Citizens of the State of Florida, etc. v. Florida Public Service Commission
The Florida Supreme Court affirmed the Public Service Commission's approval of Florida City Gas's alternative depreciation parameters and Reserve Surplus Amortization Mechanism in a contested rate case, holding the Commission acted within its discretion under section 366.06, Florida Statutes, and the Depreciation Rule. The majority found the Commission's decisions were supported by competent, substantial evidence and were rationally connected to findings of customer rate stability and savings. A three-justice dissent argued the Commission improperly reverse-engineered depreciation parameters to generate a surplus to support an earnings management tool unrelated to depreciation.
Key facts
- Florida City Gas (FCG), a natural gas utility subsidiary of FPL, petitioned the Public Service Commission for approval of a four-year rate plan in 2022.
- The Commission approved FCG's alternative depreciation parameters (RSAM-ADP) over the standard 2022 Depreciation Study, knowing the RSAM-ADP would generate a $52.1 million reserve surplus.
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Holdings
- The Florida Depreciation Rule (Fla. Admin. Code R. 25-7.045) does not prohibit the Commission from approving depreciation parameters that result in a reserve imbalance surplus; the rule…
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Why it matters
This decision is important for practitioners involved in utility rate proceedings and administrative law challenges to PSC orders. It reinforces the substantial deference given to the Commission's factual findings and… — full analysis with a trial
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