Florida Public Service Commission native order document 09338-2024

FILED 10/2/2024
DOCUMENT NO. 09338-2024
FPSC - COMMISSION CLERK
BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION
In re: Petition for approval of safety, access, 	DOCKET NO. 20240071-GU
and facility enhancement program 	ORDER NO. PSC-2024-0438-PAA-GU
modifications, b 	Florida Cit 	Gas. 	ISSUED: October 2, 2024	--------"--"-----------..__________.,
The following Commissioners participated in the disposition of this matter:
MIKE LA ROSA, Chairman
ART GRAHAM
GARYF. CLARK
ANDREW GILES FAY
GABRIELLA PASSIDOMO
NOTICE OF PROPOSED AGENCY ACTION
ORDER APPROVING MODIFICATION OF SAFETY, ACCESS, AND FACILITY
ENHANCEMENT (SAFE) PROGRAM AND ASSOCIATED COST RECOVERY
MECHANISM
BY THE COMMISSION:
NOTICE is hereby given by the Florida Public Service Commission that the action
discussed herein is preliminary in nature and will become final unless a person whose interests
are substantially affected files a petition for a formal proceeding, pursuant to Rule 25-22.029,
Florida Administrative Code (F.A.C.).
Background
On April 19, 2024, Florida City Gas (FCG or Utility) filed its petttton requesting
approval of modifications to its safety, access, and facility enhancement (SAFE) program and
associated cost recovery mechanism. In 2015, we approved the original SAFE program and
associated cost recovery mechanism. 1 The purpose of the original SAFE program was to relocate
certain existing gas facilities located in or associated with rear lot easements to the street front
through a separate surcharge on the customers' bill. In the Order approving the SAFE program,
we found that the relocation of existing gas facilities was in the public interest to improve the
safety of Florida's natural 	gas infrastructure. 	In Order No. 	PSC-2015-0390-TRF-GU, we
required FCG to file an annual petition for a review and reset of the surcharge factors, true-up of
any over or under recovery, and update the ad valorem rate, debt, and equity cost rates. 2 At the
1 Order No. PSC-2015-0390-TRF-GU, issued September 15 , 2015, in Docket No. 150116-GU, In re: Petition for
approval of safety, access, and facility enhancement program and associated cost recovery methodology, by Florida
City Gas.
2 See page 5 of Order No. PSC-2015-0390-TRF-GU.

ORDER NO. PSC-2024-0438-PAA-GU
DOCKET NO. 20240071-GU
PAGE2
time
of
our approval, the total estimated SAFE investment from 2015 through 2025 was
approximately $105 million. 3
During the Utility's 2022 rate case, we approved a stipulation for the expansion
of
the
SAFE program in Order No. PSC-2023-0177-FOF-GU. 4 We further required FCG to propose a
new investment/construction schedule and term for the SAFE program in its next applicable
annual SAFE filing. Subsequently, the Utility proposed and we approved a 10-year investment
and construction schedule through 2035 for the SAFE program projects. 5 As
of
FCG's most
recent true-up filing, the estimated total investment
of
the SAFE program was approximately
$102 million. 6
In a recent assessment usmg its Distribution, 	Integrity, 	and Management Program
(DIMP), the Utility identified additional risks that were not contemplated in its expanded
program related to problematic pipe and equipment. Natural gas distribution pipeline operators,
such as natural gas distribution companies are required by Department
of
Transportation to
develop, write, and implement a distribution integrity management program with the following
elements: knowledge, identify threats, evaluate and rank risks, identify and implement measures
to address risks, measure performance, monitor results, and evaluate effectiveness, periodically
evaluate and improve program; and report results.
While additional risks have been identified, the Utility stated the systems are safe.
However, 	FCG would 	like to 	expeditiously 	address the 	identified 	risks 	and reduce 	any
unnecessary risk to the public. The proposed modification to the SAFE program includes the
replacement
of
the following types
of
facilities in which FCG has identified safety risks: (i)
replacing
of
span pipe; (ii) burying shallow and exposed pipelines; and (iii) replacing of obsolete
pipe and related facilities.
During the evaluation
of
the petition, we issued two data requests. Responses from FCG
were received on May 24 and August
1,
2024.7 We have jurisdiction over this matter pursuant to
Sections 366.04, 366.05, and 366.06, Florida Statutes (F.S.).
3 See page 3 of Order No. PSC-2015-0390-TRF-GU.
4 Order No. PSC-2023-0177-FOF-GU, issued June 9, 2023, in Docket No. 20220069-GU, In re: Petition/or rate
increase by Florida City Gas.
5 Order No. PSC-2023-0345-TRF-GU, issued November 16, 2023, in Docket No. 20230097-GU, In re: Petition for
approval
of
safety, access, and facility enhancement program true-up and 2024 cost recovery factors, by Florida
City Gas.
6 See page 1 of Attachment A to Document No. 05041-2023.
7 Responses to Staffs First Data Request (Document No. 04172-2024), Responses to Staffs Second Data Request
(Document No. 08145-2024).
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ORDER NO. PSC-2024-0438-PAA-GU
DOCKET NO. 20240071-GU
PAGE3
Decision
FCG states that during a recent risk assessment using its DIMP, it identified various types
of
problematic pipe and facilities that pose safety risks to its system. As such, FCG is requesting
to address these risks on an expedited basis. The problematic pipe and facilities FCG intends to
include for replacement under its SAFE program are previously unidentified bare steel mains,
steel tubing, span pipe, shallow and exposed pipe, and other obsolete pipe and related facilities,
all
	of
which are 	currently 	included 	in its 	affiliate's, 	Florida Public 	Utilities 	Company's
(FPUC's), Gas Utility Access and Replacement Directive (GUARD) program. FCG is requesting
to more closely align its SAFE program with FPUC's GUARD program which was approved by
us in Docket No. 20230029-GU.8
Span pipes are segments
of
pipe that are susceptible to outside force damage and
corrosion, as they are installed above grade and cross creeks, rivers, ditches, or highways.
Shallow and exposed pipes are segments that are no longer safely buried due to erosion and other
changes in the environment, and are similarly susceptible to outside force damage and corrosion.
Obsolete pipe includes Aldyl-A, a type
of
first generation plastic pipe installed prior to 1982,
previously unidentified bare steel pipe, steel tubing and orange pipe, which was approved for
replacement in FCG's SAFE program in Docket No. 20220069-GU. 9 Due to the evolution
of
piping materials, construction methods, and standards
of
related metering and regulating (M&R)
facilities, obsolete pipe and related facilities may be at risk
of
third-party damage and failure.
FCG retained the same contractor retained by FPUC for its GUARD program, R.J. Ruiz
and Associates, Inc., to conduct a review
of
its natural gas facilities. At the conclusion
of
the
review, the contractor provided a risk assessment report identifying threats to FCG's system. The
Utility used this report to identify the following projects: (i) three span pipe projects, consisting
of
the replacement
of
82 span pipe segments in FCG's service area; (ii) three exposed pipe
projects; and (iii) 17 projects related to obsolete pipe and related facilities. 1
°FCG prioritized the
facilities for replacement based on the highest risk
of
failure identified in the contractor's risk
assessment and the Utility's DIMP, as well as input from the Utility's subject matter experts. In
response to our first data request, the Utility provided maps which depict the areas FCG projects
facility replacements will take place.
11
FCG identified project areas located in Miami-Dade,
Broward, and Brevard Counties.
FCG estimates that the span pipe projects will cost $20 million, the exposed pipe projects
will cost $4.1 million, and the obsolete pipe and related facilities projects will cost $25.7 million,
for a total of $49.8 million over the 2024 through 2035 SAFE program term. The estimated
annual project expenditures range from approximately $2.8 million to
$5
million, and are lowest
in the first and last years of the program term.
8 Order No. PSC-2023-0235A-PAA-GU, issued August 18, 2023 , in Docket No. 20230029-GU, In re: Petition for
approval
of
gas utility access and replacement directive, by Florida Public Utilities Company.
9 Order No. PSC-2023-0177-FOF-GU.
10
Document No. 04172-2024.
11
Attachment A to Responses to Staff's First Data Request, Document No. 04172-2024.

ORDER NO. PSC-2024-0438-PAA-GU
DOCKET NO. 20240071-GU
PAGE4
We · find 	that
	FCG's
	request 	to 	modify 	its 	SAFE program 	to 	include 	the 	expedited
replacement
of
problematic pipe and facilities is necessary to improve the safety
of
FCG's
natural gas infrastructure, and to reduce risk to life and property. We find the inclusion
of
the
proposed projects is also consistent with our approval
of
FPUC's
GUARD program.
I.
	Projected Incremental SAFE Investments
FCG 	estimated the 	incremental 	costs 	for 	the 	SAFE program 	modifications to 	be
approximately $49.8 million, as summarized in Table 1 below:
p 	.roJecte
SAFE Project Type
Problematic Mains
Obsolete pipe replacement
Span pipe replacement
Exposed pipeline burials
TOT AL (rounded)
Table 0
d 2025 2035 I 	1 SAFE C	- 	ncrementa 	osts
Estimated Cost ($ in millions)
$25.7
$20.0
$4.1
$49.8
Source: Responses to Commission
Staffs
Second Data Request, Document No. 08145-2024
The Utility believes that the currently approved 10-year term for the SAFE program is
adequate to complete the projects described in this filing.
12
In response to our second data
request, FCG provided a breakdown detailing the projected timeline
of
the projects. According to
the Utility, the modifications to the SAFE program would be approximately $49.8 million in
incremental costs.
13
In its Petition, FCG states that it also proposes to continue to use the cost allocation
methodology 	currently 	being 	utilized. 	Furthermore, 	the 	Utility 	is 	not 	proposing 	any
modifications to the current surcharge in this petition. Instead, FCG would recalculate the SAFE
surcharges for 2025 in its annual true-up filing. FCG states that
if
this petition is approved, it
would include the revenue requirement associated with the additional project categories in its
annual true up filings, starting in September 2024. FCG stated that the surcharge would increase
by no more than 10 percent
of
the program's current charge for 2025, based on the estimate
provided by the contractor.
14
We find that the proposed expenses are consistent with the
approved 2015 SAFE cost allocation methodology and are reasonable.
12
Response No. 3 to Staffs Second Data Request, Document No. 08145-2024.13
Attachment C to Responses to Staffs Second Data Request, Document No. 08145-2024.14
Response No. SB to Staff's First Data Request, Document No. 04172-2024.
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ORDER NO. PSC-2024-0438-PAA-GU
DOCKET NO. 20240071-GU
PAGES
Conclusion
We hereby 	approve 	FCG's proposed modifications to 	the 	SAFE program and 	its
associated components to include: (i) replacing
of
span pipe; (ii) burying shallow and exposed
pipelines; and (iii) replacing
of
obsolete pipe and related facilities. The proposed program
modification will improve the safety
of
FCG's natural gas infrastructure and reduce risk to life
and property, and is consistent with our prior Orders.
Based on the foregoing, it is
ORDERED by the Florida Public Service Commission that Florida City Gas's proposed
modifications to its safety, access, and facility enhancement program and associated cost
recovery mechanism to include: (i) replacing
of
span pipe; (ii) burying shallow and exposed
pipelines; and (iii) replacing
of
obsolete pipe and related facilities.
ORDERED that
if
no protest is filed by a person whose substantial interests are affected
within
21
days
of
the issuance
of
the Order, this docket shall be closed upon the issuance
of
a
Consummating Order.
By ORDER
of
the Florida Public Service Commission this 2nd day
of
October, 2024.
TPS/SF
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.
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ORDER NO. PSC-2024-0438-PAA-GU
DOCKET NO. 20240071-GU
PAGE6 
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 that is available under Section 120.57,
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 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.
The action proposed herein is preliminary in nature. Any person whose substantial
interests are affected by the action proposed by this order may file a petition for a formal
proceeding, in the form provided by Rule 28-106.201, Florida Administrative Code. 	This
petition must be received by the Office
of
Commission Clerk, 2540 Shumard Oak Boulevard,
Tallahassee, Florida 32399-0850, by the close
of
business on October
23
. 2024.
In the absence
of
such a petition, this order shall become final and effective upon the
issuance
of
a Consummating Order.
Any objection or protest filed in this/these docket(s) before the issuance date
of
this order
is considered abandoned unless it satisfies the foregoing conditions and is renewed within the
specified protest period.
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