CHAPTER 367

367.011 Jurisdiction; legislative intent. (1) This chapter may be cited as the “Water and Wastewater System Regulatory Law.” (2) The Florida Public Service Commission shall have exclusive jurisdiction over each utility with respect to its authority, service, and rates. (3) The regulation of utilities is declared to be in the public interest, and this law is an exercise of the police power of the state for the protection of the public health, safety, and welfare. The provisions of this chapter shall be liberally construed for the accomplishment of this purpose. (4) This chapter shall supersede all other laws on the same subject, and subsequent inconsistent laws shall supersede this chapter only to the extent that they do so by express reference. This chapter shall not impair or take away vested rights other than procedural rights or benefits. History. — s. 1, ch. 71-278; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 1, 25, 26, ch. 80-99; ss. 2, 3, ch. 81-318; ss. 6, 15, ch. 82-25; ss. 1, 26, 27, ch. 89-353; s. 4, ch. 91-429. 367.021 Definitions. As used in this chapter, the following words or terms shall have the meanings indicated: (1) “Certificate of authorization” means a document issued by the commission authorizing a utility to provide service in a specific service area. (2) “Commission” means the Florida Public Service Commission. (3) “Contribution-in-aid-of-construction” means any amount or item of money, services, or property received by a utility, from any person or governmental authority, any portion of which is provided at no cost to the utility, which represents a donation or contribution to the capital of the utility, and which is used to offset the acquisition, improvement, or construction costs of the utility property, facilities, or equipment used to provide utility services. (4) “Corporate undertaking” means the unqualified guarantee of a utility to pay a refund and pay interest connected therewith which may be ordered by the commission at such time as the obligation becomes fixed and final. (5) “Domestic wastewater” means wastewater principally from dwellings, business buildings, institutions, and sanitary wastewater or sewage treatment plants. (6) “Effluent reuse” means the use of wastewater after the treatment process, generally for reuse as irrigation water or for in-plant use. (7) “Governmental authority” means a political subdivision, as defined by s. 1.01(8), a regional water supply authority created pursuant to s. 373.713, or a nonprofit corporation formed for the purpose of acting on behalf of a political subdivision with respect to a water or wastewater facility. (8) “Industrial wastewater” means wastewater not otherwise defined as domestic wastewater, including runoff and leachate from areas that receive pollutants associated with industrial or commercial storage, handling, or processing. (9) “Official date of filing” means the date upon which it has been determined, pursuant to s. 367.083, by the commission that the utility has filed with the clerk the minimum filing requirements as established by rule of the commission. (10) “Service area” means the geographical area described in a certificate of authorization, which may be within or without the boundaries of an incorporated municipality and may include areas in more than one county. (11) “System” means 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. (12) “Utility” means a water or wastewater utility and, except as provided in s. 367.022, includes every person, lessee, trustee, or receiver owning, operating, managing, or controlling a system, or proposing construction of a system, who is providing, or proposes to provide, water or wastewater service to the public for compensation. (13) “Wastewater” means the combination of the liquid and water-carried pollutants from a residence, commercial building, industrial plant, or institution, together with any groundwater, surface runoff, or leachate that may be present. History. — s. 1, ch. 71-278; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 2, 25, 26, ch. 80-99; ss. 2, 3, ch. 81-318; ss. 2, 26, 27, ch. 89-353; s. 4, ch. 91-429; s. 3, ch. 99-319; s. 9, ch. 2010-205. 367.022 Exemptions. The following are not subject to regulation by the commission as a utility nor are they subject to the provisions of this chapter, except as expressly provided: (1) The sale, distribution, or furnishing of bottled water. (2) Systems owned, operated, managed, or controlled by governmental authorities, including water or wastewater facilities operated by private firms under water or wastewater facility privatization contracts as defined in s. 153.91, and nonprofit corporations formed for the purpose of acting on behalf of a political subdivision with respect to a water or wastewater facility. (3) Manufacturers providing service solely in connection with their operations. (4) Public lodging establishments providing service solely in connection with service to their guests. (5) Landlords providing service to their tenants without specific compensation for the service. (6) Systems with the capacity or proposed capacity to serve 100 or fewer persons. (7) Nonprofit corporations, associations, or cooperatives providing service solely to members who own and control such nonprofit corporations, associations, or cooperatives. (8) Any person who resells water or wastewater service at a rate or charge which does not exceed the actual purchase price of the water or wastewater. (9) Any person who resells water service to his or her tenants or to individually metered residents for a fee that does not exceed the actual purchase price of the water and wastewater service plus the actual cost of meter reading and billing, not to exceed 9 percent of the actual cost of service. (10) Wastewater treatment plants operated exclusively for disposing of industrial wastewater. (11) The sale of bulk supplies of desalinated water to a governmental authority. (12) Any person providing only nonpotable water for irrigation or fireflow purposes in a geographic area where potable water service is available from a governmentally or privately owned utility or a private well. (13) The sale for resale of bulk supplies of water or the sale or resale of wastewater services to a governmental authority or to a utility regulated pursuant to this chapter either by the commission or the county. (14) The owner of a mobile home park operating both as a mobile home park and a mobile home subdivision, as those terms are defined in s. 723.003, who provides service within the park and subdivision to a combination of both tenants and lot owners, provided that the service to tenants is without specific compensation. History. — s. 1, ch. 71-278; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 3, 25, 26, ch. 80-99; ss. 2, 3, ch. 81-318; ss. 3, 26, 27, ch. 89-353; s. 1, ch. 90-166; s. 4, ch. 91-429; s. 1, ch. 96-107; s. 10, ch. 96-202; s. 24, ch. 97-236; s. 4, ch. 99-319; s. 39, ch. 2002-296; s. 2, ch. 2016-226; s. 12, ch. 2020-27. 367.031 Original certificate. Each utility subject to the jurisdiction of the commission must obtain from the commission a certificate of authorization to provide water or wastewater service. A utility must obtain a certificate of authorization from the commission prior to being issued a permit by the Department of Environmental Protection for the construction of a new water or wastewater facility or prior to being issued a consumptive use or drilling permit by a water management district. The commission shall grant or deny an application for a certificate of authorization within 90 days after the official filing date of the completed application, unless an objection is filed pursuant to ss. 120.569 and 120.57, or the application will be deemed granted. History. — s. 1, ch. 71-278; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 5, 25, 26, ch. 80-99; ss. 2, 3, ch. 81-318; s. 1, ch. 85-85; ss. 4, 26, 27, ch. 89-353; s. 4, ch. 91-429; s. 8, ch. 93-35; s. 183, ch. 94-356; s. 3, ch. 96-407; s. 94, ch. 96-410. 367.045 Certificate of authorization; application and amendment procedures. (1) When a utility applies for an initial certificate of authorization from the commission, it shall: (a) Provide notice of the actual application filed by mail or personal delivery to the governing body of the county or city affected, to the Public Counsel, to the commission, and to such other persons and in such other manner as may be prescribed by commission rule; (b) Provide all information required by rule or order of the commission, which information may include a detailed inquiry into the ability of the applicant to provide service, the area and facilities involved, the need for service in the area involved, and the existence or nonexistence of service from other sources within geographical proximity to the area in which the applicant seeks to provide service; (c) File with the commission schedules showing all rates, classifications, and charges for service of every kind proposed by it and all rules, regulations, and contracts relating thereto; (d) File the application fee required by s. 367.145; and (e) Submit an affidavit that the applicant has provided notice of its actual application pursuant to this section. (2) A utility may not delete or extend its service outside the area described in its certificate of authorization until it has obtained an amended certificate of authorization from the commission. When a utility applies for an amended certificate of authorization from the commission, it shall: (a) Provide notice of the actual application filed by mail or personal delivery to the governing body of the county or municipality affected, to the Public Counsel, to the commission, and to such other persons and in such other manner as may be prescribed by commission rule; (b) Provide all information required by rule or order of the commission, which information may include a detailed inquiry into the ability or inability of the applicant to provide service, the need or lack of need for service in the area that the applicant seeks to delete or add; the existence or nonexistence of service from other sources within geographical proximity to the area that the applicant seeks to delete or add, and a description of the area sought to be deleted or added to the area described in the applicant’s current certificate of authorization; (c) Provide a reference to the number of the most recent order of the commission establishing or amending the applicant’s rates and charges; (d) Submit an affidavit that the utility has tariffs and annual reports on file with the commission; (e) File the application fee required by s. 367.145; and (f) Submit an affidavit that the applicant has provided notice of its actual application pursuant to this section. (3) If, within 30 days after the last day that notice was mailed or published by the applicant, whichever is later, the commission does not receive written objection to the notice, the commission may dispose of the application without hearing. If the applicant is dissatisfied with the disposition, it may bring a proceeding under ss. 120.569 and 120.57. (4) If, within 30 days after the last day that notice was mailed or published by the applicant, whichever is later, the commission receives from the Public Counsel, a governmental authority, or a utility or consumer who would be substantially affected by the requested certification or amendment a written objection requesting a proceeding pursuant to ss. 120.569 and 120.57, the commission shall order such proceeding conducted in or near the area for which application is made, if feasible. Notwithstanding the ability to object on any other ground, a county or municipality has standing to object on the ground that the issuance or amendment of the certificate of authorization violates established local comprehensive plans developed pursuant to ss. 163.3161-163.3211. If a consumer, utility, or governmental authority or the Public Counsel requests a public hearing on the application, such hearing must, if feasible, be held in or near the area for which application is made; and the transcript of such hearing and any material submitted at or before the hearing must be considered as part of the record of the application and any proceeding related thereto. (5)(a) The commission may grant or amend a certificate of authorization, in whole or in part or with modifications in the public interest, but may not grant authority greater than that requested in the application or amendment thereto and noticed under this section; or it may deny a certificate of authorization or an amendment to a certificate of authorization, if in the public interest. The commission may deny an application for a certificate of authorization for any new Class C wastewater system, as defined by commission rule, if the public can be adequately served by modifying or extending a current wastewater system. The commission may not grant a certificate of authorization for a proposed system, or an amendment to a certificate of authorization for the extension of an existing system, which will be in competition with, or a duplication of, any other system or portion of a system, unless it first determines that such other system or portion thereof is inadequate to meet the reasonable needs of the public or that the person operating the system is unable, refuses, or neglects to provide reasonably adequate service. (b) When granting or amending a certificate of authorization, the commission need not consider whether the issuance or amendment of the certificate of authorization is inconsistent with the local comprehensive plan of a county or municipality unless a timely objection to the notice required by this section has been made by an appropriate motion or application. If such an objection has been timely made, the commission shall consider, but is not bound by, the local comprehensive plan of the county or municipality. (6) The revocation, suspension, transfer, or amendment of a certificate of authorization is subject to the provisions of this section. The commission shall give 30 days’ notice before it initiates any such action. History. — ss. 5, 27, ch. 89-353; s. 4, ch. 91-429; s. 95, ch. 96-410. 367.071 Sale, assignment, or transfer of certificate of authorization, facilities, or control. (1) No utility shall sell, assign, or transfer its certificate of authorization, facilities or any portion thereof, or majority organizational control without determination and approval of the commission that the proposed sale, assignment, or transfer is in the public interest and that the buyer, assignee, or transferee will fulfill the commitments, obligations, and representations of the utility. However, a sale, assignment, or transfer of its certificate of authorization, facilities or any portion thereof, or majority organizational control may occur prior to commission approval if the contract for sale, assignment, or transfer is made contingent upon commission approval. (2) The commission may impose a penalty pursuant to s. 367.161 when a transfer occurs prior to approval by the commission. The transferor remains liable for any outstanding regulatory assessment fees, fines, or refunds of the utility. (3) An application for proposed sale, assignment, or transfer shall be accompanied by a fee as provided by s. 367.145. No fee is required to be paid by a governmental authority that is the buyer, assignee, or transferee. (4) An application shall be disposed of as provided in s. 367.045, except that: (a) The sale of facilities, in whole or part, to a governmental authority shall be approved as a matter of right; however, the governmental authority shall, prior to taking any official action, obtain from the utility or commission with respect to the facilities to be sold the most recent available income and expense statement, balance sheet, and statement of rate base for regulatory purposes and contributions-in-aid-of-construction. Any request for rate relief pending before the commission at the time of sale is deemed to have been withdrawn. Interim rates, if previously approved by the commission, must be discontinued, and any money collected pursuant to interim rate relief must be refunded to the customers of the utility with interest. (b) When paragraph (a) does not apply, the commission shall amend the certificate of authorization as necessary to reflect the change resulting from the sale, assignment, or transfer. (5) The commission by order may establish the rate base for a utility or its facilities or property when the commission approves a sale, assignment, or transfer thereof, except for any sale, assignment, or transfer to a governmental authority. (6) Any person, company, or organization that obtains ownership or control over any system, or part thereof, through foreclosure of a mortgage or other encumbrance, shall continue service without interruption and may not remove or dismantle any portion of the system previously dedicated to public use which would impair the ability to provide service, without the express approval of the commission. This provision may be enforced by an injunction issued by a court of competent jurisdiction. History. — s. 1, ch. 71-278; s. 3, ch. 76-168; s. 1, ch. 77-457; ss. 9, 25, 26, ch. 80-99; ss. 2, 3, ch. 81-318; ss. 7, 15, ch. 82-25; ss. 6, 26, 27, ch. 89-353; s. 2, ch. 90-166; s. 4, ch. 91-429; s. 5, ch. 99-319. 367.072 Petition to revoke certificate of authorization. The Legislature finds that it is in the public interest that water service be of good quality and consistent with the standards set forth in this chapter. Therefore, a utility’s certificate of authorization to provide water service may be revoked if, after its customers file a petition with the commission, the commission finds that revocation is in the best interest of the customers in accordance with this section. As used in this section, the term “customer” means an individual whose property is serviced by a single meter or a person whose name appears on the bill for a master meter. (1)(a) If the commission receives a letter from the customers of a utility stating their intent to file a petition pursuant to this section, the commission staff, within 10 days after receipt of the letter, shall notify the utility of the customers’ intent to file a petition. (b) Commission staff shall send to the customers instructions regarding the information required on the petition and the subsequent process the commission will follow. The petition must be filed within 90 days after the receipt of the instructions. Commission staff shall review the petition and notify the customers within 10 days after receipt of the petition that the petition is sufficient for the commission to act or that additional information is necessary. The customers must file a cured petition within 30 days after receipt of the notice to cure and provide a copy of the petition to the utility. If the customers fail to file or refile a petition within the allotted time, the commission shall dismiss the petition with prejudice, and the customers may not file another petition for 1 year after the dismissal. (2) A petition must: (a) State with specificity each issue that customers have with the quality of water service, each time the issue was reported to the utility, and how long each issue has existed; and (b) Be signed by at least 65 percent of the customers of the service area covered under the certificate of authorization. A person whose name appears on the bill for a master meter may sign a petition if at least 65 percent of the customers, tenants, or unit owners served by the master meter support the petition, in which case documentation of such support must be included with the petition. (3) If the petition is in compliance with this section and the issues identified within the petition support a reasonable likelihood that the utility is failing to provide quality of water service, the utility shall thereafter be prohibited from filing a rate case until the commission has issued a final order addressing the issues identified in the petition. The utility shall use the following criteria in preparing a response to the commission, addressing the issues identified within the petition and defending the quality of its water service: (a) Federal and state primary water quality standards or secondary water quality standards pursuant to s. 367.0812; and (b) The relationship between the utility and its customers, including each complaint received regarding the quality of water service, the length of time each customer has been complaining about the service, the resolution of each complaint, and the time it has taken to address such complaints. (4) The commission shall evaluate the issues identified in the petition, the utility’s response as to whether it is providing quality of water service, and any other factor the commission deems relevant. (5) Based upon its evaluation, the commission shall: (a) Dismiss the petition, in which case the decision must be supported by clear and convincing evidence and is subject to ss. 120.569 and 120.57; (b) Require the utility to take the necessary steps to correct the quality of water service issues identified in the petition. The commission shall set benchmarks within a timeframe, not to exceed 3 years, and may require the utility to provide interim reports describing its progress in meeting such benchmarks. The commission may extend the term 3 years for circumstances that delay the project which are not in the control of the utility, such as natural disasters and obtaining permits necessary for meeting such benchmarks; or (c) Notwithstanding s. 367.045, revoke the utility’s certificate of authorization, in which case a receiver must be appointed pursuant to s. 367.165 until a sale of the utility system has been approved pursuant to s. 367.071. (6) The commission shall adopt by rule the format of and requirements for a petition and may adopt other rules to administer this section. History. — s. 1, ch. 2014-68. 367.081 Rates; procedure for fixing and changing. (1) Except as provided in subsection (4) or subsection (6), a utility may only charge rates and charges that have been approved by the commission. (2)(a)1. The commission shall, either upon request or upon its own motion, fix rates which are just, reasonable, compensatory, and not unfairly discriminatory. In every such proceeding, the commission shall consider the value and quality of the service and the cost of providing the service, which shall include, but not be limited to, debt interest; the requirements of the utility for working capital; maintenance, depreciation, tax, and operating expenses incurred in the operation of all property used and useful in the public service; and a fair return on the investment of the utility in property used and useful in the public service. However, the commission shall not allow the inclusion of contributions-in-aid-of-construction in the rate base of any utility during a rate proceeding, nor shall the commission impute prospective future contributions-in-aid-of-construction against the utility’s investment in property used and useful in the public service; and accumulated depreciation on such contributions-in-aid-of-construction shall not be used to reduce the rate base, nor shall depreciation on such contributed assets be considered a cost of providing utility service. 2. For purposes of such proceedings, the commission shall consider utility property, including land acquired or facilities constructed or to be constructed within a reasonable time in the future, not to exceed 24 months after the end of the historic base year used to set final rates unless a longer period is approved by the commission, to be used and useful in the public service, if: a. Such property is needed to serve current customers; b. Such property is needed to serve customers 5 years after the end of the test year used in the commission’s final order on a rate request as provided in subsection (6) at a growth rate for equivalent residential connections not to exceed 5 percent per year; or c. Such property is needed to serve customers more than 5 full years after the end of the test year used in the commission’s final order on a rate request as provided in subsection (6) only to the extent that the utility presents clear and convincing evidence to justify such consideration. Notwithstanding the provisions of this paragraph, the commission shall approve rates for service which allow a utility to recover from customers the full amount of environmental compliance costs. Such rates may not include charges for allowances for funds prudently invested or similar charges. For purposes of this requirement, the term “environmental compliance costs” includes all reasonable expenses and fair return on any prudent investment incurred by a utility in complying with the requirements or conditions contained in any permitting, enforcement, or similar decisions of the United States Environmental Protection Agency, the Department of Environmental Protection, a water management district, or any other governmental entity with similar regulatory jurisdiction. (b) In establishing initial rates for a utility, the commission may project the financial and operational data as set out in paragraph (a) to a point in time when the utility is expected to be operating at a reasonable level of capacity. (c) In establishing rates for a utility, upon its own motion or upon the request of a utility, the commission may authorize a utility to create a utility reserve fund for infrastructure repair and replacement for a utility for existing distribution and collection infrastructure that is nearing the end of its useful life or is detrimental to water quality or reliability of service, to be funded by a portion of the rates charged by the utility, by a secured escrow account, or through a letter of credit. The commission shall adopt rules to govern the implementation, management, and use of the fund, including, but not limited to, rules related to expenses for which the fund may be used, segregation of reserve account funds, requirements for a capital improvement plan, and requirements for commission authorization before disbursements are made from the fund. (3) The commission, in fixing rates, may determine the prudent cost of providing service during the period of time the rates will be in effect following the entry of a final order relating to the rate request of the utility and may use such costs to determine the revenue requirements that will allow the utility to earn a fair rate of return on its rate base. (4)(a) On or before March 31 of each year, the commission by order shall establish a price increase or decrease index for major categories of operating costs incurred by utilities subject to its jurisdiction reflecting the percentage of increase or decrease in such costs from the most recent 12-month historical data available. The commission by rule shall establish the procedure to be used in determining such indices and a procedure by which a utility, without further action by the commission, or the commission on its own motion, may implement an increase or decrease in its rates based upon the application of the indices to the amount of the major categories of operating costs incurred by the utility during the immediately preceding calendar year, except to the extent of any disallowances or adjustments for those expenses of that utility in its most recent rate proceeding before the commission. The rules shall provide that, upon a finding of good cause, including inadequate service, the commission may order a utility to refrain from implementing a rate increase hereunder unless implemented under a bond or corporate undertaking in the same manner as interim rates may be implemented under s. 367.082. A utility may not use this procedure between the official filing date of the rate proceeding and 1 year thereafter, unless the case is completed or terminated at an earlier date. A utility may not use this procedure to increase any operating cost for which an adjustment has been or could be made under paragraph (b), or to increase its rates by application of a price index other than the most recent price index authorized by the commission at the time of filing. (b) The approved rates of any utility shall be automatically increased or decreased without hearing, upon verified notice to the commission 45 days prior to its implementation of the increase or decrease that the utility’s costs for any specified expense item have changed. 1. The new rates authorized shall reflect, on an amortized or annual basis, as appropriate, the cost of or the amount of change in the cost of the specified expense item. The new rates, however, shall not reflect the costs of any specified expense item already included in a utility’s rates. Specified expense items that are eligible for automatic increase or decrease of a utility’s rates include, but are not limited to: a. The rates charged by a governmental authority or other water or wastewater utility regulated by the commission which provides utility service to the utility. b. The rates or fees that the utility is charged for electric power. c. The amount of ad valorem taxes assessed against the utility’s used and useful property. d. The fees charged by the Department of Environmental Protection in connection with the National Pollutant Discharge Elimination System Program. e. The regulatory assessment fees imposed upon the utility by the commission. f. Costs incurred for water quality or wastewater quality testing required by the Department of Environmental Protection. g. The fees charged for wastewater biosolids disposal. h. Costs incurred for any tank inspection required by the Department of Environmental Protection or a local governmental authority. i. Treatment plant operator and water distribution system operator license fees required by the Department of Environmental Protection or a local governmental authority. j. Water or wastewater operating permit fees charged by the Department of Environmental Protection or a local governmental authority. k. Consumptive or water use permit fees charged by a water management district. 2. A utility may not use this procedure to increase its rates as a result of an increase in a specific expense item which occurred more than 12 months before the filing by the utility. 3. The commission may establish by rule additional specific expense items that are outside the control of the utility and have been imposed upon the utility by a federal, state, or local law, rule, order, or notice. If the commission establishes such a rule, the commission shall review the rule at least once every 5 years and determine if each expense item should continue to be cause for an automatic increase or decrease and whether additional items should be included. 4. This subsection does not prevent a utility from seeking a change in rates pursuant to subsection (2). (c) Before implementing a change in rates under this subsection, the utility shall file an affirmation under oath as to the accuracy of the figures and calculations upon which the change in rates is based, stating that the change will not cause the utility to exceed the range of its last authorized rate of return on equity. Whoever makes a false statement in the affirmation required hereunder, which statement he or she does not believe to be true in regard to any material matter, is guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084. (d) If, within 15 months after the filing of a utility’s annual report required by s. 367.121, the commission finds that the utility exceeded the range of its last authorized rate of return on equity after an adjustment in rates as authorized by this subsection was implemented within the year for which the report was filed or was implemented in the preceding year, the commission may order the utility to refund, with interest, the difference to the ratepayers and adjust rates accordingly. This provision shall not be construed to require a bond or corporate undertaking not otherwise required. (e) Notwithstanding anything herein to the contrary, a utility may not adjust its rates under this subsection more than two times in any 12-month period. For the purpose of this paragraph, a combined application or simultaneously filed applications that were filed under the provisions of paragraphs (a) and (b) shall be considered one rate adjustment. (f) The commission may regularly, not less often than once each year, establish by order a leverage formula or formulae that reasonably reflect the range of returns on common equity for an average water or wastewater utility and which, for purposes of this section, shall be used to calculate the last authorized rate of return on equity for any utility which otherwise would have no established rate of return on equity. In any other proceeding in which an authorized rate of return on equity is to be established, a utility, in lieu of presenting evidence on its rate of return on common equity, may move the commission to adopt the range of rates of return on common equity that has been established under this paragraph. (5) An application for a rate change must be accompanied by a fee as provided by s. 367.145, except that no fee shall be required for an application for a rate change made pursuant to subsection (4). (6) The commission may withhold consent to the operation of any rate request or any portion thereof by a vote to that effect within 60 days after the date of filing of the rate request, or within a shorter period established by rule of the commission. The order shall state a reason or statement of good cause for the withholding of consent. The commission shall provide a copy of the order to the utility and all interested persons who have requested notice. Such consent shall not be withheld for a period longer than 8 months following the date of filing. The new rates or all or any portion thereof not consented to may be placed into effect by the utility under a bond, escrow, or corporate undertaking subject to refund at the expiration of such period upon notice to the commission and upon filing the appropriate tariffs. The commission shall determine whether the corporate undertaking may be filed in lieu of the bond or escrow. The utility shall keep accurate, detailed accounts of all amounts received because of such rates becoming effective under bond, escrow, or corporate undertaking subject to refund, specifying by whom and in whose behalf such amounts were paid. In its final order relating to such rate request, the commission shall direct the utility to refund, with interest at a fair rate to be determined by the commission in such manner as it may direct, such portion of the increased rates which are found not to be justified and which are collected during the periods specified. The commission shall provide by rule for the disposition of any funds not refunded, but in no event shall such funds accrue to the benefit of the utility. The commission shall take final action on the docket and enter its final order within 12 months of the official date of filing. (7) The commission shall determine the reasonableness of rate case expenses and shall disallow all rate case expenses determined to be unreasonable. No rate case expense determined to be unreasonable shall be paid by a consumer. In determining the reasonable level of rate case expense the commission shall consider the extent to which a utility has utilized or failed to utilize the provisions of paragraph (4)(a) or paragraph (4)(b) and such other criteria as it may establish by rule. (8) The amount of rate case expense that the commission determines a public utility may recover through its rates pursuant to this chapter shall be apportioned for recovery over 4 years unless a longer period can be justified and is in the public interest. At the conclusion of the recovery period, the public utility shall immediately reduce its rates by the amount of the rate case expense previously included in rates. (9) A utility may not earn a return on the unamortized balance of the rate case expense. Any unamortized balance of rate case expense shall be excluded in calculating the utility’s rate base. (10) A utility may specifically request the commission to process its petition for rate relief using the agency’s proposed agency action procedure, as prescribed by commission rule. The commission shall enter its vote on the proposed agency action within 5 months of the official filing date. If the commission’s proposed action is protested, the final decision shall be rendered by the commission within 8 months of the date the protest is filed. At the expiration of 5 months following the official filing date, if the commission has not taken action or, if the commission’s action is protested by a party other than the utility, the utility may place its requested rates into effect under bond, escrow, or corporate undertaking subject to refund, upon notice to the commission and upon filing the appropriate tariffs. The utility shall keep accurate records of amounts received as provided by subsection (6). History. — s. 1, ch. 71-278; s. 5, ch. 74-195; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 53, ch. 78-95; ss. 10, 25, 26, ch. 80-99; ss. 2, 3, ch. 81-318; ss. 8, 15, ch. 82-25; s. 26, ch. 83-218; s. 3, ch. 84-149; s. 3, ch. 85-85; s. 25, ch. 87-225; ss. 7, 26, 27, ch. 89-353; s. 3, ch. 90-166; s. 4, ch. 91-429; s. 85, ch. 93-213; s. 184, ch. 94-356; s. 978, ch. 95-148; s. 1, ch. 99-319; s. 3, ch. 2016-226. 367.0811 Rates; alternative procedure for establishing rate base value of acquired utility system. (1) The Legislature finds that it is in the public interest to promote consolidation efforts with water and wastewater utility systems in order to encourage economies of scale, better access to lower material and supply costs, better access to capital, improvement in utility infrastructure, and improvement in the quality of service overall. (2) As used in this section, the term “rate stabilization plan” means an acquiring utility’s plan to implement rate changes incrementally over a period of time to mitigate rate increases and to predictably achieve consolidated pricing over time. (3)(a) If a utility acquires an existing utility system, including a system described in s. 367.022(2), the utility may petition the commission to establish a rate base value for the utility system being acquired using the valuation process in this section instead of the cost method pursuant to s. 367.081. (b) The rate base value established by the commission under this section shall be used for ratemaking purposes in the acquiring utility’s next general rate case. The rate base value may not exceed the lesser of the purchase price negotiated between the parties to the acquisition transaction or the average of the three appraisals conducted under subsection (4) and may not be adjusted for contribution-in-aid-of-construction or used and useful in serving the public. However, the rate base value may include reasonable transaction and closing costs incurred by the acquiring utility and reasonable fees paid to the appraisers. (4)(a) For purposes of this section, the utility system being acquired shall be appraised by three licensed appraisers chosen from a list established by the commission. Appraisals shall be paid for by the buyer. Each appraiser shall provide an appraisal of the value of the utility system being acquired that is consistent with the Uniform Standards of Professional Appraisal Practice. (b) The acquiring utility and the utility system being acquired shall jointly retain a licensed engineer to conduct an assessment of the tangible assets of the utility system being acquired, and the assessment shall be provided to the three appraisers for use in determining the value of the utility system being acquired. (5) A petition filed under this section to establish the rate base value for a utility system being acquired must contain all of the following: (a) The requested rate base value for the utility system being acquired. (b) Copies of the appraisals required by this section, including the average of the valuations produced by each appraisal. (c) A copy of the assessment of tangible assets required by this section. (d) A 3-year plan to address each deficiency identified by the assessment of tangible assets required by this section. The plan must address impact on quality of service and any planned improvements to water quality. (e) The 5-year projected rate impact on the customers of the utility system being acquired, including, but not limited to, the rate impact of all of the following: 1. Any cost efficiencies expected to result from the acquisition transaction. 2. Use of this section, instead of the cost method pursuant to s. 367.081, to establish the rate base value. (f) The contract of sale. (g) The estimated value of fees and transaction and closing costs to be incurred by the acquiring utility. (h) A tariff, including rates equal to the rates of the utility system being acquired, and a rate stabilization plan, if applicable to the acquisition. A rate stabilization plan must be filed if the acquisition would result in a significant individual increase in rates during the period identified in paragraph (e). (6)(a) If the petition meets the filing requirements of subsection (5), the commission, no later than 8 months after the date the complete petition is filed, shall issue a final order on the petition. (b) The commission may, in the public interest, grant the petition, in whole or in part, or with modifications, or may deny the petition. (c) The commission may not approve a rate base value higher than that requested in the petition. (7) Notwithstanding any provision in this section, the commission may, pursuant to this chapter, set rates for the acquired utility system in future rate cases and may classify the acquired utility system as a separate entity for ratemaking purposes if it is deemed to be in the public interest. (8) This section applies to acquiring utilities that are engaged in an arms-length acquisition of a water or wastewater system, or both, and: (a) Provide water or wastewater service, or both, to more than 10,000 customers; or (b) Are permitted to produce at least 3 million gallons per day of drinking water. (9) At minimum, in considering a rate base value petition pursuant to this section, the commission must consider all of the following in serving the public interest and pursuant to the goals of this section: (a) Improvements in quality of service. (b) Improvements in compliance with regulatory requirements. (c) Rate reductions or rate stability over a long-term period. (d) Cost efficiencies. (e) A demonstration that the purchase is being made as part of an arms-length transaction. (f) Economies of scale to be generated by the transaction. (g) A comparison of the acquiring utility’s net book value, to the extent available, and the proposed rate base value of the utility being acquired. (h) A demonstration that the acquiring utility has greater access to capital than the utility being acquired. (10) The commission may set reasonable performance goals based on the standards specified in subsection (9) and review utility performance regarding these standards in a rate proceeding. (11) The commission shall adopt rules to implement this section. History. — s. 1, ch. 2023-291. 367.0812 Rate fixing; quality of water service as criterion. (1) In fixing rates that are just, reasonable, compensatory, and not unfairly discriminatory, the commission shall consider the extent to which the utility provides water service that meets secondary water quality standards as established by the Department of Environmental Protection. In determining whether a utility has satisfied its obligation to provide quality of water service that meets these standards, the commission shall consider: (a) Testimony and evidence provided by customers and the utility; (b) The results of past tests required by a county health department or the Department of Environmental Protection which measure the utility’s compliance with the applicable secondary water quality standards; (c) Complaints regarding the applicable secondary water quality standards filed by customers with the commission, the Department of Environmental Protection, the respective local governmental entity, or a county health department during the past 5 years; and (d) If the commission deems necessary, the results of any updated test. (2)(a) In determining the quality of water service, the commission shall consider a finding by the Department of Environmental Protection as to whether the utility has failed to provide water service that meets the secondary water quality standards of the department. (b) The utility shall create an estimate of the costs and benefits of a plausible solution to each issue identified by the commission. (c) The utility shall meet with its customers within a time prescribed by the commission to discuss the estimated costs and benefits of and time necessary for implementing a plausible solution for each quality of water service issue identified, and the utility shall report the results of such meetings to the commission. (d) The utility shall inform the commission, if: 1. The customers and the utility agree on a solution for each quality of water service issue identified, of each agreed-on solution and the cost of each solution; or 2. The customers and the utility prefer a different solution to at least one of the quality of water service issues identified, of the preferred solutions by each and the cost of each solution. (e) The commission may require the utility to implement a solution that is in the best interest of the customers for each quality of water service issue. The utility may recover its costs in implementing the solutions ordered by the commission. The commission may establish the necessary benchmarks that a utility must meet for each solution and require the utility to report periodically until each solution is completed. (3) Notwithstanding s. 367.072, customers may not petition the commission to revoke the certificate of authorization of a utility if it is the subject of a proceeding under this chapter. (4) The commission may prescribe penalties for a utility’s failure to adequately resolve each quality of water service issue as required. Penalties may include penalties as provided in s. 367.161, a reduction of return on equity of up to 100 basis points, the denial of all or part of a rate increase for a utility’s system or part of a system if it determines that the quality of water service is less than satisfactory until the quality of water is found to be satisfactory, or revocation of the certificate of authorization pursuant to s. 367.072. (5) The commission shall adopt rules to assess and enforce compliance with this section. History. — s. 2, ch. 2014-68. 367.0813 Gain or loss on purchase or condemnation by governmental authority. In order to provide appropriate incentives to encourage the private sector to participate in the investment in water and wastewater infrastructure, to protect private sector property rights of a utility’s shareholders, and to avoid an additional burden of costs placed on ratepayers by relitigating this issue, the Legislature affirms and clarifies the clear policy of this state that gains or losses from a purchase or condemnation of a utility’s assets which results in the loss of customers served by such assets and the associated future revenue streams shall be borne by the shareholders of the utility. This section applies to all transactions prior to and after the effective date of this section. History. — s. 2, ch. 2004-336. 367.0814 Staff assistance in changing rates and charges; interim rates. (1) The commission may establish rules by which a water or wastewater utility whose gross annual revenues are $250,000 or less may request and obtain staff assistance for the purpose of changing its rates and charges. A utility may request staff assistance by filing an application with the commission. The gross annual revenue level shall be adjusted on July 1, 2013, and every 5 years thereafter, based on the most recent cumulative 5 years of the price index established by the commission pursuant to s. 367.081(4)(a). (2) The official date of filing is established as 30 days after official acceptance by the commission of the application. If a utility does not remit a fee, as provided by s. 367.145, within 30 days after acceptance, the commission may deny the application. The commission has 15 months after the official date of filing within which to issue a final order. (3) The provisions of s. 367.081(1), (2)(a), and (3) shall apply in determining the utility’s rates and charges. However, the commission may not award rate case expenses to recover attorney fees or fees of other outside consultants who are engaged for the purpose of preparing or filing the case if a utility receives staff assistance in changing rates and charges pursuant to this section, unless the Office of Public Counsel or interested parties have intervened. The commission may award rate case expenses for attorney fees or fees of other outside consultants if such fees are incurred for the purpose of providing consulting or legal services to the utility after the initial staff report is made available to customers and the utility. If there is a protest or appeal by a party other than the utility, the commission may award rate case expenses to the utility for attorney fees or fees of other outside consultants for costs incurred after the protest or appeal. By December 31, 2016, the commission must propose rules to administer this subsection. (4) The commission may, upon its own motion, or upon petition from the regulated utility, authorize the collection of interim rates until the effective date of the final order. Such interim rates may be based upon a test period different from the test period used in the request for permanent rate relief. To establish interim relief, there must be a demonstration that the operation and maintenance expenses exceed the revenues of the regulated utility, and interim rates shall not exceed the level necessary to cover operation and maintenance expenses as defined by the Uniform System of Accounts for Class C Water and Wastewater Utilities (1996) of the National Association of Regulatory Utility Commissioners. (5) The commission may require that the difference between the interim rates and the previously authorized rates be collected under bond, escrow, letter of credit, or corporate undertaking subject to refund with interest at a rate ordered by the commission. (6) The utility, in requesting staff assistance, shall agree to accept the final rates and charges approved by the commission unless the final rates and charges produce less revenue than the existing rates and charges. (7) In the event of a protest or appeal by a party other than the utility, the commission may provide for temporary rates subject to refund with interest. (8) If a utility becomes exempt from commission regulation or jurisdiction during the pendency of a staff-assisted rate case, the request for rate relief is deemed to have been withdrawn. Interim rates, if previously approved, shall become final. Temporary rates, if previously approved, must be discontinued, and any money collected pursuant to the temporary rates, or the difference between temporary and interim rates, if previously approved, must be refunded to the customers of the utility with interest. (9) The commission may by rule establish standards and procedures whereby rates and charges of small utilities may be set using criteria other than those set forth in s. 367.081(1), (2)(a), and (3). (10) The commission shall submit to the President of the Senate and the Speaker of the House of Representatives by January 1, 2013, and every 5 years thereafter, a report of the status of proceedings conducted under this section, including the number of utilities eligible to request staff assistance, the number of proceedings conducted annually for the most recent 5-year period, the associated impact on commission resources, and any other information the commission deems appropriate. History. — ss. 8, 27, ch. 89-353; s. 4, ch. 91-429; s. 7, ch. 99-319; s. 1, ch. 2008-56; s. 4, ch. 2016-226. 367.0817 Reuse projects. (1) A utility may submit a reuse project plan for commission approval. A reuse project plan shall include: (a) A description of the project and other effluent disposal options considered by the utility. (b) Copies of the pertinent Department of Environmental Protection and water management district permit applications filed or, in lieu thereof, a statement of the project’s permit status. (c) A statement that the reuse project is required or recommended pursuant to s. 403.064 or other relevant authority. (d) The number and identity of the project’s proposed reuse customer(s) and copies of written agreements, if any, between the utility and the customer(s) regarding the project. (e) The projected costs associated with the reuse project. As used in this section, the term “costs” includes, but is not limited to, all capital investments, including a rate of return, any applicable taxes, and all expenses related to or resulting from the reuse project which were not considered in the utility’s last rate proceeding. (f) The utility’s proposal for recovering the project’s costs through rates. (g) A proposed inservice schedule for the project. (h) Any other information the commission may require pursuant to rule. (2) The commission shall review the utility’s reuse project plan and shall determine whether the projected costs are prudent and the proposed rates are reasonable and in the public interest. The commission shall issue a proposed agency action order to approve or disapprove the utility’s reuse project plan. The commission shall enter its vote on the proposed agency action within 5 months of the date of filing. If the commission’s proposed action is protested, the final decision shall be rendered by the commission within 8 months of the date the protest is filed. (3) All prudent costs of a reuse project shall be recovered in rates. The Legislature finds that reuse benefits water, wastewater, and reuse customers. The commission shall allow a utility to recover the costs of a reuse project from the utility’s water, wastewater, or reuse customers or any combination thereof as deemed appropriate by the commission. (4) The commission’s order approving the reuse project plan shall approve rates based on projected costs and shall provide for the implementation of rates without the need for a subsequent proceeding. The commission shall allow the approved rates to be implemented when the reuse project plan is approved or when the project is placed in service. If the commission allows the rates to be implemented when the plan is approved, the commission may order the utility to escrow the resulting revenues until the project is placed in service. Escrowed revenues shall be used exclusively for the reuse project. (5) If the commission allows the rates to be implemented when the plan is approved, the utility may place its proposed rates into effect on a temporary basis, subject to refund, in the event of a protest by a party other than the utility. If the utility has requested rate implementation upon approval of the plan and the commission has exceeded the time allowed in subsection (2), the utility may place its proposed rates into effect on a temporary basis, subject to refund. (6) After the reuse project is placed in service, the commission, by petition or on its own motion, may initiate a proceeding to true-up the costs of the reuse project and the resulting rates. History. — s. 1, ch. 94-243. 367.082 Interim rates; procedure. (1) The commission may, during any proceeding for a change of rates, upon its own motion, upon petition from any party, or by a tariff filing of a utility or a regulated company, authorize the collection of interim rates until the effective date of the final order. Such interim rates may be based upon a test period different from the test period used in the request for permanent rate relief. Upon application by a utility, the commission may use the projected test-year rate base when determining the interim rates or revenues subject to refund. To establish a prima facie entitlement for interim relief, the commission, the petitioning party, the utility, or the regulated company shall demonstrate that the utility or the regulated company is earning outside the range of reasonableness on rate of return calculated in accordance with subsection (5). (2)(a) In a proceeding for an interim increase in rates, the commission shall authorize, within 60 days of the filing for such relief, the collection of rates sufficient to earn the minimum of the range of rate of return calculated in accordance with subparagraph (5)(b)2. The difference between the interim rates and the previously authorized rates shall be collected under bond, escrow, letter of credit, or corporate undertaking subject to refund with interest at a rate ordered by the commission. (b) In a proceeding for an interim decrease in rates, the commission shall authorize, within 60 days of the filing for such relief, the continued collection of the previously authorized rates; however, revenues collected under those rates sufficient to reduce the achieved rate of return to the maximum of the rate of return calculated in accordance with subsection (5) shall be placed under bond, escrow, letter of credit, or corporate undertaking subject to refund with interest at a rate ordered by the commission. (c) The commission shall determine whether escrow, letter of credit, or corporate undertaking may be filed in lieu of the bond. (3) In granting such relief, the commission may, in an expedited hearing but within 60 days of the commencement of the proceeding, upon petition or upon its own motion, preclude the recovery of any extraordinary or imprudently incurred expenditures or, for good cause shown, increase the amount of the bond, escrow, letter of credit, or corporate undertaking. (4) Any refund ordered by the commission shall be calculated to reduce the rate of return of the utility or regulated company during the pendency of the proceeding to the same level within the range of the newly authorized rate of return which is found fair and reasonable on a prospective basis, but the refund shall not be in excess of the amount of the revenues collected subject to refund and in accordance with paragraph (2)(b). In addition, the commission may require interest on the refund at a rate established by the commission. (5)(a) In setting interim rates or setting revenues subject to refund, the commission shall determine the revenue deficiency or excess by calculating the difference between the achieved rate of return of a utility or regulated company and its required rate of return applied to an average investment rate base or an end-of-period investment rate base. (b) For purposes of this subsection: 1. “Achieved rate of return” means the rate of return earned by the company for the most recent 12-month period. The achieved rate of return shall be calculated by applying appropriate adjustments consistent with those which were used in the most recent individual rate proceeding of the utility or regulated company and annualizing any rate changes occurring during such period. 2. “Required rate of return” shall