Florida Public Service Commission native order document 06917-2026

FILED 9/22/2026
DOCUMENT NO. 06917-2026
FPSC 	- COMMISSION CLERK
BEFORE THE FLORIDA PUBLIC SERVICE COMMISSION
In re: Application for rate increase by Florida 	DOCKET NO. 20260026-GU
City Gas. 	ORDER NO. PSC-2026-0334-PHO-GU
_ ISSUED: September 22, 2026
PREHEARING ORDER
Pursuant to Notice and in accordance with Rule 28-106.209, Florida Administrative Code
(F.A.C.), 	a 	Prehearing Conference was 	held on September 	14, 	2026, 	in 	Tallahassee, 	Florida,
before Commissioner Mike La Rosa, as Prehearing Officer.
APPEARANCES:
BETH KEATING, ESQUIRE, 	Gunster, 	Yoakley & 	Stewart, 	P.A., 	215 	South
Monroe 	Street, Suite 601, Tallahassee, Florida 32301
On behalf of Florida City Gas (FCG) 	.
WALT TRIERWEILER, CHARLES REHWINKEL and AUSTIN WATROUS,
ESQUIRES, 	Office 	of Public 	Counsel, 	c/o The 	Florida 	Legislature, 111 	West
Madison Street, Suite 812, Tallahassee, Florida 32399-1400
On behalf of Office of Public Counsel (OPC) 	.
MATTHEW 	R. VONDRASEK, THOMAS A 	JERNIGAN, 	LESLIE 	R.
NEWTON, ESQUIRES, Federal Executive Agencies, 	139 Barnes Drive, 	Suite 	1,
Tyndall Air Force Base, Florida 32403
On behalf of Federal Executive Agencies (FEA) 	.
MAJOR THOMPSON and ALISHA HIXON, ESQUIRES, Florida Public Service
Commission, 2540 Shumard Oak Boulevard, Tallahassee, Florida 32399-0850
On behalf of the Florida Public Service Commission (Staff) 	.
MARY ANNE HELTON, ESQUIRE, Deputy General 	Counsel, 	Florida 	Public
Service Commission, 2540 Shumard Oak Boulevard, Tallahassee, Florida 32399-
0850
Advisor to the Florida Public Service Commission 	.
ADRIA 	E. HARPER, ESQUIRE, 	General 	Counsel, 	Florida 	Public 	Service
Commission, 2540 Shumard Oak Boulevard, Tallahassee, Florida 32399-0850
Florida Public Service Commission General Counsel.

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I. 	CASE BACKGROUND
On April 20, 2026, Florida City Gas (FCG or Company) filed its petition seeking the
Florida Public Service Commission’s (Commission) approval of a base rate increase. FCG, a
subsidiary of Chesapeake Utilities Corporation, is a natural gas local distribution company
providing sales and transportation of natural gas and is a public utility subject to our regulatory
jurisdiction under Section 366.04, Florida Statutes (F.S.). FCG serves approximately 125,000
residential, commercial, and industrial gas customers in Miami-Dade, Broward, St. Lucie, Indian
River, Brevard, Palm Beach, Hendry, and Martin counties.
FCG initially requested a total base revenue increase of $63.3 million, which consisted of
an incremental base rate increase of $46.9 million and reclassification of its Safety, Access, and
Facility Enhancement (SAFE) program revenues in the amount of $16.4 million from surcharge
recovery to base rates. FCG has updated the requested figures to a total base revenue increase of
$63.2 million, with an incremental base rate increase of $46.8 million and reclassification of
SAFE revenues remaining at $16.4 million. FCG has stated the $46.8 million is necessary to
allow FCG an opportunity to earn a fair return on investment. The Company is requesting 11.25
percent as the mid-point return on equity.
An administrative hearing for this docket has been scheduled for September 28-October
2, 2026. The Intervenors in this docket are the Office of Public Counsel (OPC) and Federal
Executive Agencies (FEA).
II. 	CONDUCT OF PROCEEDINGS
Pursuant to Rule 28-106.211, F.A.C., this Prehearing Order is issued to prevent delay and
to promote the just, speedy, and inexpensive determination of all aspects of this case.
III. 	JURISDICTION
This Commission is vested with jurisdiction over the subject matter by the provisions of
Chapters 120 and 366, F.S. This hearing will be governed by said Chapters and Rules 28-106,
25-7, and 25-22 F.A.C., as well as any other applicable provisions of law.
IV. 	PROCEDURE FOR HANDLING CONFIDENTIAL INFORMATION
Information for which proprietary confidential business information status is requested
pursuant to Section 366.093, F.S., and Rule 25-22.006, F.A.C., shall be treated by the
Commission as confidential. The information shall be exempt from Section 119.07(1), F.S.,
pending a formal ruling on such request by the Commission or pending return of the information
to the person providing the information. If no determination of confidentiality has been made and
the information has not been made a part of the evidentiary record in this proceeding, it shall be

ORDER NO. PSC-2026-0334-PHO-GU
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returned to the person providing the information. If a determination of confidentiality has been
made and the information was not entered into the record of this proceeding, it shall be returned
to the person providing the information within the time period set forth in Section 366.093, F.S.
The Commission may determine that continued possession of the information is necessary for
the Commission to conduct its business.
It is the policy of this Commission that all Commission hearings be open to the public at
all times. The Commission also recognizes its obligation pursuant to Section 366.093, F.S., to
protect proprietary confidential business information from disclosure outside the proceeding.
Therefore, any party wishing to use any proprietary confidential business information, as that
term is defined in Section 366.093, F.S., at the hearing shall adhere to the following:
(1) 	When confidential information is used in the hearing that has not been filed as
prefiled 	testimony 	or 	prefiled 	exhibits, 	parties 	must 	have 	copies 	for 	the
Commissioners, necessary staff, and the court reporter, in red envelopes clearly
marked with the nature of the contents and with the confidential information
highlighted. Any party wishing to examine the confidential material that is not
subject to an order granting confidentiality shall be provided a copy in the same
fashion as provided to the Commissioners, subject to execution of any appropriate
protective agreement with the owner of the material.
(2) 	Counsel and witnesses are cautioned to avoid verbalizing confidential information
in such a way that would compromise confidentiality. Therefore, confidential
information should be presented by written exhibit when reasonably possible.
At the conclusion of that portion of the hearing that involves confidential information, all
copies of confidential exhibits shall be returned to the proffering party. If a confidential exhibit
has been admitted into evidence, the copy provided to the court reporter shall be retained in the
Office of Commission Clerk’s confidential files. If such material is admitted into the evidentiary
record at hearing and is not otherwise subject to a request for confidential classification filed
with the Commission, the source of the information must file a request for confidential
classification of the information within 21 days of the conclusion of the hearing, as set forth in
Rule 25-22.006(8)(b), F.A.C., if continued confidentiality of the information is to be maintained.
V. 	PREFILED TESTIMONY AND EXHIBITS; WITNESSES
Testimony of all witnesses to be sponsored by the parties and Staff has been prefiled and
will be inserted into the record as though read after the witness has taken the stand and affirmed
the correctness of the testimony and associated exhibits. All testimony remains subject to timely
and appropriate objections. Upon insertion of a witness’ testimony, exhibits appended thereto
may be marked for identification. Each witness will have the opportunity to orally summarize his
or her testimony at the time he or she takes the stand. Summaries of testimony shall be limited to
five (5) minutes.

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Witnesses are reminded that, on cross-examination, responses to questions calling for a
simple yes or no answer shall be so answered first, after which the witness may explain his or her
answer. After all parties and Staff have had the opportunity to cross-examine the witness, the
exhibit may be moved into the record. All other exhibits may be similarly identified and entered
into the record at the appropriate time during the hearing.
The Commission frequently administers the testimonial oath to more than one witness at
a time. Therefore, when a witness takes the stand to testify, the attorney calling the witness is
directed to ask the witness to affirm whether he or she has been sworn.
The parties shall avoid duplicative or repetitious cross-examination. Further, friendly
cross-examination will not be allowed. Cross-examination shall be limited to witnesses whose
testimony is adverse to the party desiring to cross-examine. Any party conducting what appears
to be a friendly cross-examination of a witness should be prepared to indicate why that witness’
direct testimony is adverse to its interests.
All parties must refer to the Exhibit Number established by the Comprehensive Exhibit
List when referencing an exhibit during cross-examination.
VI. 	ORDER OF WITNESSES
Each witness whose name is preceded by a plus sign (+) will present direct and rebuttal
testimony together.
Witness 	Proffered By 	Issues #
Direct
Matthew Everngam 	FCG 	1, 6, 13, 52, 71
Michael Galtman 	FCG 	9
+David Haag 1 	FCG 	29
+John Taylor 	FCG 	2-3, 5, 53-59, 64
Abhijit Bhatwadekar2 	FCG 	9, 38
Noah Russell3 	FCG 	22-26, 30, 33, 40, 42, 47, 48, 70
1 Errata filed July 10, 2026.
2 Errata filed July 10, 2026.
3 Errata filed July 10, 2026.

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Witness 	Proffered By 	Issues #
Joanah Baugh 4 	FCG 	1-2, 5, 7, 9, 12, 14-15, 17-18, 20-
21, 23-24, 27, 31, 33-35, 43-46,
48, 50-52, 68-70
George J. Navo 	FCG 	38, 39, 44, 46, 49
William Haffecke5 	FCG 	8, 10, 38, 49
Brian Gilliam 	FCG 	18
Kim Estrada 	FCG 	6, 9
James Kendall 	FCG 	6
+Dan Noia 	FCG 	64-66
+Jessica Husted 	FCG 	2-5, 11, 16, 41, 60-61
+Terry Deason 6 	FCG 	13, 44
Tina Barrington7 	FCG 	38-39
Wraye Grimard8 	FCG 	58, 62-68
Christopher C. Walters 	OPC 	25, 28-30
Lane Kollen 	OPC 	9, 22-26, 30, 35, 37, 47
Helmuth W. Schultz, III 	OPC 	4-5, 8, 12-14, 16, 18-21, 23, 25-
26, 30, 34, 36-46, 48-52, 70
Michael Gorman 	FEA 	53-54, 59
Angela Kendrick 	Staff 	6
Curt Mouring 	Staff 	As needed
4 Errata filed July 10, 2026. Second errata filed September 14, 2026.
5 Errata/Supplemented regarding change to damage prevention system filed August 31, 2026.
6 Errata filed July 10, 2026. Errata for rebuttal testimony filed September 14, 2026.
7 Errata filed August 21, 2026.
8 Errata filed August 28, 2026.

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Witness 	Proffered By 	Issues #
Rebuttal
William Haffecke 	FCG 	8
Joanah Baugh 9 	FCG 	5, 14-15, 21, 31, 43, 49, 70
George Navo 	FCG 	14, 21, 38-39
Noah Russell 	FCG 	22-23, 26, 28, 30
Michael Reno 	FCG 	22-23, 47, 70
Matthew Everngam 	FCG 	4, 13
Michael Galtman 	FCG 	13, 19, 34, 36-37, 70
VII. 	BASIC POSITIONS
FCG: 	FCG’s last rate relief request was filed on May 31, 2022. That request was fully
litigated, and the Commission’s decision was memorialized in Order No. PSC-
2023-0177-FOF-GU, issued June 9, 2023, in Docket No. 20220069-GU (“2022
Rate Order”). Since its last rate case, FCG has been acquired by Chesapeake from
FPL. It has also grown by several thousand customers and facilitated significant
distribution pipeline projects to provide service to new customers and also to begin
enabling practical solutions for capacity constraints in the southern portions of its
service area. Throughout this period of growth and change, FCG has maintained its
focus on its customers, which has driven its desire to implement new technology
that will further enhance its customer service and customer communications. While
the Company has kept its focus on its service, the core principle for everything the
Company does is founded upon safety - both for its customers and its employees.
This core value has driven improvements in the Company’s distribution facilities.
As will be demonstrated by the testimony provided in this case, the past 4 years
have seen the Company evolve and grow due, in large part, to its new parent
company’s experience in the natural gas industry and strategic approach to
expanding the availability of gas to customers in southeast Florida in a safe and
reliable manner.
As a wholly-owned subsidiary of Chesapeake, FCG now benefits from the parent
company’s extensive experience in the natural gas industry, as well as its long-term
9 Errata filed September 14, 2026.

ORDER NO. PSC-2026-0334-PHO-GU
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commitment to operational excellence and disciplined investment. Chesapeake also
owns 	Florida 	Public 	Utilities 	Company, 	reflecting 	CUC’s 	experience 	and
knowledge of the Florida natural gas market. The CUC operations in Florida, as a
whole, 	are 	well-positioned 	to 	leverage 	shared 	capabilities, 	enhance 	system
resilience, and support continued infrastructure modernization. FCG rate payers
benefit from infrastructure and safety improvements, as well as the focus on
increased capacity for peak load. Other major modernization initiatives, such as the
1CX Customer Experience Platform and the new ERP system will eliminate aging
systems 	that 	are 	costly 	to 	maintain 	and 	elevate 	FCG 	to 	industry-standard
technology. The overall benefits to customers when these projects are fully realized
will be increased reliability, enhanced safety and customer service, as well as
business efficiencies that, in the longer term, are expected to mitigate future rate
increases. 	These investments are essential to improving system performance,
enhancing cybersecurity, and supporting customer service enhancements. As FCG’s
parent, CUC has the ability to realize these goals by virtue of its significant
experience in this industry, its prudent cost management and capital deployment
practices, and its ability to access to capital on favorable financial terms.
Nonetheless, as it currently stands, the Company’s current rates and charges no
longer allow it to earn a fair and reasonable rate of return, nor do they yield
reasonable compensation for services provided, which FCG is entitled to under
Section 366.06(3), F.S. As detailed in FCG’s testimonies and exhibits, the
Company’s December earnings surveillance reports and 2026 forecasted earnings
surveillance 	report 	filed 	with 	the 	Commission 	demonstrate 	that 	FCG 	has
continually earned and expects to earn at or below the bottom of its authorized ROE
range each year since its last general rate case. Further, based on the Company’s
projected 2027 financial forecast, FCG projects that its earned ROE will be
significantly below the bottom of the current authorized ROE range in 2027 without
rate relief.
FCG 	operates 	a 	capital-intensive 	business 	that 	requires 	sustained 	long-term
investment to maintain safe, reliable, and resilient natural gas service. Since its last
rate case, FCG has experienced cost pressures that exceed inflation, including
increases in materials, labor, insurance, and property-related expenses, as well as
the need for additional staffing and programs to meet customer growth and
operational expectations. 	A primary driver of the requested rate relief is the
substantial increase in capital investment required to maintain and enhance the
Company’s natural gas distribution system. The Company has undertaken major
infrastructure improvements to support system safety and reliability, accommodate
customer growth, and address capacity constraints.
In addition to capital investments, FCG faces rising O&M costs that exceed general
inflation, 	such 	as 	labor 	expenses, 	increased 	property 	taxes, 	insurance 	cost
escalation, and the impacts of supply chain pressures on materials and contracted
services. In particular, CUC’s changes in insurance premiums continue to be driven

ORDER NO. PSC-2026-0334-PHO-GU
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by increased exposure from growth, reduced carrier capacity, and overall market
conditions in the power and utility sector. Over the last two years, CUC has
experienced cost increases across its primary casualty, excess liability, and property
programs, while executive risk coverages — including cyber — have remained
relatively flat. Excluding excess liability coverage, primary casualty insurance has
increased approximately twenty-nine percent over the last two years. This increase
reflects a shrinking number of participating carriers due to industry consolidation
and a shift toward higher minimum deductibles. 	Notably, the utility and energy
sectors have also experienced their own elevated loss trends, further influencing
pricing. These factors together have driven an approximately 30 percent increase in
CUC’s excess liability premiums over the last two years.
Another major driver of the Company’s request is the need for technological
transformation. FCG’s legacy systems are no longer adequate to support the scale,
complexity, and cybersecurity requirements of a modern natural gas utility. CUC’s
initiative 	to 	replace 	outdated 	systems 	with 	integrated, 	secure, 	and 	efficient
technology that enhances billing accuracy, strengthens internal controls, improves
customer interactions, and supports long-term operational planning will improve all
CUC affiliates, including FCG. Additionally, efficiencies, in the longer term, are
expected to put downward pressure on future rate increases. The investments
underlying this request are focused on enhancing system reliability and resilience,
improving customer service, modernizing critical systems, and preparing for future
technologies.
Before filing this request, the Company undertook appropriate steps to attempt to
defer the need for rate relief, including implementing operational efficiencies, such
as shared operating resources with its other Florida business unit, FPUC. 	In
addition, the Company did delay the filing of this case while FCG’s most recent
depreciation study was before the Commission.
However, as evidenced by FCG’s under-earnings and related need to utilize the
RSAM mechanism approved in its last base rate case, the revenues and rate relief
authorized in FCG’s 2022 rate case ultimately proved to be insufficient to allow the
Company an opportunity to earn within its approved earnings range for any
extended period of time. Accordingly, a rate increase has become necessary to
generate the revenues necessary to allow FCG a reasonable opportunity to recover
its prudent investments, maintain financial stability, and earn a fair rate of return.
This will, in turn, support CUC’s ability to attract capital at reasonable terms to the
benefit 	of 	FCG, 	as 	well 	as 	the 	Company’s 	continued 	investment 	in 	the
infrastructure and systems required to serve customers safely and reliably.
As detailed herein and in FCG’s evidence in this case, FCG’s request includes
certain components that are essential to the Company’s ability to continue to
provide safe and reliable service to its customers, while also ensuring that it is able
to 	provide 	service 	to 	those 	customers 	consistent 	with 	21st 	century 	service

ORDER NO. PSC-2026-0334-PHO-GU
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expectations, as well as heightened security requirements. Thus, FCG’s request
includes: (a) a single incremental base rate increase of $46.8 million to become
effective on January 1, 2027; (b) reclassification of SAFE revenues in the amount
of $16.4 million; (c) a capital structure and ROE that provide the necessary
financial support and enable FCG the opportunity to earn a fair and reasonable
return; (d) continuation of the storm damage reserve previously approved in the
Company’s 2018 Settlement and maintained in the 2022 Rate Case; (e) expanded
deployment of AMI meters; and (f) retention of the unamortized amount of the
acquisition adjustment originally approved by Order No. PSC-2007-0913-PAA-
GU. Approval by the Commission of the requested rate relief will ensure that FCG
can continue meeting customer expectations, maintain system safety, and support
long-term 	infrastructure 	resilience 	and 	growth 	in 	a 	prudent 	and 	financially
sustainable manner. Using a projected test year ending December 31, 2027, the
Company is seeking an increase in its base rates of $63,163,068. Of that amount,
$16,402,944 is associated with moving the Company’s current SAFE investments
as of December 31, 2026, into rate base and resetting the SAFE surcharge to $0, as
contemplated by Order No. PSC 2015-0930-TRF-GU. The additional $46,760,124
is necessary to allow FCG an opportunity to earn a fair return on investment.
2004 Acquisition Adjustment
As noted, FCG seeks to retain the 2004 Acquisition Adjustment on its books until
fully amortized. To be clear, the only acquisition adjustment FCG is addressing at
this time is retention of the previously approved 2004 acquisition adjustment. The
inclusion of the 2004 Acquisition Adjustment and related amortization in base rates
is consistent with the treatment for any other regulatory asset or liability that FCG
had in its books when it became a wholly-owned subsidiary of Chesapeake. While
FCG has been acquired three times since that initial acquisition by AGL Resources,
based upon the Commission’s analysis of the five-factor test and FCG’s situation
before it was acquired by AGL, the evidence will demonstrate that FCG has
retained the benefits found by the Commission in Order No. PSC-2007-0913-PAA-
GU with each subsequent acquisition. There is no need to make an adjustment to
remove the 2004 Acquisition Adjustment and associated amortization from FCG’s
2027 Test Year, nor would it be fair to do so.
Retention of the 2004 Acquisition Adjustment still meets the Five-Factor Test. FCG
saw cost savings as a result of the 2004 acquisition from NUI, and as shown in
Exhibit ME-3, these savings continue. 	Specifically, Exhibit ME-3 reflects that
appropriate starting point for the analysis, which are the prior period costs under
NUI’s ownership. 	Starting with 2003, Exhibit ME-3 compares the actual cost of
the acquisition adjustment by year to the current savings in order to support the
continued benefits. 	The Commission should find that savings still exist and that
retention of the acquisition adjustment on FCG’s books is still supported by the
Five-Factor Test.

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ERP
The implementation of Chesapeake’s ERP follows two previous SAP related
implementations of the billing systems for CUC’s legacy distribution businesses
and FCG, both of which were completed on time and further support our position to
utilize year-end 2027 versus a 13-month average. For FCG, the ERP program
provides a centralized software program that enables consistent business processes,
improved data integrity, and enhanced business decision-making using financial
and operational data. By reducing reliance on fragmented systems and manual
processes, the ERP platform serves to strengthen internal controls, improve
regulatory reporting, and support future growth as FCG grows to meet the needs of
its customers. 	The system is being implemented across CUC’s business units; as
such, the ERP-related allocation to FCG should be allowed.
AMI
FCG’s 	planned 	AMI 	implementation 	aligns 	with 	these 	established 	industry
practices and reflects a prudent, forward-looking investment in system safety,
operational efficiency, and customer service. The AMI deployment is a prudent,
necessary investment supported by a completed vendor evaluation and selection
process, industry-standard phased deployment practice among peer gas utilities, and
identifiable customer and safety benefits, including the integrated safety features of
the ultrasonic smart meters. The contingency is reasonable, the 13-month average
rate base treatment is correct, and the Company has deliberately limited its request
by excluding the corporate Itron communications and software costs from this
proceeding. 	The 	associated 	$284,739 	in 	annual 	operating 	expense 	and 	the
derivative depreciation adjustments should be approved along with the plant. 	To
the extent the Commission approves the AMI plant additions — as it should — the
associated depreciation expense and accumulated depreciation follow with the plant
and should likewise be approved.
To leverage existing Company-owned assets that still have a significant remaining
depreciable life, FCG will install ERT devices on meters that are 7.5 years old or
newer. Meters older than 7.5 years will be replaced with new smart meters. As
ERT-equipped meters age out over time, they will be replaced with ultrasonic smart
meters through FCG’s aged-meter replacement program. This phased approach
reduces up-front capital requirements while still enabling the long-term transition to
full AMI functionality. Ultrasonic meters provide highly precise, solid-state gas
measurement 	without 	moving 	mechanical 	parts, 	eliminating 	the 	wear 	and
calibration issues associated with traditional diaphragm meters. Beyond improved
accuracy, these ultrasonic smart meters incorporate advanced integrated safety
features designed to enhance protection for both customers and employees. These
capabilities allow the utility to rapidly identify leaks, fire events, tampering, or
pressure abnormalities. In many cases, the meter can automatically shut off gas

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flow to prevent escalation, improving overall system safety and reducing risk to
Company personnel and the public.
Benefits of Acquisition by CUC
CUC engaged in a substantial due diligence process before committing to acquire
FCG, including a review of financial statements, operational data, regulatory
filings, capital plans, information technology systems, personnel, environmental
compliance, and legal matters. CUC also engaged top legal and financial advisors
to assist it in the due diligence, negotiation and consummation of the transaction.
The due diligence process was appropriate for an acquisition of this size and
complexity.
It is critical here to recognize that CUC, at its core, is a gas distribution company,
with extensive knowledge of doing business in Florida. This focus and experience
allowed CUC to provide improvements and renewed dedication to the safety,
reliability and integrity of FCG’s gas infrastructure and facilities. FCG is now
benefiting from the experience that CUC brings from operating other, similarly-
situated natural gas utilities, including FPUC. CUC has been a leader in providing
safe, reliable service to its customers including over 230,000 natural gas customers
in Florida. FCG’s focus on safety is at the forefront of all decisions and is being
enhanced through investments in training facilities and our partnerships with local
communities. Under CUC, FCG is prioritizing reliability projects and is dedicated
to solving capacity issues, especially in South Florida. 	FCG also anticipates that
through the implementation of technology addressed in this request, such as the
new ERP system, and with additional time to realize and leverage efficiencies
across the CUC platform in Florida, FCG will find more ways to mitigate
inflationary factors and improve cost savings for its customers.
Every well-run acquisition benefits from the combined strengths of the acquiring
and acquired organizations. In acquiring FCG, CUC anticipated leveraging its
operational 	experience, 	technology 	platforms, 	regulatory 	expertise, 	financial
resources, and management capabilities for the benefit of FCG. CUC also expected
to benefit from increased scale, improved business processes, enhanced technology
capabilities, and opportunities to avoid duplicative investments over time. These
types of benefits are qualitatively different from a direct one-for-one reduction in
operating expenses. Likewise, many acquisition benefits are realized through
improved capabilities, risk reduction, stronger operating performance, enhanced
customer service, access to expertise, and avoidance of future expenditures. While
those 	benefits 	may 	provide 	value 	to 	both 	customers 	and 	shareholders, 	and
potentially savings, the fact that FCG has not yet quantified those savings does not
indicate: 1. that FCG will not be able to demonstrate savings in the future; and 2.
that 	FCG 	has 	somehow 	inappropriately 	funneled 	savings 	to 	its 	investors.
Moreover, the fact that FCG was previously owned by an efficient, well-run electric
utility does not foreclose the possibility that an energy company that focuses on

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natural gas distribution service, with vast experience and expertise in providing
natural gas service, will be able to better manage and improve the performance of
FCG. 	The evidence that FCG will provide in this proceeding, as supported by its
parent CUC, is fact-based and data driven and will not be undone by unsupported
allegations.
OPC: 	Florida City Gas (“FCG”) may have filed this case under its name, but it is almost
entirely Chesapeake Utilities Corporation (“CUC”) and its shareholders’ efforts to
extract excessive profits to the detriment of, and by injecting enormous costs into
the monthly bills of the FCG customers.
This point was exemplified before the Commission by a humble and polite FCG
customer. Recent retiree Elizabeth Nolan, who has lived in her house since the
1960s, took time out of her day at 10am on a Monday to provide testimony on
FCG’s excessive request. Apologizing for using “such a strong word[s]” by calling
CUC “greedy,” Ms. Nolan absolutely nailed it when she chastised CUC, stating,
“[y]ou just got the company and already you are milking the basic customers.”10
Ms. Nolan’s testimony was spot on. CUC’s milking of FCG customers commenced
in earnest on December 1, 2023, the day after it paid $923 million for a company
this Commission had valued at only $457 million just six months earlier. The
milking machine ramped up to full speed when CUC invoked the self-interested
measure of making a joint section 338(H)(10) election with the seller. This required
the buyer to pay more for FCG so that CUC could step up the basis of the assets it
acquired to include the goodwill for accelerated tax depreciation purposes. This
allowed CUC to deduct the goodwill for income tax purposes on its consolidated
income tax return as additional accelerated tax depreciation over 15 years ($466
million total).
The casualties of this back-of-the-dairy-barn transaction were the FCG customers,
like Elizabeth Nolan, who prepaid income taxes for future payment to the United
States Treasury. Her prepayments – recorded as accumulated deferred income tax
credits or ADITs and those of a hundred thousand other captive customers, totaling
over $38 million – were lost to her. Ms. Nolan’s prepayments were recaptured by
the seller to help pay the seller’s taxes on the windfall that CUC paid to get a seat
on the milking stool. This magic milking stool will produce almost a half billion
dollars in tax benefits and over a half billion dollars in profitable investments for
CUC in Florida. Meanwhile, outside the barn, the customers continue to face
spiraling costs, beginning with this case.
Based on her keen and pithy observations, Ms. Nolan would probably not be the
least bit surprised to learn that two large corporations had gotten together and
10 August 	17, 	2026, 	10 	AM 	Service 	Hearing, 	video 	record 	beginning 	at 	15:15, 	https://psc-
fl.granicus.com/player/clip/5001 .

ORDER NO. PSC-2026-0334-PHO-GU
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greased each other’s palms to reap enormous tax benefits, while leaving the
defenseless11 FCG customers to pick up the tab. 	Some callous individuals might
call the FCG case presented by CUC in this docket “a standalone” utility filing
undeserving of close scrutiny for unwarranted shareholder overreach. Those
individuals would be wrong. This filing reeks with affiliated abuse. The record will
reveal 	multiple 	attempts 	at 	unconscionable 	extractions 	from 	FCG’s 	captive
ratepayers for the benefit of CUC’s shareholders. The evidence of milking was also
visible when FCG went to the market and, to facilitate the purchase, borrowed over
$500 million in long term debt at excessive rates (double the rate under the prior
owners and materially above what the legacy CUC customers in Florida pay) so
that it could unlock enormous profits for its shareholders. CUC now seeks, through
an affiliate transaction, to force Ms. Nolan and her neighbors down at “the inner
city parish,” who are already discouraged by “big business,”12 to pick up the tab for
extra cost of this debt.
Additionally, soon after the transaction closed, CUC promptly began increasing the
affiliate charges to the utility it just “got.” The milking continues – as yet unabated
– as increased executive salaries and incentive compensation charges flooded into
the 	FCG 	income 	statement. 	Corporate 	costs 	that 	would 	otherwise 	be 	the
responsibility of other CUC legacy systems were offloaded onto FCG, making
those companies’ burdens now FCG’s.
The milking did not stop there. 	CUC has used the $21 million balance from the
$25 	million 	Reserve 	Amount, 	along 	with 	the 	associated 	Reserve 	Surplus
Amortization Mechanism (“RSAM”) device – expertly sized by the former owner
to last over a four year period – to prematurely soak up $21 million of costs in a 13-
month period when that balance was supposed to fully last the remaining 37 months
(or until December 31, 2026). Some of these sponged-up costs included transaction
and acquisition costs of the FCG sale that was only conceived for the benefit of the
CUC shareholders. These acquisition-related costs have been transferred to FCG’s
rate base and are still being passed on to customers today, absent the Commission’s
active supervision.
That still was not enough activity in the CUC dairy yard. In 2025, CUC sought to
reach down and grab another $27 million pail (or “tranche” in the non-dairy world)
of bogus depreciation expense to continue with the milking. Fortunately, this effort
was squeezed off before it was productive for CUC. Nevertheless, even the attempt
indicated that CUC was determined to force FCG customers to pay for its purchase
11 FCG customers, like those of any investor-owned gas or electric utility in Florida, do not have the protection of a
Commission with advance merger and acquisition authority. Transactions are reviewed after the fact and absent
vigilance by the Commission and its staff (certain of which tend to myopically view the subsidiary of a new owner
as a hermetically sealed “standalone” entity with its own books and records devoid of outside influence or control),
these customers are at the mercy of aggressive efforts to make them pay to be bought and sold with impunity.
12 Nolan testimony beginning at around 15:40, https://psc-fl.granicus.com/player/clip/5001.

ORDER NO. PSC-2026-0334-PHO-GU
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of FCG. That activity illustrates the theme of this case. Elizabeth Nolan was right:
the basic customers are only there to be used.
The customers should not be forced to pay higher rates merely because their
monopoly, a regulated natural gas provider, has been passed around among three
different owners in a 5-year period. This churning has provided huge benefits to
shareholders while providing little if any value to customers. The evidence in this
case overwhelmingly demonstrates that immediately prior to CUC ownership, FCG
was a well-run company providing service that, within the same 90-day period, the
Commission found was providing the same adequate level of service as was the
legacy CUC gas utility in Florida. The evidence in this case will show that the level
of service that FCG customers have received since June of 2023 has maybe even
declined.
Contrasted with that decline in service is a proposed rate increase that is premised
on enormous increase in costs intended to force FCG customers to pay for the
privilege of being bought by CUC and to help share in the cost of the legacy CUC
companies to upgrade their systems in a plan that was underway before FCG was
purchased. CUC executives made it very clear that the acquisition of FCG was for
the purpose of enhancing shareholder value. As noted above, a brazen example of
this was the agreement to pay the seller more so that CUC could receive a $466
million tax deduction. This only benefited the consolidated CUC shareholders in
boosting shareholder value by reducing their taxes and offsetting their taxes payable
on the future profits to be extracted from FCG’s and other regulated utilities’
customers. 	The price the customers paid for this completely non-regulated tax
benefit was the loss of the bill-lowering, cost free capital represented by the
accumulated deferred income taxes customers had prepaid in their rates.
The Commission is obligated to protect customers from this blatant abuse. The
Commission is only authorized to review these acquisition transactions in the rear
view mirror and on a time frame completely controlled by the utility. Unlike the
rest of the nation, Florida does not review mergers and has no authority to protect
customers on the front end from abusive merger and acquisition terms. This makes
it imperative for the Commission to be extra vigilant on the backend, 	when the
company like here chooses to seek a change in rates or approval of an acquisition
adjustment, in ferreting out and correcting abusive acquisition terms for which there
is zero oversight by the regulator at the time the deal is struck.
OPC experts Helmuth (Bill) Schultz, III. and Lane Kollen present the Commission
commonsense adjustments that can be implemented to neutralize the abuses and to
protect customers from shareholder overreach. 	The answer is not that the
Commission’s hands are tied and they have to sit on them because someone cries
out, “It’s a standalone utility and you have to allow whatever their accountants
write down on a piece of paper.” 	FCG is a fully CUC-controlled subsidiary and
CUC carefully and intentionally structured the transaction to maximize its financial

ORDER NO. PSC-2026-0334-PHO-GU
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PAGE 15
and income tax benefits, all of which come at the expense of the customers. The
affiliate transactions in the form of diverted ADITs, bloated debt, and increased
shareholder-centric incentive compensation are within the Commission’s authority
to review and exclude or otherwise adjust on behalf of the customers.
Our cost of capital expert Chris Walters presents the Commission a common sense
return on equity recommendation of 9.45%, which is only 5 basis points below the
current Commission established ROE of 9.5%. FCG witness Haag offers an out of
step and unrealistic 11.25% ROE which is 30 basis points higher than the nominal
midpoint that FPL gave itself in the settlement deal it struck with itself. It is time for
the Commission to pay more than lip-service to the affordability crisis and require
shareholders to live within the same means in which customers are increasingly
being forced to live (and in which they increasingly suffer).
One note on the capital structure. The Commission should be mindful that the ROE
is a profit determination on the equity component of what is a hypothetical
projected capital structure that is abusively controlled by CUC. Since the first half
of 2023, CUC has receive an undeserved windfall of approximately $12 million of
a return on phantom equity. 	FCG was awarded an equity ratio of 59.6%, and
legacy Chesapeake Florida natural gas operations were awarded a faux-precision
55.1% equity ratio. Rates were set using these numbers. Because of decisions made
solely by CUC shareholders, these levels were never reached, even though rates
were specifically established under the representation under oath that they would
be. 	Not 	a 	finger 	was 	lifted 	by 	the 	Commission 	to 	address 	this 	gross
misrepresentation that resulted in an unwarranted overcollection. 	Customers are
wondering what remedy there is to get this overcollection back.
Why is this an issue in this case, you ask? While the OPC has not taken issue in
formal testimony with the projected 50.14% equity ratio (there is that highly
specific, to-the-decimal-point number again) requested in this proceeding, evidence
has recently surfaced in this case that could cause that to change. 	When CUC
issued new debt to acquire FCG for the benefit of its shareholders, it pushed down
the equity ratio into the 47%-48% range, thus reducing its cost structure, at least the
equity cost component, despite the fact that it continued to recover revenues based
on the authorized 59.6% equity ratio. CUC retained and will continue to retain this
over-recovery until base revenues are reset in this proceeding. Taxable profit
revenue streams embedded in rates and bills were replaced by tax deductible debt
costs. The cumulative delta for this amount approaches $12 million for 2023-2025.
The evidence in this case is that CUC remains on the lookout for future acquisitions
through which it can allocate the costs, not only of the acquisition itself, but also its
capital structure and the related financing costs, as well as its corporate overheads,
in order to maximize the value of these acquisitions to its shareholders without
consideration of the costs to its customers. If so, it could mean that yet again the
sworn, projected equity ratio target upon which the Company would have the
Commission set rates, will yet again be unmet. For this reason and based on this

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PAGE 16
history, the OPC will petition the Commission to grant an equity ratio more in line
with historical results.
FEA: 	FEA filed testimony regarding class cost of service (“CCOS”) and rate design.
FCG’s CCOS study classifies allocation of distribution and main costs based on
both demand and customer components. FEA supports this classification as it more
accurately aligns with how these cost are incurred in order to provide service to
each of the rate classes.
FEA also addresses FCG’s development of the demand or capacity cost allocation
factor. The company develops a capacity or demand allocation factor based on
equal 	weighting 	of 	monthly 	peak 	sales 	and 	average 	annual 	sales. 	This 	is
problematic. Capacity costs are designed to serve peak day or peak hour demand,
and the Company’s proposal does not address actual peak demands and the ability
to provide firm service.
FEA also addresses FCG’s proposed revenue spread. FCG’s proposal moves
residential and certain commercial customer classes further away from cost of
service. FEA recommends a revenue spread that moves each rate class towards cost
of service, with moderation and gradualism in keeping with fundamental rate
making principles.
STAFF: 	Staff’s positions are preliminary and based on materials filed by the parties and on
discovery. The preliminary positions are offered to assist the parties in preparing
for the hearing. Staff’s final positions will be based upon all the evidence in the
record and may differ from the preliminary positions.
VIII. 	ISSUES AND POSITIONS
TEST PERIOD AND FORCASTING
ISSUE 1: 	Is FCG’s projected test period of the twelve months ending December 31,
2027, appropriate?
FCG: 	Yes. The Company seeks an increase in base rates effective January 1, 2027.
Accordingly, 2027 is the most appropriate year to evaluate the Company’s
projected revenue requirements to afford the appropriate match between revenues
and revenue requirements. (Everngam, Baugh)
OPC: 	FCG has not demonstrated that the costs that is has projected for inclusion are
representative of conditions that will be in representative of the time that new
rates (if an increase is granted) will be in effect.

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FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 2: 	Should the Commission approve FCG’s forecasts of customers and therms
by rate class for the 2027 projected test year? If not, what adjustment(s)
should be made?
FCG: 	Yes. The forecasting methods and input assumptions used by FCG to forecast
customers and therms by rate class for the 2027 projected Test Year are
reasonable and appropriate. Likewise, the forecast of customers and therms by
rate schedule is consistent with the sales and customer forecast by revenue class
and reflects the billing determinants specified in each rate schedule. 	(Baugh,
Taylor, Husted)
OPC: 	No.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 3: 	Should the Commission approve FCG’s estimated revenues from sales of gas
by rate class at present rates for the 2027 projected test year? If not, what
adjustment(s) should be made?
FCG: 	Yes. FCG’s sales forecasts were developed using econometric and regression
models that are statistically sound and rely upon reasonable drivers. 	The
forecasted billing determinants for non-weather sensitive and negotiated rate
customers were based on actual historical values from the historic base year
adjusted for known and measurable changes and then projected using these billing
determinants multiplied by their applicable rates. As a result, FCG has correctly
estimated the 2027 revenues from sales of gas at present rates, as reflected in
MFR E-1. (Taylor, Husted)
OPC: 	No.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.

ORDER NO. PSC-2026-0334-PHO-GU
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ISSUE 4: 	Should 	the 	Commission 	approve 	FCG’s 	estimated 	amount 	of 	Total
Miscellaneous Revenue and estimated amount of Third Party Supplier
revenue at present rates for the 2027 projected test year? If not, what
adjustment(s) should be made?
FCG: 	Yes. 	Projected 	miscellaneous 	charge 	revenues 	were 	properly 	calculated 	by
applying the proposed service charge amounts previously discussed to a projected
level of occurrences for each charge category. Third Party Supplier revenues were
projected using the current tariff rates multiplied by actual historical number of
suppliers and forecasted billing determinants of transportation customers used in
MFR Schedule G2-8. Late payment and Insufficient Funds (NSF) charges were
projected using a 3-year average based on actual historical revenues. Water heater
interest was projected using actual historical revenues trended for growth and
inflation at a rate of 3% per year. In addition, in accordance with our tariff, fifty
percent (50%) of all off system sales (“OSS”) net revenues shall be retained by
the Company. The remaining fifty percent (50%) of such net revenues (and all
Transaction Charges) shall be used to reduce Company's cost of gas recovered
through the Purchased Gas Cost Recovery Adjustment Clause.” FCG Tariff
Volume No. 11, Original Sheet No. 71. OSS sales are considered as part of the
PGA mechanism and not part of base rates, therefore it is appropriate that the
2027 projected balance for OSS is zero. (Husted, Noia, Everngam)
OPC: 	No. Projected test year revenues should be adjusted. Miscellaneous Revenue
should be increased $820,022. Other Revenue should be increased $1,004,899.
Finally, test year revenues should be increased at least $1,564,274 to reflect
inclusion of Off-system Sales in base rates based on historical results. Revenues
should be increased at least $3,389, 195 before considering any adjustment that
might be required if adjustments are made to the revenue forecast. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 5: 	Should 	the 	Commission 	approve 	FCG’s 	estimated 	amount 	of 	Total
Operating Revenue at present rates for the 2027 projected test year? If not,
what adjustment should be made?
FCG: 	FCG has correctly projected its Total Operating Revenue at present rates for the
projected test year 2027. No adjustments are necessary or appropriate. (Husted,
Baugh, Taylor)
OPC: 	No. See OPC position on Issue 4. (Schultz)

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PAGE 19
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
QUALITY OF SERVICE
ISSUE 6: 	Is the quality of service provided by FCG adequate?
FCG: 	Yes. FCG has a high level of customer service and yet it is continually striving to
enhance its service to customers. 	The Commission held a total of three customer
service hearings, with two held virtually and one held in-person. At these hearings,
a total of 6 individuals appeared, and none expressed a negative view of the service
quality provided by FCG. 	FCG has also migrated into CUC’s CIS and asset
management systems, adopted CUC’s operations and construction procedures, and
is continuously finding ways to enhance system safety and reliability through
pressure improvement and SAFE projects. (Estrada, Kendall, Everngam)
OPC: 	The evidence received so far has not demonstrated that service quality has
improved under CUC ownership.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
RATE BASE
ISSUE 7: 	Has FCG made the appropriate adjustment to rate base to transfer the
Safety, 	Access, 	and 	Facility 	Enhancement 	(SAFE) 	investments 	as 	of
December 31, 2026, from clause recovery to base rates?
FCG: 	Yes. 	Consistent 	with 	Order 	No. 	PSC-2015-0390-TRF-GU 	in 	Docket 	No.
20150116-GU and as reflected on MFR Schedule G1 page 4, $110.9 million net of
accumulated depreciation of SAFE investments through December 31, 2026, were
transferred from surcharge recovery to base rates in the 2027 Test Year. (Baugh)
OPC: 	No position.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.

ORDER NO. PSC-2026-0334-PHO-GU
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ISSUE 8: 	Should FCG’s proposed Advanced Metering Infrastructure (AMI) costs be
included in the 2027 projected test year? If so, what amounts, if any, should
be included?
FCG: 	Yes. Consistent with its adoption by FCG’s industry peers, AMI is a mature
technology and its full deployment across FCG’s system will improve operational
efficiency, safety, billing accuracy, and system visibility. 	As a first step in that
deployment, FCG has included the costs associated with AMI-capable meters and
meter installations for recovery in this case, as reflected in the plant additions on
MFR G1-24 and G1-27 with a phased deployment in Rockledge and Port St.
Lucie, where existing meters were already in need of replacement. 	FCG’s
deployment of this technology is thoughtful and reasonable and reflects adoption
of technology that has become an industry standard. 	As such, the meter costs
reflected in the MFR G1 schedules should be included. (Haffecke, Gilliam)
OPC: 	No. FCG’s proposed AMI cost of $18,141,069 should be excluded from the 2027
projected test year. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 9: 	Should allocated costs associated with the proposed enterprise resource
planning (ERP) program be included in FCG’s 2027 projected test year,
approved for a subsequent step rate increase upon completion, or afforded
some other treatment? What adjustments, if any, should be made to the costs
allocated to FCG?
FCG: 	The full investment and operating costs associated with the ERP allocation to FCG
should be included in the projected test year. 	However, in the alternative, FCG
suggests that a step rate increase upon implementation would also be a means to
appropriately address the investment and allocated costs. 	Implementation of the
ERP program across CUC’s platform, including FCG, is a multi-year initiative to
modernize and integrate core financial and operational business systems centered
around SAP, a leading provider of enterprise resource planning software solutions.
The ERP will replace outdated, difficult-to-support systems that are difficult to
maintain and pose potential security risks. 	Implementing the SAP software will
allow CUC, and FCG, to manage and integrate their core business activities within
a single system and will integrate with the new CIS system. The new ERP system
will be built from SAP and will integrate and streamline the core finance and
general ledger accounting system, construction and project management, asset
management, and procurement processes and will also modernize CUC/FCG’s

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PAGE 21
employee management systems. Beyond operational efficiencies, this investment is
expected to optimize workforce needs, enhance productivity, improve customer and
employee safety, and reduce future operating costs.
For FCG, the ERP will provide a centralized software program that enables
consistent business processes, improved data integrity, and enhanced business
decision making using financial and operational data. By reducing reliance on
fragmented systems and manual processes, the ERP platform serves to strengthen
internal controls, improve regulatory reporting, and support future growth as FCG
grows to meet the needs of its customers. Investing in the ERP platform now allows
CUC and FCG to proactively manage growth, improve efficiency, and mitigate
higher 	cost 	increases 	that 	would 	be 	expected 	with 	the 	legacy 	information
technology platform. This approach is consistent with Florida Public Service
Commission standards that encourage timely, prudent investments that support
reliable service, regulatory transparency, and the long-term interests of customers.
From a timing perspective, addressing these resource and talent challenges now
allows the Company to stabilize its operating environment and avoid escalating
support costs in the future. Deferring modernization would increase dependence on
scarce resources, increase operational risk, and ultimately place additional cost
pressure on customers. Investing in a modern ERP platform supports a more
efficient workforce model, strengthens internal controls, and positions the Company
to operate sustainably as an integrated utility organization. The ERP program
establishes a consistent technology platform and set of operating practices that can
be leveraged by CUC’s businesses. Operations at FCG will benefit from process
standardization and integration, improved data quality and visibility, increased
operating efficiency, stronger internal controls and enhanced governance and
scalability to support cost effective operations and a high level of customer service.
Ultimately, the SAP system will allow FCG to operate more efficiently over time
and support reliable service at a reasonable cost to customers as demand for natural
gas service increases and regulatory requirements continue to evolve. SAP as the
ERP solution and the implementation approach are prudent for FCG because they
leverage 	a 	proven, 	industry 	standard 	software 	platform, 	emphasize 	process
standardization 	over 	customization, 	and 	are 	supported 	by 	an 	experienced
implementation partner (IBM) with a demonstrated track record in utility ERP
transformations. 	Moreover, combining the ERP program with the 1CX system,
modernizes and integrates FCG’s core financial and operational systems into a
single, integrated platform, replacing fragmented legacy tools and reducing reliance
on manual processes and complex reconciliations. Together, 1CX and ERP reflect a
continuation of Chesapeake’s strategy of investing in people, processes, and
technology to strengthen service capability, improve data integrity and governance,
and support efficient and affordable service in the future. The Company has
included, in the projected test year, FCG’s allocated portion of the full rate base of
$23,584,551 and annual expense recovery on the ERP system of $2,635,078 (net of

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tax). The total revenue requirement for the ERP system in FCG’s projected test year
is $6.2 million. (Galtman, Bhatwadekar, Estrada, Baugh)
OPC: 	No, not as proposed. FCG’s proposal to annualize the per books test year rate base
and related depreciation expense from a half year to a full year should be denied.
This will reduce the Company’s rate base by $10,826,950, net of accumulated
depreciation, and reduce the related depreciation expense by $601,501. (Kollen)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 10: 	Should FCG’s proposed Advanced Mobile Leak Detection (AMLD) costs be
included in the 2027 projected test year? If so, what adjustments, if any,
should be included?
FCG: 	Yes. These vehicles will enable the Company to perform leak surveys much more
efficiently and accurately. Among other things, the vehicles are equipped with
advanced sensors that detect methane and ethane at parts-per-billion resolution.
They are also far more precise than handheld detectors and capable of identifying
even the smallest leaks before they escalate into safety hazards. In addition, these
vehicle-mounted systems can survey large areas quickly, covering miles of
pipeline in a fraction of the time compared to foot patrols, providing real-time
data collection, which reduces the time between detection and repair. They also
integrate with GIS mapping and atmospheric modeling, providing detailed leak
location, severity, and plume analysis, which will enable FCG to prioritize repairs
based on leak size and risk. (Haffecke)
OPC: 	FCG has not demonstrated that the AMLD solution is the most reasonable and
cost-effective approach to leak detection and that the costs represent a prudent
approach to providing service.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 11: 	Is FCG’s adjustment to move existing Area Extension Plan (AEP) projects
into rate base appropriate?
FCG: 	Yes. The Company is proposing to discontinue the current AEP surcharges when
new rates go into effect for existing projects and to transfer all un-recovered

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PAGE 23
excess construction costs from the current AEP program as of December 31,
2026, to the applicable capital plant construction account. This is similar to the
approach approved by the Commission in FPUC’s 2022 rate case in Order PSC-
2023-0103-FOF-GU. (Husted)
OPC: 	FCG has not demonstrated that this transition in approach has been accurately
presented in such a way that it is properly reflected in the determination of
working capital.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 12: 	Has FCG made the appropriate adjustments to remove all non-utility
activities from Plant in Service, Accumulated Depreciation, and Working
Capital?
FCG: 	FCG has no non-utility activities; therefore, no adjustment was made or was
necessary. (Baugh)
OPC: 	No.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 13: 	Should any adjustments be made to the amounts included in the 2027
projected test year for the 2004 Atlanta Gas and Light Resources (AGLR)
acquisition 	adjustment 	and 	accumulated 	amortization 	of 	acquisition
adjustment?
FCG: 	No. 	First, 	FCG 	has 	not 	requested 	Commission 	approval 	of 	an 	acquisition
adjustment related to the acquisition from FPL in December 2023, nor has it
included any associated acquisition adjustment in its 2027 Test Year. Rather, FCG
carried over the actual amounts reflected on its balance sheet at the time of the
acquisition from FPL in December 2023, which included FCG’s existing positive
acquisition adjustment and associated accumulated amortization related to AGLR’s
acquisition of FCG in 2004, which was initially approved by Commission Order
No. PSC-07-0913-PAA-GU in Docket No. 20060657-GU (“AGLR Order”). This
acquisition adjustment survived subsequent acquisitions by Southern Company Gas
and by FPL. 	Retention and the future review of the acquisition adjustment was

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PAGE 24
addressed and resolved in FCG’s most recent base rate case in Docket No.
20220069-GU, which was upheld on appeal by Supreme Court Order No. No.
SC2023-0988. 	Consistent 	with 	the 	Commission’s 	decision 	in 	Docket 	No.
20220069-GU, FCG has presented evidence and testimony in this proceeding that
this acquisition adjustment should remain on FCG’s books until fully amortized.
As such, no adjustments should be made. (Everngam, Galtman, Deason)
OPC: 	Yes. 	The 	2004 	acquisition 	adjustment 	of 	$21,656,835 	and 	accumulated
amortization of acquisition adjustment of $16,362,943 should be removed from
the 2027 projected test year. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 14: 	What is the appropriate level of Plant Accumulated Depreciation and
Amortization that should be approved for the 2027 test year?
FCG: 	The revised accumulated depreciation and amortization for the projected test year
is $238,244,616, as a result of amendments made by the Company in its response
to OPC Interrogatory No. 275, and Will Haffecke’s supplemental testimony and
Exhibit WH-2. This amount is a combination of direct accumulated depreciation
of $218,427,373, the allocated portion of common plant of $3,454,300 and
amortization of the 2004 AGLR acquisition adjustment of $16,362,943. (Baugh,
Navo)
OPC: 	The appropriate level of Plant Accumulated Depreciation and Amortization that
should be approved for the 2027 projected test year is no more than $220,303,913.
(Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 15: 	Has FCG made the proper adjustments to the Working Capital Allowance to
reflect under recoveries and over recoveries related to the Purchased Gas
Adjustment, and Energy Conservation Cost Recovery clauses?
FCG: 	Yes. FCG has made the appropriate test year adjustments to remove forecasted
net-under recoveries related to its cost recovery clauses from working capital as
reflected on page 4 of MFR G-1. (Baugh)

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 25
OPC: 	No. Working Capital Allowance should be reduced by at least $4,056,838 by
reducing 	Customer 	Accounts 	Receivable 	for 	the 	estimated 	clause 	net
underrecoveries adjustment that has historically been required by the Commission
to remove the debit effect of that receivable that is otherwise embedded in base
rates working capital as shown on Exhibit HWS-2, Schedule B-4. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 16: 	What amount of unamortized balance of Rate Case Expense, if any, should
be included in Working Capital for the 2027 projected test year?
FCG: 	None, which is what is reflected in MFR Schedule G1 page 1. (Husted)
OPC: 	None. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 17: 	What is the appropriate level of Construction Work in Progress (CWIP) to
include in the 2027 projected test year?
FCG: 	As reflected on page 1 of MFR A-3, the Company originally requested amount of
CWIP was $28,875,708 (adjusted) for the 2027 projected test year. However, as
amended by the Company’s response to OPC Interrogatory 275, the Company’s
revised request for CWIP in the projected test year is $28,875,285. The Company
also made appropriate adjustments to remove CWIP that does not belong to FCG
and to include the appropriate impact of the 2025 depreciation study in Docket
No. 20250035-GU, finalized in February 2026. (Baugh)
OPC: 	No position.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 26
ISSUE 18: 	What is the appropriate level of plant in service for the 2027 projected test
year?
FCG: 	As reflected in page 1 of MFR A-3, the originally requested amount of plant-in-
service, 	including 	the 	gross 	amount 	of 	the 	acquisition 	adjustment, 	was
$922,313,317 (adjusted) for the 2027 projected Test Year. 	However, as a result
of adjustments associated with Will Haffecke’s supplemental testimony and
Exhibit 	WH-2, 	the 	appropriate 	total 	revised 	level 	of 	plant-in-service 	is
$922,370,239. (Baugh, Gilliam)
OPC: 	The appropriate level of plant in service for the 2027 projected test year is no
more than $870,667,780. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 19: 	Did FCG utilize the RSAM mechanism from December 1, 2023 through
December 31, 2024 in a manner inconsistent with the approval of that
mechanism such that otherwise disallowable costs were recovered? 	If so,
what adjustments, if any, should be made to rate base?
FCG: 	No, therefore no adjustments are necessary or appropriate. 	FCG utilized the
RSAM consistent with Order No. PSC-2023-0177-FOF-GU, issued in Docket No.
20220069-GU and utilized the procedure reflected by Witness Campbell’s Exhibit
MC-6 in that prior docket. The Commission’s approval of the RSAM mechanism
was recently affirmed by the Florida Supreme Court on June 4, 2026, in Case No.
SC2023-0988. As of December 31, 2024, the $25 million RSAM amount had
been fully utilized.
In the 2023 FCG Order, Order No. PSC-2023-0177-FOF-GU, the Commission
approved 	a 	$25 	million 	Reserve 	Amount 	that 	FCG 	could 	use 	to 	manage
fluctuations in revenues, expenses, interest rates, and inflation during the four-
year period following the 2022 rate case. The Commission approved the RSAM
to allow FCG to maintain its return on equity within the authorized range and to
reduce the likelihood of additional rate increases. FCG utilized the RSAM in 2023
and 2024 to earn an ROE within its authorized range, as the Order expressly
contemplated. The Order did not limit the use of the RSAM to specific categories
of costs or revenues resulting in below-target net operating income. As authorized
in the Order, if the Company’s achieved ROE fell below the authorized range and
RSAM remained available, the Company was authorized to record the necessary
entries to allow for earnings to be recognized within the authorized return range.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 27
Contrary to OPC’s assertions, the Company did not utilize RSAM to recover
Transaction Costs of $14.5 million as reported in Chesapeake’s Form 10-K, nor
were these transaction costs included in the Annual Report and surveillance
reports. These transaction costs were, instead, reflected in CUC’s consolidated
financial disclosures for investor reporting purposes as these were costs that were
incurred during 2023 and 2024 to finalize the acquisition of FCG. Again, these
Transaction Costs were not reported for regulatory purposes, including FCG’s
surveillance reports and RSAM calculations.
Transition costs, both recurring and non-recurring, supported FCG’s day-to-day
utility operations. 	As such, these costs were included in FCG’s regulatory
financial statements and reporting and were also factored into FCG’s RSAM
calculations for 2023 and 2024. That treatment was appropriate because the costs
related to operating FCG during the transition period to CUC’s operations. 	The
costs 	included 	temporary 	transition 	services 	provided 	by 	FPL, 	as 	well 	as
integration activities necessary to continue providing safe and reliable service to
FCG’s customers. Excluding those costs would have overstated FCG’s regulatory
earnings and would have prevented FCG from appropriately using the RSAM as
contemplated in the 2023 Order. In other words, it would have treated necessary
operating costs as though they did not exist for purposes of determining FCG’s
rate of return, even though those costs were actually incurred to provide utility
service during the transition period. 	Furthermore, if the non-recurring transition
costs were disallowed, the earnings of the Company in 2023 and 2024 would have
still remained below the bottom of the approved range; as such, the use of the
RSAM in those periods would have still been necessary at the same level that was
utilized in those years.
As such, OPC Witness Schultz’s proposal for an RSAM Correction Liability,
along with the corresponding amortization credit, should be rejected outright. His
proposals would effectively reopen the 2023 and 2024 periods, inappropriately,
even though the Company utilized RSAM precisely as contemplated by the
Commission. Witness Schultz’s contention that FCG utilized the RSAM for
something besides “day-to-day” operations must also be rejected. 	First, the
operation of FCG through a transition period does, in fact, constitute “day-to-day”
operations. Second, the Commission did not define otherwise – or limit – what
constitutes “day-to-day” operations.
FCG utilized the RSAM in good faith, consistent with the Commission’s Order,
and has been open and forthright in its disclosure of such usage, which was
clearly reflected in the 2023 and 2024 surveillance reports that demonstrate the
RSAM utilization in those periods. Establishing a new liability now to adjust
those prior periods would constitute retroactive ratemaking. The Commission
should, therefore, reject OPC’s arguments in this regard and make no adjustments
associated with the Company’s usage of the RSAM. (Galtman)

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 28
OPC: 	Yes. The recognition of a regulatory liability of $16,610,324 should be included
in rate base for the 2027 projected test year. This will correct an overstatement of
test year rate base based on costs being improperly offset by amortization of the
Reserve Amount. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 20: 	What is the appropriate level of working capital for the 2027 projected test
year?
FCG: 	As reflected MFR A-3, page 1, the appropriate amount of working capital for the
2027 projected test year is $29,388, 571 (adjusted). (Baugh)
OPC: 	Working capital should be reduced by $10,094,925 for taxes accrued and by
$34,438 for DOL insurance. With these adjustments and the net clause under
recoveries adjustment in Issue 14, the appropriate level of working capital for the
2027 projected test year should be no more than $18,859,431. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 21: 	What is the appropriate level of rate base for the 2027 projected test year?
FCG: 	As a result of changes arising from the Company’s response to OPC Interrogatory
No. 	275 	and 	Will 	Haffecke’s 	supplemental 	testimony 	Exhibit 	WH-2, 	the
appropriate total revised rate base in the projected test year is $742,389,478.
(Baugh, Navo)
OPC: 	The 2027 projected test year rate base should be no more than $677,831,621.
(Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 29
COST OF CAPITAL
ISSUE 22: 	Should the Commission make any adjustments to account for the Section
338(h)(10) election utilized in the 2023 transaction in which CUC acquired
FCG? If so, what adjustments should be made?
FCG: 	No. 	No adjustments are necessary or appropriate. The acquisition of FCG was
structured as a stock purchase with a valid Internal Revenue Code Section
338(h)(10) election -- substantially all historical deferred tax assets and liabilities of
the acquired entity were eliminated as of the acquisition date. The historical book-
tax temporary differences did not carry forward, and deferred taxes were reset
based on the post-acquisition tax basis of the assets. The only deferred tax balance
carried forward was the regulatory liability associated with excess accumulated
deferred income taxes resulting from the Tax Cuts and Jobs Act corporate tax rate
change and the related ARAM calculation, which was preserved to ensure
compliance with normalization requirements and prior Florida Public Service
Commission orders. No other deferred tax balances were retained through the
acquisition.
The Commission should reject OPC’s suggestion that the Commission use creative
accounting treatment to provide customers with the benefit of approximately
$38.814 million of deferred taxes that no longer exist. The deferred tax liability was
extinguished at the time of the transaction. Neither the actual post-acquisition tax
position nor sound normalization principles support including a hypothetical
deferred tax balance in FCG’s regulatory capital structure. Recharacterizing the
amount as a regulatory liability does not cure that defect. It seeks to circumvent
accounting and regulatory practices and regulations to accomplish the establishment
of an extinguished liability, resulting in a normalization violation.
OPC’s recommendations, offered by Witness Kollen, would insert into FCG’s
regulatory capital structure a hypothetical zero-cost source of capital that is not
reflected in FCG’s post¬ acquisition tax position. His proposal would require the
Commission to treat FCG as though approximately $38.814 million of deferred tax
liability (ADIT) still exists through the establishment of a regulatory liability, even
though that tax liability was eliminated as part of the transaction. His proposal
therefore creates a hypothetical source of zero¬cost capital that is not reflected on
FCG’s books, does not represent an actual tax obligation (it was an obligation of the
prior owner), and does not correspond to deferred taxes that FCG will be required
to pay in the future.
FCG emphasizes that the IRS has consistently stated that ADIT cannot be created
where it does exist in reality. Because those deferred taxes are no longer deferred
and were extinguished at the time of the transaction, there is no remaining deferred
tax balance available to include as zero-cost capital in rates. 	As such, it is
inappropriate to include such ADIT in the calculation of rates or to establish a

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 30
corresponding, ongoing tax obligation or regulatory liability. CUC did not get, nor
will it get in the future, any tax benefit associated with the legacy FCG ADIT
balance in question.
Furthermore, the inclusion of a regulatory liability in lieu of the extinguished ADIT
would 	result 	in 	an 	indirect 	violation 	of 	the 	normalization 	rules. 	Replacing
extinguished ADIT with a regulatory liability would recreate the same ratemaking
effect through a different accounting label. The elimination of the deferred tax
liability does not authorize regulators to recreate the ratemaking effect of that
liability through another mechanism. The inclusion of the proposed regulatory
liability would have a detrimental effect on customers in the future as a result of the
normalization violation penalties. The Commission should therefore reject OPC’s
proposals as it related to the 338(h)(10) election in their entirety. (Russell, Reno)
OPC: 	Yes. A regulatory liability of $38,814,000 should be recognized in the 2027
projected test year to neutralize the harm caused by CUC’s imprudent, self-
serving decision associated with the Section 338 election utilized in the 2023
transaction in which CUC acquired FCG that wiped out customer-provided, cost
free capital. (Kollen)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 23: 	What amount of accumulated deferred income taxes should be approved for
the 2027 projected test year capital structure?
FCG: 	As reflected on MFR A-5, page 1, the Company’s original amount of accumulated
deferred taxes included in capital structure for the 2027 projected test year is
$13,838,900 (adjusted). However, as amended by the Company’s response to
OPC Interrogatory 275, the Company’s revised accumulated deferred taxes in the
projected test year is $14,286,935. 	The appropriate amount of Regulatory
Liability FAS 109 Deferred Tax is $9,105,416 (adjusted). (Russell, Reno, Baugh)
OPC: 	The amount of accumulated deferred income taxes should be at least $22,813,547
for the 2027 projected test year. These customer provided funds should not be
transferred to shareholders by way of a pro rata reconciliation of rate base and
capital structure. (Kollen, Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 31
ISSUE 24: 	What amount and cost rate for customer deposits should be approved for the
2027 projected test year capital structure?
FCG: 	As reflected on MFR A-5, the appropriate amount and cost rate for customer
deposits for the 2027 test year is $4,665,303 (adjusted), subsequently corrected to
$4,665,155, and 2.64%, respectively. (Baugh, Russell)
OPC: 	The amount and cost rate for customer deposits are $7,539,606 and 2.64%,
respectively, for the 2027 projected test year. 	These customer-provided funds
should not be transferred to shareholders by way of a pro rata reconciliation of
rate base and capital structure. (Kollen).
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 25: 	What amount and cost rate for short-term debt should be approved for the
2027 projected test year capital structure?
FCG: 	As reflected on MFR A-5, the Company’s original amount and cost rate for short
term debt for the 2027 projected test year is $39,638,250 (adjusted) and 4.66%,
respectively. 	However, 	as 	amended 	by 	the 	Company’s 	response 	to 	OPC
Interrogatory 275, the Company’s revised short term debt in the projected test
year is $39,612,128. (Russell)
OPC: 	The amount and cost rate for short-term debt are $32,936,468 and 4.66%,
respectively, for the 2027 projected test year. (Walters, Kollen, Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 26: 	What amount and cost rate for long-term debt should be approved for the
2027 projected test year capital structure? What adjustments, if any, are
necessary to account for the direct assignment of acquisition-related long-
term debt to FCG?
FCG: 	As reflected on MFR A-5, the Company’s original amount and cost rate for long
term debt for the 2027 projected test year is $316,731,450 with a blended,
weighted cost rate of 6.12%, which is not only consistent with current market

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 32
conditions, but lower than the cost that would result from applying the same
forecasting methodology relied upon in the prior proceeding. However, as
amended by the Company’s response to OPC Interrogatory 275 and the impact of
changes to plant balance, the Company’s revised long term debt in the projected
test year is $316,522,706. (Russell)
OPC: 	The amount and cost rate for long-term debt are $263,180,522 and 4.72%,
respectively, for the 2027 projected test year. The incremental debt cost due solely
to the acquisition is a cost CUC and its shareholders incurred to obtain the
economic value and other benefits from the acquisition without providing any
commensurate cost savings to customers. The Commission should assign this cost
to CUC and its shareholders and deny recovery from customers of this indirect,
but nevertheless real, acquisition cost from FCG’s customers. (Kollen, Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 27: 	Has FCG made the appropriate adjustments to remove all non-utility
activities/investments 	from 	the 	common 	equity 	balance 	for 	the 	2027
projected test year capital structure?
FCG: 	FCG has no non-utility activities/investments; therefore, no adjustments were
required. (Baugh)
OPC: 	No.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 28: 	What equity ratio should be approved for the 2027 projected test year capital
structure?
FCG: 	FCG’s 	equity 	ratio 	should 	be 	50.14% 	based 	on 	investor 	sources. 	This 	is
appropriate due to the fact that FCG does not issue its own debt or equity and
obtains all short- and long-term financing through its parent, CUC. (Russell)
OPC: 	The equity ratio for the 2027 projected test year should be no more than 50.14%.
(Walters)

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 33
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 29: 	What return on equity (ROE) should be approved for establishing FCG’s
2027 projected test year revenue requirement?
FCG: 	The Commission should authorize 11.25% as the mid-point return on common
equity. Granting FCG’s requested return on equity will appropriately take into
account FCG’s unique risk profile and is critical to maintaining FCG’s financial
strength. (Haag)
OPC: 	The ROE for establishing the 2027 projected test year revenue requirement should
be 9.45%. (Walters)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 30: 	What capital structure and weighted average cost of capital should be
approved 	for 	establishing 	FCG’s 	2027 	projected 	test 	year 	revenue
requirement?
FCG: 	The appropriate capital structure for FCG is 50.14 percent common equity and
49.86 percent debt, which is consistent with CUC’s capital structure, and which
benefits customers because of its lower equity to debt ratio than that of FCG’s
prior owner. The appropriate weighted average cost of capital to use is 8.31%.
(Russell)
OPC: 	The weighted average cost of capital should be no more than 6.25% in establishing
the projected test year revenue requirement. (Walters, Kollen, Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 34
NET OPERATING INCOME
ISSUE 31: 	Has FCG properly removed Purchased Gas Adjustment and Natural Gas
Conservation Cost Recovery Clause revenues, expenses, and taxes-other-
than-income from the 2027 projected test year? If not, what adjustments, if
any, should be made?
FCG: 	Yes. FCG has properly removed Purchased Gas Adjustment and Natural Gas
Conservation Cost Recovery Clause revenues, expenses, and taxes-other-than
income from the projected test year. (Baugh)
OPC: 	No.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 32: 	Has FCG made the appropriate adjustment to Net Operating Income to
remove amounts associated with the transfer of SAFE investments as of
December 31, 2026, from clause recovery to base rates? If not, what
adjustments, if any, should be made?
FCG: 	Yes. 	Pursuant 	to 	Order 	No. 	PSC-2015-0390-TRF-GU, 	FCG 	has 	made 	the
appropriate adjustments to Net Operating Income to reflect the transfer of SAFE
investments as of December 31, 2026, from clause recovery to base rates. (Baugh)
OPC: 	No position.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 33: 	Should the projected test year O&M expenses be adjusted to reflect changes
to the non-labor trend factors for inflation and customer growth?
FCG: 	No, the factors were based on the best estimates at the time and any changes
would still be estimates. The Company has applied trend factors that are most
appropriate for the trended accounts and has made sure that the applications of
these factors have produced reasonable results. Because insurance cost increases
are expected to exceed inflation, the Company directly projected insurance
premiums for the 2026 and 2027 test years, incorporating anticipated premium

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 35
increases based on recent renewal experience and current and projected market
conditions. The self-insurance reserve accrual should be $502,739. The injuries
and damages insurance expense of $2,592,499 reflected in the projected test year
is based on estimates from discussions with the Company’s insurance broker, not
a mechanical inflation trend. (Baugh, Russell)
OPC: 	O&M expenses should reflect the reasonable and prudent costs to serve its own
customers without reference to the experience of peers. The Commission should
take into account the magnitude of cost increases in the brief period the company
has been under CUC ownership that are not due to inflation and customer growth.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 34: 	What amount of 2027 projected test year Uncollectible Accounts and Bad
Debt should be included in the Revenue Expansion Factor?
FCG: 	As shown in MFR G-2, page 19g, and MFR G-4, the appropriate amount of bad
debt expense is $600,441, and the appropriate rate of 0.3288% should be included
in the revenue expansion factor. The Company appropriately used a five-year
average bad debt expense to revenues ratio in computing its proposed bad debt
rate in the revenue expansion factor. (Galtman, Baugh)
OPC: 	Uncollectible or bad debt expense for the 2027 projected test year should be
$420,281 which results in a reduction of $180,160. The Bad Debt rate to include
in the NOI Multiplier for the 2027 projected test year should be 0.2301%.
(Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 35: 	Has FCG made the appropriate adjustments to remove all non-utility
activities from operation expenses, including depreciation and amortization
expense? If not, what adjustments, if any, should be made?
FCG: 	FCG does not have any non-utility investments and, therefore, adjustments were
not required. (Baugh)

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 36
OPC: 	No. Chesapeake Utilities Parent Company (CU) and Florida Public Utilities
Parent Company (FU) expenses are caused by or incurred for the benefit of only
the affiliates but are improperly allocated to FCG. This effectively places non-
utility activity costs on the FCG regulated books. Expenses should be reduced at
least $597,000. (Kollen)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 36: 	Are there any transaction costs associated with the acquisition of FCG by
CUC included in the projected test year? 	If so, what adjustments, if any,
should the Commission make to the 2027 test year?
FCG: 	No. 	There are no transaction costs associated with the acquisition of FCG by
CUC included in the 2027 projected test year. (Galtman)
OPC: 	Yes. These costs are residually included in the rate base and should be removed
through the recognition of a regulatory liability as described in Issue 19. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 37: 	How should the Commission treat costs, if any, included in the test year
representing the costs of transition, integration, and rebranding associated
with CUC’s December 1, 2023, acquisition of FCG? What adjustments, if
any, should the Commission make to the 2027 test year to account for the
costs 	of 	transition, 	integration, 	and 	rebranding 	associated 	with 	CUC’s
acquisition of FCG?
FCG: 	Transition costs, which FCG interprets to include integration and rebranding, are
costs incurred to operate, stabilize, and integrate FCG into its parent, CUC’s
operations. FCG has not included any transition, integration and rebranding costs
associated with CUC’s 2023 acquisition of FCG in the 2027 projected test year.
Additionally, FCG did not utilize RSAM inappropriately for 2023 or 2024.
Therefore, no adjustment to the 2027 projected test year is necessary. (Galtman)
OPC: 	All costs included in the 2027 test year for the transition, integration, and
rebranding associated with CUC’s December 1, 2023, acquisition of FCG should
be removed. “But for” transition, integration, and rebranding costs that would not

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 37
be incurred or included in the test year absent the Commission’s consideration of
an acquisition adjustment should be excluded from any recovery from customers.
Such consideration or approval would be tantamount to approval of an acquisition
adjustment that is not being requested at this time. (Schultz, Kollen)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 38: 	What amount of employee full time equivalent additions should be included
in the 2027 projected test year?
FCG: 	The appropriate amount of FTEs in the projected test year is the projected average
of 246, which reflects specific, identified positions supported by the direct
testimonies of multiple Company witnesses. Witness William Haffecke discusses
operational headcount additions; Witness Tina Barrington discusses HR related
positions; 	Witness 	Abhijit 	Bhatwadekar 	discusses 	IT-related 	positions; 	and
Witness George Navo discusses corporate A&G headcount additions allocated to
FCG. These are not speculative additions. Each position is tied to identifiable
operational, regulatory, compliance, or support requirements arising from the
operating model. (Navo, Barrington, Haffecke, Bhatwadekar)
OPC: 	Using the known and measurable employee count of 226 FTEs, the adjusted
payroll expense, excluding incentive compensation, of $15,327,389, should be
reduced by at least $1,359,688 to no more than $13,968,071. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 39: 	What amount of salaries and benefits should be approved for the 2027
projected test year?
FCG: 	The appropriate amount of payroll is $20,694,172 and benefits is $3,888,657,
including incentive compensation amounts allocated from CUC, to include in the
Test Year. The reasonableness of salary and benefit expense is demonstrated in a
number of ways, including comparison of FCG’s salaries, annual pay increase
program, and non-executive variable incentive pay to the relevant comparative
market. (Barrington, Navo)

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 38
OPC: 	The total salaries and benefits including incentive compensation for the 2027
projected test year should be no more than $15,327,389. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 40: 	What amount of annual storm damage accrual and cap, if any, should be
approved for the 2027 projected test year?
FCG: 	The Commission should allow FCG to maintain the currently approved Storm
Damage Reserve accrual and target reserve amounts of $57,500 and $800,000,
respectively. (Russell)
OPC: 	The annual accrual of $57,500 should be discontinued beginning January 1, 2027.
(Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 41: 	What is the appropriate annual amount and amortization period for Rate
Case Expense?
FCG: 	As shown in MFR C-13 and G2-19h, the appropriate annual amount of FCG’s
rate case expense is $4,215,262. The Company is requesting amortization of
$843,052 per year over a period of five years. (Husted, Deason)
OPC: 	The Company’s rate case expense request should be reduced by $1,467,663. Rate
case expense should be no more than $2,747,599 and amortized over 5 years.
(Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 39
ISSUE 42: 	What amount of Directors and Officers Liability Insurance expense should
be included in for the 2027 projected test year?
FCG: 	The appropriate amount of D&O liability insurance expense in the 2027 projected
test year is $151,835. Purchasing a D&O insurance policy is necessary to attract
and retain qualified employees and directors. Reducing these amounts negatively
diminishes the importance of fiduciary oversight, governance and overall risk
management and further impacts FCG's ability to incur costs to retain and attract
talent. Also, without this coverage, the Corporation’s assets are at risk. It provides
coverage for lawsuits brought by other parties. A D&O policy mitigates this risk
by covering the legal fees and other costs the Corporation may incur as a result of
such a suit. Without it, the Company could be exposed to a claim, which could
result in material legal fees and other costs that would ultimately negatively
impact ratepayers and shareholders. (Russell)
OPC: 	The Commission should completely disallow DOL insurance expense because the
cost associated with benefits of the insurance primarily accrue to shareholders,
some of whom generally are the parties initiating any suit against the directors
and officers. If the Commission does not agree with the concept that shareholders
are the prime beneficiary, then at the very least equal sharing between the
shareholders and customers should be done. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 43: 	What is the appropriate amount of 2027 projected test year O&M expenses?
FCG: 	Based upon agreed upon adjustments and the supplemental testimony of William
Haffecke, the appropriate amount of O&M expenses in the projected test year is
$46,513,711. (Baugh)
OPC: 	The appropriate amount of 2027 projected test year Other O&M expenses should
be no more than $33,789,026. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 40
ISSUE 44: 	What 	amounts 	of 	amortization 	expense 	associated 	with 	the 	AGLR
acquisition adjustment should be included in the 2027 projected test year?
FCG: 	The appropriate amount of amortization expense associated with the 2004
acquisition adjustment associated with AGLR’s acquisition of FCG to be included
in the projected test year is $721,895. (Baugh, Navo, Deason)
OPC: 	None. The $721,894 acquisition amortization associated with the 2004 AGLR
acquisition should be excluded from the 2027 projected test year. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 45: 	What is the appropriate amount of Depreciation and Amortization Expense
for the 2027 projected test year?
FCG: 	The appropriate amount of depreciation and amortization expense for the year
ended December 31, 2027, after self-reported corrections and the revisions
reflected by the supplemental testimony of William Haffecke, the appropriate,
revised amount of depreciation and amortization expense is $24,318,831. (Baugh)
OPC: 	The appropriate amount of Depreciation and Amortization Expense for the 2027
projected test year should be no more than $17,398,017. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 46: 	What is the appropriate amount of 2027 projected test year Taxes Other
than Income?
FCG: 	As reflected on MFR A-4, the appropriate amount of Taxes Other Than Income
Taxes is $10,190,264 (adjusted) for the 2027 projected test year. (Baugh, Navo,
Russell)
OPC: 	The appropriate amount of Taxes Other than Income for the 2027 projected test
year should be no more than $6,777,230. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 41
STAFF: 	No position at this time.
ISSUE 47: 	Is a Parent Debt Adjustment pursuant to Rule 25-14.004, F.A.C., appropriate
and if so, what is the appropriate amount?
FCG: 	No. FCG is not a borrower under any third-party debt arrangement. Instead, CUC,
the parent company of FCG, maintains all the third-party debt. When filing a
consolidated tax return of CUC and its subsidiaries (including FCG), the tax
deduction for interest expense is determined by the interest associated with the
third-party debt held by the parent. As FCG has no third-party debt, there is no tax
deduction for interest expense recorded on the subsidiary's Federal income tax
return. While FCG has no debt on its books and records, an allocated portion of
the parent's capital structure is applied to the rate base of FCG as illustrated in
MFR G-3 page 2. As such, no additional interest expense tax benefit exists at the
parent level and, therefore, no parent debt adjustment is required or appropriate.
Moreover, the interest synchronization calculation on MFR Schedule G-3 page 2
already captures the tax benefits of the allocable parent company debt. Applying
an additional parent debt adjustment would double-count the same tax benefit.
(Russell, Reno)
OPC: 	Yes. A parent debt adjustment in the amount of $1,773,908 should be made for
the 2027 projected test year. (Kollen)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 48: 	What is the appropriate amount of 2027 projected test year Income Tax
Expense?
FCG: 	As reflected on (MFR G-2, page 30) or (MFR A-4), adjusted for self-reported
corrections and the changes reflected in the supplemental testimony of William
Haffecke, the appropriate revised amount of Income Taxes Expense is $2,168,469
(adjusted) for the 2027 Test Year. (Russell, Baugh)
OPC: 	The appropriate amount of Income Tax Expense for the 2027 projected test year
should be no more than $4,581,092. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 42
STAFF: 	No position at this time.
ISSUE 49: 	What is the appropriate amount of Total Operating Expenses for the 2027
projected test year?
FCG: 	As reflected on MFR Schedule A-4, adjusted for self-reported corrections and the
changes 	reflected 	in 	the 	supplemental 	testimony 	of 	William 	Haffecke, 	the
appropriate amount of Total Operating Expenses in the projected test year is
$78,854,336. No further adjustments are necessary. The Commission should also
reject OPC Witness Schultz’s proposal to reduce outside services expense,
because the projected amount in the 2027 test year reflects specific engagements
for legal, consulting, and audit services required to support FCG’s regulated
operations under CUC ownership. These services include external audit fees for
the FERC Form No. 2 and annual and quarterly reports required by the SEC; legal
support for regulatory proceedings; consulting support for rate case preparation
and the ERP implementation; and specialized technical support. (Haffecke,
Baugh, Navo)
OPC: 	The appropriate amount of Total Operating Expenses for the 2027 projected test
year should be no more than $62,545,365. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 50: 	What is the appropriate amount of Net Operating Income for the 2027
projected test year?
FCG: 	As reflected on MFR Schedule A-1, adjusted for self-reported corrections and the
changes 	reflected 	in 	the 	supplemental 	testimony 	of 	William 	Haffecke, 	the
appropriate Net Operating Income amount to be included in the projected test year
is $14,928,971. (Baugh)
OPC: 	The appropriate amount of Net Operating Income for the 2027 projected test year
should be at least $34,627,138. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 43
REVENUE REQUIREMENTS
ISSUE 51: 	What revenue expansion factor and net operating income multiplier should
be approved for the 2027 projected test year?
FCG: 	As reflected in MFR G-4, the revenue expansion factor and net operating income
multiplier for the 2027 projected test year are 74.0363% and 1.3507, respectively.
(Baugh)
OPC: 	This 	issue 	is 	dependent 	on 	the 	resolution 	of 	Issue 	34. 	Based 	on 	OPC’s
recommended bad debt rate, the revenue expansion factor and net operating
income multiplier should be 74.1099% and 1.349347, respectively. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 52: 	What is the appropriate annual operating revenue increase for the 2027
projected test year?
FCG: 	The total revised annual operating revenue increase is $63,163,068 and total
revised incremental revenue increase is $46,760,124 adjusted for the self-reported
corrections in OPC ROG 275 and in the filed supplemental testimony of William
Haffecke in Exhibit WH-2. (Baugh, Everngam)
OPC: 	None. Based on OPC’s adjustments, FCG has a revenue sufficiency of at least
$5,956,640 for the 2027 projected test year. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
COST OF SERVICE AND RATE DESIGN
ISSUE 53: 	What is the appropriate cost of service methodology to allocate costs to the
rate classes?
FCG: 	The appropriate cost of service methodology is set forth in the MFR H schedules
and 	described 	by 	FCG 	Witness 	John 	Taylor, 	including 	the 	Company’s
classification 	of 	distribution 	mains 	between 	customer- 	and 	demand-related
components because that approach reasonably recognizes both the customer-

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 44
related investment required to extend and maintain the distribution network and
the demand-related costs associated with shared system capacity. 	Furthermore,
the Company’s use of the Peak and Average allocation factor for the demand-
related portion of distribution mains as it is in alignment with recent practices in
Florida, and provides a reasonable, transparent, and practical measure of relative
class responsibility. Specifically, the Company is proposing a Customer/Demand
classification and allocation methodology to reflect cost allocation to better match
cost causation. The Customer/Demand approach is applied only to small diameter
mains, while larger diameter mains continue to be classified and allocated under
the Peak and Average method. 	Under the proposed Customer/Demand COSS,
small diameter mains are classified as 60 percent customer-related and 40 percent
demand-related. This approach allows the Company to improve cost alignment
for a significant portion of distribution mains investment while maintaining
continuity with established methods for the remainder of the system. (Taylor)
OPC: 	No position at this time.
FEA: 	FCG allocates costs based on a capacity or demand allocation factor based on
equal weighting of monthly peak sales and average annual sales. This is
problematic. Capacity costs are designed to serve peak day or peak hour demand.
Average monthly peaks do not reasonably capture the capacity additions need to
provide reliable firm service because a peak month demand can be very different
than a peak day demand. The development of demand allocation factors should
reflect how the system is designed to serve peak demands and provide reliable
firm service. The appropriate cost of service methodology to allocate capacity
costs is peak day demand as described by FEA witness Gorman. FEA reserves the
right to make further argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 54: 	How should the approved revenue requirement be allocated to the rate
classes?
FCG: 	The increase should be allocated as shown in MFR Schedule H-1, page 2. FCG
has set the proposed revenues by rate class by balancing revenue increase
requirement, 	cost 	causation 	principles, 	rate 	stability, 	and 	customer 	impact
considerations, while following the Commission practice of gradualism and
considering the competitive nature of the natural gas industry. (Taylor)
OPC: 	No position at this time.
FEA: 	FCG’s proposal moves residential and certain commercial customer classes
further away from cost of service. FEA witness Gorman recommends a revenue
spread that moves each rate class toward cost of service, with moderation and

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 45
gradualism incorporated. FEA reserves the right to make further argument on this
issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 55: 	Should 	the 	Commission 	approve 	FCG’s 	proposal 	to 	consolidate 	the
residential RS-1, RS-100, and RS-600 rate classes into a single residential
rate class be approved?
FCG: 	Yes. 	The existing residential rate schedules are consolidated to simplify the rate
structure and improve consistency in how residential customers are served and
billed. Consolidating the residential rate schedules will align customers more
closely with the cost to serve and reduce intra-class subsidization. By combining
the existing classes into a single residential class, the Company can more
appropriately reflect the largely uniform cost of providing service to residential
customers. (Taylor)
OPC: 	No position at this time.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 56: 	Should the Commission approve FCG’s proposal to restructure commercial
rate schedules GS-1, GS6K, and GS-25K?
FCG: 	Yes. The applicability thresholds for commercial rate schedules, including General
Service -1 (“GS-1”), General Service - 6K (“GS 6K”), and General Service - 25K
(“GS-25K”), are modified to further align customer class definitions with those
used by CUC’s other operating entities. This change promotes consistency and
supports a more standardized and administratively efficient rate structure. The
proposed structure represents a step toward harmonizing rate schedules across
CUC’s operating units by establishing more comparable applicability ranges based
on consumption. The proposed approach is also consistent with industry literature
on developing sound rate structures. (Taylor)
OPC: 	No position at this time.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 46
ISSUE 57: 	Are FCG’s proposed Customer Charges appropriate?
FCG: 	Yes. The proposed customer charge adjustments were determined by considering
multiple factors. The customer-related unit cost, as calculated in MFR Schedule
H-l, served as the baseline. 	The proposed customer charge for residential class
reflects the consolidation of rate classes and aligns the recovery of fixed costs
with 	the 	nature 	of 	the 	fixed 	costs 	incurred 	by 	the 	Company, 	while 	also
considering customer bill impacts. (Taylor)
OPC: 	No position at this time.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 58: 	Are 	FCG’s 	proposed 	per 	therm 	Non-Fuel 	Energy 	and 	Transportation
Charges appropriate?
FCG: 	Yes. 	The "Non-Fuel Energy Charge”, which applies to the sales service rate
schedules and the “Transportation Charge,” which applies to the transportation
service rate schedules, should be approved. (Taylor, Grimard)
OPC: 	No position at this time.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 59: 	Are FCG’s proposed Demand Charges appropriate?
FCG: 	Yes. 	The demand charges reflected on MFR Schedule H-l, Schedule A, reflects
the appropriate demand charges. (Taylor)
OPC: 	No position at this time.
FEA: 	FCG witness Taylor proposes a demand allocation (or charge) factor based on
equal weighting of monthly peak sales and average annual sales. This is
inappropriate because it does not accurately allocate and reflect FCG’s capacity
costs. As described above at Issue 53, the demand or capacity cost allocation
factor should reflect daily peak demands of the system, which is what FCP

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 47
designs and invests for to provide firm reliable service. FEA reserves the right to
make further argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 60: 	Are FCG’s proposed miscellaneous service charges appropriate?
FCG: 	Yes. The Company’s proposed miscellaneous service charges were independently
evaluated based on operational cost, and projected miscellaneous charge revenues
were calculated by applying the proposed service charge amounts to a projected
level of occurrences. (Husted)
OPC: 	No position at this time.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 61: 	Are FCG’s proposed revisions to the Area Expansion Program (AEP)
appropriate?
FCG: 	Yes. 	The Company believes that the changes to the AEP reflected in Witness
Husted’s direct testimony will make the program less confusing for customers,
reduce inquiries from customers about billing under the AEP, and allow for more
straightforward administration of the AEP surcharge by the Company. The
Company will calculate the AEP rate based on the number of projected premises
located on the extension facilities. This will result in a fixed (monthly) AEP
recovery charge to the applicable customers and therefore, assure cost recovery
for the extension by the Company. (Husted)
OPC: 	No position at this time.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 48
ISSUE 62: 	Is FCG’s proposed new Minimum Volume Commitment (proposed Original
Sheet No. 6.152, provision 2) and associated Agreement (proposed Original
Sheet Nos. 8.123 – 8.126) for customers who require an extension of facilities
appropriate?
FCG: 	Yes. The tariff modification would provide the Company with the option to
require a non-residential customer that will need a facility extension to receive
service, to commit to receive service at a defined minimum level and to pay for
such minimum level of service - whether utilized or not - in accordance with a
proposed “take-or-pay” provision. (Grimard)
OPC: 	No position at this time.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 63: 	Is FCG’s proposed revision to its Load Enhancement (LE) rate schedule
appropriate?
FCG: 	Yes. The Company is proposing a preapproved “pro-forma” tariffed agreement to
be included in the Company’s published tariff. Upon entering into a LE-CTS
Agreement 	with 	a 	customer, 	the 	Company 	would 	file 	a 	notice 	with 	the
Commission Clerk notifying the Commission that it is utilizing its pre-approved
pro-forma agreement for that specific customer. This proposed change will
enhance the Company’s ability to retain large system Customers that have the
ability (on a timely basis) to bypass or use alternative fuel. (Grimard)
OPC: 	No position at this time.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 64: 	Is FCG’s proposal to eliminate the Gas Lighting, Natural Gas Vehicle
Service and Balancing Service Rider rate schedules appropriate?
FCG: 	Yes. The Gas Lighting rate schedule and the Natural Gas Vehicle Service rate
schedule are proposed to be eliminated, because of the lack of participation by
customers under these rate schedules. 	The Company proposes to eliminate its
Balancing Service Rider because it intends to seek approval to adopt the Swing

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 49
Service 	methodology 	used 	by 	Florida 	Public 	Utilities 	Company. 	(Taylor,
Grimard, Noia)
OPC: 	No position at this time.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 65: 	Should 	the 	Commission 	approve 	FCG’s 	proposed 	new 	Operational
Balancing Account tariff (proposed original Sheet Nos. 7.212-7.213)?
FCG: 	Yes. The Company is proposing to adopt FPUC’s Operational Balancing Account
schedule that has been previously approved by the Commission. This new rate
schedule will serve the same purpose as in the FPUC tariff and will provide a
recovery 	mechanism 	for 	TPS 	fuel-related 	expenses. 	By 	standardizing 	the
transportation service rules and processes for FCG and FPUC, CUC is able to
provide a more uniform service level across the sister companies’ platform in
Florida, while customers and pool managers now operate under the same tariff
provisions across the two distribution systems. (Grimard, Noia)
OPC: 	No position at this time.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 66: 	Should the Commission approve FCG’s proposed new Shipper of Last
Resort tariff (proposed Original Sheet No. 7.412)?
FCG: 	Yes. The Company is proposing to adopt FPUC’s Shipper of Last Resort schedule
that has been previously approved by the Commission. This new rate schedule
will serve the same purpose as in the FPUC tariff and will provide a recovery
mechanism for fuel related expenses and provide a gas sales mechanism for small
commercial and residential transportation customers should their TPS default. By
standardizing the transportation service rules and processes for FCG and FPUC,
CUC is able to provide a more uniform service level across the sister companies’
platform in Florida, while customers and pool managers now operate under the
same tariff provisions across the two distribution systems. (Grimard, Noia)
OPC: 	No position at this time.

ORDER NO. PSC-2026-0334-PHO-GU
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PAGE 50
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 67: 	Should the Commission approve FCG’s proposed non-rate related tariff
changes?
FCG: 	Yes. The Company’s proposed changes will align FCG’s general rules and
regulations and format with that currently applicable to Florida Public Utilities
Company. 	In addition, the Company has proposed adding a new Section 8 and
Section 9 to the tariff that will include the standard forms used by FCG and lists
the special contracts applicable to FCG. (Grimard)
OPC: 	No position at this time.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 68: 	What is the appropriate effective date for FCG’s revised rates and charges?
FCG: 	The appropriate effective date for new rates and charges for FCG is January 1,
2027. (Grimard, Baugh)
OPC: 	No position at this time.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 69: 	Should the Commission approve tariffs reflecting Commission approved
rates and charges?
FCG: 	Yes. 	The 	Commission 	should 	approve 	tariffs 	reflecting 	the 	Commission’s
approved rates and charges effective January 1, 2027. The Commission should
direct staff to verify that the revised tariffs are consistent with the Commission’s
decision. (Baugh)

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 51
OPC: 	No position at this time.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
OTHER ISSUES
ISSUE 70: 	Should any portion of the interim increases granted be refunded to the
customers?
FCG: 	No, no refund is warranted. The calculation was reviewed and approved by the
Commission on July 7, 2026. To the extent OPC’s refund request is predicated on
the Section 338(h)(10) ADIT treatment, the direct assignment of CUC acquisition
long-term debt, or the RSAM Correction Liability, those underlying premises are
without merit or support. Were the Commission to entertain any refund on the
bases proposed by the OPC – which it should not - it would also need to take into
account 	the 	fact 	that 	the 	Company 	had 	a 	PGA 	over-recovery 	balance 	of
$6,361,451 for 2025 that it erroneously failed to remove from working capital,
which reduced the amount of working capital used for the historic base year,
resulting in a benefit to customers in terms of the calculation of the effective
interim rates. The appropriate balance for the historic year 2025 should have been
an under-recovery of $2,051,654, and accordingly no impact to working capital
should have been reflected for 2025. (Baugh, Galtman, Russell, Reno)
OPC: 	Yes. (Schultz)
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.
ISSUE 71: 	Should this docket be closed?
FCG: 	Yes. (Baugh, Everngam)
OPC: 	No position at this time.
FEA: 	FEA has no specific position on this issue. FEA does not waive its right to make
argument on this issue once all facts are complete.
STAFF: 	No position at this time.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 52
IX. 	EXHIBIT LIST
Witness 	Proffered By 	Description
Direct
Matthew Everngam 	FCG 	ME-1 	List of Sponsored MFRs
Matthew Everngam 	FCG 	ME-2 	Informational Matrix of
Witnesses Sponsoring MFRs
Matthew Everngam 	FCG 	ME-3
Revised
7/24/26
Calculation of Ongoing Cost
Savings Tied to 2004 AGLR
acquisition of FCG
Michael Galtman 	FCG 	MG-1 	List of Sponsored MFRs
David Haag 	FCG 	DH-1 	Curriculum Vitae
David Haag 	FCG 	DH-2 	Dividend History
David Haag 	FCG 	DH-3 	FCG ROE Study November
2025
David Haag 	FCG 	DH-4 	Proxy Group Capitalization
John Taylor 	FCG 	JT-1 	List of Sponsored MFRs
John Taylor 	FCG 	JT-2 	Supplemental COSS – Demand
Based Classification of
Distribution Mains
John Taylor 	FCG 	JT-3 	Allocation of Proposed
Revenue Increase
John Taylor 	FCG 	JT-4 	Development of Rates under
ERP Revenue Requirement
Approach
John Taylor 	FCG 	JT-5 	Curriculum Vitae
Abhijit Bhatwadekar 	FCG 	AB-1 	List of Sponsored MFRs
Noah T. Russell 	FCG 	NTR-1 	Capitalization, Historical
Treasury Rates, and Self
Insurance Schedules
Noah T. Russell 	FCG 	NTR-2 	List of Sponsored MFRs

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 53
Witness 	Proffered By 	Description
Joanah Baugh 	FCG 	JB-1 	List of Sponsored MFRs
Joanah Baugh 	FCG 	JB-2 	ERP Revenue Requirement
Calculation
Joanah Baugh 	FCG 	JB-3 	Interim Tariff Rate Schedules
George Navo 	FCG 	GN-1 	List of Sponsored MFRs
George Navo 	FCG 	GN-2 	Summary schedule, by FERC
account, of all the direct
allocated payroll for A&G
employees
William Haffecke 	FCG 	WH-1 	List of Sponsored MFRs
William Haffecke 	FCG 	WH-2
Received
8/31/26
Summary of Changes
associated with change to
damage prevention software
Brian Gilliam 	FCG 	BG-1 	List of Sponsored MFRs
Kim Estrada 	FCG 	KE-1 	List of Sponsored MFRs
James Kendall 	FCG 	JK-1 	List of Sponsored MFRs
Dan Noia 	FCG 	DN-1 	Southeast Interstate Pipeline
Infrastructure
Jessica Husted 	FCG 	JH-1 	List of Sponsored MFRs
Jessica Husted 	FCG 	JH-2 	Benchmarking
Tina Barrington 	FCG 	TB-1 	List of Sponsored MFRs
Wraye Grimard 	FCG 	WG-1 	Matrix of the general rules and
regulations tariff language
proposed by Company
Christopher C. Walters 	OPC 	CCW-1 	Curriculum Vitae
Christopher C. Walters 	OPC 	CCW-2 	Electric and Natural Gas
Utilities Valuation Metrics
Christopher C. Walters 	OPC 	CCW-3 	Proxy Group

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 54
Witness 	Proffered By 	Description
Christopher C. Walters 	OPC 	CCW-4 	Consensus Analysts' Growth
Rates
Christopher C. Walters 	OPC 	CCW-5 	Constant Growth DCF Model
(Consensus Analysts' Growth
Rates)
Christopher C. Walters 	OPC 	CCW-6 	Payout Ratios
Christopher C. Walters 	OPC 	CCW-7 	Sustainable Growth Rate
Christopher C. Walters 	OPC 	CCW-8 	Constant Growth DCF Model
(Sustainable Growth Rate)
Christopher C. Walters 	OPC 	CCW-9 	Multi-Stage Growth DCF
Model
Christopher C. Walters 	OPC 	CCW-10 	Common Stock Market/Book
Ratio
Christopher C. Walters 	OPC 	CCW-11 	Equity Risk Premium -
Treasury Bond
Christopher C. Walters 	OPC 	CCW-12 	Equity Risk Premium - Utility
Bond
Christopher C. Walters 	OPC 	CCW-13 	Bond Yield Spreads
Christopher C. Walters 	OPC 	CCW-14 	3 and 6 Month Treasury and
Utility Bond Yields
Christopher C. Walters 	OPC 	CCW-15 	Weighted Least Squares
Regression Analysis
Christopher C. Walters 	OPC 	CCW-16 	Beta
Christopher C. Walters 	OPC 	CCW-17 	CAPM Return
Lane Kollen 	OPC 	LK-1 	Resume of Lane Kollen
Lane Kollen 	OPC 	LK-2 	FCG Response to OPC INT.
249
Lane Kollen 	OPC 	LK-3 	FCG Response to OPC INT.
162
Lane Kollen 	OPC 	LK-4 	Section 338(h)(10) Election

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 55
Witness 	Proffered By 	Description
Lane Kollen 	OPC 	LK-5 	Galtman L.F. DEP EX 3
Lane Kollen 	OPC 	LK-6 	FCG Response to OPC INT.
161
Helmuth W. Schultz, III 	OPC 	HWS-1 	Background and Qualifications
Helmuth W. Schultz, III 	OPC 	HWS-2 	Schedules
Helmuth W. Schultz, III 	OPC 	HWS-3 	Cost Analysis
Helmuth W. Schultz, III 	OPC 	HWS-4 	Cost Comparison
Helmuth W. Schultz, III 	OPC 	HWS-5 	FCG Responses to OPC
Discovery
Helmuth W. Schultz, III 	OPC 	HWS-6 	CUC Investor Information
Helmuth W. Schultz, III 	OPC 	HWS-7 	FCG ESRs and Annual Reports
Helmuth W. Schultz, III 	OPC 	HWS-8 	Starnik Order and D.R.
Helmuth W. Schultz, III 	OPC 	HWS-9 	Miscellaneous Documents
Michael Gorman 	FEA 	MPG-1 	FEA's Proposed Revenue
Spread
Angela Kendrick 	Staff 	ALK-1 	List of Service Complaints
Angela Kendrick 	Staff 	ALK-2 	List of Billing Complaints
Angela Kendrick 	Staff 	ALK-3 	List of Warm Transfers
Curt Mouring 	Staff 	CM-1 	Auditor's Report of Florida City
Gas
Rebuttal
David Haag 	FCG 	DH-5 	FCG ROE Study November
2025 (Excluding Spire)
David Haag 	FCG 	DH-6
Corrected
8/27/26
FCG ROE Study June 2026
(Including Spire)

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 56
Witness 	Proffered By 	Description
David Haag 	FCG 	DH-7
Corrected
8/27/26
FCG ROE Study June 2026
(Excluding Spire)
Joanah Baugh 	FCG 	JB-4 	Reconciliation of Staff Audit
Finding Number 3
Joanah Baugh 	FCG 	JB-5 	Reconciliation of the PGA
over/under recovery
Noah T. Russell 	FCG 	NTR-3 	Schedules reflecting 1.
Correction to Kollen Schedule;
2. FCG Adjusted Schedule; 3.
Correction to Kollen Schedule;
4. FCG Adjusted Schedule; and
5. Blue Chip Financial Forecast
May 1, 2026
Noah T. Russell 	FCG 	NTR-4 	Prior MFR Schedule G-6 Page
3 of 3 (Docket 20220069-GU)
Michael Galtman 	FCG 	MG-2 	Expense Reconciliation
Michael Galtman 	FCG 	MG-3
Revised
9/15/26
Transaction and Transition Cost
Summary
Michael Galtman 	FCG 	MG-4
Revised
9/15/26
ROR Summary
X. 	PROPOSED STIPULATIONS
There are no proposed stipulations at this time.
XI. 	PENDING MOTIONS
There are no pending motions at this time.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 57
XII. 	PENDING CONFIDENTIALITY MATTERS
1. 	FCG’s Request for Confidential Classification of certain information contained in
its Response to the Office of Public Counsel’s First Request for Production of
Documents, Nos. 11 and 12, filed May 8, 2026.
2. 	FCG’s Request for Confidential Classification of certain information contained in
its Response to the Office of Public Counsel’s Second Request for Production of
Documents, No. 26, filed May 21, 2026.
3. 	FCG’s Request for Confidential Classification of certain information contained in
its Response to the Office of Public Counsel’s Fourth Request for Production of
Documents, No. 47, filed June 10, 2026.
4. 	FCG’s Request for Confidential Classification of certain information contained in
Exhibit No. 4 to Galtman’s Deposition, filed July 20, 2026.
5. 	FCG’s Request for Confidential Classification of certain information contained in
its Response to Staff’s Ninth Set of Interrogatories, No. 119 and Staff’s Sixth
Request for Production of Documents, No. 26, filed August 25, 2026.
6. 	OPC’s Request for Confidential Classification of certain information contained in
its Response to Florida City Gas’s Second Request for Production of Documents,
No. 3, filed July 28, 2026.
7. 	OPC’s Request for Confidential Classification of certain information contained in
its Response to Staff’s First Request for Production of Documents, No. 2, filed
August 20, 2026.
XIII. 	POST-HEARING PROCEDURES
If no bench decision is made, each party shall file a post-hearing statement of issues and
positions. A summary of each position, set off with asterisks, shall be included in that statement.
If a party’s position has not changed since the issuance of this Prehearing Order, the post-hearing
statement may simply restate the prehearing position; however, if the prehearing position is
longer than 75 words, it must be reduced to no more than 75 words. Each party may provide a
position statement of up to 125 words on two issues of its choosing. If a party fails to file a post-
hearing statement, that party shall have waived all issues and may be dismissed from the
proceeding.
Pursuant to Rule 28-106.215, F.A.C., a party’s proposed findings of fact and conclusions
of law, if any, statement of issues and positions, and brief, shall together total no more than 100
pages and shall be filed at the same time.

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 58
XIV. 	RULINGS
Opening statements, if any, shall not exceed ten (10) minutes per party.
The Provision of Exhibits, as described in VI.G. of the Order Establishing Procedure, is
hereby amended to be due by 10 AM on September 24, 2026.
It is therefore,
ORDERED by Commissioner Mike La Rosa, as Prehearing Officer, that this Prehearing
Order shall govern the conduct of these proceedings as set forth above unless modified by the
Commission.
By ORDER of Commissioner Mike La Rosa, as Prehearing Officer, this 22nd day of
September, 2026.
MIKE LA ROSA
Commissioner and Prehearing Officer
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.
MRT

ORDER NO. PSC-2026-0334-PHO-GU
DOCKET NO. 20260026-GU
PAGE 59
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.
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, 	which 	is 	preliminary, 	procedural 	or
intermediate in nature, may request: (1) reconsideration within 10 days pursuant to Rule 25-
22.0376, 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 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.
Judicial review of a preliminary, procedural or intermediate 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 court, as described above, pursuant to Rule 9.100, Florida Rules of Appellate
Procedure.