1. (1) This rule applies to any regulated water or wastewater utility that adjusts its rates pursuant to Section 367.081(4)(b), F.S., to reflect an increase or decrease in the rates, fees, or costs for the following specified expenses:

   1. (a) Water or wastewater utility service purchased from a governmental authority or other water or wastewater utility regulated by the Commission;
   2. (b) Purchased electric power;
   3. (c) Ad valorem taxes;
   4. (d) National Pollutant Discharge Elimination System (NPDES) Permit Program fees charged by the Florida Department of Environmental Protection;
   5. (e) Regulatory Assessment Fees imposed by the Commission;
   6. (f) Water or wastewater quality testing required by the Department of Environmental Protection (DEP);
   7. (g) Wastewater biosolids disposal fees;
   8. (h) Tank inspection required by the DEP or a local governmental authority;
   9. (i) Treatment plant operator and water distribution system operator license fees required by the DEP or a local governmental authority;
   10. (j) Water or wastewater operating permit fees charged by the DEP or a local governmental authority, or
   11. (k) Consumptive or water use permit fees charged by a water management district.

2. (2) Prior to an adjustment in rates pursuant to Section 367.081(4)(b), F.S., the utility shall file its verified notice and supporting documents with the Commission’s Division of Accounting and Finance at least 45 days prior to the effective date of its pass through rate adjustment, or at least 60 days prior to the effective date of its combined or simultaneously filed price index and pass through rate adjustments if the utility requests an exception to the 45 day effective date, as referenced in paragraph (2)(h), to allow the price index and pass through rate adjustments to be implemented as one rate adjustment pursuant to Section 367.081(4)(e), F.S. Each verified notice of a pass through rate adjustment shall include the following supporting documents. If the same information or supporting document is required for both the price index and pass through rate adjustments, such as revised tariff sheets, annualized revenue calculations, return on equity affirmations, and customer notices, the applicant may file a combined supporting document to be used for both applications:

   1. (a) Revised tariff sheets reflecting the increased or decreased rates;

   2. (b) A schedule showing the calculation of the proposed rates, including the following information. If the pass through rate adjustment is combined with a price index rate adjustment, a combined schedule that shows the calculation of both the price index and pass through rate adjustments may be provided:

      1. (I) The percentage increase or decrease in purchased water or wastewater utility service, purchased power, or wastewater biosolids disposal may be applied solely to the gallonage charge;
      2. (II) The percentage increase or decrease in ad valorem taxes may be applied solely to the base facility charge;
      3. (III) The percentage increase or decrease in any specified expense that was adjusted using a specific allocation methodology in the utility’s last rate proceeding or in a prior pass through adjustment may be applied using that same methodology; and,
      4. (IV) The percentage increase or decrease in any specified expense that reflects a single assessment to the water and wastewater systems combined may be allocated between the water and wastewater rates based on the equivalent residential connection ratio of water and wastewater customers;

      1. The calculation of the recurring annual or amortized annual amount of the new expense or incremental change calculated as referenced in subsection (3);

      2. The utility’s actual annual revenue or calculation of the annualized revenue for the most recent 12-month period, or 12-month test year if combined or simultaneously filed with a price index application. If there were any Commission-approved changes to the utility’s rates during the 12-month period or test year, the revenue should be annualized to reflect the revenue that would have resulted if the rate change had been in effect the entire 12 months. The annualized revenue calculation should reflect the annual number of bills broken down by customer class and meter size, and the annual gallons of water or wastewater service sold broken down by customer class. Annualized revenues should be calculated separately if the utility provides both water and wastewater service;

      3. If the pass through of an increase or decrease in purchased water or wastewater utility service, purchased power, or wastewater biosolids disposal is applied only to the gallonage charge in the rate adjustment calculation, provide a schedule showing the gallons of water or wastewater service sold during each month of the most recent 12-month period or test year, broken down by customer class and meter size, if not shown in the revenue calculation previously provided in subparagraph (2)(b)2. above; and,

      4. The calculation of the proposed rates that shows the current rates, dollar amount of the pass through increase or decrease, and proposed adjusted rates. The percentage increase or decrease resulting from the pass through adjustment for any specified expense may be applied to all rates equally or allocated between the base facility charge and gallonage charge based on the following guidelines:

   3. (c) A copy of the current invoice, proof of payment, or other documentation that demonstrates that the specified expense has been adjusted or is a new requirement. If the specified expense is an existing expense that was not previously included in the utility’s rates, also provide a statement confirming that the specified expense has never been embedded in the utility’s rates;

   4. (d) A copy of the invoice(s) or other documentation that supports the utility’s calculation of the recurring annual or amortized annual increase or decrease in the specified expense referenced in subparagraph (2)(b)1., as follows:

      1. For a frequently recurring specified expense, such as purchased power, provide a copy of all invoices received for the most recent 12-month period or test year;

      2. For a specified expense that occurs on an annual basis, such as ad valorem taxes, provide a copy of the invoice received for the prior year;

      3. For a specified expense that occurs less than annually, such as NPDES permit program fees, provide a copy of the invoice received the last time the expense occurred, or

      4. For the pass through of an incremental increase or decrease in regulatory assessment fees that were previously included in the utility’s rates by another governmental entity prior to the Commission’s regulation of the utility, provide documentation that shows the percentage or amount of regulatory assessment fees that were previously included in the utility’s rates, such as a copy of an order, ordinance, rate calculation, or other available information that can be used to determine and verify the percentage of regulatory assessment fees that were previously included in the utility’s rates.

   5. (e) The utility’s DEP Public Water System identification number and Wastewater Treatment Plant Operating Permit number;
   6. (f) The affirmation required by Section 367.081(4)(c), F.S., including the rate of return on equity that the utility is affirming it will not exceed with this rate adjustment;
   7. (g) A copy of the notice to customers required by subsection (6); and,
   8. (h) If applicable, a statement that the utility requests an exception to the 45 day effective date provided by Section 367.081(4)(b), F.S., to allow combined or simultaneously filed price index and pass through rate adjustments to be implemented together as one rate adjustment pursuant to Section 367.081(4)(e), F.S., with an effective date 60 days after the official filing date of the utility’s notice of intention to increase rates through a price index rate adjustment filed pursuant to Section 367.081(4)(a), F.S., and subsection 25-30.420(2), F.A.C.

3. (3) The recurring annual or amortized annual amount of the new expense or incremental change shall be calculated as follows:

   1. (a) The change in a frequently recurring specified expense, such as purchased power, shall be calculated as an annual total, broken down by month for the most recent 12-month period or for the 12-month test year if combined or simultaneously filed with a price index rate adjustment. The calculation shall reflect the following information:

      1. All charges or fees included in the total specified expense, such as the purchased water or wastewater base facility charge, gallonage charge, any applicable billing or service fees, and taxes, even if some of the rates or fees did not change;

      2. The actual or annualized charges for the specified expense. If the rates or charges for the specified expense changed during the 12-month period or test year, the actual charges should be annualized to reflect the charges that would have resulted if the prior rates or charges had been in effect the entire 12 months;

      3. The annualized charges that would have resulted if the new rates had been in effect the entire 12 months;

      4. The difference between the charges at the prior and new rates; and,

      5. If the utility’s most recent rate proceeding included adjustments for excessive unaccounted for water (EUW) or excessive inflow and infiltration (I&I), the calculation of an increase or decrease in purchased water or wastewater utility service or purchased electric power shall also include the same percentage EUW or I&I adjustments. If the utility has taken steps to reduce EUW or I&I since its most recent rate proceeding, the utility may, but is not required to, provide additional information to demonstrate that the EUW or I&I percentages have been reduced. Any proposed revision to the EUW or I&I percentages should be calculated as referenced in subsection (4).

   2. (b) The change in a specified expense that occurs on an annual basis, such as ad valorem taxes, shall be calculated as an annual total based on a comparison of the prior expense and new expense. If applicable, the calculation of the increase or decrease in ad valorem taxes only shall include the following additional adjustments:

      1. If any ad valorem tax bills reflect a single assessment for combined water and wastewater property, the calculation shall also include the utility’s calculation of the equivalent residential connection ratio of water and wastewater customers used to allocate the combined tax assessment between the utility’s water and wastewater rates; and,

      2. If the utility’s last rate proceeding included adjustments for non-used and useful plant, the calculation shall also include an adjustment to remove the portion of the ad valorem taxes related to the water or wastewater plant that is not used and useful in providing utility service.

   3. (c) The change in a specified expense that occurs less than annually, such as NPDES permit program fees, shall be calculated as an annual amortized amount based on a comparison of the prior and new expense. The expense shall be amortized as a non-recurring expense in accordance with subsection 25-30.433(8), F.A.C., and the calculation shall include an explanation if the expense is amortized for a period other than five years.

4. (4) The pass through of changes in purchased water or wastewater utility service or purchased electric power shall be adjusted for EUW or I&I consistent with adjustments approved by the Commission in the utility’s most recent rate proceeding, if applicable. If the utility has taken steps to reduce the EUW and I&I percentages since its most recent rate proceeding, the utility may, but is not required, to provide the following information to demonstrate that the EUW and I&I percentages have been reduced and that the previously approved EUW and I&I percentages should either be reduced or eliminated from the pass through rate adjustment calculation:

   1. (a) A description of any steps taken by the utility to reduce the EUW or I&I since the utility’s last rate proceeding; and,

   2. (b) A schedule showing the updated calculation of EUW or I&I broken down by month for the most recent 12-month period or test year including:

      1. The gallons of water or wastewater treatment purchased from the governmental authority or regulated utility that has increased or decreased its rates. If wastewater treatment service is not based on a metered flow, describe how the wastewater flows are determined and include the number of units by which the service is measured;

      2. If the utility purchases water or wastewater service from more than one governmental authority or regulated utility, include the gallons of water or wastewater treatment purchased from any other governmental authority or regulated utility not reflected in subparagraph (4)(b)1., above. If wastewater treatment service is not based on a metered flow, describe how the wastewater flows are determined and include the number of units by which the service is measured;

      3. The gallons of water pumped or wastewater treated by the utility, if applicable;

      4. The gallons of water or wastewater service sold by the utility;

      5. The total unaccounted for water or inflow and infiltration; and,

      6. A statement explaining the EUW or I&I if the total water available for sale or total wastewater treatment purchased is still in excess of 110 percent of the water or wastewater service sold.

5. (5) The amount administratively approved for a pass through rate adjustment shall not exceed the actual cost incurred. Foregone pass through decreases shall not be used to adjust a pass through increase below the actual cost incurred.
6. (6) The utility shall provide each customer with written notice of the administratively approved rate adjustment, including the effective date and an explanation of the reasons for the increase or decrease, prior to the time each customer will begin consumption at the adjusted rates. If the pass through rate adjustment is combined or simultaneously filed with a price index rate adjustment, the utility may provide the information for both rate adjustments in a combined customer notice.

Rulemaking Authority 350.127(2), 367.081, 367.121(1)(c), (f) FS. Law Implemented 367.081(4), 367.121(1)(c), (g) FS. History–New 6-10-75, Amended 4-5-79, 4-5-81, 10-21-82, Formerly 25-10.179, Amended 11-10-86, 6-5-91, 4-18-99, 2-19-17.