SUGARMILL WOODS CIVIC ASSOCIATION, INC. v. Florida Water Services …, 1D98-727.
| Decision Date | 24 May 2001 |
| Docket Number | No. 1D98-727.,1D98-727. |
| Citation | 785 So.2d 720 |
| Parties | SUGARMILL WOODS CIVIC ASSOCIATION, INC., f/k/a Cypress and Oaks Villages Association, Appellant, v. FLORIDA WATER SERVICES CORPORATION f/k/a Southern States Utilities, Inc., et al., Appellees. |
| Court | Florida District Court of Appeals |
Susan W. Fox of Macfarlane, Ferguson & McMullen, Tampa, and Michael B. Twomey, Tallahassee, for Appellant.
Arthur J. England, Jr. of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A., Miami; and Kenneth A. Hoffman of Rutledge, Ecenia, Purnell & Hoffman, P.A., Tallahassee, for Appellee Florida Water Services Corporation.
Catherine Bedell, General Counsel, Mary Anne Helton, Associate General Counsel, and Christiana T. Moore, Associate General Counsel, Tallahassee, for Appellee Florida Public Service Commission.
Charles R. Forman of Forman, Krehl & Montgomery, Ocala, for Appellees Joseph J. Derouin, Victoria M. Derouin, Peter H. Heeschen, Elizabeth A. Riordan, Carvell Simpson and Edward Slezak.
Joseph A. McGlothlin and Vicki Gordon Kaufman of McWhirter, Reeves, McGlothlin, Davidson, Decker, Kaufman, Arnold & Steen, P.A., Tallahassee, for Appellees City of Keystone Heights, Marion Oaks Civic Association, Florida United Methodist Children's Home, Inc., Best Western Deltona Inn, Sugar Mill Association, Inc., and Sugar Mill Country Club, Inc.
Darol H.M. Carr and David Holmes of Farr, Farr, Emerich, Sifrit, Hachet & Carr, Port Charlotte, for Appellee Burnt Shores Lakes Property Owners Association, Inc.
John Marks of Knowles, Marks & Randolph, P.A., Tallahassee, for Appellee Charlotte County.
The Sugarmill Woods Civic Association, Inc. (Sugarmill Woods), formerly known as Cypress and Oaks Villages Association (COVA), appeals a final order of the Florida Public Service Commission (PSC or Commission) entered on remand of Southern States Utils. v. Florida Pub. Serv. Comm'n, 704 So.2d 555 (Fla. 1st DCA 1997)(Southern States I). In the order on appeal, the Commission determined not to require refunds of utility payments made by customers of Florida Water Services Corporation under a uniform rate structure which had been reversed by this court in Citrus County v. Southern States Utils., 656 So.2d 1307 (Fla. 1st DCA 1995)(Citrus County). We agree with the Commission's conclusion that, under the highly unusual circumstances of this case, it would be unfair and inequitable to surcharge some customers so that other customers might receive a refund. Accordingly, we find that the Commission did not err in declining to order a refund, and we affirm.
This case has a long and labyrinthine history, some of the more significant twists and turns of which we discuss briefly to provide a context for our holding. The case began in 1992, when Southern States Utilities (SSU), now Florida Water Services Corporation (Florida Water or utility), filed a petition for authority to increase the rates and charges for service it provided to 127 water and wastewater systems pursuant to section 367.081, Florida Statutes (1991). Sugarmill Woods intervened. In its petition, SSU proposed establishing a rate structure of modified standalone rates1 for those systems. When the Commission approved a rate increase for SSU, however, it ordered the utility to implement a single uniform rate structure throughout the 127 systems.
In its order, the PSC noted its statutory authority for such uniform rates and observed that it had approved uniform rates in other cases. The Commission noted the advantages of uniform rates: (1) administrative efficiencies in accounting, operations and maintenance; (2) rate stability; (3) insulation of customers from rate shock due to major capital improvements or increased operating costs; (4) recognition of economies of scale; (5) ease of implementation; and (6) lower rate case expense in the long run. Because of these advantages, combined with the wide disparity of rates among SSU's 127 systems when calculated on a standalone basis, the Commission determined that the advantages of uniform rates outweighed the benefits of the traditional approach of setting rates on a standalone basis. The uniform rates were effective as of September 15, 1993. Citrus County and Sugarmill Woods' predecessor, COVA, appealed. SSU filed a motion to vacate the automatic stay in effect as a result of the appeal by Citrus County, see Florida Rule of Appellate Procedure 9.310(b)(2), which was granted upon SSU posting a bond.
In the initial appeal, this court affirmed SSU's final revenue requirement, but reversed the uniform rates as unlawful because there existed "no competent substantial evidence that the facilities and land comprising the 127 SSU systems are functionally related in a way permitting the PSC to require that customers of all systems pay identical rates." Citrus County, 656 So.2d at 1310. Further, after summarizing the testimony of the various witnesses, the court observed that "[i]t is clear that this testimony does not constitute competent substantial evidence to support the PSC's decision to set uniform statewide rates for the systems involved." Id.
On remand, the Commission ordered SSU to implement modified standalone rates, effective as of January 23, 1996, and to make a refund to those customers whose rates under the uniform rate structure had been higher than their rates under the modified standalone rate structure. The customers who would have received refunds under such order included the residents of Sugarmill Woods. In addition, the Commission refused to authorize SSU to surcharge customers who had paid lower rates under the uniform rate structure than they would have paid under the modified standalone structure, thus, requiring the utility to absorb the revenue loss of the refunds. SSU moved for reconsideration of the order.
While the rate case was on remand from Citrus County, the Florida Supreme Court issued its opinion in GTE Florida, Inc. v. Clark, 668 So.2d 971 (Fla.1996), holding that equity required a utility and its customers to be treated similarly in ratemaking proceedings. Id. at 972. Clark involved an appeal from a PSC order in a telephone utility rate case by which the Commission had implemented a previous opinion from the supreme court holding that GTE could recover costs related to purchases from GTE's affiliates. See GTE Florida, Inc. v. Deason, 642 So.2d 545 (Fla.1994). In its order on remand, the Commission allowed recovery of those costs on a prospective basis only, starting on a date over nine months after the supreme court's mandate issued. The Commission rejected GTE's contention that a surcharge could be used to recover such costs incurred during the period of the appeal and remand. Clark, 668 So.2d at 972. In reversing, the supreme court rejected the Commission's rationale for denying the requested surcharge. Specifically, the court held that GTE's failure to request a stay during the pendency of the appellate and remand processes did not preclude GTE from recovering expenses incurred during that period through the use of a surcharge nor did the imposition of a surcharge constitute retroactive rate making. Id.
In the instant case, sua sponte, the Commission ordered the parties to file briefs addressing the impact of Clark on the refund and surcharge issues raised here. Following such briefing, the Commission's staff recommended that no refunds be ordered and that a surcharge was neither necessary or appropriate, based upon the rationale that the customers who had paid higher rates under a uniform rate structure would have a prospective rate reduction and the utility would continue to maintain its revenue requirement. The Commission, however, found that SSU had assumed the risk of making refunds by moving to vacate the automatic stay and that by posting its bond the utility had led the Commission to believe that it would stand behind any refund obligation. Accordingly, the Commission ordered the utility to make refunds to its customers who had paid higher rates under the uniform rate structure than the rates the customers would have paid if the modified standalone rates originally requested by SSU had been put in place in September 1993. The Commission construed the holding in Clark to be limited to the facts of that case and concluded that Clark did not mandate a surcharge. Further, the Commission denied the petition to intervene of some of the so-called underpaying customers, appellees herein, who sought to be heard on the surcharge issue.
The utility appealed. On appeal, this court held that the Commission's decision to require the utility to make a refund to some customers without authorizing a corresponding surcharge on other customers was contrary to the principles of Clark and reversed. Southern States I, 704 So.2d at 557. The Southern States I court explained:
To continue reading
Request your trial
-
Ryland v. State, 1D00-3413.
... ... STATE of Florida, Appellee ... No. 1D00-3413 ... District Court ... ...