” water
and wastewater utilities. The types of filings handled are staff-assisted rate cases, staffassisted requests for alternative rate setting, limited proceedings, overearnings investigations,
AFUDC applications, AFPI applications, service availability applications, rule proceedings,
and complex complaints that cannot be handled by the PSC’s Division of Consumer Affairs.
The processing of the Section’s workload involves holding customer meetings; participating in
formal and informal proceedings before the PSC; analyzing filings, expert testimony and
exhibits; developing cross-examination questions; presenting direct testimony; coordinating
with PSC staff outside of the Bureau; and preparing and presenting recommendations
concerning the disposition of these types of cases before the PSC.
The Engineering Section has the responsibility of supplying the necessary technical assistance to the File and Suspend Cases Section and the Staff Assisted Cases Section in the
specialized area of engineering, related to the issues of quality of service, used and useful,
construction programs and budgets, plant maintenance, service availability charges, complex
customer complaints, and rule proceedings. The processing of the Section’s workload
involves holding customer meetings, participating in formal and informal proceedings before
the PSC; analyzing filings, expert testimony and exhibits; developing cross-examination
questions; presenting direct testimony; coordinating with PSC staff outside of the Bureau; and
preparing and presenting recommendations concerning the disposition of these types of cases
before the PSC.
The Bureau of Surveillance/Accounting consists of three sections: the Accounting Section, the
Monitoring, Compliance and Enforcement Section, and the Depreciation Section. The functions
and responsibilities of each section are described below.
The Accounting Section is responsible for the revenue requirements of the electric, natural gas
and rate-base-regulated telecommunications companies. It processes rate cases and
monitors the earnings for these industries. It carries out the PSC’s surveillance program for
electric, natural gas and telecommunications companies, and regularly reviews the actual
earnings of the larger electric and gas utilities. The Section is responsible for the electric,
natural gas, and telecommunications annual report process, including all mailings, extensions,
filings, follow-up letters, delinquency notices, penalty letters, and show causes. The Section
also reviews the regulatory assessment fee (RAF) returns of electric and natural gas utilities
and reconciles them to the revenues reported in the utilities’ annual reports. In addition, the
Section regularly produces PSC reports such as the Annual Comparative Rate Statistics for
electric, natural gas, and telecommunications.
The Monitoring, Compliance and Enforcement Section is responsible for the water and
wastewater annual report process, including all mailing, extensions, filings, follow-up letters,
delinquency notices, penalty letters, and show causes. More than 200 annual reports are
reviewed for completeness. Additionally, the earnings of each company and system (more
than 400) are calculated to determine if the company is overearning. This is the PSC’s
surveillance program for water and wastewater companies. The Section also is responsible
for reviewing all RAF returns (more than 400) and reconciling them to the revenues reported
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in the annual reports. All index and pass-through applications (more than 100 annually) are
reviewed and processed through this Section. The Section ensures that four-year rate
reductions are implemented. It also monitors individual companies for compliance with PSC
orders which direct the utility to do something specific. The Section also produces reports such
as the Quarterly Rate Increase and Decrease Report and the Annual Comparative Rate
Statistics for water and wastewater companies.
The Depreciation Section is responsible for reviewing and assessing the economic effects of
depreciation and related capital recovery and technology implementation practices of jurisdictional, regulated companies. Those responsibilities include acting as technical advisers to the
PSC, participating in generic docket issues and rules, and acting as consultants to assist other
PSC staff in carrying out assigned responsibilities, specialty research, and staff technical
training. The Section supports the PSC with professional and unbiased advice based on an
analysis of depreciation practices, industry records, Florida Statutes, the Florida Administrative Code, PSC policy, and other relevant information and technical knowledge.
The Bureau of Economics, Finance and Rates consists of three sections: Forecasting and
Economics, Finance and Tax, and Rates. The Bureau’s responsibilities cross industry lines, and
affect nearly every facet of economic regulation.
The Forecasting and Economics Section participates in proceedings in support of all the
industries under PSC jurisdiction. These proceedings include electric-plant need determination cases, in which the Section conducts analyses of load forecasts supporting the need for
additional power. The Section also analyzes the customer, energy, and demand forecasts
included in the ten-year site plans submitted by ten Florida utilities.
Additional responsibilities include analyzing therm and customer forecasts in rate cases for
natural gas companies; providing economic information in dockets that analyze the competitive performance of local providers in the telecommunications industry; forecasting demand
and repression adjustments for water and wastewater rate cases; and conducting research
and writing statements of estimated regulatory costs for rulemaking and other issues. The
Section also assists the Fiscal Bureau in the PSC’s Division of Administration by independently
forecasting all the regulated utilities’ gross revenues, which is used to determine regulatory
assessment fees (RAFs).
The Finance and Tax Section provides capital structure and cost-of-capital support in earnings
investigations in the water, wastewater, telephone, electric and natural gas industries. Other
cases may involve water reuse projects, merger impacts, effects of diversification on mergers,
and the cost of telecommunications services. In addition, the Section evaluates the applications for certificates to provide competitive services in the telecommunications industry,
reviews the financial assumptions underlying need determination proceedings for new power
plants, and participates in various rulemaking proceedings.
On an ongoing basis, the Section also processes the security applications for all investorowned natural gas and electric utilities; evaluates requests for corporate undertakings from all
water and wastewater utilities; monitors all Federal Accounting Standards Board (FASB) and
SEC pronouncements that affect financial and reporting requirements of utilities, calculates
the interest on refunds, and maintains the database and cost-of-equity models used by staff
to estimate the required rate of return on common equity capital. Staff also monitors notices
issued by the FASB, the Internal Revenue Service (IRS), the FERC, and the Nuclear
Regulatory Commission (NRC) for relevant tax developments.
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The Rate Section develops rates for earnings-regulated utilities based upon revenue requirements computed by the Bureau of Rate Cases. The Section determines the split of
responsibility to produce needed revenues among classes of customers and determines rate
structure. Outside of rate case activity, the Section also analyzes rate structure for nonearnings-regulated municipal utilities and rural electric cooperatives.
Other dockets in which the Section is involved address potentially volatile customer issues
such as billing practices, master metering, and reconnection policies, as well as merger and
deregulation effects on rates.
DIVISION
OF
Legal Services
The Division of Legal Services supervises the procedural
and legal aspects of rate cases and other formal proceedings before the PSC, the Division of Administrative Hearings and, on behalf of the PSC, in civil court proceedings.
The Division also represents PSC staff before the PSC,
prepares recommendations, and prepares PSC orders
memorializing decisions. During 2000, the Division wrote
2,564 such orders.
D I R E C TO R
Noreen Davis
The Division of Legal Services has three bureaus: Telecommunications, Electric and Gas, and Water and Wastewater. Each bureau is responsible for processing docketed and undocketed matters pursuant to Chapters 364,
366, and 367, Florida Statutes, respectively. Attorneys
are cross-trained and also process cases across industry
lines. The attorneys are part of the technical team that
processes all cases under Sections 120.569 and 120.57,
Florida Statutes.
The responsibilities of the Division of Legal Services are further detailed under its component
bureaus:
The Bureau of Water and Wastewater processes the legal aspects of all dockets involving water
and/or wastewater companies, in conjunction primarily with the PSC’s Divisions of Economic
Regulation and Regulatory Oversight. The Bureau’s role includes providing legal advice to PSC
technical staff throughout the processing of each docket; identifying legal issues; writing legal
issues for recommendations as they arise; including show cause and other legal issues;
participating in customer meetings conducted prior to filing recommendations in proposed agency
action (PAA) rate cases, staff-assisted rate cases, limited proceedings, and reuse cases;
conducting formal discovery and depositions; participating in meetings with the parties to
crystallize issues and/or to discuss settlement or stipulations on certain issues; answering legal
questions as necessary at PSC Agenda Conferences; drafting orders resolving motions in
dockets scheduled for hearing; representing the PSC’s technical staff at prehearings and
hearings; and drafting orders memorializing the Commissioners’ decisions made in each case.
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In 2000, the Bureau also represented the PSC in a federal bankruptcy court proceeding and
tracked certain civil court proceedings of interest to the PSC.
The role of the Bureau of Electric and Gas is similar to that of the Bureau of Water and
Wastewater in the areas of competitive market oversight, rate base/economic regulation, and
monitoring of safety, reliability and service issues. The Bureau provides counsel to the
Commissioners and PSC staff in all assigned matters. The Bureau assists the technical staff in
all phases of docketed matters, including discovery (both formal and informal), preparation for and
representation at hearing/Agenda Conference and in the post-hearing phase. A significant
amount of the Bureau’s resources is devoted to achieving negotiated and/or stipulated resolutions
in pending cases.
In addition, the Bureau of Electric and Gas is responsible for assuring that all requirements of the
Public Records Law, the Sunshine Law, and the Administrative Procedures Act are met in all
assigned cases. The Bureau also is responsible for the preparation of all written orders and
notices in assigned cases. Finally, the Bureau often represents the PSC in civil courts and in
matters pending before other agencies.
The Bureau of Communications provides legal advice to the PSC’s technical staff by processing
each telecommunications docket. For cases going to hearing, the Bureau assists in organizing
the case, setting up the schedule for filings, preparing procedural orders for the prehearing officer,
and handling any motions or confidentiality requests that are filed. The attorneys also review and
send out discovery requests from staff, and serve as the point of contact between the parties and
PSC staff. In addition, the attorneys conduct depositions and cross-examination at hearings.
Post-hearing, the Bureau assists staff in the preparation of the recommendation. Upon the
Commission’s decision, the attorneys prepare the Commission’s Order. Thereafter, attorneys
prepare the recommendation on any motions for reconsideration that may be filed, as well as the
order resulting from that recommendation.
For non-hearing cases, the Bureau assists staff by reviewing recommendations and preparing the
orders resulting from those recommendations. In enforcement cases, the bureau prepares the
order initiating the action by the Commission and assists in any negotiation efforts between staff
and the company.
DIVISION
OF
Policy Analysis and Intergovernmental Liaison
D I R E C TO R
Charles Hill
The Division of Policy Analysis and Intergovernmental
Liaison is responsible for identifying emerging issues and
areas of inquiry in the energy, telecommunications, water,
and wastewater industries. It is also responsible for
conducting studies on topics of regulatory interest, and
providing the findings to the Commissioners and other
PSC divisions for use in making decisions regarding
regulatory policy matters. Further, the Division provides
the primary technical interface with both state and federal
agencies on regulatory matters in coordination with other
PSC divisions, the Office of General Counsel, the PSC’s
Deputy Executive Director/Technical, and the Commissioners.
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The responsibilities of the Division of Policy Analysis and Intergovernmental Liaison are further
detailed under its component bureaus below:
The primary function of the Bureau of Policy Analysis is to assist and facilitate in the
identification and analysis of policy issues. Responsibility for the Bureau falls into two broad
areas: first, to identify, analyze and alert the PSC about emerging issues, and second, to assist
PSC technical divisions and the Commissioners in analyzing policy-related matters. The sections
responsible for carrying out these responsibilities are the Special Studies Section and the Policy
Analysis Section.
Emerging competition in the regulated telecommunications and electric industries and its
effect on regulatory policy will have far-reaching effects on ratepayers. The Policy Analysis
Section identifies emerging policy issues that are critical in this rapidly changing regulatory
environment. Timely analyses of these technical issues enable the PSC to assess the effects
of policy changes on Florida ratepayers, and to respond to these changes.
In conjunction with the Policy Analysis Section, the Special Studies Section analyzes issues
and trends and produces reports, white papers, and position papers on matters identified
through the above activities. These reports/studies are the primary means of informing and
educating Commissioners and PSC staff on emerging issues and their effects on ratepayers.
The regulatory issues that have resulted from the changing telecommunications and electric
industries are highly complex. The PSC needs timely, concise and pertinent information in
order to properly anticipate the changes and formulate forward-looking policies that will benefit
Florida’s ratepayers. The above activities are critical to this end.
The Bureau of Intergovernmental Liaison has responsibilities at both the federal and state
levels:
Federal
The Bureau’s purpose is to ensure proper monitoring of and timely responses to documents issued
by federal agencies, the National Association of Regulatory Utility Commissioners (NARUC), and
Congress related to issues involving the electric, telecommunications, and water industries.
Bureau of Intergovernmental Liaison staff is responsible for monitoring action taken by these
organizations, keeping the Commissioners and appropriate agency staff informed, and leading and
coordinating the proper response. This may also include meetings with key staff in federal agencies
and Congress.
State
The PSC is working to improve coordination with other State and local agencies. As a result of the
reorganization in 2000, the PSC now has a State Liaison Section within the Division of Policy Analysis
and Intergovernmental Liaison that is charged with facilitating effective coordination between the
PSC and other state agencies and local governments.
The conflicting objectives of the agencies sometimes create difficulty in our coordination efforts and
prevent the most reasonable, least-cost solution to the problem at hand. The difficulty is not a result
of a lack of effort to cooperate with other agencies. As shown in the example below, the PSC has
often addressed these matters through mechanisms such as Memoranda of Understanding. Due to
the willingness of both parties to work together, communication lines between the agencies are
continually improving, and the challenges of coordination with other agencies are becoming
increasingly rare.
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The PSC and the Florida Department of Environmental Protection (DEP) entered into a Memorandum of Understanding that formally establishes policies and procedures to be followed by the
agencies to promote and encourage water conservation, reuse of reclaimed water, and safe and
efficient water supply and wastewater management services. Also, the PSC and the five Florida
Water Management Districts entered into a Memorandum of Understanding that formally establishes
policies and procedures to be followed by the agencies to encourage the exchange of information,
participation in cases before the agencies, and other efforts to implement an effective, statewide
water conservation policy.
DIVISION
OF
Records and Reporting
The mission of the Division or Records and Reporting is to
accurately handle, maintain, and preserve official documents filed in proceedings before the PSC and to provide
reasonable access to these documents; to provide accurate and timely records of PSC proceedings; and to
schedule all official appearances and hearings for the
Commissioners.
D I R E C TO R
Blanca Bayo
To accomplish this mission, the following Division goals have been identified:
Provide excellent customer service by responding promptly, accurately, and
courteously to requests for information and assistance.
Accept, acknowledge, and distribute documents filed in dockets and in matters
pending before the PSC in a timely and accurate manner.
Provide accurate and timely records, in paper and/or electronic form, of PSC
proceedings.
Make accurate and timely entries in the PSC’s Case Management System
(CMS) and Master Commission Directory of Utility Data (MCD).
Comply with Florida’s Public Records Act and provide assistance to PSC staff
concerning the proper handling, retention, and disposal of documents.
Continue to evaluate Division processes to ensure the effective and efficient
delivery of service.
Provide employees with the necessary skills, knowledge, abilities, and work
environment to accomplish these goals.
Customers of the Division of Records and Reporting include the general public,
practitioners who come before the PSC, legislative staff, media representatives,
Commissioners, and other PSC staff.
The Division is composed of the Bureau of Records, the Bureau of Reporting, and
the Administrative Support Unit.
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The Division’s responsibilities are further detailed under its component bureaus:
The Bureau of Records receives, records, distributes, and maintains the official files of all
documents filed in proceedings before the PSC. In coordination with the Administrative Support
Bureau, the Bureau also maintains a computerized document and case management information
system. In addition, the Bureau maintains docket mailing lists of parties and persons interested
in PSC proceedings. Finally, it issues all orders and notices of the PSC, coordinates the PSC’s
records management program and, upon request, processes the payment of appropriate fees and
provides copies of public records.
Court reporters in the Bureau of Reporting attend all PSC hearings, both in Tallahassee and
throughout the state, transcribe the proceedings, and prepare transcripts for placement in the
official record and for dissemination to participants.
The Administrative Support Unit issues reports and assists in the coordination of case management activities; prepares agendas for the PSC’s regular conferences; prepares and maintains the
official minutes of all PSC meetings; and makes arrangements for out-of-town hearings. The Unit
also maintains the Master Commission Directory of Utility Data.
DIVISION
OF
Regulatory Oversight
The Division of Regulatory Oversight is responsible for
financial, performance, and operational audits. In addition, the Division processes certification of jurisdictional
telecommunications companies and water and wastewater utilities. The Division also resolves customer complaints associated with telecommunications services and
water and wastewater certification.
D I R E C TO R
Dan Hoppe
The responsibilities of the Division of Regulatory Oversight are further detailed under its component
bureaus:
The Bureau of Regulatory Review is responsible for reviewing utility performance and operations, investigating and documenting current processes and results, and identifying areas for
improvement. The Bureau reviews utility performance and processes to determine if appropriate
internal controls are in place and if the utility is in compliance with company, state, and federal
guidelines. Areas for investigation include competitive performance analyses, electric reliability,
service quality, service availability, systems analyses, and consumer protection. These reviews
may be of a focused or a comparative nature.
The Bureau also performs special investigations of allegations relating to systemic utility fraud
such as slamming and cramming. Additionally, the Bureau responds to requests for focused or
comparative reviews, audits and investigations from other PSC divisions, the PSC’s Executive
Suite, and the Commissioners.
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The Bureau of Certification consists of two sections, the Certification and Tariff Administration
Section and the Industry Structure Section.
The Certification and Tariff Administration Section is responsible for processing all telecommunication filings related to certification for incumbent local exchange companies (ILECs),
alternative local exchange companies (ALECs), interexchange companies (IXCs), pay telephone service (PATs) providers, alternative access vendors (AAVs), and shared tenant
service (STS) providers, including new certificates, name changes, transfers, and cancellations. The Section is also responsible for ILEC, ALEC, and IXC tariff and price list filings.
Certificate, tariff, and price list filings are reviewed for compliance with applicable PSC rules,
statutes, and orders. The staff provides information on tariffed services to customers and
companies and resolves customer complaints associated with tariffed services.
As of December 2000, the number of certificated telecommunications companies in Florida
was as follows:
- 10 incumbent local exchange companies (ILECs)
- 441 alternative local exchange companies (ALECs)
- 685 interexchange companies (IXCs)
- 711 pay telephone service companies (PATs)
- 37 alternative access vendors (AAVs)
- 32 shared tenant service (STS) providers
By comparison, as of December 31, 1999, there were 10 ILECs, 346 ALECs, 653 IXCs, 981
PATs, 36 AAVs, and 31 STS providers in Florida.
The Industry Structure Section is responsible for all water and wastewater certification filings,
including original and grandfather certificates, amendments of territory, transfers of facilities
or stock, transfers to governmental entities, name changes, cancellation of certificates,
abandonments, territorial disputes, and exemption activity. The Section is also responsible for
tariff filings associated with certification cases and handles complaints and inquiries relating
to any of these areas. Certificate and tariff filings are reviewed for compliance with applicable
PSC rules, statutes, and orders.
As of December 2000, there were 206 PSC-certificated water and wastewater utilities in
Florida, compared with 213 as of December 1999. The PSC currently has jurisdiction in 36 of
the 67 counties in Florida.
The Bureau of Auditing Services consists of four field offices in Orlando, Miami, Tallahassee,
and Tampa. The auditors conduct physical examinations of utility-related financial and operating
records and provide the PSC with an independent verification of the supporting documentation
for any statements or filings made by the regulated companies. A staff of 25 accountants
completed 80 financial and special investigative audits to support the staff analyses of utility
petitions and PSC initiatives during 2000. These investigations included such topics as rate
cases, earnings surveillance, access charges, and cost recovery clauses.
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DIVISION
OF
Safety and Electric Reliability
D I R E C TO R
Joe Jenkins
The Division of Safety and Electric Reliability participates
in formal and informal proceedings relating to long-range
electric-utility bulk power supply operations and planning;
power plant and transmission line siting, including the
siting of power plants owned by non-traditional generating
entities; electric and natural gas safety and service quality, including complaints; electric utility conservation goals
and programs; emergencies due to operational events or
weather; and fuel, conservation, and environmental cost
recovery. The Division consists of two bureaus: the
Bureau of Electric Reliability and Cost Recovery, and the
Bureau of Safety.
The responsibilities of the Division of Safety and Electric Reliability are further detailed under its
component bureaus:
The Bureau of Electric Reliability and Cost Recovery is composed of two Sections, Electric
Reliability and Cost Recovery.
The Electric Reliability Section processes and makes recommendations to the PSC on
proposed power plants with a steam cycle greater than 75 megawatts, including non-utilityowned power plants (also called merchant plants) and 230-kilovolt or higher electric transmission lines. The recommendations to approve or reject a proposed power plant or transmission
line are based on either continued reliability of Florida’s bulk electric system or, if not needed
for reliability, on the proposed addition reducing electricity costs to customers from what these
costs may otherwise be. If approved by the PSC, a proposed power plant or transmission line
is subject to environmental review by the Florida Department of Environmental Protection and
ultimately by the Governor and Cabinet, sitting as the siting board. Included in bulk power
supply reliability and costs are the dispositions of wholesale power purchases and contract
buyouts. The Electric Reliability Section analyzes and prepares a report on the reliability likely
to result from implementation of annual electric utility ten-year site plans required by Florida
Statutes.
The Electric Reliability Section also makes recommendations to the PSC on utility conservation programs focusing on whether a net benefit is conveyed to those customers not
participating in a particular program. Conservation program benefits include the avoidance of
power plants or transmission lines but does not include non-quantifiable costs, such as the
benefits of cleaner air or less reliance on imported oil. The Section is also responsible for
administering the conservation cost recovery clause.
The Cost Recovery Section makes recommendations to the PSC on fuel, purchased power,
capacity, and environmental cost recovery petitions for Florida’s investor-owned electric
utilities. For 2001, the projected amount of associated cost recovery by the utilities is
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$5.06 billion. Fuel purchases are analyzed by the Section for prudence, as are major power
plant outages that can adversely affect the fuel costs charged to customers. The Section
administers a power plant efficiency incentive factor as part of the fuel clause.
The environmental cost recovery clause (ECRC) provides for cost recovery of both capital and
operating expenses incurred by investor-owned electric utilities to comply with new environmental regulations. The choice of which environment cost recovery method (either base rates
or the clause) is appropriate for certain environmental costs, especially those costs associated
with new power plants, seems to be a continuing issue. The continued implementation of the
1992 Clean Air Act is expected to result in new environmental costs for Florida utilities during
2001.
The Cost Recovery Section also makes recommendations on territorial agreements and
disputes. The Section reviews the reasonableness of the purchase price of the facilities being
transferred, impacts to reliability, and the likelihood that the agreement will eliminate existing
or potential duplication of facilities.
The Section also resolves the more complex electric distribution outage complaints, and is in
the process of proposing electric distribution reliability standards.
The Bureau of Safety is composed of two sections, Electric Safety and Gas Safety.
The Electric Safety Section verifies that the electric utilities are constructing transmission and
distribution systems in accordance with the National Electric Safety Code. Random samples
of completed work orders are inspected by the PSC’s electric safety field engineers. Variances
from the code are reported to the utilities. The utilities correct the variances and report back
to the Electric Safety Section when completed. The work order is then reinspected to verify that
everything was corrected.
The Electric Safety Section also provides technical support to the PSC’s Division of Consumer
Affairs regarding consumer complaints that either require direct contact with customers or
require additional expert advice. The Electric Safety Section provides support during
emergencies for the State Emergency Operations Center. The Section is the contact for
energy issues during emergencies for electric, natural gas, and fuel-related problems.
The Gas Safety Section is responsible for natural gas safety. The PSC’s pipeline safety
jurisdiction begins at the tap on interstate pipelines and ends at the outlet of the last customer’s
gas meter before consumption.
The PSC’s natural gas safety engineers evaluate natural gas pipelines operated by Florida’s
investor-owned natural gas utilities, municipal natural gas systems, special natural gas
districts, intrastate transmission systems, housing authorities, and private master meter
operators. General areas covered by these evaluations are new pipeline construction,
maintenance, and operations. Evaluations are made of corrosion control programs, qualifications of personnel, operating pressures, odorant concentrations in gas, emergency plans,
testing of personnel for alcohol and drug use, completion of gas leak surveys, and repairs of
leaks. Finally, staff investigates natural gas accidents to obtain information that can be used
to prevent a recurrence.
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