Citrus County v. Southern States Utilities, Inc., s. 93-3324

• Decision Date: 06 April 1995
• Docket Number: Nos. 93-3324,93-4089,s. 93-3324
• Citation: 656 So.2d 1307
• Parties: 20 Fla. L. Weekly D838 CITRUS COUNTY, FLORIDA and Cypress and Oaks Villages Association, Appellants, v. SOUTHERN STATES UTILITIES, INC., and The Florida Public Service Commission, Appellees.
• Court: Florida District Court of Appeals

Page 1307

656 So.2d 1307

20 Fla. L. Weekly D838

CITRUS COUNTY, FLORIDA and Cypress and Oaks Villages Association, Appellants, v. SOUTHERN STATES UTILITIES, INC., and The Florida Public Service Commission, Appellees.

Nos. 93-3324, 93-4089.

District Court of Appeal of Florida,

First District.

April 6, 1995.

As Corrected on Denial of Rehearing June 27, 1995.

Robert A. Butterworth & Michael A. Gross of Office of the Atty. Gen., Tallahassee and Michael B. Twomey, Tallahassee, for appellant Citrus County.

Susan W. Fox of Macfarlane, Ausley, Ferguson & McMullen, Tampa, for appellant Villages Ass'n.

Jack Shreve and Harold McLean of Office of Public Counsel, Tallahassee, for appellant Citizens of Florida.

Kenneth A. Hoffman of Rutledge, Ecenia, Underwood, Purnell & Hoffman, P.A., Tallahassee and Brian P. Armstrong of Southern

States Utilities, Inc., Apopka, for appellee Southern States Utilities.

Robert D. Vandiver & Christiana T. Moore, Tallahassee, for appellee Florida Public Service Com'n.

WENTWORTH, Senior Judge.

This is an appeal from a final order of the Public Service Commission (PSC) adopting uniform statewide rates for 127 water and wastewater utility systems owned by Southern States Utilities, Inc. (SSU). We reverse.

SSU has, over the last decade, bought small independent water and wastewater utilities throughout the states, and currently serves approximately 180,000 customers in Florida. On May 11, 1992, SSU filed an application with the PSC pursuant to chapter 367, Florida Statutes, for authority to increase the water and wastewater rates and charges for 127 of its systems. In its application, SSU proposed that the PSC calculate its new rates on a modified stand-alone basis that would involve a cap on the charge per gallon each customer would pay. The Citizens of Florida intervened through the Office of Public Counsel on May 21, 1992, and Citrus County and Cypress and Oaks Villages Association intervened at a later date.

Before a decision in this case, the PSC conducted ten service hearings throughout the state to permit customer participation in the ratemaking process, and held a technical hearing to receive evidence. On March 22, 1993, the PSC issued its Final Order, approving a 26.77% increase in SSU's annual revenue from its water systems, and a 48.61% increase in revenue from its wastewater systems. The order also approved a new rate structure for SSU in the form of statewide uniform rates for the 75,000 water customers and over 25,000 wastewater customers served by the 127 utility systems involved in this case. In making its decision on rate structure, the Commission cited a number of advantages that would result from the implementation of uniform statewide rates, and found that "the wide disparity of rates calculated on a stand-alone basis, coupled with the above cited benefits of uniform, statewide rates, outweighs the benefits of the traditional approach of setting rates on a stand-alone basis." Numerous motions for reconsideration were filed following the issuance of this order, but each was denied after the Commission staff approved implementation of the increased rates granted in the Final Order by approving revised tariff sheets for the affected SSU systems.

Citrus County and Cypress and Oaks Villages Association appealed the PSC's decision to approve statewide uniform rates for the affected utility systems, arguing that (1) there was no evidence in the record to support such rates; (2) the rates violated section 367.081(2)(a), Florida Statutes; (3) they were denied due process because the statewide uniform rate issue was not properly noticed; (4) the new rate structure resulted in a taking of their contributions-in-aid-of-construction (CIAC); (5) the order violated the doctrine of administrative res judicata; and (6) the staff's implementation of the new rates before the final order became final violated their due process rights. We decline to address each issue separately because we reverse on the ground that the PSC exceeded its statutory authority when it approved uniform statewide rates for the 127 systems involved in this proceeding, based on the evidence produced.

The Water and Wastewater System Regulatory Law, codified at chapter 367, Florida Statutes, grants the PSC authority to set rates for those utilities within its jurisdiction. We conclude that chapter 367 does not give the PSC authority to set uniform statewide rates that cover a number of utility systems related only in their fiscal functions by reason of common ownership. Florida law instead allows uniform rates only for a utility system that is composed of facilities and land functionally related in the providing of water and wastewater utility service to the public. Section 367.171(7), Florida Statutes (1991), grants the PSC exclusive jurisdiction, with some exceptions, over "all utility systems whose service transverses county boundaries." The term "system" is defined as "facilities and land used or useful in providing service and, upon a finding by the commission, may include a combination of functionally related facilities and land." Sec. 367.021(11), Fla.Stat. (1991) (emphasis added).

This court analyzed the PSC's jurisdiction in Board of County Commissioners v. Beard, 601 So.2d 590 (Fla. 1st DCA 1992), adjudicating a challenge to a PSC order which declared that the PSC, rather than St. Johns County, had jurisdiction over water and wastewater services provided by Jacksonville Suburban Utilities Corporation (JSUC) within St. Johns County. JSUC operated water and sewer facilities in Duval, Nassau and St. Johns counties that were managed from a central office and shared the same manager, officers, engineers, accountants, maintenance personnel, customer service representatives and testing laboratories. Id. at 592. JSUC also performed other functions on a system-wide basis, including purchasing, budgeting, planning and staffing. Id. Based on these relationships the company argued that all of its facilities were part of a single utility system, which placed it within the ambit of the PSC's jurisdiction as enunciated in section 367.171(7). This court agreed, rejecting the county's argument that JSUC's facilities must be physically connected to constitute a functionally related system under section 367.021(11), and finding that the undisputed evidence established that JSUC's facilities were interrelated not only administratively but also...