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61 1 RESOLUTION NO. 2 -------- 3 A Resolution instructing the City Attorney to hire outside legal 4 counsel to intervene on the City's behalf in the FPL rate case 5 before the Florida Public Services Commission, for an amount 6 not to exceed $25,000. 7 8 WHEREAS, Florida Power and Light ("FPL") provides electricity within the City of 9 South Miami ("City"), and the City and its residents have no alternative but to purchase 10 services from FPL; and the City government purchases electricity from FPL to power City 11 Hall and numerous municipal buildings in order to provide services to residents; and 12 13 WHEREAS, the residents and businesses of the City must also purchase electric 14 service from FPL; and 15 16 WHEREAS, the City, its residents and businesses continue to face a depressed 17 economy with limited resources wherein jobs are being lost, incomes and revenues are static 18 or declining, and home mortgages are being foreclosed, requiring the City, its residents and 19 businesses to live within their means and budget accordingly; and 20 21 WHEREAS in March 2012, FPL proposed a 16% base rate hike in order to ensure up 22 to a 12.5% return on equity for its shareholders, currently at 11.25%; and 23 24 WHEREAS, FPL benefits from more pass-through cost recovery mechanisms than 25 any other regulated utility in the United States of America, including the Storm Cost Recovery 26 Surcharge, the Fuel Cost Recovery Clause pass-through, the Environmental Cost Recovery 27 Clause pass-through, the Capacity Cost Recovery Clause pass-through, the Conservation Cost 28 Recovery Clause pass-through, and the Nuclear Cost Recovery Clause pass-through, which 29 pass-through mechanisms increase FPL's current cash flow without the scrutiny employed in a 30 traditional rate case; and 31 32 WHEREAS, currently, approximately 52% of the rates paid by FPL customers are 33 paid pursuant to these cost recovery mechanisms instead ofthrough base rates; and 34 35 WHEREAS, in 2009 the Florida Public Service Commission ("PSC") awarded FPL 36 only 7% of its requested base rate relief, yet FPL continued in 2010 and 2011 to report 37 substantial earnings growth, including an increase of 14% in 2010 and 13% in 2011; and 38 39 WHEREAS, October 4,2010, the PSC Staff recommended that the PSC order FPL to 40 hold $400 million for possible refund to customers and that the PSC investigate over earning 41 by the company, however the customers never received a refund; and 42 43 WHEREAS, the proposed rate increases will cost South Miami residents and 44 businesses approximately $1.7 million a year, sixty-eight times the annual cost of joining a 45 legal intervention; and 46 WHEREAS, the City of South Miami wishes to join with neighboring municipalities, 47 business groups, and consumer interest groups in filing an intervention against FPL's 48 requested rate increase before the Florida Public Services Commission, and 49 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 WHEREAS, the Tallahassee law firm of Nabors, Giblin, & Nickerson is expert in utilities law, specializes in the representation of municipalities, and WHEREAS, the Nabors, Giblin, & Nickerson firm currently represents other municipalities in Miami-Dade County in opposition to the activities ofFPL, and WHEREAS, the firm of Nabors, Giblin, & Nickerson has submitted a proposal to represent the City of South Miami, as part of a coalition of local municipalities, business groups, and public interest groups, in a rate case intervention before the Florida Public Services Commission, and WHEREAS, the City Attorney for the City of South Miami has recommended hiring the law firm of Nabors, Giblin, & Nickerson to represent the City in a rate case intervention before the Florida Public Services Commission should the City desire to intervene in that case, NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA, THAT: Section 1. The City adopts, by reference, the recitals set forth hereinabove . Section 2. The City desires to intervene in the case before the Florida Public Services Commission in opposing FPL's rate increase. Section 3. The City hereby instructs the City Attorney to hire the outside legal counsel recommended by him to intervene on the City'S behalf in the FPL rate case before the Florida Public Services Commission, for an amount not to exceed $25,000. Section 4. This Resolution shall be effective immediately upon its adoption. Passed and adopted this __ day of _____ -', 2012. ATTEST: City Clerk READ AND APPROVED AS TO FORM, LANGUAGE, LEGALITY AND SUFFICIENCY: CITY ATTORNEY Page 2 of2 APPROVED: Mayor COMMISSION VOTE: Mayor Stoddard: Vice Mayor Liebman: Commissioner Newman: Commissioner Harris: Commissioner Welsh: 29 May 2012 To: From: CC: Re: South Miami City Commission: Vice Mayor Leibman, Commissioner Harris, Commissioner Newman, Commissioner Welsh Philip Stoddard, Mayor City Manager Hector Mirabile, City Attorney Thomas Pepe FPL Rate case intervention FPL seeks a 16% rate increase FPL is asking Florida's Public Service Commission (FPSC) for a 16% rate increase, nearly all of which will go to increase the rate of return to their corporate shareholders. FPL insists the increase will only cost us rate payers a percent or two, because their increase to the base rate will be offset by dropping fuel charges. Forget that logic: those fuel savings belong to us, the rate payers. Our FPL bills have two parts, the base rate and the fuel charge, so the fuel cost is passed through straight to the rate payers. If the cost of fuel goes up, we pay more; if it goes down, we pay less. Very simple -the cost of fuel is independent of the base rate. Cost of FPL rate increase to South Miami's economy I calculate that the base rate increase will cost South Miami's residents and businesses $1.7 million a year, none of which will come back to improve our service. FPL already gets "pass-throughs" to charge us directly for storm recovery and storm reserves. This $1.7 million would be extracted from our economy every year to benefit FPL's shareholders. In fact, the stock price of their parent company, Next Era Energy (NYSE: NEE) has already risen 15% in anticipation that the rate case will be approved. FPL reminds us that they have among the lowest rates in Florida. Terrific. Let's keep it that way. In a final bid for sympathy to their rate increase request, FPL's government representative told me that utilities do go bankrupt. Hmm. Not as often as cities. Another twist of the screw Through the Nuclear Cost Recovery pass-through, FPL's rate payers are already paying $3 billion up front to "uprate" FPL's nuclear reactors at Turkey Point and St. Lucy, enabling them to generate 15% more power with the same fuel from the same 40 year old reactor vessels. We deserve the reward on our capital investment and risk. Instead, FPL's shareholders currently get to charge us 11.25% on our investment, and now FPL is asking to INCREASE the amount we pay their shareholders for the capital we gave them. If that sounds completely preposterous, it is. That's what happens when a Wall Street monopoly buys Tallahassee. And the ultimate injury to South Miami, the issue that put FPL in the dog house to begin with ... US 1 transmission lines FPL has stonewalled South Miami's request that FPL bear the full $21 million cost of burying their proposed 230 kV transmission lines on South Miami's US 1. Our economic study estimated those transmission lines, if built above ground, will destroy $28.5 million in South Miami property values, cost $21.6 million annually in lost wages, and cost us $1.73 million in annual property taxes. And that's on top of the extra $1.7 million FPL will take from us every year they get their requested rate increase. Let us not forget the greatly elevated incidence of childhood leukemia, Alzheimer's disease, and other senile dementi as reported among people living near transmission lines . So let's figure this out.. . 1. FPL really wants their rate increase -it's worth a LOT of money to them. In fact, when I placed a resolution before the City Commission to notify the FPSC of our opposition (the legal equivalent ofa frowny face), FPL's lobbyists phoned incessantly, begging me not to do it. They hired our state senator as a lobbyist and he begged me not to do it. They even asked my friends to ask me not to do it. 2. South Miami really wants NOT to have 230 kV transmission lines on US 1. They will kill us. 3 . We have nothing to gain by throwing another $1.7 million a year to FPL' s shareholders, and $1.7 million to lose. 4. The utilities rewrote the state laws to assure that we have very little direct leverage on the transmission line issue, but they can't stop us from opposing their request for a rate increase. Intervening in the rate case South Miami and the neighboring municipalities have the unique opportunity to file as interveners in the FPL rate case, but we have to do it soon because the case will be decided in October 2012. We would be represented by Bill Gamer and Brian Armstrong of Nabors, Giblin, & Nickerson, Attorneys at Law, a Tallahassee firm that specializes in representing municipalities in disputes with utilities. This is the same legal firm that's representing Pinecrest in the Transmission Line proceedings. Their proposal is attached. South Miami's share of the legal costs would be capped at $25,000. We have the money, and if we get more partners, our cost could be less. We are soliciting other municipalities and local business interests to join us. That sure beats shelling out millions to FPL's shareholders, and maybe FPL concludes it's cheaper to resolve the transmission line problem that's keeping us so riled up. Do the math. Are you in? TALLAHASSEE Suite 200 1500 Mahan Drive Tallahassee, Florida 32308 (850) 224-4070 Tel (850) 224-4073 Fax Rep ly to Tallahassee The Honorable Cindy Lerner Mayor, Village of Pi necrest 12645 Pinecrest Parkway Pinecrest, FL 33156 The Honorable Jim Cason Mayor, City of Coral Gables Office of the Mayor 405 Biltmore Way, Second Floor Coral Gables, FL 33134 The Honorable Shelley Stanczyk Mayor, Village of Palmetto Bay 9705 East Hibiscus Street Palmetto Bay, FL 33157 Nabors Gi bli n ,~ Nicl<ers6n PA !\fT(if?N[V':; AI' L/\W May 24 ,2012 Via Electronic and U.S. Mail FORT LAUDERDALE 208 S.E . Sixth Street Fort Lauderdale, Florida 33301 (954) 525-8000 Tel (954) 525-8331 Fax TAMPA Suite 1060 2502 Rocky Point Drive Tampa, Florida 33607 (813) 281-2222 Tel (813) 281-0129 Fax The Honorable Philip K. Stoddard, Ph .D Mayor, City of South Miami 6130 Sunset Drive South Miami, FL 33143 The Honorable Edward MacDougall Mayor, Town of Cutler Bay 10720 Caribbean Boulevard Suite 105 Cutler Bay, FL 33189 The Honorable Susan Gottlieb Mayor, City of Aventura 19200 West Country Club Dr ive Aventura, FL 33180 RE: Intervention into FPL Rate Case Currently Before the Florida Public Service Commission Dear Mayor, At the request of Village of Pinecrest Mayor Cindy Lerner, and in light of your recent discussions with colleagues from other Miami-Dade County municipalities affected by rate increase proposals advanced by Florida Power & Light Company (FPL), I have prepared this brief general description of the "base rate" portion of an investor-owned utility'S rates, the process for raising an investor-owned utility's base rates, and a brief description of the posture of FPL's current rate case before the Florida Public Service Commission (FPSC). I have also included a generalized estimate of costs and a means for limiting your municipality's liability for those costs if you join with your sister municipalities to intervene in FPL's cu r rent rate case before the FPSC. May 24,2012 Page 2 of 5 If your municipality desires to retain our services on the terms indicated in Attachment "A", kindly sign and date this letter in the space provided and return it to me in the self-addressed, postage pre-paid envelope provided herewith. Introduction Florida Power & Light Company (FPL) is before the FPSC seeking a 16 percent increase in its authorized base rate revenues. The base rate component of the bill represents nearly half of a customer's bill. Consequently, adjustments to the base rate have a significant impact on the amount utility customers pay to FPL. Different types of customers are affected differently by an increase in base rates. Although FPL describes the impact of its rate increases in terms of a "typical" customer who uses 1,000kW/h, it should be understood that many customers pay amounts far in excess of what is described by FPL as typical. When the FPSC sets base rates for any investor-owned electric utility ("IOU"), including FPL, it determines the value of the utility's investment in plant and its operating expenses, and then determines what it thinks is a reasonable rate of return, or profit, for investors. The resulting amount is referred to as the "revenue requirement." It should be noted that FPL has requested a profit return of up to 12.5 percent. In the last FPL rate case every 1 percent of profit represented approximately $100 million in increased rates. Once the FPSC has determined the revenue requirement, it then determines the "rate structure" where it sets rates designed to meet such requirement. Different rates are set for different classes of customers. For example, a residential customer will pay one rate and a commercial customer will pay a different rate. In addition, customers who use more electricity pay higher rates. This is known as an "inclining block rate" structure and it is designed to promote conservation. FPL's method of describing rate impacts has very little relevance to the actual experience of real customers, particularly in the communities south of the City of Miami where most customers are likely to consume well in excess of 1,000kW/h each month. Regardless of how FPL presents its increase based on a "typical" customer, the fact is, FPL is asking the FPSC to allow it to increase its base rate revenues by approximately 16 percent. A local government should be keenly interested in a request by its electric service provider to raise rates for two reasons. First, a local government is a customer that relies on large quantities of electricity for its day-to-day operations. As a result, an increase in the utility's base rates means an increase to the local government's cost of providing essential services to its residents. Second, a local government is, fundamentally, concerned with the health, safety and welfare of its residents who are also customers of the same utility that provides service to the government. As such, it is appropriate for the representatives of those residents to advocate on their behalf and defend them against May 24,2012 Page 3 of 5 unwarranted increases in their cost of living. Finally, an increase in electric rates represents an opportunity cost to utility customers who cannot use the money otherwise spent on electricity for other beneficial economic purposes. This can depress economic activity in the community, which is detrimental not only to residents and businesses, but to government revenues as well. A Rate Case When an IOU wishes to increase base rates it notifies the FPSC of its intention and describes its proposed rate increase in general terms. The FPSC acknowledges the utility's request and establishes a date by which the utility should file its petition. When the utility files its petition it also submits full data as required under FPSC rules and witness testimony in support of the proposed rates. After the FPSC staff has determined that the utility's filing is adequate to move forward with a full investigation of the proposal it will recommend to the Commission that the utility's proposed rates be suspended from taking effect and that a formal hearing process be initiated. The formal hearing process is similar to a civil trial in that the parties may conduct full discovery, sponsor and cross examine witnesses, and present evidence. During the pre-hearing phase of the proceeding, parties examine the data and testimony submitted by the utility and engage in the information gathering process called discovery wherein the parties may depose witnesses, request the production of documents, propound interrogatories, etc. During this phase the FPSC also schedules "service hearings" at locations throughout the utility's service area where the public gives its opinion concerning the quality of service and the impact of the proposed rate increase. At the start of the rate case, an FPSC Commissioner assigned to act as a prehearing officer issues an "Order Establishing Procedure" which guides the conduct of prehearing activities. The parties conduct their preparation and discovery based on this Order. During the prehearing phase, parties intervening in the rate case must by specified dates complete discovery, determine and disclose what witnesses and exhibits they will introduce, if any; identify and take a position on issues in the case, and file or respond to pretrial motions, among other activities. At the close of the discovery period, the prehearing officer holds a prehearing conference to dispose of outstanding motions, refine and narrow issues, and establish additional procedures if necessary. Typically, the full hearing begins within two weeks of the prehearing conference, and can last two or more weeks. The hearing is similar to a trial. Parties make opening statements, examine witnesses and introduce evidence. Within a couple of weeks after the hearing concludes, the parties are permitted to file closing briefs. The FPSC staff then, within the next several weeks, examines the hearing record and files a recommendation on the rates. The commission typically renders its decision at the next regularly scheduled Agenda Conference or in one or more special conferences depending on circumstances . After the Commission has made its decision, it issues a Final Order explaining its May 24,2012 Page 4 ofS decision. After the Final Order has issued, the parties may move for reconsideration or may appeal directly to the Florida Supreme Court. Intervention In FPL's Current Rate Case FPL notified the FPSC on January 17, 2012 that it is seeking an increase in its base rates. On March 19, 2012, FPL filed its formal petition and submitted witness testimony and exhibits. Several "interested parties" have intervened in the rate case, including the Office of Public Counsel, the Florida Retail Federation, the Florida Industrial Power User's Group, the South Florida Hospital and Healthcare Association, and a few individual customers . The discovery process has started and the first Customer Service Hearings at which the public may speak are scheduled to start on May 31, 2012, in Southwest Florida. The Service Hearings will continue through the month of June. Miami-Dade County hearings will be held on June 26 th in Miami and Miami Gardens and on June 27th in Plantation. The Miami area hearings are scheduled to occur at 9 a.m. and 4 p.m., times not typically conducive to significant public participation. A motion to change these hearing times should be filed so that members of the public can more easily attend them to voice their opinion. For Miami-Dade municipalities to intervene and mount an effective case, the decision to intervene must be made as soon as possible. Under the current procedural schedule, included as Attachment "B", Intervener's must file direct testimony and exhibits by July 2, 2012, rebuttal testimony and exhibits by July 31,2012 and discovery must be concluded by August 13, 2012. The cost of litigating a rate case varies considerably depending on several variables, including whether direct and rebuttal testimony and exhibits are offered by a party. Even without offering witnesses, in order to litigate the case through the pre-hearing discovery and customer hearing process, through the administrative hearing process and through the post-hearing issue briefing stage, costs could range from $150,000 to $250,000. This estimate could be low depending in large part on the results of an analysis of FPL's case and issues it raises. In order to manage costs, it has been proposed that several parties with common interests combine in joint intervention capping each party's liability for legal fees at $25,000 plus costs. In order to utilize this approach, it would be necessary for the joint parties to formalize their relationship and provide a clear methodology for the sharing and reimbursement of fees and costs. Attachment itA" includes terms to accomplish these goals. Cone/usion At Nabors, Giblin & Nickerson, we have been honored to assist the Village of Pinecrest in its efforts to protect the p'ublic interest as it pertains to the quality, price and method of electric utility service in Miami-Dade County. Should your municipality choose to join the Village in this effort, we look May 24,2012 Page 5 of 5 forward to working with you in this regard as well . If you have any questions regarding the rate case process or the Village of Pinecrest's proposal, please feel free to call me, or my colleague Brian Armstrong in our office in Tallahassee at (850) 224-4070. Signature William C. Garner Print Name and Title Date ATTACHMENT "A" Introduction Thank you for considering the firm of Nabors, Giblin & Nickerson, P .A. ("NGN") to represent your government or organization in Florida Power & Light Company's (FPL) current rate proceeding before the Florida Public Service Commission (FPSC). NGN is the preeminent Florida law firm representing local governments in a wide array of matters, including matters concerning public utilities. Our statewide public utility representation has afforded NGN significant experience advocating at the FPSC on behalf of clients with positions adverse to those of FPL and other major investor-owned public utility companies. From this experience we have gained valuable insight into FPL, and have developed means for achieving positive results for our clients. We believe that our Firm is well suited to assist your government or organization opposing FPL' s proposed increase in base rates. Our lawyers have vast experience in the regulatory process and specifically in representing large investor-owned utilities (lOUs) and government utilities. Our experience with IODs is particularly helpful as we are able to share with you our insights into the mindset and strategic decision-making of IOU management. Qualifications NGN possesses a breadth of experience in utility-related matters which few other firms possess. For ten years, Brian Armstrong represented Florida's largest investor-owned water utility in complex litigation before the FPSC. He remains intimately familiar with the workings of the FPSC. Since joining NGN in 2000, Mr. Armstrong has represented local governments and electric cooperatives in significant matters related to IODs including rate cases, territory disputes, service agreements and franchise agreements. William "Bill" Gamer will also be principally involved in this matter. Nearly a decade of Mr. Garner's 12-year legal career has been devoted to public utility law. Mr. Gamer possesses expertise on a wide range of utility matters. From 2005 to 2010 he served as the Chief Policy Advisor to FPSC Commissioners including the Chairman. This role afforded him the opportunity to learn and understand the regulatory process from the inside out, and to observe the workings of all major utility companies, including FPL. Many decisions issued by the FPSC during Mr. Garner's tenure with the agency play a major role in shaping FPL's present activities and strategies. Notable actions of the FPSC during this time period include: implementation of storm cost recovery and securitization; rulemaking concerning the hardening of electric utility infrastructure against hurricanes; denial of petitions seeking determination of need for coal fired power plants; approval of petitions seeking determination of need for nuclear power plants and associated transmission lines; adoption and implementation of the nuclear cost recovery rule; hearings on numerous statewide rate cases, including those for FPL, Progress Energy Florida, Inc., and Tampa Electric Company; and many other matters. Mr. Gamer's legal practice at NGN focuses on public utility law, acquisitions and divestitures, and representation before regulatory bodies such as the FPSC and the Florida Department of Environmental Protection's Office of Siting Coordination. He possesses a thorough understanding of operational and legal challenges faced by private sector and government-owned utilities. About the Firm NGN was fonned in 1984 and has exclusively represented government clients and not-for-profit organizations within the State of Florida on a wide variety of issues. In addition to its utilities practice, NGN currently represents a broad base of local governments in complex litigation, municipal bond finance and legislative services, all of which have proved to be complimentary to each other over the years. Absence of Conflict Our Firm is not currently engaged, nor have we ever been engaged, in any activity which would prevent us from assisting you and providing the highest quality legal representation in your opposition to FPL's rate increase. Our Firm represents only government and not-for-profit clients and we possess no prior or continuing engagements that would inhibit us in any way from engaging FPL in any court, agency or other venue. Attorneys Who Would Assist in This Matter Work on this matter would be performed primarily by Brian Armstrong and Bill Gamer, although other NGN attorneys with FPSC experience also are available to assist as necessary. Services provided by NGN attorneys other than Mr. Armstrong or Mr. Garner will be provided only as circumstances require. Fees for Services and Scope of Representation A. NGN is currently representing the Village of Pinecrest in state site certification proceedings related to FPL's u.s. 1 transmission line project and the appeal to the Florida Supreme Court of the FPSC's advanced nuclear cost recovery orders. Our services related to intervention in the FPL rate case (including preparation and filing of pleadings, attendance at hearings, preparation of witnesses, if any, and all other activities typical in administrative proceedings) would be provided at the same hourly rates as billed to the Village in the site certification matter. The hourly rates for the proposed services are: $250 per hour for shareholders $220 per hour for associates B. We would not bill your government or organization for attorney time in travel but would be reimbursed in the manner described in paragraph C for actual costs and expenses incurred on behalf of clients engaging our services under this common proposal, including long distance telephone charges, overnight delivery charges, photocopying, travel expenses and other typical costs of rendering our services. C. This proposal contemplates a cooperative effort among several parties. Your government or organization's responsibility for fees for the services contemplated in this proposal, as described in paragraph A above, will not exceed $25,000 without us first obtaining express consent from you. Fees and costs will be billed to all clients engaging our services under this common proposal on a per capita basis. As any additional client engages our services under this common proposal, such client will be billed for fees and costs incurred from the date of such client's engagement until such client has been billed an amount equal to that already billed to previously engaged clients. From the point each client engaging our services has been billed fees and costs in an equal amount, billing will resume on a per capita basis among all clients engaging our services under this common proposal. The fee cap is intended to cap the amount of fees described in paragraph A. Costs described in Paragraph B that may be due are in addition to the fees described in Paragraph A, and are not limited by the $25,000 fee cap. D. By your acceptance of these tenns, you acknowledge the joint nature of the engagement and the joint nature of the payment for legal services. In consideration for limitation of your government or organization's responsibility for payment of fees in an amount not to exceed $25,000, you agree that NGN and any of its lawyers who provide service pursuant to this engagement may cease work on your behalf on matters contemplated by this common proposal if fees for services rendered reach the cap for all clients engaged under the terms of the proposal unless and until additional clients engage our services under this proposal or you expressly authorize payment for work above the fee cap amount. If these terms are acceptable, please indicate your acceptance by signing the letter accompanying this Attachment A and return the signed copy in the postage paid, self-addressed envelope provided. Thank you for your consideration of the firm of Nabors, Giblin & Nickerson, P .A., and please do not hesitate to call Brian Armstrong or Bill Garner at (850) 322-4097 if you have any questions or would like to discuss this proposal further. We look forward to the opportunity of working with you. ATTACHMENT "B" BEFORE THE FLORIDA PUBLlC SERV]CE COMM]SSION DOCKET NO. 120015-EI In re: Petition for increase in rates by Florida Power & Light Company. ----------------------------------~ ORDER NO. PSC-12-0 14J-PCO-Er ISSUED: March 26, 2012 ORDER ESTABLISHING PROCEDURE 1. C;ase Background On March 19, 2012, pursuant to Section 366.06, Florida Statutes eF.S.), and Rules 25-. 6.0425 and 25-6.043, Florida Administrative Code (F.A.C.), Florida Power & Light Company (FPL) filed a petition for approval of permanent increase in its base rates and charges. Accordingly, in compliance with Section 366.06(2), F.S., an administrative hearing will be held in this matter for August 20-24 and 27-31, 2012. This Order is issl!ed pursuant to the authority granted by Rule 28-106.211, F.A.C., which provides that the presiding officer before whom a case is pending may issue any orders necessary to effectuate discovery, prevent delay, and promote the just, speedy, and inexpensive determination of all aspects of the case. The scope of this proceeding shall be based upon the issues raised by the parties and Commission staff up to and during the Prehearing Conference, unless modified by the Commission. The hearing will b~ conducted according to the provisions of Chapter 120 , Florida Statutes (F.S.), and all administrative rules applicable to this Commission. n. General Filing Procedures In accordance with Rule 25-22.028, F.A.C., parties filing documents in this proceeding shall submit the original document and the appropriate number of copies to the Office of Commission Clerk for filing in the Commission's docket file. Filings may be made by mail, hand delivery, courier service, or in some instances electronically. Please refer to the rule for the requirements of filing on diskette for certain utilities. To the extent possible, all filings made electronically or on diskette shall be provided in Microsoft Word format. Filings pertaining to this docket should identify the assigned docket number and should be addressed to: Office of Commission Clerk Florida Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399-0850 o I 7 7 2 HfIR 25 ~ iFF'S"'L..-C[II"I ,',lr ::'Cli ('If:-r:>!.f . If I .. J...Jj ft ~ ~J\I;'- ORDER NO. PSC-12-0 143-PCO-ET DOCKET NO. 120015-£I PAGE2 III. Notice and Public Information The utility shall comply with the requirements of Rule 25-22.0406, F.A.C . The notice required by Rule 25-22.0406, F.A.C., shall also include a .statement that any customer comments regarding the utility's service or the proposed rate increase should be addressed to the Commission Clerk, Office of Commission Clerk, Florida Public Service Commission, 2540 Shumard Oak Boulevard, Tallahassee, Florida 32399-0850, and that such comments should identify the docket num ber assigned to this proceeding. In addition to the requirements of Rule 25~22.0406, F.A.C., the utility shall give written notice of the date, time, location, and purpose of the hearing to each of its customers no less than fourteen days prior to the first day of the hearing. The utility shall utilize first class mail for notices sent to customers with out-of-town mailing addresses. IV. Prefiled Testimony and Exhibits Each party shall file, in writing, all testimony and exhibits that it intends to sponsor, pursuant to the schedule set forth in Section IX of this Order. An original and 15 copies of all testimony and exhibits shall be filed with the Office of Commission Clerk, by 5:00 p.m. on the date due. A copy of all prefiled testimony and exhibits shall be served by regular mai I, overnight mail, or hand delivery to all other parties and staff no later than the date filed with the Commission . Failure of a party to timely prefile exhibits and testimony from any witness in accordance with the foregoing requirements may bar admission of such exhibits and testimony . Testimony shall be typed on 8 Y2 inch x II inch transc.tipt-quality paper, double-spaced, with 25 numbered lines, on consecutively numbered pages., with lett margins of at least 1.25 inches . All pages shall be filed on three-holed paper and unbound. Each exhibit sponsored by a witness in support of his or her premed testimony shaU be: (1) Attached to that witness' testimony when filed; (2) On three-holed paper and unbound; (3) Sequentially numbered beginning with 1 (any exhibits attached to subsequently filed testimony of the same witness shall continue the sequential numbering system); (4) Identified in the upper right-hand corner of each page by the docket number, a brief title , and the witness' initials followed by the exhibit's number ; and (5) Paginated by showing in the upper right-hand corner of each page the page number followed by the total number of pages in the exhibit. ---------- ORDER NO. PSC-12-0 143-PCO-EI DOCKET NO.1 20015-EI PAGE 3 An example of the information to appear in the upper right-hand corner of the exhibit is as follows: Docket No. 012345-EJ Foreign Coal Shipments to Port of Tampa ExhibitBLW-I, Page 1 of2 After an opportunity for opposing parties to object to introduction of the exhibits and to cross-examine the witness sponsoring them, exhibits may be offered into evidence at the hearing. V. Discovery Procedures A. General Requirements Discovery shall be conducted in accordance with the provisions of Chapter 120, F.S., and the relevant provisions of Chapter 366, F.S., Rules 25-22, 25-40, and 28-:106, F.A.C., and the Florida Rules of Civil Procedure (as applicable), as modified herein or as may be subsequently modified by the Prehearing Officer. Unless subsequently modified by the Prehearing Officer, the fOllowing shall apply: (I) Discovery shall be completed by August 13,2012. (2) Discovery requests shall be served by electronic mail, hand delivery, or overnight mail. ff a request is served electronically, a hard copy of the request shall be served by hand-delivery, U.S. Mail, or overnight mail on the day that the request is served electronically. (3) Sets of interrogatories, requests for admissions, requests for production of documents, or other forms of discovery shall be numbered sequentially in order to facilitate their identification. (4) Within each set, discovery requests shall be numbered sequentially, and any discovery requests in subsequent sets shall continue the sequential numbering system. (5) Discovery responses shall be served within 25 days calendar days (inclusive of mailing) of receipt of the discovery request. Discovery responses for interrogatories and requests for admission shall be served by electronic mail. Parties are encouraged to serve discovery responses to req uests for production electronically to all partles when possible. One hard copy of the response shall also be served by hand-delivery, U.S. Mail, or overnight mail on the day that responses are served electronically. For discovery requests related to matters addressed in a utility'S rebuttal testimony, the utility shall serve its respOnses to the requesting party within 10 days of the date of the request. If responses are served electronically, a hard copy of the responses shall be served by hand- delivery, U.S. Mail, or overnight mail on the day that responses are served electronically. ORDER NO. PSC-12-0143-PCO-EI DOCKET NO. 120015-EI PAGE 4 (6) Each page of every document produced pursuant to requests for production of documents shall be identified individually through the use of' a Bates Stamp Or other equivalent method of sequential identification. Parties shall number their produced documents in an unbroken sequence through the final hearing. (7) Copies of discovery requests and responses shall be served on parties other than the party from whom discovery is sought to the extent required by the applicable provisions of the Florida Rules of Civil Procedure. However, Parties are encouraged to serve discovery responses on all parties in this action. In addition, copies of all responses to requests for production of documents shall be provided to the Commission staff at its Tallahassee office unless otherwise agreed. Unless subsequently modified by the Prehearing Officer, the following shal1 apply: (1) Interrogatories, including all subparts, shall be limited to 500. (2) Requests for production of documents, including all subparts, shall be limited to soo. (3) Requests for admissions, including all SUbparts, shall be limited to 500; When a discovery request is served and the respondent intends to seek clarification of any portion of the discovery request, the respondent shall request such clarification within 7 days of service of the discovery request. FUlther, any specific objections to a discovery request shall be made within 15 days of service of the discovery request. When a discovery request is served related to matters raised in the utility'S rebuttal testimony and exhibits, and the respondent intenc}s to seek clarification of any portion of the discovery request, the respondent shall request such clarification within 5 days of service of the discovery request. Further, any specific objections to a discovery request related to nHltters raised in the utility'S rebuttal testimony and exhibits shall be made within 5 days of service of the discovery request. These procedures are intended to reduce delay in resolving discovery disputes. B. Confidentia l Information P r:.ov ided Pursuant to Di s coverx Any information provided to the Commission staff pursuant to a discovery request by the staff or any other person and for which proprietary confidential business information status is requested pursuant to Se.cti'on 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 011 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 returned to the person providing the information. If a determination of contidentiality has been made and the information was 110t 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. ---------------------- ORDER NO. PSC-12-0143-PCO-EI DOCKET NO. 12001S-EI PAGES When a person provides information that it maintains as proprietary confidential business information to the Office of Public Counsel pursuant to a discovery request by the Office of Public Counselor any other party, that party may request a temporary protective order pursuant to Rule 2S-22.006(6)(c), F.A.C., exempting the information from Section 119.07( I), F.S. When a pa11y other than the Commission staff or the Office of Public Counsel requests information through discovery that the respondent maintains as proprietary confidential business information, or when such a party would otherwise be entitled to copies of such information requested by other parties through discovery (e.g., interrogatory responses), that party and respondent shall endeavor in good faith to reach agreement that will allow for the exchange of sLich information on reasonable terms, as set forth in Rule 2S-22.006(7)(b), F.A.C. VI. Prehearing Procedures A. Prehearing Statements All parties in this docket and the Commission staff shall file a prehearing statement pursuant to the schedule set forth in Section IX of this Order. The original and seven copies of each prehearing statement shall be filed with the Office of Commission Clerk by 5;00 p.m. on the date due. A copy of the prehearing statement shali be served on all other parties and staff no later than the date it is filed with the Commission. Each party's prehearing statement shall set forth the following information In the sequence listed below: (I) The name of all known wi tnesses whose testimony has been preti led or who may be called by the party, alo.ng with subject matter of each such witness' testimony in the order that the witnesses shall be presented at hearing; (2) A description of all prefiled exhibits and other exhibits that may be used by the party in presenting its direct case (including individual components of a compo.site exhibit) and the witness sponsoring each; (3) A statement of the party's basic position in the proceeding; (4) A statement of each question of fact, question of law, and policy question that the party considers at issue, along with the party's positio.i1 on each issue, and, where applicable, the names of the party's witness(es) who wifJ address each issue. Parties who wish to maintain "no position at this time" on any particular issue or issues should refer to the reqllirements of subsection C, below; (5) A statement of issues to which the parties have stipulated; (6) A statement of all pending mo.tions 0.1' other matters the party seeks action upon; (7) A statement identifying the party's pending requests or claims for confidentiality; ORDER NO . PSC-12-0143-PCO-EI DOCKET NO. 120015-EI PAGE6 (8) Any objections to a witness' qllalitications as an expert. Failure to identify such objection will result in restriction of a party's ability to conduct voir dire absent a showing of good cause at the time the witness is offered for cross-examination at hearing; and (9) A statement as to any requirement set forth in this order that cannot be complied with, and the reasons therefore. Failure of a party to timely file a prehearing statement shall be a waiver of any issue not raised by other parties or by the Commission. In addition, such failt\re shall preclude the party from presenting testimony in suppOL1 of its position on each such issue. B. Attendance at Prehearing Conference Pursuant to Rule 28-106.209, F.A.C., a Prehearing Conference will be held August 14, 2012, at the Betty Easley Conference Center, 4075 Esplanade Way, Tallahassee, Florida. Unless excused by the Prehearing Officer for good cause shown, each party (or designated representative) shall person'ally appear at the Prehearing Conference. Failure of a pal1y (or that party's representative) to appear shall constitute waiver of that party's issues and positions, and that party may be dismissed from the proceeding. C. Waiver of Issues Any issue not raised by a party ei'ther before or during tbe Preheating Conference shall be waived by that pal1y, except for good cause shown. A party seeking to raise a new issue after the Prehearing Conference shall demonstrate each of the following: (1) The party was unable to identify the issue because of the complexity of the matter. (2) Discovery or other prehearing procedures were not adequate to fully develop the issue. (3) Due diligence was exercised to obtain facts touching on the issue. (4) Information obtained subsequent to the Prehearing Conference was not previollsly available to enable the party to identify the issue. (5) Introduction of the issue would not be to the prejudice or surprise of any party. Specific reference shall be made to the information received and how it enabled the party to identify the issue. Unless a matter is not at issue for that party, each party shall take a position on each issue by the time of the Prehearing Coriference or by such later time as may be permitted by the Prehearing Officer. If a pat1y is unable through diligence and good faith efforts to take a position on a matter at issue for that party, it shall explicitly state in its prehearing statement why it cannot take a position. If the Prehearing Officer finds that the party has acted diligently and in good faith to take a position, and further finds that the party's failure to take a position will not prejudice other parties or confuse the proceeding, the party may maintain "no position at this time" prior to hearing and thereafter identify its position in a post-hearing statement of issues. In ORDER NO. PSC-12-0 143-PCO-EI DOCKET NO. 1200 15-E1 PAGE 7 the absence of such a finding by the Prehearing Officer, the party shall have waived the entire issue, and the party's position shall be shown as "no position" in the Prehearing Order. When an issue and position have been properly identified, any party may adopt that issue and position in its post-hearing statement. Commission staff may take "no position at this time" or a similar position on any issue without having to make the showing described above. D. Motions to Strike Prefiled Testimony and Exhibits Motions to strike any portion of the prefiled testimony and related portions of exhibits of any witness shall be made in writing no later than the Prehearing Conference, Motions to strike any portion of prefiled testimony and related portions of exhibits at hearing shall be considered untimely, absent good cause shown. E. Demonstrative_Exhibits If a party wishes to tlSe a demonstrative exhibit or other demonstrative tools at hearing, such materials must be identified by the time of the Prehearing Conference. F. Official Recognition Parties seeking official recognition of materials pursuant to Section 120.569(2)(i), F.S., shall notify all other parties and staff in writing no later than two business days prior to the first scheduled hearing date. Such notification shall identify all materials for which the party seeks official recognition, and to the extent sLlch materials may not be readily available to all parties, such materials shall be provided along with the notification. VII. Hearing Procedures A. Attendance at Hearing Unless excused by the Presiding Officer for good cause shown, each patty (or designated representative) shall personally appear at the hearing. Failure of a palty, or that patty's representative, to appear shall constitLlte waiver of that palty's issues, and that paJty may be dismissed from the proceeding. Likewise, all witnesses are expected to be present at the hearing unless excused by the Presiding Officer upon the staff attorney's confirmation prior to the hearing date of the following: (!) AI! parties agree that the witness will not be needed for cross examination. (2) All Commissioners assigned to the panel do nol have questions for the witness. In the event a witness is excused in this manner, his or her testimony may be entered into the record as though read following the Commission's approval of the proposed stipulation of that witness' testimony. ORDER NO . PSC-12-0143-PCO-EI DOCKET NO. 120015-El PAGE 8 B. Cross-Examination 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's direct testimony is adverse to its interests. C. Use of Confidential Information at Hearing It is the policy of this Commission that all Commission hearings be open to the public at all limes. The Commission also recognizes its obligation pursuant to Section 366.093, F.S., to protect proprietary confidential business infdrmatiort from disclosure outside the proceeding. Therefore, any party wishing to lise 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, parties must have copies fot the Commissioners, necessary staft~ and the COU11 reporter, in red envelopes clearly marked with the nature of the contents. 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 contldential information in slIch 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 cdpies of con±idential exhibits shall be retunied 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 information is admitted into the evidentiary record at hearing and is not otherwise subject to a request for contidentiality 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. VIII. Post-Hearing Procedures If the Commission (or assigned panel) does not render a bench decision at the bearing, it may allow each party to file a post-hearing statement of issues and positions pursuant to the schedule set forth in Section IX of this Order. In Stich event, a summary of each position of no more than 50 words, set off with asterisks, shall be included in that statement. If a party's position has not changed since the issuance of the Preheating Order, the post-hearing statement may simply restate the prehearing position. However, the position must be reduced to no more _ .. __ ._--------- ORDER NO. PSC-12-0143-PCO-EI DOCKET NO. 1200JS-EI PAGE 9 than 50 words. If a post-hearing statement is required and a party fails to file in conformance with the rule, 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 50 pages and shall be filed at the same time, unless modified by the Presiding Officer. IX. Controlling Dates The following dates have been established to govern the key activities of this case: (I) Utility's direct testimony and exhibits March 19,2012 (2) Intervenor's Direct Testimony and Exhibits July 2,2012 (3) Staffs direct testimony and exhibits, ifany July 16, 20J 2 (4) Rebuttal testimony and exhibits July31,2012 (5) PreheaTing Statements August 6, 20 II (6) Discovery deadline August 13,2012 (7) Prehearing Conference August 14, 20 J 2 (8) Hearing August 20-24 and 27- 31,2012 (l0) Briefs September 14, 2012 In addition, aJl pmties shall be on notice that the Prehearing Officer may exercise the discretion to schedule additional Prehearing Conferences or meetings of the pmties as deemed appropriate. Such meetings will be properly noticed to afford the parties an opportunity to attend. Based upon the foregoing, it is ORDERED by Commissioner Art Graham, as Prehearing Officer, that the provisions of this Order shall govern this proceeding unless modified by the Commission. ORDER NO. PSC-12-0143-PCO-EI DOCKET NO. 120015-El PAGE 10 By ORDER of Commissioner Ali Graham, as Prehearing Officer, this 26th day of March 20]2 KY ART GRAHAM Commissioner and Prehearing Officer Florida Public Service Commission 2540 Shumard Oak Boulevard Tallahassee, Florida 32399 (850) 413-6770 www.f1oridapsc.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. NOTICE OF FURTHER PROCEEDINGS OR JUDICIAL REVIEW The Florida Public Service Commission is required by Section 120.569(l), 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 lhe final action will not provide an adequate remedy. Such review may be requested from the appropriate cOUli, as described above, pursuant to Rule 9.100, Florida Rules of Appellate Procedure. --'~""-'~'-~~-"~.