Order No. PSC-2024-0379-PCO-GU•Florida Public Service Commission native order document 08720-2024
Florida Public Service Commission native order document 08720-2024
Order No. PSC-2024-0379-PCO-GUFlapubserv
Gesamter Gesetzestext
FILED 8/28/2024 DOCUMENT NO. 08720-2024 FPSC - COMMISSION CLERK BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION In re: Petition for rate increase by St. Joe Natural Gas Company, Inc. DOCKET NO. 20240046-GU -----------------~ ORDER NO. PSC-2024-03 79 -PCO-GU ISSUED: August 28, 2024 The following Commissioners participated in the disposition of this matter: BY THE COMMISSION: MIKE LA ROSA, Chairman ARTGRAHAM GARY F. CLARK ANDREW GILES FAY GABRIELLA P ASSIDOMO ORDER SUSPENDING FINAL RATES AND GRANTING INTERIM RATES Background On May 29, 2024, St. Joe Natural Gas Company, Inc. (SJNG or Company) filed a petition seeking our approval to increa se rates and charges. SJNG provides sales a nd transportation of natural gas and is a public utility subject to our regulatory jurisdiction under Chapter 366, Florida Statutes (F.S.). SJNG currently serves approximately 3,186 residential and commercial customers in Gulf and Bay Counties. In its petition, SJNG requested an increase of $1,043,838 in additional gross annual revenues. The requested increase, according to SJNG, will provide the Company with an opportunity to earn an overall rate of return of 6.05 percent on the Company's plant and property used to serve its customers based on a midpoint return on equity of 11.00 percent. The Company ba sed its request on a 13-month average rate base of $3,38 1,746 for the projected test year ending December 2024. SJNG is also proposing to restructure its residential service class to reduce stratification within the residential classes. Per Rule 25- 7.140(1 )( d), Florida Administrative Code (F.A.C.), SJNG has elected to use the five month Proposed Agency Action process authorized in Section 366.06(4) F.S. SJNG's last approved rate case was in 2008 in Docket No. 20070592-GU.1 More recently, in Docket No. 20230022-GU, we approved new depreciation rates with an implementation date of January 1, 2023. Notably, in Docket No. 20160033-GU,2 we approved SJNG's request to reallocate the $285,0 11 annual revenue deficiency resulting from the 'Ord er No. PSC-2008-0436-PAA-GU, issued July 8, 2008, in Docket No. 20070592-GU, In re: Petition for rate increase by St. Joe Natural Gas Company, Inc. 2 Order No.PSC-20 16-0297-PAA-GU, i ss ued July 27, 2016, in Docket No. 20160033-GU, In re: Petition for limited pro ceeding to restructure rates by St. Jo e Natural Gas Company, Inc.
ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 2 permanent loss of its largest customer, the Arizona Chemical Company, to the remaining customer classes. Also, in Docket No. 20200039-GU, 3 we approved a temporary storm cost recovery surcharge to deal with Hurricane Michael recovery. The Utility stated that the key drivers for the proposed rate increase are: current rates not recovering its property tax expense or property insurance expense, increases to rate base associated with extensions to serve new customers, increasing operating expenses reflecting nearly 16 years of inflation, and increases in regulatory costs, particularly federal pipeline safety regulations. In its petition, the Company also requested an interim rate increase of $612,209 based on a historic test year ended December 31, 2023. Section 366.071, F.S., addresses interim rates and procedures and requires us to authorize within 60 days of a filing for an interim rate increase the collection of interim rates. On May 29, 2024, the Company waived the 60-day provision of Section 366.071(2), F.S., and agreed to defer implementation of the proposed interim rates until the issue could be addressed at the scheduled August 6, 2024, Commission Conference.4 Due to Tropical Storm Debby, the Commission Conference scheduled for August 6, 2024, was rescheduled to August 8, 2024. This order addresses the requested interim revenue increase and rates and the suspension of the Company’s requested permanent rate increase. We have jurisdiction over this request under Sections 366.06 and 366.071, F.S. Decision I. Suspension of Permanent Rates The requested permanent increase in rates and charges shall be suspended for SJNG to allow our staff time to analyze the case. Pursuant to Section 366.06(3), F.S., we may withhold consent to the operation of all or any portion of a new rate schedule, delivering to the utility requesting such a change, a reason, or written statement of good cause for doing so within 60 days. On May 29, 2024, the Company waived the 60-day provision of Section 366.071(2), F.S., and agreed to defer the file and suspend requirements until the issue could be addressed at the scheduled August 6, 2024 Commission Conference.5 Due to Tropical Storm Debby, the Commission Conference scheduled for August 6, 2024, was rescheduled to August 8, 2024. We find that the reasons stated above are good cause consistent with the requirements of Section 366.06(3), F.S. II. Interim Rate Base In its filing, the Company proposed an interim 13-month average rate base of $3,186,767 for the period ended December 31, 2023. Pursuant to Section 366.071(5)(a), F.S., the Company is permitted to elect either an average or year-end rate base to calculate its interim revenue 3Order No. PSC-2021-0196-AS-GU, issued June 3, 2021, in Docket No. 20200039-GU, In re: Petition for approval to implement a temporary storm cost recovery surcharge, by St. Joe Natural Gas Company, Inc. 4Document No. 04381-2024, filed May 30, 2024. 5Document No. 04381-2024, filed May 30, 2024.
ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 3 request. We reviewed the rate base adjustments made in the current interim filing for consistency with the Commission-approved adjustments in SJNG’s last rate case proceeding, where appropriate, as well as other applicable dockets.6 Based on our review, it appears that the Company made applicable adjustments that are consistent with our prior orders. However, the Company made adjustments to plant and accumulated depreciation based on its non-utility allocation percentage from 2022. Therefore, we shall make adjustments to decrease plant and accumulated depreciation by $58,773 and $38,974, respectively, to reflect non-utility allocation for the proper 2023 interim test year. As such, $3,166,968 is the appropriate amount of rate base for the historical interim test year ended December 31, 2023. The calculations are shown in Attachment A to this order. III. Interim Return on Equity For purposes of its interim rate request, SJNG used an overall cost of capital of 5.46 percent based on a return on equity (ROE) of 11.00 percent. The Company reflected a capital structure for the 13-month average historical interim test year ended December 31, 2023. Several adjustments are necessary. Pursuant to Section 366.071(2)(a), F.S., the appropriate ROE for purposes of determining an interim rate increase is the minimum of the Company’s currently authorized ROE range. In its last rate case, SJNG’s ROE midpoint was set at 11.00 percent, with a range of plus or minus 100 basis points. Therefore, we find that an ROE of 10.00 percent is appropriate for the purpose of determining interim rates. In the last rate case, we made an adjustment to limit the Company’s equity ratio to no more than 60 percent equity as a percentage of investor sources of capital.7 In the present filing, SJNG’s equity ratio exceeds 60 percent. Therefore, we find that an adjustment to the capital structure to limit the equity ratio to 60 percent equity as a percentage of investor capital is appropriate. Additionally, MFR Schedule F-8 reflected total capital that was not equal to the rate base that we determined. Therefore, we made pro rata adjustments to the investor sources of capital to reconcile to rate base. These adjustments result in an overall cost of capital of 4.81 percent. We find that the capital structure of SJNG for the historical interim 13-month average test year shall reflect an ROE of 10.00 percent resulting in an overall cost of capital of 4.81 percent. Attachment B to this order details the calculations of the overall cost of capital. IV. Interim Test Year Net Operating Income The proposed net operating income for SJNG of negative $284,430 is the twelve-month amount for the historical interim test year ended December 31, 2023. We reviewed the net 6Order No. PSC-2008-0436-PAA-GU. 7Order No. PSC-2008-0436-PAA-GU.
ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 4 operating income adjustments made in the current interim filing for consistency with the Commission-approved adjustments in the last rate case proceeding, as well as other applicable dockets.8 Based on our review, it appears that the Company made applicable adjustments that are consistent with our prior order. However, MFR Schedule F-4 failed to reflect the Company’s adjustment to depreciation expense based on its non-utility allocation percentage. Therefore, we shall make an adjustment to reduce depreciation expense by $34,073 to reflect the appropriate 2023 allocation. We also made adjustments to rate base in Section II and cost of capital in Section III. These adjustments have fallout effects which have altered the proposed net operating income for SJNG. We find that negative $250,357 is the appropriate amount of net operating income for the historical interim test year ended December 31, 2023. The calculations are shown in Attachment A to this order. V. Interim Net Operating Income (NOI) Multiplier On MFR Schedule F-6, SJNG calculated an interim NOI multiplier of 1.3356 based on a revenue expansion factor of 74.8744 using a 21 percent federal income tax rate, a 4.458 percent state income tax rate, a 0.3 percent bad debt rate and a 0.5 percent factor for regulatory assessment fees. However, the appropriate state income tax rate for the interim test year is 5.5 percent. Therefore, we find that 1.3503 is the appropriate interim NOI multiplier. The calculations are shown below. Table 1 Interim NOI Multiplier Description Revenue Requirement 100.0000% Regulatory Assessment Fee -0.5000% Bad Debt Rate -0.3000% Net Before Income Tax 99.2000% State Income Tax @ 5.5% -5.4175% Federal Income Tax @ 21% -19.6862% Revenue Expansion Factor 74.0578% NOI Multiplier (100/74.0578) 1.3503 VI. Interim Revenue Increase Request SJNG requested interim rate relief of $612,209 for the historical test year ended December 31, 2023. As discussed in Sections II, III, IV, and V, we made adjustments to the Company’s rate base, cost of capital, NOI, and NOI multiplier. These adjustments result in fallout adjustments to the total interim revenue increase for SJNG. As such, we find that the appropriate revenue increase is $543,665 for the historical test year ended December 31, 2023. 8Order No. PSC-2008-0436-PAA-GU.
ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 5 The interim revenue increases allow SJNG an opportunity to earn an overall rate of return of 4.81 percent based on the minimum range of return on equity of 10.00 percent. After a determination of the permanent rate increase has been made, the interim rate increase will be reviewed to determine if any portion should be refunded to customers. The calculation of interim rate relief is shown in Table 2. Table 2 Interim Revenue Increase Description Jurisdictional Adjusted Rate Base $3,166,968 Overall Rate of Return 4.81% Jurisdictional Net Operating Income $152,268 Jurisdictional Adjusted Net Operating Income ($250,357) Revenue Deficiency $402,625 Net Operating Income Multiplier 1.3503 Interim Revenue Increase $543,665 Base Rate Revenues $1,293,560 Recommended Percentage Increase Factor 42.03% VII. Interim Rates and Associated Tariffs As discussed in Section VI, we made adjustments to the interim revenue request by SJNG. Attachment C to this order provides the allocation of the interim increase. Furthermore, Attachment C provides the resulting cents-per-therm increase to be applied to the rate classes to recover the interim revenue increase. These increases were calculated using the methodology contained in Rule 25-7.040, F.A.C., which requires that any increase be applied evenly across the board to all rate classes based on their base rate revenues. The interim rates shall be made effective for all meter readings occurring on or after thirty days from the date of our vote. The Company included proposed interim tariff sheet No. 84 in its petition. The Company shall file a revised interim tariff for administrative approval by our staff. Pursuant to Rule 25-22.0406(8), F.A.C., the Company shall provide notice to customers of the revised rates. The notice must be approved in advance by our staff and provided to the customers with the first bill containing the new rates. VIII. Security to Guarantee Amount Subject to Refund We find that all funds collected subject to refund shall be secured by a corporate undertaking. The criteria for a corporate undertaking include sufficient liquidity, ownership equity, profitability, and interest coverage to guarantee any potential refund. SJNG requested an interim revenue increase of $612,209. In Section VI, we found an interim revenue increase of $543,665. Based on an estimated eight-month collection period of interim rates, we calculated the maximum amount of revenues that may need to be protected is $364,256. We reviewed
ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 6 SJNG’s three most recent annual reports filed with us (2023, 2022, and 2021) to determine if the Company can support a corporate undertaking to guarantee the funds collected during the interim collection period. SJNG’s financial information demonstrates the Company has acceptable levels of liquidity, ownership equity, and interest coverage to support a potential refund of $364,256. SJNG has adequate resources to support a corporate undertaking in the amount found in Section VI. Based on this analysis, we find that a corporate undertaking of $364,256 is acceptable. This brief financial analysis is only appropriate for deciding if the Company can support a corporate undertaking in the amount requested and shall not be considered a finding regarding our position on other issues in this proceeding. Based on the foregoing, it is ORDERED by the Florida Public Service Commission that St. Joe Natural Gas Company, Inc.’s requested permanent rate increase is suspended pending further review. It is further ORDERED that the appropriate interim rate base for St. Joe Natural Gas Company, Inc. shall be $3,166,968. It is further ORDERED that the appropriate return on equity for St. Joe Natural Gas Company, Inc. shall be 10.00 percent and the overall cost of capital shall be 4.81 percent for purposes of determining interim rates. It is further ORDERED that the appropriate historical base year ended December 31, 2023, net operating income for St. Joe Natural Gas Company, Inc. shall be negative $250,357. It is further ORDERED that St. Joe Natural Gas Company, Inc. shall be granted an interim net operating income multiplier of 1.3503. It is further ORDERED that the appropriate interim revenue increase for St. Joe Natural Gas Company, Inc. shall be $543,665. It is further ORDERED that St. Joe Natural Gas Company, Inc. shall file a revised interim tariff for administrative approval by our staff. The interim rates shall be made effective for all meter readings occurring on or after thirty days from the date of our vote, August 8, 2024. In addition, pursuant to Rule 25- 22.0406(8), F.A.C., the Company shall provide notice to customers of the revised rates. The notice must be approved in advance by our staff and provided to the customers with the first bill containing the new rates. It is further ORDERED that the Company shall furnish a corporate undertaking subject to refund in the amount of $364,256. It is further ORDERED that this docket shall remain open pending our final resolution of the Company’s requested rate increase.
ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 7 By ORDER of the Florida Public Service Commission this 28th day of August, 2024. DD Florida Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399 (850) 413-6770 www.floridapsc.com Copies furnished: A copy of this document is provided lo the parties of record at the time of issuance and, if applicable, interested persons. The Florida Public Service Commission is required by Section 120.569( I), Florida Statutes, to notify parties of any administrative hearing or judicial review of Commission orders that is available under Sections 120.57 or 120.68, Florida Statutes, as we ll as the procedures and time limits that apply. This notice should not be construed to mean all requests for an administrative hearing or judicial review will be granted or result in the relief sought. Mediation may be available on a case-by-case basis. If mediation is conducted, it does not affect a substantially interested person's right to a hearing. Any party adversely affected by this order suspending the permanent rates, which is preliminary, procedural or intermediate in nature. may request: ( 1) reconsideration within I0 days pursuant to Rule 25 -22.0376, Florida Administrative Code; or (2) judicial review by the Flo rida Supreme Court, in the case of an electric, gas or te lephone utility, or the First District Court of Appeal, in the case of a water or wastewater utility. A motion for reconsideration shall be tiled with the Office of Commission Clerk, in the form prescribed by Rule 25-22.0376, Florida Administrative Code. Judicial review of a preliminary, procedural or intennediate ruling or order is available if review of the final action will not provide an adequate remedy. Such review may be requested from the appropriate cou11, as described above, pursuant to Rule 9.100, Florida Rules of Appellate Procedure. Any party adversely affected by this order approving interim rates, which is non-final in nature, may request ( 1) reconsideration within IO days pursuant to Rule 25-22.03 76, Florida Administrative Code, or (2) judicial review by the Florida Supreme Court, in the case of an
ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 8 electric, gas or telephone utility, or the First District Court of Appeal, in the case of a water or wastewater utility. A motion for reconsideration shall be filed with the Office of Commission Clerk, in the form prescribed by Rule 25-22.0376, Florida Administrative Code. Citizens of the State of Florida v. Mayo, 316 So.2d 262 (Fla. 1975), states that an order on interim rates is not final or reviewable until a final order is issued. Such review may be requested from the appropriate court, as described above, pursuant to Rule 9.100, Florida Rules of Appellate Procedure.
ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU Attachment A PAGE 9 ST. JOE NATURAL GAS COMPANY, INC. Docket No. 20240046-GU Interim Base Year December 31, 2023 Adjusted Base Adjusted Base Year Per Company Adjustments Year Per Commission Rate Base Plant in Service $9,253,814 - $9,253,814 Common Plant Allowed (216,805) (58,773) (275,578) Accumulated Depreciation (6,055,109) 38,974 (6,016,135) Net Plant in Service $2,981,900 (19,799) $2,962,101 Construction Work In Progress 158,646 - 158,646 Net Utility Plant $3,140,546 (19,799) $3,120,747 Working Capital Allowance 46,221 - 46,221 Total Rate Base $3,186,767 (19,799) $3,166,968 Income Statement Operating Revenues $1,652,727 - $1,652,727 Operating Expenses: Operation & Maintenance $1,379,944 - $1,379,944 Depreciation & Amortization 381,751 (34,073) 347,678 Taxes Other Than Income 175,462 - 175,462 Income Taxes - Federal - - - Income Taxes - State - - - Total Operating Expenses $1,937,157 ($34,073) $1,903,084 Net Operating Income ($284,430) $34,073 ($250,357) Overall Rate of Return -8.93% -7.91%
ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU Attachment B PAGE 10 ST. JOE NATURAL GAS COMPANY, INC. Docket No. 20240046-GU Interim Base Year December 31, 2023 Jurisdictional Capital Cost Weighted Capital Component Structure Ratio Rate Cost Rate Long-Term Debt $49,019 1.55% 6.50% 0.10% Long-Term Debt – Shoaf Family 653,242 20.63% 6.50% 1.34% Customer Deposits 64,115 2.02% 2.00% 0.04% Common Equity 1,053,392 33.26% 10.00% 3.33% Deferred Income Taxes 937,870 29.61% 0.00% 0.00% Deferred Credits – FCPC & GCI 409,330 12.92% 0.00% 0.00% Total $319,224,069 100.00% 4.81%
ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU Attachment C PAGE 11
OCR transcription for search; preserved printed pages are authoritative
FILED 8/28/2024 DOCUMENT NO. 08720-2024 FPSC - COMMISSION CLERK BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION In re: Petition for rate increase by St. Joe DOCKET NO. 20240046-GU Natural Gas Company, Inc. ORDER NO. PSC-2024-0379-PCO-GU ISSUED: August 28, 2024 The following Commissioners participated in the disposition of this matter: MIKE LA ROSA, Chairman ART GRAHAM GARY F. CLARK ANDREW GILES FAY GABRIELLA PASSIDOMO ORDER SUSPENDING FINAL RATES AND GRANTING INTERIM RATES BY THE COMMISSION: Background On May 29, 2024, St. Joe Natural Gas Company, Inc. (SJNG or Company) filed a petition seeking our approval to increase rates and charges. SJNG provides sales and transportation of natural gas and is a public utility subject to our regulatory jurisdiction under Chapter 366, Florida Statutes (F.S.). SJNG currently serves approximately 3,186 residential and commercial customers in Gulf and Bay Counties. In its petition, SING requested an increase of $1,043,838 in additional gross annual revenues. The requested increase, according to SJNG, will provide the Company with an opportunity to earn an overall rate of return of 6.05 percent on the Company's plant and property used to serve its customers based on a midpoint return on equity of 11.00 percent. The Company based its request on a 13-month average rate base of $3,381,746 for the projected test year ending December 2024. SJNG is also proposing to restructure its residential service class to reduce stratification within the residential classes. Per Rule 25- 7.140(1)(d), Florida Administrative Code (F.A.C.), SING has elected to use the five month Proposed Agency Action process authorized in Section 366.06(4) F.S. SJING‘s last approved rate case was in 2008 in Docket No. 20070592-GU.! More recently, in Docket No. 20230022-GU, we approved new depreciation rates with an implementation date of January 1, 2023. Notably, in Docket No. 20160033-GU,? we approved SJNG's request to reallocate the $285,011 annual revenue deficiency resulting from the ‘Order No. PSC-2008-0436-PAA-GU, issued July 8, 2008, in Docket No. 20070592-GU, Jn re: Petition for rate increase by St. Joe Natural Gas Company, Inc. Order No. PSC-2016-0297-PAA-GU, issued July 27, 2016, in Docket No. 20160033-GU, Jn re: Petition for limited proceeding to restructure rates by St. Joe Natural Gas Company, Inc. ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 2 permanent loss of its largest customer, the Arizona Chemical Company, to the remaining customer classes. Also, in Docket No. 20200039-GU, 3 we approved a temporary storm cost recovery surcharge to deal with Hurricane Michael recovery. The Utility stated that the key drivers for the proposed rate increase are: current rates not recovering its property tax expense or property insurance expense, increases to rate base associated with extensions to serve new customers, increasing operating expenses reflecting nearly 16 years of inflation, and increases in regulatory costs, particularly federal pipeline safety regulations. In its petition, the Company also requested an interim rate increase of $612,209 based on a historic test year ended December 31, 2023. Section 366.071, F.S., addresses interim rates and procedures and requires us to authorize within 60 days of a filing for an interim rate increase the collection of interim rates. On May 29, 2024, the Company waived the 60-day provision of Section 366.071(2), F.S., and agreed to defer implementation of the proposed interim rates until the issue could be addressed at the scheduled August 6, 2024, Commission Conference.4 Due to Tropical Storm Debby, the Commission Conference scheduled for August 6, 2024, was rescheduled to August 8, 2024. This order addresses the requested interim revenue increase and rates and the suspension of the Company’s requested permanent rate increase. We have jurisdiction over this request under Sections 366.06 and 366.071, F.S. Decision I. Suspension of Permanent Rates The requested permanent increase in rates and charges shall be suspended for SJNG to allow our staff time to analyze the case. Pursuant to Section 366.06(3), F.S., we may withhold consent to the operation of all or any portion of a new rate schedule, delivering to the utility requesting such a change, a reason, or written statement of good cause for doing so within 60 days. On May 29, 2024, the Company waived the 60-day provision of Section 366.071(2), F.S., and agreed to defer the file and suspend requirements until the issue could be addressed at the scheduled August 6, 2024 Commission Conference.5 Due to Tropical Storm Debby, the Commission Conference scheduled for August 6, 2024, was rescheduled to August 8, 2024. We find that the reasons stated above are good cause consistent with the requirements of Section 366.06(3), F.S. II. Interim Rate Base In its filing, the Company proposed an interim 13-month average rate base of $3,186,767 for the period ended December 31, 2023. Pursuant to Section 366.071(5)(a), F.S., the Company is permitted to elect either an average or year-end rate base to calculate its interim revenue 3Order No. PSC-2021-0196-AS-GU, issued June 3, 2021, in Docket No. 20200039-GU, In re: Petition for approval to implement a temporary storm cost recovery surcharge, by St. Joe Natural Gas Company, Inc. 4Document No. 04381-2024, filed May 30, 2024. 5Document No. 04381-2024, filed May 30, 2024. ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 3 request. We reviewed the rate base adjustments made in the current interim filing for consistency with the Commission-approved adjustments in SJNG’s last rate case proceeding, where appropriate, as well as other applicable dockets.6 Based on our review, it appears that the Company made applicable adjustments that are consistent with our prior orders. However, the Company made adjustments to plant and accumulated depreciation based on its non-utility allocation percentage from 2022. Therefore, we shall make adjustments to decrease plant and accumulated depreciation by $58,773 and $38,974, respectively, to reflect non-utility allocation for the proper 2023 interim test year. As such, $3,166,968 is the appropriate amount of rate base for the historical interim test year ended December 31, 2023. The calculations are shown in Attachment A to this order. III. Interim Return on Equity For purposes of its interim rate request, SJNG used an overall cost of capital of 5.46 percent based on a return on equity (ROE) of 11.00 percent. The Company reflected a capital structure for the 13-month average historical interim test year ended December 31, 2023. Several adjustments are necessary. Pursuant to Section 366.071(2)(a), F.S., the appropriate ROE for purposes of determining an interim rate increase is the minimum of the Company’s currently authorized ROE range. In its last rate case, SJNG’s ROE midpoint was set at 11.00 percent, with a range of plus or minus 100 basis points. Therefore, we find that an ROE of 10.00 percent is appropriate for the purpose of determining interim rates. In the last rate case, we made an adjustment to limit the Company’s equity ratio to no more than 60 percent equity as a percentage of investor sources of capital.7 In the present filing, SJNG’s equity ratio exceeds 60 percent. Therefore, we find that an adjustment to the capital structure to limit the equity ratio to 60 percent equity as a percentage of investor capital is appropriate. Additionally, MFR Schedule F-8 reflected total capital that was not equal to the rate base that we determined. Therefore, we made pro rata adjustments to the investor sources of capital to reconcile to rate base. These adjustments result in an overall cost of capital of 4.81 percent. We find that the capital structure of SJNG for the historical interim 13-month average test year shall reflect an ROE of 10.00 percent resulting in an overall cost of capital of 4.81 percent. Attachment B to this order details the calculations of the overall cost of capital. IV. Interim Test Year Net Operating Income The proposed net operating income for SJNG of negative $284,430 is the twelve-month amount for the historical interim test year ended December 31, 2023. We reviewed the net 6Order No. PSC-2008-0436-PAA-GU. 7Order No. PSC-2008-0436-PAA-GU. ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 4 operating income adjustments made in the current interim filing for consistency with the Commission-approved adjustments in the last rate case proceeding, as well as other applicable dockets.8 Based on our review, it appears that the Company made applicable adjustments that are consistent with our prior order. However, MFR Schedule F-4 failed to reflect the Company’s adjustment to depreciation expense based on its non-utility allocation percentage. Therefore, we shall make an adjustment to reduce depreciation expense by $34,073 to reflect the appropriate 2023 allocation. We also made adjustments to rate base in Section II and cost of capital in Section III. These adjustments have fallout effects which have altered the proposed net operating income for SJNG. We find that negative $250,357 is the appropriate amount of net operating income for the historical interim test year ended December 31, 2023. The calculations are shown in Attachment A to this order. V. Interim Net Operating Income (NOI) Multiplier On MFR Schedule F-6, SJNG calculated an interim NOI multiplier of 1.3356 based on a revenue expansion factor of 74.8744 using a 21 percent federal income tax rate, a 4.458 percent state income tax rate, a 0.3 percent bad debt rate and a 0.5 percent factor for regulatory assessment fees. However, the appropriate state income tax rate for the interim test year is 5.5 percent. Therefore, we find that 1.3503 is the appropriate interim NOI multiplier. The calculations are shown below. Table 1 Interim NOI Multiplier Description Revenue Requirement 100.0000% Regulatory Assessment Fee -0.5000% Bad Debt Rate -0.3000% Net Before Income Tax 99.2000% State Income Tax @ 5.5% -5.4175% Federal Income Tax @ 21% -19.6862% Revenue Expansion Factor 74.0578% NOI Multiplier (100/74.0578) 1.3503 VI. Interim Revenue Increase Request SJNG requested interim rate relief of $612,209 for the historical test year ended December 31, 2023. As discussed in Sections II, III, IV, and V, we made adjustments to the Company’s rate base, cost of capital, NOI, and NOI multiplier. These adjustments result in fallout adjustments to the total interim revenue increase for SJNG. As such, we find that the appropriate revenue increase is $543,665 for the historical test year ended December 31, 2023. 8Order No. PSC-2008-0436-PAA-GU. ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 5 The interim revenue increases allow SJNG an opportunity to earn an overall rate of return of 4.81 percent based on the minimum range of return on equity of 10.00 percent. After a determination of the permanent rate increase has been made, the interim rate increase will be reviewed to determine if any portion should be refunded to customers. The calculation of interim rate relief is shown in Table 2. Table 2 Interim Revenue Increase Description Jurisdictional Adjusted Rate Base $3,166,968 Overall Rate of Return 4.81% Jurisdictional Net Operating Income $152,268 Jurisdictional Adjusted Net Operating Income ($250,357) Revenue Deficiency $402,625 Net Operating Income Multiplier 1.3503 Interim Revenue Increase $543,665 Base Rate Revenues $1,293,560 Recommended Percentage Increase Factor 42.03% VII. Interim Rates and Associated Tariffs As discussed in Section VI, we made adjustments to the interim revenue request by SJNG. Attachment C to this order provides the allocation of the interim increase. Furthermore, Attachment C provides the resulting cents-per-therm increase to be applied to the rate classes to recover the interim revenue increase. These increases were calculated using the methodology contained in Rule 25-7.040, F.A.C., which requires that any increase be applied evenly across the board to all rate classes based on their base rate revenues. The interim rates shall be made effective for all meter readings occurring on or after thirty days from the date of our vote. The Company included proposed interim tariff sheet No. 84 in its petition. The Company shall file a revised interim tariff for administrative approval by our staff. Pursuant to Rule 25-22.0406(8), F.A.C., the Company shall provide notice to customers of the revised rates. The notice must be approved in advance by our staff and provided to the customers with the first bill containing the new rates. VIII. Security to Guarantee Amount Subject to Refund We find that all funds collected subject to refund shall be secured by a corporate undertaking. The criteria for a corporate undertaking include sufficient liquidity, ownership equity, profitability, and interest coverage to guarantee any potential refund. SJNG requested an interim revenue increase of $612,209. In Section VI, we found an interim revenue increase of $543,665. Based on an estimated eight-month collection period of interim rates, we calculated the maximum amount of revenues that may need to be protected is $364,256. We reviewed ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 6 SJNG’s three most recent annual reports filed with us (2023, 2022, and 2021) to determine if the Company can support a corporate undertaking to guarantee the funds collected during the interim collection period. SJNG’s financial information demonstrates the Company has acceptable levels of liquidity, ownership equity, and interest coverage to support a potential refund of $364,256. SJNG has adequate resources to support a corporate undertaking in the amount found in Section VI. Based on this analysis, we find that a corporate undertaking of $364,256 is acceptable. This brief financial analysis is only appropriate for deciding if the Company can support a corporate undertaking in the amount requested and shall not be considered a finding regarding our position on other issues in this proceeding. Based on the foregoing, it is ORDERED by the Florida Public Service Commission that St. Joe Natural Gas Company, Inc.’s requested permanent rate increase is suspended pending further review. It is further ORDERED that the appropriate interim rate base for St. Joe Natural Gas Company, Inc. shall be $3,166,968. It is further ORDERED that the appropriate return on equity for St. Joe Natural Gas Company, Inc. shall be 10.00 percent and the overall cost of capital shall be 4.81 percent for purposes of determining interim rates. It is further ORDERED that the appropriate historical base year ended December 31, 2023, net operating income for St. Joe Natural Gas Company, Inc. shall be negative $250,357. It is further ORDERED that St. Joe Natural Gas Company, Inc. shall be granted an interim net operating income multiplier of 1.3503. It is further ORDERED that the appropriate interim revenue increase for St. Joe Natural Gas Company, Inc. shall be $543,665. It is further ORDERED that St. Joe Natural Gas Company, Inc. shall file a revised interim tariff for administrative approval by our staff. The interim rates shall be made effective for all meter readings occurring on or after thirty days from the date of our vote, August 8, 2024. In addition, pursuant to Rule 25- 22.0406(8), F.A.C., the Company shall provide notice to customers of the revised rates. The notice must be approved in advance by our staff and provided to the customers with the first bill containing the new rates. It is further ORDERED that the Company shall furnish a corporate undertaking subject to refund in the amount of $364,256. It is further ORDERED that this docket shall remain open pending our final resolution of the Company’s requested rate increase. ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 7 By ORDER of the Florida Public Service Commission this 28th day of August, 2024. DD Florida Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399 (850) 413-6770 www.floridapsc.com Copies furnished: A copy of this document is provided lo the parties of record at the time of issuance and, if applicable, interested persons. The Florida Public Service Commission is required by Section 120.569( I), Florida Statutes, to notify parties of any administrative hearing or judicial review of Commission orders that is available under Sections 120.57 or 120.68, Florida Statutes, as we ll as the procedures and time limits that apply. This notice should not be construed to mean all requests for an administrative hearing or judicial review will be granted or result in the relief sought. Mediation may be available on a case-by-case basis. If mediation is conducted, it does not affect a substantially interested person's right to a hearing. Any party adversely affected by this order suspending the permanent rates, which is preliminary, procedural or intermediate in nature. may request: ( 1) reconsideration within I0 days pursuant to Rule 25 -22.0376, Florida Administrative Code; or (2) judicial review by the Flo rida Supreme Court, in the case of an electric, gas or te lephone utility, or the First District Court of Appeal, in the case of a water or wastewater utility. A motion for reconsideration shall be tiled with the Office of Commission Clerk, in the form prescribed by Rule 25-22.0376, Florida Administrative Code. Judicial review of a preliminary, procedural or intennediate ruling or order is available if review of the final action will not provide an adequate remedy. Such review may be requested from the appropriate cou11, as described above, pursuant to Rule 9.100, Florida Rules of Appellate Procedure. Any party adversely affected by this order approving interim rates, which is non-final in nature, may request ( 1) reconsideration within IO days pursuant to Rule 25-22.03 76, Florida Administrative Code, or (2) judicial review by the Florida Supreme Court, in the case of an ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 8 electric, gas or telephone utility, or the First District Court of Appeal, in the case of a water or wastewater utility. A motion for reconsideration shall be filed with the Office of Commission Clerk, in the form prescribed by Rule 25-22.0376, Florida Administrative Code. Citizens of the State of Florida v. Mayo, 316 So.2d 262 (Fla. 1975), states that an order on interim rates is not final or reviewable until a final order is issued. Such review may be requested from the appropriate court, as described above, pursuant to Rule 9.100, Florida Rules of Appellate Procedure. ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU Attachment A PAGE 9 ST. JOE NATURAL GAS COMPANY, INC. Docket No. 20240046-GU Interim Base Year December 31, 2023 Adjusted Base Adjusted Base Year Per Company Adjustments Year Per Commission Rate Base Plant in Service $9,253,814 - $9,253,814 Common Plant Allowed (216,805) (58,773) (275,578) Accumulated Depreciation (6,055,109) 38,974 (6,016,135) Net Plant in Service $2,981,900 (19,799) $2,962,101 Construction Work In Progress 158,646 - 158,646 Net Utility Plant $3,140,546 (19,799) $3,120,747 Working Capital Allowance 46,221 - 46,221 Total Rate Base $3,186,767 (19,799) $3,166,968 Income Statement Operating Revenues $1,652,727 - $1,652,727 Operating Expenses: Operation & Maintenance $1,379,944 - $1,379,944 Depreciation & Amortization 381,751 (34,073) 347,678 Taxes Other Than Income 175,462 - 175,462 Income Taxes - Federal - - - Income Taxes - State - - - Total Operating Expenses $1,937,157 ($34,073) $1,903,084 Net Operating Income ($284,430) $34,073 ($250,357) Overall Rate of Return -8.93% -7.91% ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU Attachment B PAGE 10 ST. JOE NATURAL GAS COMPANY, INC. Docket No. 20240046-GU Interim Base Year December 31, 2023 Jurisdictional Capital Cost Weighted Capital Component Structure Ratio Rate Cost Rate Long-Term Debt $49,019 1.55% 6.50% 0.10% Long-Term Debt – Shoaf Family 653,242 20.63% 6.50% 1.34% Customer Deposits 64,115 2.02% 2.00% 0.04% Common Equity 1,053,392 33.26% 10.00% 3.33% Deferred Income Taxes 937,870 29.61% 0.00% 0.00% Deferred Credits – FCPC & GCI 409,330 12.92% 0.00% 0.00% Total $319,224,069 100.00% 4.81% ORDER NO. PSC-2024-0379-PCO-GU DOCKET NO. 20240046-GU PAGE 11 Attachment C Calculation Of Interim Rate Relief - Deficiency Allocation Including Commission Approved Adjustments Year Ended 12/31/23 (1) (2) (3) (4) (5) (6) (7) (8) (9) Rate Line No. Schedule Bills Therm Sales Customer Charge Delivery Charge Total (4+5) Dollar Increase Percent Increase Cents Per Themm Increase 1 RS-1 13,785 98,200 $179,192 $124,365 $303,557 $127,580 42.03% $1.2992 2 RS-2 13,932 169,748 223,036 149,354 372,390 156,510 42.03% 0.9220 3 RS-3 8,151 168,591 163,163 121,807 284,970 119,769 42.03% 0.7104 4 GS-1 1,930 132,929 38,590 84,417 123,007 51,698 42.03% 0.3889 5 GS-2 412 209,923 29,260 91,068 120,328 50,572 42.03% 0.2409 6 GS-4 12 95,847 24,000 15,182 39,182 16,468 42.03% 0.1718 7 TS-4 12 164,934 24,000 26,126 50,126 21,067 42.03% 0.1277 8 Total 38,234 1,040,172 $681,241 $612,319 $1,293,560 $543,665 42.03% $0.5227
Was bedeutet dieser Text für Ihre Situation?
Kostenlose und unverbindliche Beratung
Schildern Sie uns Ihre Situation. Unser Team meldet sich per E-Mail bei Ihnen für Ihre Beratung.
Setzen Sie Ihre Recherche in ChatGPT oder Claude fort
Verbinden Sie Omnilex, um den Rechtskorpus über Ihren KI-Assistenten zu durchsuchen.