The Florida Public Service Commission (PSC) voted today to propose rules allowing water and wastewater utilities to request a reserve fund, that may provide accessible, low-cost funding for infrastructure repair and replacement projects. The rules are consistent with House Bill 491, passed by the 2016 Florida Legislature, giving the PSC authority to establish reserve funds for water and wastewater utilities.
“Carrying out the Legislature’s directives to address water and wastewater utilities’ need to repair and replace infrastructure, which is an ongoing industry issue in our state, reduces utilities’ borrowing costs and make funding more readily available to meet short- and long-term capital expenditures,” said PSC Chairman Julie Brown. “A reserve fund can also help reduce a utility’s need for frequent rate cases, thus lowering the impact of rate case expense for its customers.”
Chairman Brown added, “Safe, affordable drinking water and sanitary waste disposal are vital building blocks for economic development, job creation and retention in Florida’s communities. We will continue to work with the Legislature, helping Florida’s water and wastewater utilities meet their operational challenges to provide quality service to their customers.”
The proposed rules allow the PSC to create a reserve fund to be used for certain infrastructure repair and replacement projects, with disbursement subject to Commission approval. Once a reserve fund is approved, it will be secured through an escrow account or irrevocable letter of credit. The utility is required to provide a monthly report of the fund deposits and disbursements, a project status report every six months, an update in its annual report, and an updated capital improvement plan every three years.
The PSC held an initial rule development workshop in December 2016; water and wastewater industry representatives and the Office of Public Counsel, who represents utility customers, participated. If no requests for hearing or comments are filed, the rules will be filed with the Department of State.
Currently, the PSC has jurisdiction over 131 water and wastewater IOUs in 37 Florida counties.
For additional information, visit www.floridapsc.com.
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