Florida Public Service Commission native order document 01452-2026

FILED 3/9/2026
DOCUMENT NO. 01452-2026
FPSC 	- COMMISSION CLERK
BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION
In re: Petition for approval of 2025
depreciation study and for approval 	to amortize
reserve imbalance, by Florida City Gas._
DOCKET NO. 20250035-GU
ORDER NO. PSC-2026-0055-FOF-GU
ISSUED: March 	9, 2026
The following Commissioners participated in the disposition of this matter:
GABRIELLA PASSIDOMO SMITH, Chairman
GARY F. CLARK
MIKE LA ROSA
FINAL ORDER APPROVING FLORIDA CITY GAS’S
2025 DEPRECIATION STUDY AND
AMORTIZATION OF RESERVE IMBALANCE
BY THE COMMISSION:
Background
On February 24, 2025, Florida City Gas (FCG or Company) filed a Petition for Approval
of Depreciation Study and 	for Approval 	to Amortize Reserve Imbalance 	(Petition) under Rule
25-7.045, Florida Administrative Code (F.A.C.). The Petition included a depreciation study and
proposed 	depreciation 	parameters 	that 	resulted 	in 	a 	total 	calculated 	reserve 	surplus of $27.3
million. 	In 	its 	Petition, FCG requested approval of 	its 	depreciation 	study; an 	effective 	date 	for
new depreciation rates of January 	1, 2025; and approval 	to amortize 	the Company’s 	calculated
$27.3 million reserve surplus over a 2-year period (2025 and 2026).
On February 26, 2025, the Office of Public Counsel (OPC) 	filed a Notice of Intervention
pursuant to Section 350.0611, Florida Statutes 	(F.S.). On the following day, February 27, 2025,
OPC 	filed a Motion 	to Hold Proceedings 	in Abeyance, which was denied by Order No. PSC-
2025-01 02- PCO-GU, issued April 	1, 2025. On April 	11, 2025, OPC timely 	filed 	a Motion 	for
Reconsideration of that Order, along with a Request 	for Oral Argument. 	Separately, on June 20,
2025, OPC 	filed a Motion 	to Dismiss, along with a corresponding Request for Oral Argument.
We denied both Motions and Requests 	for Oral Argument by Order No. PSC-2025-0360-PCO-
GU, issued September 24, 2025.
The 	current depreciation 	rates 	for FCG were approved 	in 2023 	in connection with 	the
Company’s 2022 request for base rate increase. 1The approved depreciation parameters resulted
in a total reserve surplus of $52. 1 	million, of which $25 million could be amortized over a 4-year
period using a Reserve Surplus Amortization Mechanism (RSAM). OPC appealed the 2023 	rate
1Order No. PSC-2023-0177-FOF-GU, issued June 9, 2023, in Docket No. 20220069-GU, In re: Petition for rate
increase by Florida City Gas.

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 2
case Final Order, as well as the Commission’s subsequent Clarifying Order.2 The appeals of
these Orders have been consolidated and are currently pending before the Florida Supreme
Court.
As part of its Petition and accompanying depreciation study filed on February 24, 2025,
FCG calculated a $27.3 million reserve surplus. On August 5, 2025, FCG filed a Revised 2025
Depreciation Study and reduced its calculated reserve surplus to $22.3 million. On November 4,
2025, the Company amended its testimony with resulting changes to both the narrative and
workbook schedules, and further reduced its calculated reserve surplus to $19.2 million. For
purposes of this order, the November 4, 2025 filing is the final depreciation study filed for
review, is referred to as the 2025 Depreciation Study or 2025 Study, and supplants FCG’s
August 5, 2025 Revised 2025 Depreciation Study.
We conducted an evidentiary hearing on December 11, 2025. This order addresses a
threshold issue of whether FCG’s depreciation rates should be revised; other issues that identify
the appropriate depreciation parameters, rates, expenses, theoretical reserve imbalance, and
related corrective measures; and further issues identified in the prehearing order.3
We have jurisdiction over this matter pursuant to Chapter 366, F.S., including Sections
366.04, 366.05, and 366.06, F.S.
Decision and Analysis
1. 	Need to Revise Currently Prescribed Depreciation Rates
Overview
Rule 25-7.045, F.A.C. (the depreciation rule), requires regulated gas companies to file a
comprehensive depreciation study at least once every five years from the date of the last study or
pursuant to Commission order. The submission date of FCG’s last depreciation study (2022
Depreciation Study) was May 31, 2022. Based on the five-year provision in the depreciation
rule, OPC argued that this case should be closed, the current depreciation rates should remain in
effect, and a new, correct depreciation study should be filed as part of the next rate case or by
May 31, 2027, whichever is earlier.
Additionally, OPC argues that the filing was premature due to the “Four-Year Stay Out.”
Specifically, OPC asserts that the Company pledged in its last rate case in 2023 to “stay out” and
not come to the Commission with a request for rate relief for four years if it was allowed to use
no more than $25 million of an identified $52 million depreciation reserve imbalance during that
period. 	OPC 	argues 	that 	the 	Company’s 	request 	in 	this 	docket 	is 	contrary 	to 	these
representations, and that FCG’s instant depreciation study is insufficient due to it being two
years premature. OPC further contends that FCG’s 2025 Study itself has serious flaws, including
2 Order No. PSC-2023-0299-FOF-GU, issued October 2, 2023, in Docket No. 20220069-GU, In re: Petition for rate
increase by Florida City Gas.
3 Order No. PSC-2025-0444-PHO-GU, issued December 9, 2025, in Docket No. 20250035-GU, In re: Petition for
approval of 2025 depreciation study and for approval to amortize reserve imbalance, by Florida City Gas.

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 3
inconsistencies between study data and audited FCG Annual Reports and missing cost of
removal information. OPC further alleged that a statistical life analysis is required by the
depreciation rule, but was not included in the 2025 Study. OPC concludes that FCG’s request to
revise the currently-approved depreciation rates and the underlying parameters is really a request
for $19.2 million of customer money to boost earnings as a form of rate relief.
At the time that FCG submitted its last depreciation study, the Company was owned by
Florida Power & Light Company. Since December 2023, FCG has become a wholly owned
subsidiary of Chesapeake Utilities Corporation (CUC). FCG claimed that the change in operating
environment associated with new ownership and other factors led the Company to identify a
need to seek to revise its depreciation rates.
As to the timing of this submission, FCG maintained that the depreciation rule neither
requires that a gas utility wait five years to file a new study, nor restricts the filing of
depreciation studies to coincide with a rate case. The Company claimed that the plain language
of the depreciation rule allows a gas utility to file a depreciation study more often than the 5-year
minimum.
FCG continued that the instant request is justified at this time due to changed accounting
treatments.4 FCG further explained that, as the study neared completion, it became aware that a
significant 	surplus 	reserve 	imbalance 	would 	likely 	result 	from 	the 	study, 	and 	a 	2-year
amortization was determined to be the most appropriate timeframe and methodology to resolve
the reserve imbalance. FCG indicated that the study completion coincided with adverse financial
conditions confronting the Company, including a $4.1 million decrease in net income and a
$16.0 million increase in rate base versus the approved rate case amounts. The utility had fully
utilized $25 million of the RSAM reserve by the end of 2024. FCG stated that the requested
revisions will allow it to maintain earnings within its range and more effectively evaluate a
potential future consolidated depreciation study or rate case.
In FCG’s 2025 Study, book investments of various plant accounts, including all Office
Furniture and Equipment, Software, and all Transportation assets, are restated based on proposed
new subaccounts. Restated account numbers are based on the new owner’s (CUC’s) standard
chart of accounts for all natural gas business units to streamline operations, as presented in
Schedule 	A 	of 	the 	2025 	Study. 	Additionally, 	various 	accounts 	are 	reclassified 	to 	the
corresponding newly proposed accounts, including: Misc. Intangibles from Account 30302 to
Account 3031; Steel Mains from Account 3761 to Account 3762; Plastic Mains from Account
3762 to Account 3761; Steel Services from Account 3801 to Account 3802; Plastic Services
from Account 3802 to Account 3801; and ERTs Meter from Account 3811 to Account 3812. The
Company claimed that these reclassifications are for consistency across all CUC business units
and administrative ease.
4 For instance, FCG is now using the same operational and accounting procedures as other Chesapeake business
units, is no longer pursuing certain capital projects previously planned, and is implementing changes in net plant
(investment less reserve).

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 4
FCG asserts that a historical life statistical analysis is not required by Rule 25-7.045(5),
F.A.C., and that all aspects of its 2025 depreciation study are consistent with the Rule. FCG
acknowledged that, due to the change of its ownership, it cannot provide complete supporting
documentation for activities recorded prior to acquisition and must rely on source records from
the 	prior 	owners. 	FCG 	relied 	on 	continuous 	property 	records 	and 	provided 	detailed
reconciliations for all accounts with significant variances between the study data and Annual
Reports as new, correct information came to light. FCG asserts that many of the inconsistencies
cited by OPC were due to timing differences between in-service date and late charges or true-ups
related to the project.
Analysis
OPC’s post-hearing brief reasserted several arguments regarding our jurisdiction over this
matter. Because we have previously considered and rejected these arguments, some of them
twice, we find no further analysis is required.5 We will not reiterate any legal issues and
argument that were disposed of in the prior orders but, rather, will address the merits of FCG’s
current request.
FCG has alleged that circumstances have changed from its last proceeding before the
Commission, and these changes in circumstances warrant a revision to its depreciation rates. We
agree. Rather than establishing a schedule or definitive cycle, the depreciation rule sets five years
as the maximum period that a company may take between depreciation studies. Stated
differently, the depreciation rule does not mandate that a company take the entire five years
between every study. Indeed, by requiring that a company include a narrative that describes the
factors that lead to an application for a revision in depreciation rates, the depreciation rule
contemplates intermittent filings based on current circumstances. We find that FCG’s ownership,
plant activities, accounting procedures, and assets’ life and net salvage projections for various
accounts have changed since its last depreciation study, and that the timing of the 2025 Study is
justified by these changed circumstances.6
The depreciation rule prescribes that “upon establishing a new account or subaccount
classification, each utility shall request Commission approval of a depreciation rate for the new
plant category.” OPC contends that FCG did not provide the support for its study that is required
by the rule, argues that the study is incomplete and contains errors, and requests that we
disregard the depreciation study in its entirety. We have reviewed FCG’s explanations, data
reconciliations, 	and 	corrections 	regarding 	OPC’s 	assertions 	that 	there 	are 	inconsistencies
between FCG’s 2025 Study data and its audited annual report, and consider them to be
reasonable.
5 Order Nos. PSC-2025-0102-PCO-GU, issued April 1, 2025, and PSC-2025-0360-PCO-GU, issued September 24,
2025, in Docket No. 20250035-GU, In re: Petition for approval of 2025 depreciation study and for approval to
amortize reserve imbalance, by Florida City Gas.
6 Delray Medical Center, Inc. v. State, Agency for Health Care Admin., 5 So. 3d 26, 29 (Fla. 4th DCA 2009) (stating
Florida courts do not apply the doctrine of administrative finality when there has been a significant change of
circumstances or there is a demonstrated public interest).

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DOCKET NO. 20250035-GU
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Rule 25-7.045(3)(b), F.A.C., prescribes that “upon establishing a new account or
subaccount classification, each utility shall request Commission approval of a depreciation rate
for the new plant category.” We find that, absent the Company filing its 2025 Depreciation Study
as it did, a depreciation revision filing regarding the proposed new subaccounts, restatements and
reclassifications, would have been necessary to comply with Rule 25-7.045(3)(b), F.A.C.
Conclusion
Based on our review of the record, we find that the preponderance of evidence --
particularly 	the 	evidence 	regarding 	changed 	circumstances 	cited 	and 	discussed 	above 	--
demonstrates that FCG’s depreciation rates should be revised. We find that the study complies
with the timing and filing requirements of Rule 25-7.045, F.A.C. The revisions to FCG’s
currently prescribed depreciation rates are discussed below.
2. 	Appropriate Depreciation Parameters and Resulting Rates
Overview
We now turn to the depreciation parameters and resulting depreciation rates for FCG’s
depreciable plant accounts. Depreciation parameters include an average service life (ASL), a
curve shape, an average remaining life (ARL), and an average future net salvage percentage (NS)
for each depreciable account.7 The combination of these parameters and the net plant investment
of the account can be used to provide an account-specific depreciation rate on a going-forward
basis, which is also referred to as the remaining life depreciation rate (depreciation rate). This
depreciation rate is designed to recover the remaining unrecovered plant balance, or investment,
over the remaining life of the associated investment in the account. The formula for the
remaining life depreciation rate is prescribed in our depreciation rule.8
For each plant account, FCG witness Lee proposed an ASL with a curve shape (life
pattern), an ARL, a NS, and the resulting depreciation rate, all of which are detailed in FCG’s
2025 Depreciation Study.
OPC 	argued 	that 	the 	Company 	should 	retain 	the 	current 	approved 	depreciation
parameters and rates for all accounts. OPC asserted that any revisions to the currently prescribed
depreciation rates for FCG should be consistent with the recommendation of Staff witness
Kunkler. OPC argued that FCG’s proposal to transfer the reserve surplus to owners creates a
conflict of interest in making the parameter selections used to calculate the surplus.
7 For a depreciation account, the ASL is the average number of years that the assets in the account are expected to be
in-service; the curve shape is a graphical representation of the retirement pattern for the plant assets in the account;
the ARL is the average number of in-service years left for plant currently in service; and the NS, also referred to as
Net Salvage Factor, is gross salvage minus cost of removal of the retired plant assets.
8 See Rule 25-7.045(1)(e), F.A.C., Remaining Life Rate = (100% - Reserve % - Average Future Net Salvage %) ÷
Average Remaining Life in Years.

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 6
As this case evolved, FCG made several revisions to its parameters in response to data
requests and discovery. Commission staff witness Kunkler provided testimony on alternative
depreciation parameters applicable to certain depreciable plant accounts contained in FCG’s
2025 Depreciation Study. These alternative parameters included a different Iowa curve shape for
Account 3762: Mains-Steel, and a lower net salvage factor for Account 3762: Mains-Steel and
Account 3801: Services-Plastic. These alternative parameters are supported by the Company’s
historical retirement and salvage data. These two accounts are the second and third-largest
accounts by plant investment, and together constitute nearly 40 percent of the Company’s total
plant investment. 9
A. 	Curve Shape for Account 3762: Mains-Steel10
Account 	3762 	includes 	the 	cost 	of 	FCG’s 	steel 	distribution 	mains 	and 	related
components. This account is the Company’s second largest account by plant investment. As of
January 	1, 	2025, 	the 	investment 	and 	restated 	reserve 	balances 	are 	$143,280,076 	and
$61,968,633, respectively. The average age of the account’s surviving investments is 21.7 years.
For this account, the life pattern underlying the current approved ARL is an ASL of 65 years
with an R1.5 curve shape, denoted as 65/R1.5.11
The selected curve shape of an account impacts the ARL calculation, subsequently
impacting an account’s theoretical reserve level, reserve imbalance, depreciation rate, and annual
depreciation expense. For Account 3762, FCG proposed to change the curve shape from R1.5 to
R2.5 while retaining the currently approved ASL of 65 years. Staff witness Kunkler concurred
with retaining a 65-year ASL but disagreed with FCG’s proposed change in curve shape. He
proposed using the R4 curve shape instead as a better representation for this account’s historical
retirement dispersions.
Witness Lee testified that the proposed curve shapes are based on existing curve shapes
underlying the currently prescribed average remaining life for each account, a review of the
curve shapes proposed in the 2022 Depreciation Study, actual retirement experience over the
2020-2024 period as well as historical retirements, and the current average age. For account
3762, witness Lee testified that FCG’s program to relocate mains from the customer’s back yard
to more accessible areas, as well as the program to retire orange pipe due to safety concerns, has
led to increased future retirement expectations, and a mortality dispersion (curve shape)
9 (Account 3762 plant invested + Account 3801 plant invested)/total plant invested = ($143,280,076 +$128,613,988)
/$696,714,096 = 39.03 percent.
10 In depreciation studies, Iowa Curves, published in Bulletin 125, Statistical Analysis of Industrial Reporting,
published in 1935, by Robley E. Winfrey of the Iowa State College Engineering Experimental Station, are widely
used to depict the retirement pattern (mortality dispersion) of a plant asset. Each curve is denoted by a letter and a
number. The letter defines when retirements are more likely to occur. An L curve implies that retirements tend to
occur prior to the ASL, an R curve implies that retirements tend to occur after the ASL. The number portion of the
Iowa Curve designation indicates how steep or flat the curve’s shape is. Lower numbers indicate a wide, broader
variance of retirement ages around the ASL, while higher numbers indicate a narrow, less broad variance of
retirement ages around the ASL.
11 The curve shape, and average age are used to develop the ARL of the account.

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 7
recognizing more early retirements, which support a curve indicating more early retirements than
historical indications.
An account’s curve shape is usually determined using the retirement rate method when
sufficient detail exists. This method uses the average rate at which the account’s plant for each
age group is retired to calculate the percent surviving for the account’s original life table and
original stub curve shape.12 The stub curve shape is then compared to the Iowa curves using
visual and mathematical matching in order to determine the better fitting smooth curves. The
average rate of retirement used in the calculation of the percent surviving requires two sets of
data: the plant retired during a period of observation, identified by the plant’s age at retirement;
and the plant exposed to retirement at the beginning of the age intervals during the same
period.13,14 This method was used in FCG’s last depreciation study. In the 2025 Study, the
Company did not use the method to calculate the retirement rate for each depreciable account,
including Account 3762, for developing the corresponding original curve shape.
FCG’s 2025 Study includes the calculated retirement rate for each depreciable account in
Schedule (Sch) F-1 of the 2025 Study. These exhibits show that FCG calculated the retirement
rate by dividing the total retirements by the total ending plant balance for each account for each
year from 2021-2024. The nominator used in the calculation is a simple summation (not
weighted) of the aged retirements. The denominator is the plant balance (exposure), which
consists of multiple vintages with materially different ages and historical costs, as shown in Sch
F-1 of the 2025 Study.
OPC disagreed with FCG’s retirement rate calculations in the 2025 Study. and argued
that the calculations in the FCG filing divide dollar amounts which were recorded more recently
by dollar amounts that were recorded farther back in the past, which ignores the effects of
inflation. Because the denominator reflects mixed‐age exposures stated in nominal dollars, we
agree with OPC that this approach does not account for inflation or the time value of money,
effectively treating a dollar of plant added decades ago as equivalent to a dollar of recent
investment. For this reason, we find that calculating retirement rates based on retirements and the
corresponding plant exposures by age interval data is more precise than FCG’s calculation.
Witness Lee testified that FCG does not have the data of plant exposures by age interval
because collecting such data would be very time consuming and expensive. We note that FCG
used a calculation method, as described above by witness Lee, which we accepted in prior cases,
particularly for smaller utilities, largely because it is simpler, less time-consuming, and less
expensive than vintage-based or age-weighted methods.15
12 An account’s original surviving curve is usually an incomplete curve (stub curve), one that does not extend to
maximum life. It shows the percent of plant survivors in that account as function of the average age of the plant in
the account, and is prepared from the Company’s original life table. The curve shape is complete (extend to the
maximum life) when the account is fully retired or approaches full retirement.
13 Depreciation Systems, Frank K. Wolf and W. Chester Fitch, Iowa State University Press, 1994.
14 In an account: Percentage of surviving = (1 - Percentage of retirement).
15 Order No. PSC-14-0698-PAA-GU, issued December 18, 2014, in Docket No. 20140016, In re: 2014 depreciation
study by Florida Public Utilities Company; PSC-2023-0103-FOF-GU, issued March 15, 2023, in Docket No.
20220067-GU, In re: Petition for rate increase by Florida Public Utilities Company, Florida Division of

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 8
With respect to the proposed curve shape for Account 3762, witness Lee first calculated
the account’s retirement rate for the 2004-2024 period, which is 0.26 percent, and compared that
to the most recent 2021-2024 period average, which is 0.49 percent. Witness Lee then testified
that while historical retirements have been miniscule, recent years indicate an increase in
retirement rates. In recognition of future expectations of retiring early vintage orange pipe due to
safety concerns as well as the Company’s program to replace mains running through less
assessable parts of customer property (e.g., backyards) with mains located in more accessible
areas, FCG proposed an R2.5 curve shape.
Witness Kunkler recommended 65/R4 and testified that the R4 curve shape is the curve
shape proposed in FCG’s last depreciation study, reviewed by witness Lee, and originally
proposed in the current docket. Compared to a R2.5 curve shape, the R4 curve shape is a higher
modal curve which reflects a retirement dispersion that is more concentrated around the ASL.
Witness Kunkler pointed out that FCG’s historical curve shape for Accounts 3761 and 3762
shows that up to age 50, plant assets in the accounts had few retirements (approximately 89
percent of these assets surviving at an age of 50.5 years). Immediately following age 50, a
relatively rapid increase in the frequency of retirements is observed (approximately 70 percent of
these assets surviving at an age of 57.5 years). In other words, the asset retirements of the
accounts are concentrated towards 65 years (the ASL of Account 3762). Witness Kunkler further
performed curve fitting by comparing the stub curve against both R2.5 and R4 curve shapes.
Witness Kunkler concluded that, visually, a 65/R4 life pattern represents a better fit.
FCG argued that witness Kunkler’s curve shape selection fails to account for input from
Company personnel, who indicate increased expectations for retirement. Witness Lee asserted
that witness Kunkler based his recommendation for life/curve pattern for Steel Mains (Account
3762) on a curve derived from historical retirements in the Gannett Fleming Depreciation Study
and did not incorporate the Company’s expectations or judgment about future retirements,
including those influenced by FCG’s SAFE program. She contended that because FCG’s
historical data is limited, it is critical to consider additional factors.
Our concern is with how the Company considers historical data to support the underlying
account estimates and analyses. An account’s life pattern estimate shall be based on a number of
factors including historical data analysis; current Company management plans, policies and
outlook; and the curve shape estimates that originate from previous studies of the Company. In
our view, relying solely on historical data of an account is not ideal, nor is it appropriate to
ignore the past behaviors of the account and its previous curve shape estimates.
Notably, as shown in FCG’s 2025 Study, Sch F, Account 3762 was established in 1963,
and the Company maintains more than 60 years of aged retirement data. The use of historical
Chesapeake Utilities Corporation, Florida Public Utilities Company - Fort Meade, and Florida Public Utilities
Company – Indiantown Division; PSC-2023-0215-PAA-GU, issued July 26, 2023, in Docket No. 20230022-GU, In
re: Petition for approval of Depreciation Study by St. Joe Natural Gas; PSC-2022-0153-PAA-GU, issued in Docket
No. 20210183-GU, In re: Petition for approval of 2021 depreciation study, by Sebring Gas System, Inc.

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 9
retirement data is an important foundation to project the account’s retirement behavior and
related impact on remaining life estimates for the next five years.16
Further, we find that the current plans, policies and outlook of the Company’s are
important factors to be considered in deriving a 5-year projection of the parameters and rate for
the account.17 Our staff investigated FCG’s future plans and expectations pertaining to the life
pattern of Account 3762 under the SAFE and orange pipe replacement programs. Results show
that even with the commencement of orange pipe replacement in 2024, FCG’s actual rate of pipe
replacement, based on a five-year average of total miles of pipe replaced, is nearly the same in
the current filing as it was at the time of FCG’s last filing. The 2022 FCG Study had a five-year
average replacement of 29.2 pipe miles, the 2025 FCG Study had a five-year average
replacement of 31.5 pipe miles, and FCG projects that, in 2030, the Company will have a five-
year average replacement of 31.6 pipe miles, as indicated in Table 1 below.
Table 1
FCG’s SAFE and Orange Pipe Replacements
FCG opposed the R4 curve shape for Account 3762 and claimed that this curve shape
selection fails to account for the Company’s expectations of increased rate of retirements
resulting from the SAFE program. However, as discussed above and as shown in Table 1, the
detailed future retirement expectations provided by FCG seem not to deviate significantly from
the historical pattern the Company experienced. Therefore, we are not persuaded by the
16 In line with Rule 25-7.045, F.A.C, all the parameters and rates of gas utility’s accounts shall be reviewed at least
every 5 years.
17 The depreciation parameters and rates resulting from the current depreciation study will be reviewed by the
Commission again in five years per Rule 25-7.045, F.A.C.
2014
2015
2016 	17.1 	17.1
2017 	37.5 	37.5
2018 	27.6 	27.6
2019 	37.8 	37.8
2020 	25.5 	25.5
2021 	26.0 	26.0
2022 	29.0 	29.0 	29.2 	FCG filed its last depreciation study
2023 	23.7 	23.7
2024 	23.7 	5.6 	29.3
2025 	31.7 	18.0 	49.7 	31.5 	FCG filed its current depreciation study
2026 	21.9 	11.5 	33.4
2027 	14.5 	18.0 	32.5
2028 	14.0 	18.5 	32.5
2029 	12.5 	17.5 	30.0
2030 	12.0 	17.5 	29.5 	31.6 	FCG filing its next deprecation study
Annual Average 	23.6 	15.2 	30.7 	Annual Average for SAFE + Orange Pipe
Source of Data: EXH 30, BSP E-170 − E-173.
Year
Miles of Pipe Replaced 	5-yr Average
of the Total
Replacements
SAFE
Replacements
Orange Pipe
Replacements
Total
Replacements

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 10
Company’s argument and find that a 65/R4 life pattern, derived based on historical data, is still
indicative of the expected pattern of retirement for Account 3762 at the present. Taking into
consideration both the historical data analysis and the current Company plans and outlook, as
well as the curve shape the Company studied and derived just 3 years ago, we approve a 65/R4
as an appropriate life pattern estimate for Account 3762.
B. 	Net Salvage for Accounts 3762: Mains-Steel and 3801: Services-Plastic18
The currently prescribed net salvage (NS) for Account 3762: Mains-Steel is (50) percent.
FCG contended that an increase from (50) percent to (40) percent is justified due to recent
trends, easier accessibility to retired pipe, and expectations of other Florida gas companies.
Account 3801: Services-Plastic is FCG’s third largest account by plant investment.
Assets in this account represent plastic distribution service lines from the mains to the customers’
property lines or meter location. The currently prescribed NS for this account is (68) percent.
FCG based its proposed increase of the NS of this account from (68) percent to (40) percent on
easier accessibility to the retired services, as well as the expectations of other Florida gas
companies.
OPC objected to every NS change proposed by FCG. OPC witness Dunkel recommended
that all accounts’ current NS factors should remain in effect because, as shown in Table 2, FCG’s
proposed increase in NS “is contrary to even the net salvage data as calculated and filed by
FCG.”
Table 2
Comparison of Net Salvage Factors
Net Salvage Percentage
FCG Last 5-yr Avg. 	Currently Approved FCG Proposed
Per FCG Schedule 	for FCG
Account 3762: Main-Steel 	(73) 	(50) 	(40)
Account 3801: Services-Plastic 	(132) 	(68) 	(40)
OPC contended that FCG’s claim that the Cost of Removal for Service-Plastic will be
much less in the future than it has been in the past was not supported in the record. Staff witness
Kunkler also disagreed with FCG’s NS proposals for Accounts 3762 and 3801, stating that
retaining the currently approved net salvage factors is the most reasonable approach for these
two accounts at this time because the Company’s proposed increase is not supported by historical
salvage data and exhibits an over-reliance on expectations. Witness Kunkler also noted that the
realized average net salvage factor for the account over the past 20 years and the most recent 5
years are both lower net salvage factors than the factor currently prescribed. With the exception
of 2024 (in which the full cost of removal may not be fully processed as of yet), FCG has not
18 Net salvage (NS) is an important parameter for calculating the remaining life depreciation rate. It is gross salvage
minus cost of removal of the retired plant assets. When an account’s cost of removal is larger than the gross salvage
of the retired assets in that account, the NS value of the account becomes negative.

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 11
experienced a single year since 2008 in which the realized net salvage has been greater than (90)
percent.
FCG argued that that less negative net salvage is expected in the future, primarily due to
improved accessibility to retired pipe, which will reduce labor costs − the largest component of
removal expense. Additionally, the FCG proposals reference net salvage estimates from other
Florida gas companies.
When steel mains pipes [Account 3762 plants] are retired, they are usually permanently
physically disconnected from all sources of gas and abandoned in place. When plastic services
pipes [Account 3801 plants] are retired, they are cut and capped at the main and abandoned in
place. There are costs associated with accessing the line, disconnecting it from all sources of gas,
locking valves to prevent gas flow, and completing any surface restoration.
The cost of removal is part of the NS, which in turn is part of depreciation costs. Hence,
when the cost of removal of an account decreases, the NS of the account increases. FCG
supported 	its 	increase 	in 	NS 	via 	improved 	accessibility 	by 	claiming 	that 	the 	improved
accessibility will make it easier for field personnel to cut and cap the pipes when the relocated
mains/service lines were retired and abandoned. However, FCG and CUC were unable to state
whether FCG’s prior owner had experienced that same degree of accessibility. FCG further
claimed that net salvage for Steel Mains has improved significantly, and that this this trend is
expected to continue. Plastic Services show a similar, though less pronounced, improvement.
In terms of the “Chesapeake’s removal practices” before and after FCG’s ownership, the
Company continues to utilize the services of the same vendor. The main difference is the amount
of paperwork involved due to system changes. Company personnel has noted an ease with
CUC’s current work flow processes.
FCG’s proposed increase in NS is not well supported. First, as noted in the Company’s
discovery response discussed above, the ‘improved accessibility’ was observed before FCG’s
ownership change, but the data supporting the claim appears to be lacking, with no additional
information available from either FCG or its current owner CUC. Second, FCG did not report
any major changes in removal practices (such as transforming from ‘cut, physical removal,
transport, and recycle’ to ‘cut, cap, and abandon in place’); hence, no substantial decrease in
physical removal costs has been claimed. We are not persuaded that changes in the amount of
paperwork related to work flow processes would be expected to cause a significant reduction in
cost of removal of the pipelines.
We 	also 	reviewed 	the 	Company’s 	claim 	that 	“[r]etirements 	are 	delayed 	because
operations require newly installed mains and services to be fully operational before retiring the
old ones. This delay also impacts net salvage.” As testified by FCG witness Lee, there could
have been a lag in reporting and some 2024 retirement-related removal costs may have been
recorded in 2025. Thus, the relatively high NS recorded in 2024 (negative one percent)
highlighted by witness Lee is not a correct representation of the account’s true NS value in that

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 12
year. As such, we give more consideration to FCG’s historical 5-year average NS in determining
the future NS estimate to be applied in this case.
Further, FCG witness Lee testified that the average NS for the most recent five years is
(73) percent and (132) percent for Accounts 3762 and 3801, respectively. This indicates that
FCG’s proposed (40) percent NS values deviates significantly from the Company’s own
historical data. On the other hand, a NS of (50) percent for Accounts 3762 and a NS of (68) for
Account 3801, which are currently approved and recommended to be retained by both OPC
witness Dunkel and staff witness Kunkler, are more in line with the Company’s historical data.
These NS estimates are within the industry range.19
Based on the record evidence, we find that retaining a NS of (50) percent and (68)
percent 	for 	Accounts 	3762 	and 	3801, 	respectively, 	is 	appropriate. 	We 	will 	review 	the
appropriateness of these NS estimates in no more than five years pursuant to Rule 25-7.045
F.A.C.
C. 	Parameters for Other Accounts
Our staff thoroughly reviewed the appropriateness of FCG’s proposed parameters and
rates for all other depreciable accounts. The Company revised certain depreciation parameters
and amended its proposals based on this review and the information that was available to it after
the Company’s ownership change. We find that the proposed depreciation parameters for such
accounts as set forth in FCG’s 2025 Study are reasonable at this point in time.
Additionally, 	FCG 	submitted 	certain 	amortizable 	accounts 	as 	part 	of 	the 	2025
Depreciation Study.20 The Company proposed to synchronize the amortization periods with those
of its parent Company, CUC, which has uniform amortization periods for amortizable accounts
across all of its natural gas distribution business units. The Company indicated that amortization
periods are based on judgement and were approved in the latest depreciation studies for CUC
Florida Public Utilities Company’s consolidated natural gas division and CUC-Maryland. They
have also been proposed in the CUC-Delaware 2024 depreciation study.
We find that FCG’s amortizable accounts’ parameters and rates are supported by the
record 	and 	reasonable. 	The 	Company’s 	request 	regarding 	its 	proposed 	modifications 	to
19 See Order Nos. PSC-2023-0177-FOF-GU, issued June 9, 2023, in Docket No. 20220069-GU, In re: Petition for
rate increase by Florida City Gas; PSC-2023-0103-FOF-GU, issued March 15, 2023, in Docket No. 20220067-GU,
In re In re: Petition for rate increase by Florida Public Utilities Company, Florida Division of Chesapeake Utilities
Corporation, Florida Public Utilities Company - Fort Meade, and Florida Public Utilities Company – Indiantown
Division; PSC-2023-0388-FOF-GU, issued December 27, 2023, in Docket No. 20220212-GU, In re: Petition for
approval of depreciation rate and subaccount for renewable natural gas facilities leased to others, by Peoples Gas
System, Inc.; PSC-2023-0215-PAA-GU, issued July 26, 2023, in Docket No. 20230022-GU, In re: Petition for
approval of 2022 Depreciation Study by St. Joe Natural Gas Company, Inc.; PSC-2022-0153-PAA-GU, issued April
22, 2022, in Docket No. 20210183-GU, In re: Petition for approval of 2021 depreciation study, by Sebring Gas
System, Inc.
20 An amortizable account is usually used to book intangible assets and small plant items such as office equipment,
tools, and miscellaneous equipment. For each such account, the Commission prescribes an amortization period (e.g.
10 years) to allow the investment of the account to be recovered evenly throughout the plant’s service life.

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 13
amortizable accounts to reflect the amortization of CUC’s other gas business units comports with
Rule 25-7.045(3)(b), F.A.C.
Summary
There is some degree of subjectivity in depreciation studies. Our analysis weighed the
arguments and support for parameter adjustments based on the degree of reliance placed on
historical retirement/salvage activity as well as the reliance placed on future expectations and
professional judgement. After thoroughly reviewing all depreciation parameters presented in the
2025 Study, we find adjustments to one account’s proposed curve shape and two accounts’ NS
are necessary.
We find FCG’s proposed R2.5 curve shape used to calculate remaining life rate for
Account 3762: Mains-Steel unsupported in the record. We find that the Company’s historic
curve shape for this account is supported by the preponderance of evidence in the record and
most appropriate. We approve R4 as the appropriate curve shape for Account 3762.
We find the continuation of current NS percentages for accounts 3762 and 3801 are
supported by the preponderance of the evidence, most notably the testimony of both OPC
witness Dunkel and staff witness Kunkler.
Conclusion
We approve the depreciation parameters and resulting remaining life depreciation rates
for each depreciable account, as well as the amortization period for each amortizable account, as
set forth in Attachment A to this order, which is incorporated by this reference as if fully set
forth herein.
3. 	FCG’s Resulting Depreciation Imbalances
Rule 25-7.045(4)(k), F.A.C., provides that an account’s theoretical reserve amount is
determined by the account’s book investment minus the account’s future accruals and future net
salvage. The theoretical reserve is a calculated reserve based on the proposed parameters of that
account.21
The reserve imbalance of the account is the difference between the account’s theoretical
reserve and its book reserve. If the book reserve amount is larger than the theoretical reserve
amount for a particular account, then this account presents a reserve surplus at a specific point in
time. If the book reserve amount is less than the theoretical reserve amount, the account presents
a deficit.
Applying the depreciation parameters and depreciation rate proposed in the 2025 Study,
FCG witness Lee calculated the Company’s theoretical reserve and reserve imbalance for each
21 Rule 25-7.045(1)(k), F.A.C..

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 14
depreciable account. The resulting total imbalance calculated by the Company is a surplus of
$19.2 million, as of January 1, 2025.
OPC recommended that FCG’s 2025 Study should be rejected but, in the alternative,
OPC proposed that the Commission should adopt the recommendation of staff witness Kunkler.
We have reviewed FCG’s reserve imbalance for each depreciable account. We also
reviewed the reserve imbalance provided by staff witness Kunkler. We agree with the reserve
imbalance as calculated by witness Kunkler. The resulting reserve imbalance is a surplus of
$6,716,759 for the depreciable accounts. Adding in the Company’s identified reserve surplus of
$43,469 associated with the amortizable accounts, the total amount of reserve imbalance for
FCG’s is a surplus of $6,760,228, or approximately $6.8 million.
Table 3 below shows our approved theoretical reserve imbalances for each FCG
depreciable plant account. The table includes some inter-account reserve transfers, which are all
within the same plant category (distribution). These transfers do not impact the reserve
imbalance calculation here because they net to zero.

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 15
Table 3
Commission Approved Theoretical Reserve Imbalance (as of 1/1/2025)
Conclusion
We approve the resulting theoretical reserve imbalances for FCG’s depreciable plant
accounts as shown in Table 3.
4. 	Corrective Measures to the Theoretical Reserve Imbalances
This section addresses whether any corrective measures should be taken with regard to
the theoretical reserve imbalances. The remaining life technique is the most common method we
use to address reserve imbalances (surplus or deficit).22 We have approved other corrective
22 Order Nos. PSC-14-0514-PAA-GU, in Docket No. 20140051-GU, issued September 25, 2014, In re: 2014
depreciation study by Florida City; PSC-2018-0190-FOF-GU, issued April 20, 2018, in Docket No. 20170179-GU,
In re: Petition for rate increase by Florida City Gas; PSC-17-0066-AS-GU, issued February 28, 2017, in Docket
3642 Structures & Improvements 	$807 	$717 	$90 	$807
3643 LNG Processing Terminal Equipment 	$2,464 	$4,795 	($2,331) 	$2,464
3645 Measuring and Regulating Equip. 	$808 	$718 	$90 	$808
3646 Compressor Station Equipment 	$1,922,731 	$1,194,047 	$728,684 	$1,922,731
3743 Right‐of‐Way 	$0 	$4,601 	($4,601) 	$0
3750 Structures & Improvements 	$8,672 	$39,118 	($30,446) 	$8,672
3761 Mains ‐ Plastic (Formally Acct 3762) 	$49,591,899 	$41,145,183 	$8,446,716 	($8,446,716) 	$41,145,183
3762 Mains ‐ Steel (Formally Acct 3761) 	$67,160,281 	$69,435,729 	($2,275,448) 	$2,275,448 	$69,435,729
3780 Measuring and Regulating Equip. ‐ General 	$410,733 	$492,151 	($81,418) 	$410,733
3790 Measuring and Regulating Equip. ‐ City Gates 	$5,689,779 	$5,075,410 	$614,369 	$5,689,779
3801 Services ‐ Plastic (Formally Acct 3802) 	$32,898,453 	$31,428,582 	$1,469,871 	$32,898,453
3802 Services ‐ Steel (Formally Acct 3801) 	$18,490,162 	$15,969,307 	$2,520,855 	$18,490,162
3810 Meters 	$6,267,515 	$9,351,739 	($3,084,224) 	$3,084,224 	$9,351,739
3812 Meters ‐ ERTs (Formally Acct 3811) 	$301,699 	$641,492 	($339,793) 	$339,793 	$641,492
3820 Meter Installations 	$256,072 	$1,372,701 	($1,116,629) 	$1,116,629 	$1,372,701
3821 Meter Installations ‐ ERT 	($1,172,264) 	$5,868 	($1,178,132) 	$1,178,132 	$5,868
3830 House Regulators 	$1,225,606 	$1,613,062 	($387,456) 	$387,456 	$1,613,062
3840 House Regulators Installations 	$432,366 	$613,491 	($181,125) 	$65,034 	$497,400
3850 Indus. Meas. & Reg. Station Equip 	$2,309,679 	$2,160,730 	$148,949 	$2,309,679
3870 Other Equipment 	$713,530 	$556,798 	$156,732 	$713,530
3900 Structures & Improvements 	$2,490,539 	$2,295,127 	$195,412 	$2,490,539
3921 Cars (revised subaccount) 	$163,750 	$203,248 	($39,498) 	$163,750
3922 Light ‐Med. Trucks, SUVs & Vans (revised subaccount) 	$3,453,447 	$2,530,685 	$922,762 	$3,453,447
3923 Heavy Trucks 	$591,746 	$556,287 	$35,459 	$591,746
3924 Trailers (formally account 3920) 	$137,364 	$87,623 	$49,741 	$137,364
3941 Natural Gas Vehicle Equipment 	$826,016 	$664,662 	$161,354 	$826,016
3960 Power Operated Equipment 	$84,705 	$97,926 	($13,221) 	$84,705
Total - Depreciable Accounts 	$194,258,559 	$187,541,800 	$6,716,759 	$0 	$194,258,559
Total - Amortizable Account 	$43,469
Grand Total 	$6,760,228
Rounded 	$6.8 Million
Imbalance
(+) = surplus
(-) = deficit
Theoretical
Reserve
Book
Reserve
Commission
Approved
Reserve
Transfer
Restated
Book
Reserve
Account Description
Acnt
No.

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 16
measures, including amortization of a certain portion of the surplus over a period of time that is
shorter than the remaining life, or amortization of the entire surplus over a specific period (years)
shorter than the remaining life.23 In this Section, the dispute is over the methodology to address
reserve imbalances.
FCG witness Lee calculated the Company’s total theoretical reserve imbalance, resulting
in a surplus of $19,200,911 for depreciable accounts. Adding in the Company’s identified
reserve imbalance of $43,469 associated with the amortizable accounts, FCG’s total reserve
imbalance is $19,244,380, or approximately $19.2 million. The Company requested the total of
its calculated $19.2 million reserve surplus be amortized over 2 years.
OPC opposed FCG’s proposed corrective measure of a 2-year amortization of the
Company’s calculated reserve surplus and asserted if there is any imbalance identified in this
case, it should be addressed in the remaining life calculations using the remaining life technique.
OPC offered testimony that the Company’s amortization proposal would result in future service
rates being higher than if the surplus were not removed from the depreciation reserve. If we were
to approve any reserve surplus amortization in this docket, the associated value would be
collected through future depreciation expense and ultimate service rates. Meaning in general, a
reserve amortization dollar today would be equal to a depreciation expense dollar and the
additional grossed-up return on the increased rate base in the future. The additional return would
result from the corresponding increase in rate base caused by the reduction of the depreciation
reserve. Based on the Company’s latest depreciation parameters and associated reserve surplus,
OPC estimated the initial annual (return-related) revenue requirement, or grossed-up return on
the increased rate base associated with FCG’s proposal, to be $1,676,453. This figure correlates
to the Company’s calculated depreciation reserve surplus in the amount of $19.2 million, the
last-authorized overall rate of return of 6.44 percent, and gross-up factor of 1.3527 used in
setting current customer base rates.
Additionally, 	OPC 	contended 	that 	reliance 	on 	Rule 	25-7.1352, 	F.A.C., 	“Earnings
Surveillance Report[s],” is insufficient to form a basis for understanding a regulated natural gas
company’s earnings position. In its Brief, OPC stated that a necessary detailed earnings review to
determine FCG’s true earnings posture can only be done in a rate case.
No. 160159-GU, In re: Petition for approval of settlement agreement pertaining to Peoples Gas System’s 2016
depreciation study, environmental reserve account, problematic plastic pipe replacement, and authorized ROE;
PSC-2023-0388-FOF-GU, issued December 27, 2023, in Docket No. 20220219-GU, In re: Petition for approval of
2022 depreciation study by Peoples Gas System, Inc.; PSC-14-0698-PAA-GU, issued December 18, 2014, in Docket
No. 20140016, In re: 2014 depreciation study by Florida Public Utilities Company; PSC-2023-0103-FOF-GU,
issued March 15, 2023, in Docket No. 20220067-GU, In re: Petition for rate increase by Florida Public Utilities
Company, Florida Division of Chesapeake Utilities Corporation, Florida Public Utilities Company - Fort Meade,
and Florida Public Utilities Company – Indiantown Division; PSC-2023-0215-PAA-GU, issued July 26, 2023, in
Docket No. 20230022-GU, In re: Petition for approval of Depreciation Study by St. Joe Natural Gas; PSC-2022-
0153-PAA-GU, issued April 4, 2022, in Docket No. 20210183-GU, In re: Petition for approval of 2021
depreciation study, by Sebring Gas System, Inc.
23 Order Nos. PSC-2023-0177-FOF-GU; PSC-2020-0485-FOF-GU, issued December 10, 2020, in Docket
20200051-GU, In re: Petition for rate increase by Peoples Gas System; PSC-2021-0446-S-EI, issued December 2,
2021, in Docket No. 20210015-EI, In re: Petition for increase in rates by Florida Power & Light Company.

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 17
In support of its 2-year amortization request, FCG asserted that it is currently earning far
below its authorized rate of return, and would have likely filed for a base rate increase in 2025 if
if had known that this depreciation study would take longer than anticipated to be resolved. FCG
continued that this earnings posture implies its customers are not paying rates sufficient to allow
the Company to cover operating expenses and earn an adequate return on its investments.
Specifically, for the 12 months ended June 30, 2025, the Company reported under-earning its
mid-point rate of return (mid-point equity return of 9.50 percent and a weighted average cost of
capital of 7.65 percent) by approximately $10.8 million.24 The Company is under-earning the
low-point of its earnings range by approximately $8.4 million. FCG is projected to under-earn by
an even greater margin at year end 2025. FCG contended that the 2-year amortization proposal is
a fair balance between the ongoing benefits of a delayed rate case filing and associated delayed
rate increase for customers, and would promptly correct the reserve imbalance and allow the
Company a better opportunity to earn near or within its approved rate of return range.
FCG also argues that the the 2-year amortization of the $19.2 million depreciation reserve
surplus would put downward pressure on future (rate case) interim service rates because the
amortization amount would be accounted for in determining the level of under-earnings reflected
in the Company’s historic test year, provided such amortization occurs in that year. Stated
alternatively, the amount of under-earnings would be greater absent amortization of any reserve
surplus. Interim service rates would be based on the level of under-earnings; thus, the greater
level of under-earnings, the higher the interim service rates.
Analysis
Our decision as to the technique to be utilized to address a reserve surplus in a particular
instance must be based on the record before us, but is also infused with many policy
considerations. As previously noted, we exercised our discretion in the past and approved
different methodologies as necessary to address the needs of a particular situation.
We do not agree with FCG’s proposal of the 2-year amortization for correcting the
Company’s total depreciable plants’ theoretical reserve surplus. We approve the remaining life
technique to address the reserve surplus. The use of the remaining life technique in calculating
depreciation rates will spread any surplus (or deficit) over the remaining life of the asset group
by adjusting the depreciation rate up or down. 25 In essence, the remaining life technique either
slows down the rate of depreciation in the case of a surplus, or increases the rate of depreciation
in the case of a deficit. As such, the resulting remaining life rate for each account is self-
correcting with regard to the imbalance (surplus or deficit) over the remaining life of the asset.
This stability benefits ratepayers.
FCG argued that its calculated total reserve imbalance of $19.2 million represents nearly
10 percent of the calculated theoretical reserve; using the remaining life technique to correct it
will take too many years so that a short 2-year amortization period is justified. We do not agree
24 Id.
25 Order No. PSC-2023-0388-FOF-GU, at page 26.

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 18
with this argument. The matter of how a reserve imbalance should be corrected is not a subject of
depreciation theory but is instead a policy decision. In prior cases, we have approved using the
remaining life technique to address varying levels of reserve imbalances, some of which are
relatively large in size, as shown in Table 4 below.
Table 4
Total Theoretical Reserve Imbalance and the Corrective Measure
Each of the orders cited in rows 3 through 5 of Table 4 address a reserve surplus that is
relatively large in size, when measured against the corresponding theoretical reserve, the book
reserve, and the plant investment. In essence, we have ordered using the remaining life technique
as the corrective measure for relatively large reserve imbalances. Compared with these cases,
FCG’s currently calculated total reserve surplus is small, when measured against the theoretical
reserve, the book reserve, or the investment.
The Company claimed that another reason for its proposed corrective measure of a 2-year
amortization was that using the remaining life technique would mean that it would take 43 years
to correct the imbalance. A 2-year amortization ensures that those customers who contributed to
the surplus are more likely to receive the benefit promptly by reducing depreciation expense.
However, taking 43 years to correct FCG’s calculated reserve surplus can only be realized if
FCG’s currently proposed depreciation parameters are not changed throughout the 43 years,
which is the estimated average remaining life of the Company’s total depreciable plant. The
depreciation rule provides that the calculated reserve imbalance and its underlying depreciation
parameters will be reviewed at least every five years. Consequently, the resulting theoretical
reserve imbalances should be calculated and action taken to address such imbalance on that same
schedule.
FCG’s argument for transferring depreciation reserves to earnings is based on the claim
that current customers are underpaying for service. However, a depreciation reserve surplus
indicates that - based on current information - depreciation expense has been greater than
necessary. The depreciation expense customers have paid to this point did not cause FCG to
under-earn its authorized return. Such a surplus should be returned to customers through the
remaining life technique.
The record shows that if the $6.8 million reserve imbalance approved is amortized over a
2-year period, the resulting annual depreciation expenses (as shown in Section II of Attachment
B to this order) would be lower than the annual depreciation expenses resulting from applying
($) 	($) 	($) 	($) 	(%) 	(%) 	(%)
Utility Docket No. Status 	(1) 	(2) 	(3) 	(4)=(2)-(3) (5)=(4)/(3) (6)=(4)/(2) (7)=(4)/(1) 	(8)
Staff Proposed 	682,544,588 194,258,559 187,541,800 	6,716,759 	3.6% 	3.5% 	1.0% 	Remaining life
FCG Proposed 	682,544,588 194,258,559 175,057,648 	19,200,911 	10.9% 	9.9% 	2.8% 	2-yr amortization
2 FCG 20170179-GU PSC-2018-0190-FOF-GU 	425,352,480 180,638,460 169,129,311 	11,509,149 	6.8% 	6.4% 	2.7% 	Remaining life
3 PGS 20220219-GU PSC-2023-0388-FOF-GU 3,186,513,154 889,076,505 728,684,347 160,392,158 	22.0% 	18.0% 	5.0% 	Remaining life
4 PGS 20180044-GU PSC-2018-0501-S-GU 	1,378,109,097 664,335,975 515,783,674 148,552,301 	28.8% 	22.4% 	10.8% 	Remaining life
5 FPUC 20220067-GU PSC-2023-0103-FOF-GU 	572,352,652 140,037,855 119,869,638 	20,168,217 	16.8% 	14.4% 	3.5% 	Remaining life
Surplus/
Book
Reserve
Surplus/
Investment 	Corrective
Measure
FCG 20250035-GU
Depreciable
Plant
Investment
Depreciable
Plant
Book Reserve
Theoretical
Reserve
Reserve
Imbalance:
Surplus
Surplus/
Theoretical
Reserve
1

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 19
the remaining life technique to correct the reserve imbalance (see Section I of Attachment B).
However, amortization of the reserve imbalance over less than remaining life would, all else
being equal, cause future depreciation rates and revenue requirements to increase. More
specifically, FCG indicated that, with respect to the impact of its proposed surplus corrective
measure on customer’s rates in next base rate case, correction of the reserve surplus over the
proposed 2-year period compared to correction through the remaining life rate design could, in a
vacuum, result in an increased rate base and depreciation expenses in FCG’s next rate case
proceeding.
An impact of FCG’s proposed 2-year amortization would be increased Company earnings
because the depreciation reserve would be used to offset or credit 2025 and 2026 depreciation
expenses. Given that the Company is under-earning through June 30, 2025, and projected to
under-earn for calendar year 2025, FCG’s amortization proposal “would be acting as a bridge” in
terms of earnings support between now and a future rate case/implementation of revised base
rates. 	However, 	the 	2-year 	amortization 	proposal 	is 	not 	being 	offered 	as 	a 	definitive
postponement of a future rate case.
The specific accounting entries associated with the Company’s 2-year amortization
proposal 	consist 	of 	debits 	to 	accumulated 	depreciation 	by 	Federal 	Energy 	Regulatory
Commission plant account and credits to depreciation expense. While the Company’s under-
earnings level quoted in this Section is associated with the first half of 2025 and the proposed
amortization occurs over calendar year 2025, approving the Company’s requested depreciation
parameters and $19.2 million 2-year amortization proposals could potentially bring it inside the
authorized earnings range for 2025.
The matter of how a reserve imbalance should be corrected is not a subject of
depreciation theory but is instead a policy decision. In this case, approving a 2-year amortization
for correcting staff’s calculated $6.8 million reserve surplus, which can help in addressing FCG’s
short term under earnings, is one direction available to us. However, there are compelling
reasons to support using the remaining life technique to address the identified theoretical reserve
surplus.
Conclusion
We approve using the remaining life technique to correct the theoretical reserve
imbalances. The resulting total annual depreciation expense is $17.3 million, as shown in
Attachment B, Section I, which is incorporated by this reference as if fully set forth herein.
5. 	Implementation Date
Rule 25-7.045(5)(b), F.A.C., states, in part, a depreciation study shall include “a
comparison of current and proposed annual depreciation rates and expenses. The comparison of
current and proposed rates shall identify the proposed effective date for the proposed rates.”
FCG’s 2025 Depreciation Study included a proposed effective date of January 1, 2025, for the
proposed depreciation rates as required by this Rule.

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 20
OPC recommended that FCG’s 2025 Depreciation Study should be rejected and any
implementation date should be no sooner than the effective date of new end user rates resulting
from the Company’s next rate case.
An implementation date must be set. FCG’s proposed effective date of January 1, 2025 is
in line with the Company’s data and proposals set forth in this docket. Additionally the
Company’s investments and reserves used for calculating the reserve imbalance are as of January
1, 2025. We find the appropriate implementation date should be January 1, 2025.
Conclusion
The implementation date for revised depreciation rates and amortization schedules shall
be January 1, 2025.
6. 	Amortization of Investment Tax Credits (ITCs) and Flow Back of Excess Deferred
Income Taxes (EDITs)
FCG argued if the Commission approves the 2025 Depreciation Study, the flow back of
EDITs should be revised to reflect the depreciation rates and amortization schedules ultimately
approved by us in this proceeding. FCG explained that if we approve changing the remaining
lives of depreciable property, it would also be necessary to change the amortizations of ITCs and
EDITs to avoid conflict with provisions of the Internal Revenue Code (IRC) and Tax Cuts and
Jobs Act. The flow back of EDITs should be revised to reflect the depreciation rates and
amortization schedules ultimately approved by the Commission in this proceeding. FCG
affirmed it does not have any ITCs at this time.
OPC contended FCG did not file a complete depreciation study as required by Rule 25-
7.045, F.A.C.; therefore, there is no lawful basis to change depreciation rates and amortization
schedules, thus rendering this issue moot. OPC acknowledged in the event the Commission
grants FCG’s request, the Commission should follow Commission practice.
In order to ensure consistency with the applicable provisions of the IRC and Tax Cuts
and Jobs Act, the amortization of EDITs shall be revised to reflect the rates approved in this
order.
In addition, FCG confirmed it does not have any ITCs. FCG agreed that if the Company
changes the remaining lives of depreciable property, it is also important to change the
amortization of ITCs and EDITs to avoid violation of provisions of IRC Section 50(d)(2) for
ITCs, and IRC Section 168(i)(9), former Section 167(1), and Section 13001(d) of the Tax Cuts
and Jobs Act for EDITs, and their underlying Treasury Regulations.
Revising a utility’s book depreciation lives in general results in a corresponding change
in its rates of ITC amortization and flow back of EDITs. This revision is implemented in order to
comply with normalization requirements of the IRC as set forth in Federal Tax Regulations

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 21
under the Code sections,26 Sections 168(f)(2) and (i)(9),27 former IRC Sections 167(1), and
46(f), 28 and Section 203(e) of the Tax Reform Act of 1986 (the Act).29
Former IRC Section 46(f)(6) of the Code indicated that the amortization of the ITC
should be determined by the period of time actually used in computing depreciation expense on
the regulated books of the utility for ratemaking purposes.30 While Section 46(f)(6) was repealed,
under IRC Section 50(d)(2), the terms of former IRC Section 46(f)(6) remain applicable to
public utility property for which a regulated utility previously claimed ITCs. FCG confirmed in
response to our staff’s 3 rd set of interrogatories, No. 55, that 26 U.S.C 46(f)(6) has been repealed
and at the time of filing, it did not have any ITCs. The Company is requesting changes to the
remaining lives and the EDITs must also be changed to avoid a potential IRC violation. Changes
in the ITCs and EDITs are needed to avoid violations of the provisions of IRC Section 50(d)(2)
for ITCs, and IRC Section 168(i)(9), former Section 167(I), and Section 13001(d) of the Tax
Change 	and 	Jobs 	Act 	for 	EDITs, 	and 	their 	underlying 	U.S. 	Treasury 	Regulations. 	The
consequence of an ITC or EDIT normalization violation is a repayment of unamortized ITC
balances to the IRS and the inability to utilize accelerated depreciation. Therefore, we approve
the flow back of EDITs be revised to match the actual recovery periods for the related property.
Conclusion
The current amortization of ITCs, if any, and the flow back of EDITs shall be revised to
reflect the depreciation rates and amortization schedules approved by the Commission. FCG
shall file detailed calculations of the revised EDITs at the same time it files its earnings
surveillance report as specified in Rule 25-7.1352, F.A.C.
Based on the foregoing, it is
ORDERED by the Florida Public Service Commission that our review of Florida City
Gas’s depreciation study indicates a need to review the Company’s currently prescribed
depreciation rates. It is further
ORDERED that the depreciation parameters and resulting depreciation rates for each
depreciable plant account, as well as the amortization periods for each amortizable account listed
in Attachment A to this Order are approved. It is further
ORDERED that the resulting theoretical reserve imbalances of FCG’s total plant
accounts, as of January 1, 2025, is a surplus of $6.8 million as shown in Table 3 on Page 15 of
this Order. It is further
26 Treas. Reg. §1.167; Treas. Reg. §1.46.
27 Title 26 US Code §§168(f)(2) and (i)(9).
28 Under IRC Section 50(d)(2), the terms of former 26 US Codes §167(1) and §46(f), which were repealed by the
Revenue Reconciliation Act of 1990 (Pub. L. No. 101-508, §11812(a)(1-2)(1990)), remain applicable to public
utility property for which a regulated utility previously claimed ITCs, which is the case here. (I.R.S. Priv. Ltr. Rul.
200933023, 1n.1 (May 7, 2009).
29 Tax Reform Act of 1986, Pub. L. No. 99-514 (100 State, 2085, 2146)(1986).
30 Former 26 US Code §46(f)(6) (establishing proper determination of ratable portion).

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 22
ORDERED 	that 	the remaining 	life 	technique 	shall be used 	to 	correct 	the 	depreciation
reserve imbalances 	identified in Section 	3 of this Order. The resulting annual 	depreciation rates
and expenses are presented in Attachment B, Section 	I.
ORDERED 	that the implementation of the new depreciation 	rates 	for FCG approved 	in
this order shall be January 	1, 2025. 	It 	is further
ORDERED 	that 	the 	current 	amortization 	of ITCs 	and 	flow back 	of EDITs 	shall 	be
revised to reflect the depreciation rates and amortization schedules approved by the Commission.
FCG 	shall 	file 	detailed 	calculations of the revised EDITs 	at the same time 	it 	files 	its 	earnings
surveillance report as specified in Rule 25-7.1352, F.A.C. 	It is further
ORDERED that this docket shall be closed once the time for filing an appeal has run.
By ORDER of the Florida Public Service Commission this 9th day of March, 2026 	.
ADAMWmN
Commission Clerk
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 	to 	the 	parties 	of record 	at 	the 	time 	of
issuance and, 	if applicable, interested persons.
JDI/lt

ORDER NO. PSC-2026-0055-FOF-GU
DOCKET NO. 20250035-GU
PAGE 23
NOTICE OF FURTHER PROCEEDINGS OR JUDICIAL REVIEW
The Florida Public Service Commission is required by Section 120.569(1), 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 well 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.
Any party adversely affected by the Commission's final action in this matter may request:
1) reconsideration of the decision by filing a motion for reconsideration with the Office of
Commission Clerk, 2540 Shumard Oak Boulevard, Tallahassee, Florida 32399-0850, within
fifteen (15) days of the issuance of this order in the form prescribed by Rule 25-22.060, Florida
Administrative Code; or 2) judicial review by the Florida Supreme Court in the case of an
electric, gas or telephone utility or the First District Court of Appeal in the case of a water and/or
wastewater utility by filing a notice of appeal with the Office of Commission Clerk, and filing a
copy of the notice of appeal and the filing fee with the appropriate court. This filing must be
completed within thirty (30) days after the issuance of this order, pursuant to Rule 9.110, Florida
Rules of Appellate Procedure. The notice of appeal must be in the form specified in Rule
9.900(a), Florida Rules of Appellate Procedure.

ORDER NO. PSC-2026-0055-FOF-GU 	Attachment A
DOCKET NO. 20250035-GU
PAGE 24
Acnt No. Acnt Description 	Book**
Investment
Book
Reserve 	Curve ASL 	ARL 	NS 	Curve ASL ARL NS Reserve
Ratios
RL
Depreciation
/Amortization
Rate***
MORT
Depreciation
/Amortization
Rate****
(As of 1/1/2025) (As of 1/1/2025) 	(Yrs.) (Yrs.) 	(%) 	(Yrs.) (Yrs.) (%) 	(%) 	(%) 	(%)
3031 Miscellaneous Intangible Plant
(formally Acct 30302) 	$2,126,505 	$313,262 	SQ 	SQ 	14.7 	6.7 	6.7
3032 Miscellaneous Intangible Plant 	$6,944,592 	$1,358,546 	SQ 	SQ 	19.6 	5.0 	5.0
Total Intangible Plant 	$9,071,097 	$1,671,808
3642 Structures & Improvements 	$35,843 	$807 	S4 	50 	50 	- 	S4 	50 	49 	0 	2.3 	2.0 	2.0
3643 LNG Processing Terminal
Equipment 	$239,769 	$2,464 	S4 	50 	50 	- 	S4 	50 	49 	0 	1.0 	2.0 	2.0
3645 Measuring and Regulating Equip. 	$35,905 	$808 	S4 	50 	50 	- 	S4 	50 	49 	0 	2.3 	2.0 	2.0
3646 Compressor Station Equip. 	$59,702,374 	$1,922,731 	S4 	50 	50 	- 	S4 	50 	49 	0 	3.2 	2.0 	2.0
Total Storage Plant 	$60,013,891 	$1,926,810
3743 Right-of-Way 	$11,132 	$0 	SQ 	75 	44 	0 	0.0 	2.3 	1.3
3750 Structures & Improvements 	$273,829 	$8,672 	L0 	33 	31 	- 	R4 	35 	30 	0 	3.2 	3.2 	2.9
3761 Mains - Plastic
(Formally Acct 3762) 	$237,376,057 	$49,591,899 	R2 	75 	66 	(33) 	R2.5 	75 	65 	(30) 	20.9 	1.7 	1.7
3762 Mains - Steel
(Formally Acct 3761) 	$143,280,076 	$65,981,846 	R1.5 	65 	50 	(50) 	R4 	65 	44 	(50) 	46.1 	2.3 	2.3
3780 Measuring and Regulating Equip.
- General 	$2,556,627 	$410,733 	R1.5 	40 	37 	(10) 	S3 	40 	33 	(10) 	16.1 	2.8 	2.8
3790 Measuring and Regulating Equip.
- City Gates 	$17,746,190 	$5,689,779 	R2.5 	50 	41 	(10) 	R3 	50 	37 	(10) 	32.1 	2.1 	2.2
3801 Services - Plastic
(Formally Acct 3802) 	$128,613,988 	$32,898,453 	R1.5 	55 	47 	(68) 	R1.5 	55 	47 	(68) 	25.6 	3.0 	3.1
3802 Services - Steel
(Formally Acct 3801) 	$16,378,776 	$18,490,162 	R0.5 	52 	32 	(125) 	R1.5 	60 	34 (125) 112.9 	3.3 	3.8
3810 Meters 	$24,050,241 	$6,267,515 	R2 	19 	12.4 	3 	R2 	20 	12.6 	(5) 	26.1 	5.3 	5.3
3812 Meters - ERTs
(Formally Acct 3811) 	$4,266,834 	$301,699 	R2 	19 	14.4 	3 	R2 	20 	17.0 	0 	7.1 	5.0 	5.0
3820 Meter Installations 	$6,710,985 	$256,072 	R1 	44 	35 	(25) 	R1 	44 	35 	0 	3.8 	2.3 	2.3
3821 Meter Installations - ERT 	$258,204 	$6,171 	R1 	44 	36 	(25) 	R1 	44 	43 	0 	2.4 	2.3 	2.3
3830 House Regulators 	$7,527,623 	$1,225,606 	S1 	42 	33 	- 	S0 	42 	33 	0 	16.3 	2.4 	2.4
3840 House Regulators Installations 	$2,065,464 	$432,366 	R1 	47 	35 	(25) 	R1 	47 	33 	0 	20.9 	2.3 	2.1
3850 Indus. Meas. & Reg.
Station Equip 	$3,740,797 	$2,309,679 	R3 	37 	17.8 	(2) 	S3 	40 	16.9 	0 	61.7 	2.3 	2.5
3870 Other Equipment 	$2,783,990 	$713,530 	L2 	24 	18.1 	- 	R3 	35 	28 	0 	25.6 	2.7 	2.9
Total Distribution Plant 	$597,640,813 	$184,584,182
3900 Structures & Improvements 	$13,115,013 	$2,490,539 	L0 	25 	20 	- 	S0.5 	40 	33 	0 	19.0 	2.5 	2.5
3910 Office Equipment 	$36,234 	$40,214 	SQ 	SQ 	111.0 	7.1 	7.1
3912 Computer Hardware (Combines
Accounts 39112 and 3915) 	$1,062,207 	$913,452 	SQ 	SQ 	86.0 	10.0 	10.0
3913 Office Furniture
(formally account 3910) 	$1,280,582 	$447,729 	SQ 	SQ 	35.0 	5.0 	5.0
3914 Computer Software
(formally account 39111) 	$0 	$0 	SQ 	SQ 	- 	10.0 	10.0
3921 Cars (revised subaccount) 	$324,144 	$163,750 	L2.5 	9 	4.2 	11 	S2 	12 	3.7 	10 	50.5 	10.8 	7.5
3922 Light -Med. Trucks, SUVs &
Vans (revised subaccount) 	$8,392,837 	$3,453,447 	L3 	10 	6.1 	11 	S2 	12 	7.5 	20 	41.1 	5.2 	6.7
3923 Heavy Trucks 	$1,040,846 	$591,746 	L2 	12 	6.5 	4 	L3 	13 	5.3 	10 	56.9 	6.3 	6.9
3924 Trailers (formally account 3920) 	$174,493 	$137,364 	L2 	12 	4.7 	4 	L2 	20 	9.5 	0 	78.7 	1.8 	4.8
3930 Stores Equipment 	$32,400 	$1,566 	SQ 	SQ 	4.8 	3.8 	3.8
3940 Tools, Shop & Garage Equip. 	$965,394 	$327,689 	SQ 	SQ 	33.9 	6.7 	6.7
3941 Natural Gas Vehicle Equip. 	$1,564,204 	$826,016 	S4 	20 	13.5 	- 	S4 	20 	11.5 	0 	52.8 	4.1 	5.0
3950 Laboratory Equip. 	$0 	$0 	SQ 	SQ 	- 	5.0 	5.0
3960 Power Operated Equip. 	$278,349 	$84,705 	SQ 	15 	10.3 	10 	L2 	15 	9.1 	10 	30.4 	6.5 	6.0
3970 Communication Equip. 	$1,202,866 	$290,423 	SQ 	SQ 	24.1 	7.7 	7.7
3980 Miscellaneous Equip. 	$505,540 	($51,276) 	SQ 	SQ 	(10) 	5.9 	5.9
Total General Plant 	$29,975,107 	$9,717,364
Total Gas Plant 	$696,700,908 	$197,900,164
*
**
***
****
26 Yr Amortization
13 Yr Amortization
Attachment A: Depreciation Parameters and Amortization Periods with Resulting Depreciation/Amortization Rates
15 Yr Amortization
20 Yr Amortization
14 Yr Amortization
10 Yr Amortization
CURRENT*
15 Yr Amortization
COMMISSION APPROVED
12 Yr Amortization
20 Yr Amortization
5 Yr Amortization
Represents Depreciation Rates and Annual Expense using Remaining Life technique to address calculated reserve surplus
Represents Depreciation Rates and Annual Expense using 2-year amortization to address calculated reserve surplus
25 Yr Amortization
10 Yr Amortization
20 Yr Amortization
15 Yr Amortization
20 Yr Amortization
15 Yr Amortization
17 Yr Amortization
Current parameters are approved by Order No. PSC-2023-0177-FOF-GU and Order No. PSC-2018-0190-FOF-GU.
Some accounts were restated by FCG to reflect FCG's parent company CUC's standard natural gas subaccounts, or retirement adjustments. (EXH 3, MPN C2-142, C2-146 )
20 Yr Amortization
20 Yr Amortization
12 Yr Amortization
15 Yr Amortization
12 Yr Amortization

ORDER NO. PSC-2026-0055-FOF-GU 	Attachment B
DOCKET NO. 20250035-GU
PAGE 25
Depreciation/ 	Depreciation/ 	Depreciation/ 	Depreciation/
Amortization 	Annual 	Amortization 	Annual 	Amortization 	Annual 	Amortization 	Annual
Rate 	Expense 	Rate 	Expense 	Rate 	Expense 	Rate 	Expense
Acnt No. 	(%) 	(%) 	(%) 	(%)
3031 	8.3 	$176,500 	6.7 	$141,782 	6.7 	$141,782 	6.7 	$141,767
3032 	5.0 	$347,230 	5.0 	$347,230 	5.0 	$347,230 	5.0 	$347,230
3642 	2.0 	$717 	2.0 	$715 	2.0 	$717 	2.0 	$717
3643 	2.0 	$4,795 	2.0 	$4,843 	2.0 	$4,795 	2.0 	$4,795
3645 	2.0 	$718 	2.0 	$716 	2.0 	$718 	2.0 	$718
3646 	2.0 	$1,194,047 	2.0 	$1,179,176 	2.0 	$1,194,047 	2.0 	$1,194,047
3743 	$0 	2.3 	$253 	1.3 	$148 	1.3 	$148
3750 	3.8 	$10,406 	3.2 	$8,839 	2.9 	$7,824 	2.9 	$7,832
3761 	1.6 	$3,798,017 	1.7 	$4,114,518 	1.7 	$4,114,518 	1.7 	$4,106,606
3762 	2.0 	$2,865,602 	2.3 	$3,306,463 	2.3 	$3,306,463 	2.1 	$3,080,522
3780 	2.6 	$66,472 	2.8 	$72,774 	2.8 	$70,307 	2.8 	$70,307
3790 	2.0 	$354,924 	2.1 	$373,812 	2.2 	$390,416 	2.2 	$390,416
3801 	3.1 	$3,987,034 	3.0 	$3,897,299 	3.1 	$3,928,573 	2.6 	$3,279,657
3802 	2.5 	$409,469 	3.3 	$540,061 	3.8 	$614,204 	3.8 	$614,204
3810 	6.9 	$1,659,467 	5.3 	$1,262,638 	5.3 	$1,262,638 	5.3 	$1,262,638
3812 	9.7 	$413,883 	5.0 	$213,342 	5.0 	$213,342 	5.0 	$213,342
3820 	3.6 	$241,595 	2.3 	$152,522 	2.3 	$152,522 	2.3 	$152,339
3821 	10.3 	$26,595 	2.3 	$5,868 	2.3 	$5,868 	2.3 	$5,861
3830 	2.3 	$173,135 	2.4 	$179,229 	2.4 	$179,229 	2.4 	$179,157
3840 	3.4 	$70,226 	2.3 	$47,460 	2.1 	$43,946 	2.1 	$43,994
3850 	2.3 	$86,038 	2.3 	$84,704 	2.5 	$93,520 	2.5 	$93,520
3870 	4.4 	$122,496 	2.7 	$73,945 	2.9 	$79,543 	2.9 	$79,622
3900 	4.0 	$524,601 	2.5 	$321,954 	2.5 	$327,875 	2.5 	$327,875
3910 	6.7 	$2,428 	7.1 	$2,588 	7.1 	$2,588 	7.1 	$2,588
3912 	20.0 	$212,441 	10.0 	$106,221 	10.0 	$106,221 	10.0 	$106,221
3913 	6.7 	$85,799 	5.0 	$64,029 	5.0 	$64,029 	5.0 	$64,029
3914 	8.3 	$0 	10.0 	$0 	10.0 	$0 	10.0 	$0
3921 	6.0 	$19,449 	10.8 	$35,163 	7.5 	$24,311 	7.5 	$24,311
3922 	6.6 	$553,927 	5.2 	$436,110 	6.7 	$559,522 	6.7 	$559,746
3923 	7.7 	$80,145 	6.3 	$65,343 	6.9 	$72,059 	6.9 	$72,034
3924 	13.4 	$23,382 	1.8 	$3,161 	4.8 	$8,376 	5.0 	$8,725
3930 	4.0 	$1,296 	3.8 	$1,246 	3.8 	$1,246 	3.9 	$1,246
3940 	6.7 	$64,681 	6.7 	$65,224 	6.7 	$65,224 	6.7 	$64,360
3941 	3.0 	$46,926 	4.1 	$64,181 	5.0 	$78,210 	5.0 	$78,210
3950 	5.0 	$0 	5.0 	$0 	5.0 	$0 	5.0 	$0
3960 	6.5 	$18,093 	6.5 	$18,148 	6.0 	$16,701 	6.0 	$16,701
3970 	8.3 	$99,838 	7.7 	$92,528 	7.7 	$92,528 	7.7 	$92,528
3980 	5.0 	$25,277 	5.9 	$29,738 	5.9 	$29,738 	5.9 	$29,738
$17,767,649 	$17,313,823 	$17,600,979 	$16,717,752
Total amount amortized 	($6,760,228) 	($19,244,380)
Annual amount amortized 	($3,380,114) 	($9,622,190)
$14,220,865 	$7,095,562
2-Year Amortization of Reserve Surplus
Annual Expense over 2-Year Amortization Period
CURRENT*
Corrective Measure for
Theoretical Reserve Imbalance
Remaining Life Technique
Total Annual Expenses
Attachment B: Comparison of Annual Expenses
Corrective Measure for
Theoretical Reserve Imbalance
2-Year Amortization
Section I 	Section II 	Section III
Commission Approved 	Alternative Option 	Company Proposed
Corrective Measure for
Theoretical Reserve Imbalance
2-Year Amortization