GULF COAST ELEC. CO-OP., INC. v. Johnson, 92,479.

• Decision Date: 18 February 1999
• Docket Number: No. 92,479.,92,479.
• Citation: 727 So.2d 259
• Parties: GULF COAST ELECTRIC COOPERATIVE, INC., Appellant, v. Julia L. JOHNSON, et al., Appellees.
• Court: Florida Supreme Court

727 So.2d 259

GULF COAST ELECTRIC COOPERATIVE, INC., Appellant, v. Julia L. JOHNSON, et al., Appellees.

No. 92,479.

Supreme Court of Florida.

February 18, 1999.

John H. Haswell of Chandler, Lang & Haswell, P.A., Gainesville, Florida, and J. Patrick Floyd, Port St. Joe, Florida, for Appellant.

Robert D. Vandiver, General Counsel, and Richard C. Bellak, Associate General Counsel, Florida Public Service Commission, Tallahassee, Florida; and Jeffrey A. Stone and Russell A. Badders of Beggs & Lane, Pensacola, Florida, on behalf of Gulf Power Company, for Appellees.

PARIENTE, J.

Gulf Coast Electric Cooperative, Inc. (Gulf Coast) appeals an order of the Public Service Commission (PSC) concerning a territorial dispute between Gulf Coast and Gulf Power Company (Gulf Power).¹ We have jurisdiction. See art. V, § 3(b)(2). For the reasons that follow, we affirm the PSC's decision.

I. FACTS

This is the second appeal in a dispute between Gulf Coast and Gulf Power regarding which party has the right to provide electrical service to certain areas in west Florida. In the first appeal, this Court reversed the PSC's decision that Gulf Power had the right to provide electrical service to the Washington County correctional facility. See Gulf Coast Elec. Coop. v. Clark, 674 So.2d 120 (Fla.1996)

. In this case, Gulf Coast petitioned the PSC to impose territorial boundaries to establish designated geographical areas where each utility would have the exclusive right to provide electrical service in the future.

At issue are developed areas in south Washington and Bay counties where it is undisputed that the two utilities have commingled facilities, as well as additional areas in these counties that are primarily undeveloped. Unlike the situation in the first appeal, in this appeal there is no present dispute regarding service to any current or future identifiable customers. In fact, both utilities agree that existing customers of either facility should not be switched in the commingled areas, even if a boundary were to be established.

After a two-day hearing, which included visits by the commissioners to fifteen locations in the areas in question and the consideration of multiple exhibits and witnesses, the PSC found in a two-to-one decision that territorial boundaries should not be imposed at this time. In an eleven-page order detailing its findings, the PSC concluded that:

There is no assurance that a territorial boundary is going to be the most economic way of providing service. We have established that the facilities are commingled and that the incremental cost to serve additional customers is negligible. Thus, in the congested areas, a `line on the ground' will cure neither past nor future duplication. In the undeveloped areas, a line on the ground will eliminate the flexibility the utilities need to determine which one is in the most economic position to extend service. That flexibility will result in the least cost service provision. It is inappropriate for us to draw lines in undeveloped areas in south Washington and Bay Counties where we do not know what the expansion patterns are going to be. The utilities are the entities with the best evidence of what their long range plans are, what their systems are and what is the most economic way of providing additional service.

It is not our position that establishing a territorial boundary is never appropriate. In this instance, the purpose of the hearing was to explore the situation in south Washington and Bay Counties in its entirety. In Order No. PSC-95-0913-FOF-EU, issued July 27, 1995, we ordered the parties to establish a territorial boundary in those areas "where facilities are commingled ... and where further conflict is likely." As stated previously, the evidence in the record is that while the facilities are commingled, further conflict is not likely because the facilities are already in place. If a specific dispute occurs, such as a prison being built in an undeveloped area, we have jurisdiction to, on a case-by-case basis, draw a line within the given area and we will continue to appropriately exercise our jurisdiction to do so. This Order is limited to the identified areas of south Washington and Bay Counties and shall have no effect on established territorial boundaries throughout Florida that have heretofore been created and approved.

Order No. PSC-95-0913-FOF-EU also stated that "[a] boundary is not necessarily required in areas where there is no conflict and none is reasonably foreseeable." In those areas, the utilities were encouraged to consider a wide range of solutions to accommodate future growth. Gulf Power has suggested criteria for the delineation of service territory in south Washington and Bay Counties. Gulf Power's guidelines, along with the established Commission precedent for determining service areas, can provide the utilities with the flexibility they need to address growth and it will result in the most economic method of providing service. Carving up the two counties, in this instance, will not result in the most economic provision of electric service. Rather, drawing lines on the ground would result in centralized planning by this Commission which is not the most economic way to determine the service areas because it does not take into account market forces which will dictate the manner in which some of the expansion of facilities is going to take place.

Although refusing to establish territorial boundaries at this time, the PSC explicitly reserved jurisdiction to resolve any future disputes regarding particular customers on a case-by-case basis.

On appeal, Gulf Coast argues that the PSC was required to impose territorial boundaries under the circumstances of this case, and its refusal to do so is not supported by competent substantial evidence. In the alternative, Gulf Coast argues that the PSC was obligated to establish territorial boundaries based on its previous orders entered in the administrative proceedings in this case.

II. STANDARD OF REVIEW

We begin our analysis by emphasizing the scope of this Court's review of PSC orders. Although the Florida Constitution vests this Court with mandatory jurisdiction to hear appeals from PSC orders, see art. V, § 3(b)(2), Fla. Const., our review function is circumscribed by certain well-established principles:

Commission orders come to this Court "clothed with the statutory presumption that they have been made within the Commission's jurisdiction and powers, and that they are reasonable and just and such as ought to have been made." Moreover, an agency's interpretation of a statute it is charged with enforcing is entitled to great deference. The party challenging an order of the Commission bears the burden of overcoming those presumptions by showing a departure from the essential requirements of law. We will approve the Commission's findings and conclusions if they are based on competent substantial evidence,[²] and if they are not clearly erroneous.

AmeriSteel Corp. v. Clark, 691 So.2d 473, 477 (Fla.1997) (citations omitted) (quoting PW Ventures, Inc. v. Nichols, 533 So.2d 281, 283 (Fla.1988)). Considering the PSC's specialized knowledge and expertise in this area, this deferential standard of review is appropriate. See Gulf Oil Co. v. Bevis, 322 So.2d 30, 32 (Fla.1975),

superseded by statute on other grounds as stated in General Dev. Utils., Inc. v. Hawkins, 357 So.2d 408, 409 n. 4 (Fla.1978); see also Public Serv. Comm'n v. Fuller, 551 So.2d 1210, 1212 (Fla.1989).

III. ANALYSIS

A. Territorial Boundaries

Gulf Coast acknowledges this Court's deferential standard of review of PSC orders, but asserts that the PSC's decision not to establish territorial boundaries in light of the undisputed areas of commingled facilities is unsupported by any evidence and is a departure from the essential requirements of law. Gulf Coast maintains that the PSC has a clear obligation to establish territorial boundaries in this case to prevent further uneconomic duplication and to avoid future territorial disputes.

Gulf Power argues against drawing territorial "lines in the ground" under the circumstances of this case, especially in the absence of a present dispute over service to a particular customer. Gulf Power concedes that there is a commingling of facilities in the developed areas. Gulf Power asserts, however, that this duplication of facilities is not necessarily "uneconomic," and that mere duplication of facilities does not require the PSC to establish a territorial boundary. Gulf Power further maintains that any decision regarding where to set the territorial boundaries in the undeveloped areas would not be in the public interest at this time because of uncertainty over where future development will occur and which company will be able to provide the most cost-effective service to these areas.

We must initially decide whether the PSC was required, as a matter of law, to impose territorial boundaries not agreed to by both parties, where there is no dispute regarding service to current or future identifiable customers. This case differs from others that we have reviewed involving territorial agreements, see, e.g., Ameristeel, 691 So.2d at 473; Fort Pierce Utils. Auth. v. Beard, 626 So.2d 1356 (Fla.1993); Utilities Comm'n of New Smyrna Beach v. Florida Pub. Serv. Comm'n, 469 So.2d 731 (Fla.1985), or territorial disputes regarding service to particular customers where no territorial agreement exists. See, e.g., Clark, 674 So.2d at 120

; Lee County Elec. Coop. v. Marks, 501 So.2d 585 (Fla.1987); Gulf Coast Elec. Coop. v. Florida Pub. Serv. Comm'n, 462 So.2d 1092 (Fla. 1985). Here, there is no present dispute as to service to any current or future identifiable customer, no pre-existing territorial agreement, and no agreement on the basic issue of whether a boundary should be imposed, much less where the boundary should be located.

In considering this issue, we note that there is no explicit...