Reso 2009-1419 - Laserfiche WebLink

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Page 2 Our citizens know that underground electric distribution facilities experienced fewer and less severe outages during the hurricanes that struck Florida in 2004 and 2005 than did overhead facilities. We are deeply concerned about the reliability of the electric utility infrastructure and other utility infrastructure serving our citizens as provided by FPL. Accordingly, most of us have concluded that converting existing overhead facilities within our respective geographic boundaries to underground service is a step in the right direction in hurricane vulnerable Florida. The MUUC has funded a study to determine the true cost of underground service versus overhead service and this study found that FPL needed to provide a 51% credit to underground service applicants based on then current FPL cost differentials charged to underground service applicants based on documented operations and maintenance savings that accrue to FPL by virtue of underground electric delivery systems versus antiquated overhead systems. We attempted to negotiate a reasonable settlement with FPL on this issue to no avail. Thus, we are currently preparing for a hearing before the Public Service Commission on this and another similar type issue. Millions of dollars of public funds are riding on the outcome of this hearing. In the third quarter on 2009, we anticipate another formal evidentiary hearing before the PSC on outlandish corporate overhead charges that FPL has added to the cost of underground service requests. Naturally, FPL is not pleased with our efforts and has sought to thwart us at every step. Evidentiary hearings are our only recourse to reduce the cost of underground service in the FPL service area and overcome FPL's internal bias in favor of overhead service. The first item the funding request will be used for is formally objecting to the PSC decision to increase the cost of undergrounding instead of providing for a credit for the savings that underground service allows the utility to realize including avoided vegetation maintenance costs, reduced liability expenses by avoiding vehicular accidents with FPL utility poles and, of course, reduced electrocutions from overhead lines. Providing for an O&M credit to the contribution in aid of construction (CIAC)formula. Just as FPL realizes avoided costs associated with storm restoration when the customer is served by underground facilities, they also avoid numerous expenses in their operations and maintenance expenditures. An example of such is that there are virtually no vegetation maintenance expense incurred by FPL when systems are underground. There are no poles to maintain and replace after vehicles crash into them. No oxidation of facilities due to salt corrosion. There are other avoided costs as well. The study conducted by the MUUC consultants found this savings to be about 25%, the same savings realized from avoided storm restoration expenses and