Gulf Coast Elec. Co-op., Inc. v. Clark, 85464
| Decision Date | 23 May 1996 |
| Docket Number | No. 85464,85464 |
| Citation | 674 So.2d 120 |
| Parties | , Util. L. Rep. P 26,530, 21 Fla. L. Weekly S221 GULF COAST ELECTRIC COOPERATIVE, INC., Appellant/Cross-Appellee, v. Susan F. CLARK, etc., et al., Appellees/Cross-Appellants. |
| Court | Florida Supreme Court |
John H. Haswell of Chandler, Lang & Haswell, P.A., Gainesville, and J. Patrick Floyd, Port St. Joe, for Appellant/Cross-Appellee.
Robert D. Vandiver, General Counsel and Mary Anne Helton, Associate General Counsel, Florida Public Service Commission, Tallahassee, and Jeffrey A. Stone and Russell A. Badders of Beggs & Lane, Pensacola, on behalf of Gulf Power Company, for Appellees/Cross-Appellants.
We have on appeal a decision by the Florida Public Service Commission (the Commission) resolving a territorial dispute between Gulf Coast Electric Cooperative, Inc. (Gulf Coast) and Gulf Power Company (Gulf Power). We have jurisdiction. Art. V, § 3(b)(2), Fla. Const. For the reasons expressed, we reverse the Commission's order awarding service to Gulf Power and remand for entry of an order awarding service to Gulf Coast.
The relevant, unrefuted facts in this record are as follows. In April 1993, Gulf Coast became aware that the Florida Department of Corrections (DOC) was planning to locate a prison in West Florida and was considering sites in several counties, including one in Washington County. In that same month, Gulf Coast made a public proposal to the Washington County Commission for a $45,000 grant and for assistance in securing a loan of $300,000 to acquire Washington County property for the prison. Gulf Power, which also served the Washington County area, made no similar proposal. The loan and grant were put in place and a site was selected and secured. Gulf Coast was selected to provide service to the site by Washington County, and DOC approved that choice.
To serve the prison, Gulf Coast relocated its existing Red Sapp Road single-phase line, which was located on the prison site, and upgraded the line to three-phase at a total cost of $51,579. The relocation cost was $36,997 and the upgrade to three-phase cost was $14,583. This existing line had to be relocated, regardless of whether Gulf Coast or Gulf Power served the prison. The line was relocated by Gulf Coast across the road from Gulf Power's existing three-phase line that was constructed during the early 1970s.
In September 1993, Gulf Power filed with the Commission a petition seeking to serve the prison and asserting that Gulf Coast had constructed facilities that duplicated Gulf Power's. In resolving the dispute, the Commission followed Florida Administrative Code Rule 24-6.0441(2) (1993), which provides:
(2) In resolving territorial disputes, the Commission may consider, but not be limited to consideration of:
(a) the capability of each utility to provide reliable electric service within the disputed area with its existing facilities and the extent to which additional facilities are needed;
(b) the nature of the disputed area including population and the type of utilities seeking to serve it, and degree of urbanization of the area and its proximity to other urban areas, and the present and reasonably foreseeable future requirements of the area for other utility services;
(c) the cost of each utility to provide distribution and subtransmission facilities to the disputed area presently and in the future; and
(d) customer preference if all other factors are substantially equal.
The Commission also applied section 366.04(5), Florida Statutes (1993), which provides:
(5) The commission shall further have jurisdiction over the planning, development, and maintenance of a coordinated electric power grid throughout Florida to assure an adequate and reliable source of energy for operational and emergency purposes in Florida and the avoidance of further uneconomic duplication of generation, transmission, and distribution facilities.
(Emphasis added.)
Under subsection (a) of rule 25-6.0441(2), the Commission found that both utilities had been serving the same area for more than twenty years and that the utilities had a "comparable ability" to serve the prison. Specifically, the Commission found:
Both utilities have been serving customers in the vicinity of the intersection of County Road 279 and State Road 77 for over 20 years. Gulf Coast has served retail customers along Red Sapp Road since 1949-50. Gulf Coast has also maintained two-phase and three-phase service adjacent to the correctional facility site since 1950. Currently, Gulf Coast is serving 665 customers within 5 miles of the site. Gulf Power currently has 532 metered customers within five miles of the site, 330 of which are in Sunny Hills.
The Commission also found that "both utilities have adequate facilities to serve the prison, both are capable of providing reliable electric service, and therefore both have comparable ability to serve."
Subsection (b) of rule 24-6.0441(2), which concerns the nature of the disputed area (rural with small commercial development), was not at issue in this proceeding.
Under subsection (c) of the rule, the Commission found that Gulf Coast had expended $14,583 upgrading its single-phase line to a three-phase line in order to provide service. Because Gulf Power had an existing three-phase line capable of providing service to the prison, the Commission found that the $14,583 represented the cost differential between the two utilities' "cost to serve."
The Commission found subsection (d), customer preference, to be inapplicable, concluding that it could consider customer preference in resolving territorial disputes only if all other factors were substantially equal. The Commission determined, however, that all other factors in this case were not equal because Gulf Coast had duplicated Gulf Power's existing lines and had engaged in a "race to serve." In making this determination, it said:
We have decided that Gulf Power shall provide electric service to the new correctional facility in Washington County. Our primary reason for this is that Gulf Coast duplicated Gulf Power's existing facilities in order to serve the prison. We understand that the area in dispute is primarily rural. We understand that the additional cost to Gulf Coast to serve the facility is relatively small. We believe that Gulf Coast is as able as Gulf Power to serve reliably, and we are aware that the customer prefers Gulf Coast even though its rates are higher. We simply cannot ignore the fact that Gulf Coast's upgrade of the relocated Red Sapp Road single-phase line to three-phase duplicated Gulf Power's existing facilities. We always consider whether one utility has uneconomically duplicated...
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