Citizens of the State of Florida, Etc. v. Florida Public Service Commission

── Citizens of the State of Florida, Etc. v. Florida Public Service Commission ── Court: Supreme Court of Florida Date: June 04, 2026 Category: General Supreme Court of Florida ____________ No. SC2023-0988 ____________ CITIZENS OF THE STATE OF FLORIDA, etc., Appellant, vs. FLORIDA PUBLIC SERVICE COMMISSION, Appellee. June 4, 2026 FRANCIS, J. The Office of Public Counsel (OPC) appeals the Public Service Commission’s (the Commission’s) partial approval of Florida City Gas’s (FCG’s)1 petition for a rate increase. 2 Specifically, OPC challenges the Commission’s approval of two accounting measures that impact FCG’s rate plan: (1) the Reserve Surplus Amortization 1. FCG is a utility company and subsidiary of Florida Power & Light Company (FPL), serving residential, commercial, and industrial customers in Miami-Dade, Broward, St. Lucie, Indian River, Brevard, Palm Beach, Hendry, and Martin counties. It sells and transports natural gas to customers. 2. We have jurisdiction. See art. V, § 3(b)(2), Fla. Const. Mechanism-Adjusted Depreciation Parameters (RSAM-ADP); and (2) the Reserve Surplus Amortization Mechanism (RSAM). OPC also challenges the Commission’s continuation of an accounting adjustment related to a corporate transaction, referred to as an acquisition adjustment. We affirm. I. BACKGROUND In 2022, FCG petitioned the Commission, seeking approval of a four-year rate plan. In relevant part, FCG’s petition sought approval of the above-mentioned RSAM-ADP and the RSAM. The continuation of an acquisition adjustment was not initially addressed in FCG’s petition, but it became an issue during litigation. With respect to the RSAM-ADP, at the final hearing the Commission considered three different depreciation proposals: (1) FCG’s 2022 Depreciation Study, a mandatory depreciation study; (2) the RSAM-ADP, FCG’s alternative depreciation study; and (3) OPC’s proposed Depreciation Parameters. While each of these proposals was based on slightly different underlying depreciation parameters, according to FCG’s lead witness Ned Allis, each of FCG’s proposals was within the “range of reasonableness.” -2-  The RSAM-ADP—according to the collective testimonies of Mr. Allis and Mark Campbell—was a reasonable alternative to the traditional depreciation parameters and, if adopted, would provide customers with rate stability and certainty and avoid repetitive and costly rate proceedings. Liz Fuentes also testified that the RSAM- ADP was based on depreciation parameters that were previously approved by the Commission. Their individual testimonies are further discussed below. FCG, however, offered no testimony regarding whether the RSAM-ADP complied with the Commission’s Depreciation Rule.3 Under the Depreciation Rule, when there is a reserve deficiency or surplus4 because of proposed depreciation parameters, two things must happen. First, a gas utility’s depreciation study must explain and justify “any proposed transfers 3. See Fla. Admin. Code R. 25-7.045 (regulating gas utilities’ obligation to account for depreciation in the ratemaking process). 4. We have explained that “[a] depreciation reserve surplus occurs when a company collects a higher amount than needed to cover depreciation expenses given new information revealing that an asset, like a plant, has a longer-than-expected service life.” Floridians Against Increased Rates, Inc. v. Clark (FAIR), 371 So. 3d 905, 908 n.8 (Fla. 2023). -3- of reserve between categories or accounts intended to correct deficient or surplus reserve balances.” Fla. Admin. Code R. 25- 7.045(5)(f). And second, the Commission should investigate “[t]he possibility of [a] corrective reserve transfer[] . . . prior to changing depreciation rates.” Id. R. 25-7.045(4)(e).