Sugarmill Woods Civic Ass'n, Inc. v. Southern States Utilities

• Decision Date: 04 February 1997
• Docket Number: 95-457,Nos. 95-425,s. 95-425
• Citation: 687 So.2d 1346
• Parties: 22 Fla. L. Weekly D373 SUGARMILL WOODS CIVIC ASSOCIATION, INC. f/k/a Cypress & Oaks Villages Association, Inc. and Spring Hill Civic Association, Appellant, v. SOUTHERN STATES UTILITIES and Florida Public Service Commission, Appellees. HERNANDO COUNTY, Appellant, v. SOUTHERN STATES UTILITIES and Florida Public Service Commission, Appellees.
• Court: Florida District Court of Appeals

Page 1346

687 So.2d 1346

22 Fla. L. Weekly D373

SUGARMILL WOODS CIVIC ASSOCIATION, INC. f/k/a Cypress & Oaks Villages Association, Inc. and Spring Hill Civic Association, Appellant, v. SOUTHERN STATES UTILITIES and Florida Public Service Commission, Appellees.

HERNANDO COUNTY, Appellant, v. SOUTHERN STATES UTILITIES and Florida Public Service Commission, Appellees.

Nos. 95-425, 95-457.

District Court of Appeal of Florida First District.

Feb. 4, 1997.

An appeal from an order of the Florida Public Service Commission.

Susan W. Fox of Macfarlane, Ausley, Ferguson & McMullen, Tampa, for Appellant/Sugarmill Woods Civic Association.

Michael B. Twomey, Tallahassee, for Appellant/Spring Hill Civic Association.

Robert Bruce Snow, Brooksville, for Appellant/Hernando County.

Robert D. Vandiver, General Counsel; and Christiana T. Moore, Associate General Counsel, Tallahassee, for Appellee/Florida Public Service Commission.

Arthur J. England, Jr., of Greenberg, Traurig, Hoffman, Lipoff, Rosen and Quentel, P.A., Miami; Brian P. Armstrong, Apopka; and Kenneth A. Hoffman and William B. Willingham of Rutledge, Ecenia, Underwood, Purnell & Hoffman, P.A., Tallahassee, for Appellee/Southern States Utilities, Inc.

DAVIS, Judge.

Appellants, Sugarmill Woods Civic Association (Sugarmill), Spring Hill Civic Association (Spring Hill), and Hernando County, seek review of an order rendered by the Public Service Commission (PSC) on January 11, 1995. In that order, the PSC set uniform statewide rates for water and wastewater customers of Southern States Utilities, Inc.'s (SSU) systems in Florida, and set a separate rate for SSU bulk sales of wastewater service to Hernando County. Appellants also appeal an interlocutory order in which the PSC granted motions to quash subpoenas duces tecum, thereby denying certain discovery sought by appellant Hernando County. Finding no abuse of discretion, we affirm the order quashing the subpoenas, as well as the Hernando County bulk wastewater rate. We, however, reverse the order setting a uniform statewide rate structure for SSU customers because that order does not contain the findings necessary to establish the PSC's jurisdiction to set the rates.

The PSC and SSU both concede that the order setting a uniform statewide rate structure for SSU customers is defective because it lacks the findings that this court has held are a necessary predicate to establishing PSC jurisdiction to set rates effective in both jurisdictional and non-jurisdictional counties. See Citrus County v. Southern States Utilities, 656 So.2d 1307 (Fla. 1st DCA), review denied mem., 663 So.2d 631 (Fla.1995); Board of County Commissioners of St. Johns County v. Beard, 601 So.2d 590 (Fla. 1st DCA 1992). After filing of the notice of appeal in this case, the PSC moved to relinquish jurisdiction back to the PSC due to its failure to make these findings. The PSC more recently filed a motion to dismiss the appeal from the order setting uniform statewide rates, contending that this appeal is moot, confessing error, and reciting that it has now retracted the uniform statewide rate structure and established modified stand-alone rates effective in jurisdictional counties. Although we accept the PSC's confession of error, we reject its contention that the appeal is moot.

It is regrettable that the resolution of this issue has been unnecessarily complicated by the piecemeal manner in which it has been addressed. On January 27, 1993, SSU filed a petition for a declaratory statement regarding PSC jurisdiction over SSU's water facilities in St. Johns County. While that case was pending, on March 22, 1993, in a separate proceeding, the PSC issued a final order approving a new rate structure for SSU in the form of statewide uniform rates for the customers served by 127 water and wastewater utility systems owned by SSU in Florida. Citrus County and Cypress and Oaks Villages Association appealed the PSC's decision to approve uniform rates. This court reversed, holding that in order to have authority to set uniform statewide rates, the PSC must make a finding that the facilities and land are part of a single functionally related system. The Court explained:

We conclude that chapter 367, Florida Statutes, 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." § 367.021, Fla.Stat. (1991) ...

In Citrus County this court held that the March 22, 1993, order set statewide rates without making the necessary predicate finding that the facilities and land formed a functionally related system, and therefore the PSC lacked authority to set statewide uniform rates. Citrus County, 656 So.2d at 1309-10. We explained further that "functionally related" systems need not be physically interconnected, but must be integrated in the operational aspects of utility service delivery, not merely administratively or fiscally interconnnected. Id. at 1310-11.

Despite the March 22, 1993, order setting statewide uniform rates (and during the pendency of the appeal of that order), the PSC subsequently ruled in a separate order on SSU's first petition for declaratory statement regarding jurisdiction over water facilities in St. Johns County. That order, rendered August 10, 1993, found that SSU's facilities in St. Johns County received "[a]ll administrative and operational services ... primarily through Southern States' Woodmere facility in Duval County, which is under the jurisdiction of this Commission, and also through employees and facilities in Putnam, Volusia and Orange Counties." The Commission found that St. Johns County is contiguous to Duval County and Putnam County, and that budgeting, personnel management, purchasing, billing and collection, strategic and operational planning, accounting, engineering, environmental permitting and compliance, meter readers and maintenance services all transversed county lines. While some of those services extended from the noncontiguous central office in Orange County, the PSC expressly found, sufficient services transversed the boundaries of contiguous counties to support a finding that the facilities in St. Johns and Duval Counties formed a system, a combination of functionally related facilities, and that the PSC had exclusive jurisdiction over SSU's facilities in St. Johns County. In Re: Southern States Utilities, Inc.'s Petition for a Declaratory Statement Regarding Commission Jurisdiction Over its Water Facilities in St. Johns County, 93 F.P.S.C. 8:181 (1993). That decision was not appealed.

On September 23, 1993, SSU filed a second petition for declaratory statement regarding the PSC's jurisdiction. That petition related only to SSU's facilities in Polk and Hillsborough Counties. On its own motion, the PSC converted that petition into an "Investigation into the appropriate rate structure for Southern States Utilities, Inc. for all regulated systems in Bradford, Brevard, Citrus, Clay, Collier, Duval, Hernando, Highlands, Lake, Lee/Charlotte, Marion, Martin, Nassau, Orange, Osceola, Pasco, Putnam, Seminole, St. Johns, St. Lucie, Volusia, and Washington Counties." That investigation culminated in the order under review, rendered January 11, 1995, once again setting statewide rates for SSU.

In the present case, the PSC expressly excluded from its consideration whether all of SSU's facilities and land comprise a single system providing service transversing county boundaries. The December 16, 1993, "Order Setting Issues" stated repeatedly that the issue of the Commission's legal authority to set rates using a statewide uniform rate structure could not be raised in the present case because it had been resolved in the March 22, 1993, order, and was precluded by the doctrine of administrative finality. Four months after rendition of the final order now appealed, this court decided Citrus County v. Southern States Utilities, supra, reversing the March 22, 1993, order on the ground that the PSC exceeded its statutory authority when it approved uniform statewide rates without first making a finding that SSU's facilities and land were "functionally related" in utility service delivery so as to comprise a single system. As stated above, the PSC has now properly confessed it erred in entering the order presently...