Title: Choctawhatchee Elec. Coop., Inc. v. Graham

State: florida

Issuer: Florida Supreme Court

Document:

Supreme Court of Florida 
 
 
____________ 
 
No. SC11-1830 
____________ 
 
CHOCTAWHATCHEE ELECTRIC COOPERATIVE, INC., 
Appellant, 
 
vs. 
 
ART GRAHAM, ETC., et al.,  
Appellees. 
 
[January 9, 2014] 
 
LABARGA, J. 
 
We review a decision of the Florida Public Service Commission               
(the Commission) relating to the service of a public utility providing electric 
service.  We have jurisdiction.  See art. V, § 3(b)(2), Fla. Const.  The Commission 
settled a territorial dispute between two utilities: appellant Choctawhatchee 
Electric Cooperative, Inc. (CHELCO), and appellee Gulf Power Company (Gulf 
Power).  CHELCO and Gulf Power each sought the right to provide electric 
service for Freedom Walk, a proposed multi-purpose development located in 
Okaloosa County.  The Commission awarded Gulf Power the right to serve 
Freedom Walk.  For the reasons explained below, we affirm.  
 
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FACTUAL AND PROCEDURAL BACKGROUND 
 
Freedom Walk is an approximately 179-acre proposed development within 
the city of Crestview in Okaloosa County.  The development, owned by Emerald 
Coast Partners, LLC, was designated by local ordinance in 2007 as a Community 
Development District.  The developer’s plans for Freedom Walk include both 
residential and commercial establishments.   
In 2010, CHELCO petitioned the Commission to resolve a territorial dispute 
between CHELCO and Gulf Power regarding the right to provide electric service 
to Freedom Walk.  In 2011, the Commission held a hearing on the dispute, 
following which the Commission issued its order resolving the dispute in favor of 
Gulf Power.1
                                         
 
1.  The Commission issued its order entitled “Order Resolving a Territorial 
Dispute and Awarding Territory in Okaloosa County to Gulf Power Company.”  
The Commission divided the order into the following sections: (I) Background; 
(II) Approved Stipulations; (III) Boundaries of the Area That is the Subject of This 
Territorial Dispute; (IV) Commission’s Jurisdiction to Enforce or Apply Provisions 
of Chapter 425, F.S.; (V) Is Freedom Walk Development a “Rural Area” as 
Defined in Section 425.03(1), F.S.; (VI) If the Freedom Walk Development Is Not 
Found to be “Rural” in Nature, Is CHELCO Prohibited From Serving the Freedom 
Walk Development; (VII) Nature of the Freedom Walk Development; (VIII) 
Existing and Planned Load to Be Served in the Freedom Walk Development; 
(IX) Necessary Facilities and Associated Costs for CHELCO to Extend Adequate 
and Reliable Service to the Freedom Walk Development; (X) Necessary Facilities 
and Associated Costs for Gulf to Extend Adequate and Reliable Service to the 
Freedom Walk Development; (XI) Necessary Facilities and Associated Costs for 
CHELCO and Gulf to Provide Adequate and Reliable Service Within the Freedom 
Walk Development; (XII) Uneconomic Duplication of Existing Facilities; (XIII) 
Capability of Each Utility to Provide Adequate and Reliable Electric Service to the 
  In the order, the Commission concluded that because the multiple 
 
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factors it considered were substantially equal, customer preference would 
determine the outcome of the dispute.  The Commission concluded that customer 
preference favored Gulf Power and awarded Gulf Power the right to serve 
Freedom Walk.  The Commission also determined that Gulf Power was entitled to 
a preference as an investor-owned utility.   
 
On appeal, CHELCO challenges the Commission’s findings and conclusions 
in four areas: (1) cost to provide service; (2) ability to provide service;                 
(3) uneconomic duplication of facilities; and (4) customer preference as the 
determining factor.  The Florida Electric Cooperatives Association (FECA) filed 
an amicus brief in support of CHELCO.  
ANALYSIS 
Standard of Review 
 
CHELCO’s appeal of the Commission’s order invokes this Court’s 
mandatory jurisdiction under article V of the Florida Constitution.  Specifically, 
our mandatory jurisdiction includes review of actions by the Public Service 
Commission related to electric service.  See art. V, § 3(b)(2), Fla. Const.  As we 
fulfill our constitutional obligation, we are mindful of the scope of our review, and 
we afford deference to the Commission’s findings.  As we have consistently 
                                                                                                                                   
Freedom Walk Development; (XIV) Customer Preference; and (XV) Awarding of 
the Right to Serve the Freedom Walk Development.  
 
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observed, “[c]ommission orders come to this Court clothed with the presumption 
that they are reasonable and just.”  W. Fla. Elec. Coop. Ass’n v. Jacobs, 887 So. 2d 
1200, 1204 (Fla. 2004) (citing Gulf Coast Elec. Coop. v. Johnson, 727 So. 2d 259, 
262 (Fla. 1999)).  Thus, CHELCO cannot prevail on appeal unless the Commission 
departed from the essential requirements of law.  Id. (citing Ameristeel Corp. v. 
Clark, 691 So. 2d 473, 477 (Fla. 1997)).  We will not disturb the Commission’s 
findings and conclusions if they are supported by competent substantial evidence 
in the record and are not clearly erroneous.  Id.   
Applicable Law 
 
We now turn to the law that applies to the Commission’s resolution of 
disputes between electric utilities.  The jurisdiction of the Commission is set forth 
in chapter 366, Florida Statutes (2010), which governs public utilities.  
Specifically, the Commission’s authority to settle territorial disputes such as the 
present one between CHELCO and Gulf Power is found in section 366.04(2), 
which provides that “the commission shall have power over electric utilities . . . 
[t]o resolve, upon petition of a utility or on its own motion, any territorial dispute 
involving service areas between and among rural electric cooperatives, municipal 
electric utilities, and other electric utilities under its jurisdiction.”  § 366.04(2)(e), 
Fla. Stat. (2010).   
 
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When resolving territorial disputes, the Commission must be especially 
mindful of its responsibility to avoid “further uneconomic duplication of 
generation, transmission, and distribution facilities.”  § 366.04(5), Fla. Stat. (2010).  
Moreover, the Commission is guided by multiple factors that are set forth by 
statute and by administrative rule.  The statutory factors, which are not exclusive, 
include “the ability of the utilities to expand services within their own capabilities 
and the nature of the area involved, including population, the degree of 
urbanization of the area, its proximity to other urban areas, and the present and 
reasonably foreseeable future requirements of the area for other utility services.”  
§ 366.04(2)(e), Fla. Stat. (2010).  Additionally, rule 25-6.0441, contained in the 
Florida Administrative Code, provides as follows: 
25-6.0441.  Territorial Disputes for Electric Utilities  
. . . . 
(2)  In resolving territorial disputes, the Commission may 
consider, but not be limited to consideration of: 
(a)  The capability of each utility to provide reliable electric 
service within the disputed area with its existing facilities and the 
extent to which additional facilities are needed; 
(b)  The nature of the disputed area including population and 
the type of utilities seeking to serve it, and degree of urbanization of 
the area and its proximity to other urban areas, and the present and 
reasonably foreseeable future requirements of the area for other utility 
services; 
(c)  The cost of each utility to provide distribution and 
subtransmission facilities to the disputed area presently and in the 
future; and 
(d)  Customer preference if all other factors are substantially 
equal. 
   
 
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Fla. Admin. Code R. 25-6.0441 (2010).  
The Freedom Walk Dispute 
Because the Commission determined that the factors it considered with 
respect to CHELCO and Gulf Power were substantially equal, it relied on customer 
preference to settle the dispute.  CHELCO argues that certain factors were not 
substantially equal and that therefore, the Commission should not have reached the 
issue of customer preference.  To the extent that the Commission did ultimately 
rely on customer preference, CHELCO also argues that the Commission erred 
when it determined that customer preference favors Gulf Power.  As we evaluate 
CHELCO’s claims, we stress the deference to which the Commission’s order is 
entitled, and we emphasize that the Court will not substitute itself as the finder of 
fact.  Indeed, as we observed in Chicken ‘N’ Things v. Murray, 329 So. 2d 302, 
305 (Fla. 1976), even when this Court differs with the Commission’s view as to the 
effect of the evidence as a whole, an order will be upheld “so long as there is 
competent substantial evidence to support the orders.”  We now address 
CHELCO’s claims, beginning with the factors that CHELCO argues are not 
substantially equal.  We then turn to the issue of customer preference.  
Cost to Extend Service to Freedom Walk 
CHELCO challenges the Commission’s findings and conclusions related to 
the two utilities’ costs to extend service to Freedom Walk.  Rule 25-6.0441(2)(c) of 
 
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the Florida Administrative Code provides that the Commission may consider “[t]he 
costs of each utility to provide distribution and subtransmission facilities to 
[Freedom Walk] presently and in the future.”  As a part of this analysis, the 
Commission evaluated both CHELCO’s and Gulf Power’s costs to extend service 
to the Freedom Walk development.   
The Commission concluded that CHELCO would not incur any cost to 
extend service to Freedom Walk apart from existing facilities and planned 
upgrades, and CHELCO does not challenge that conclusion.  However, CHELCO 
does challenge the Commission’s findings and conclusions as to Gulf Power’s 
actual cost to extend service to Freedom Walk.  Moreover, CHELCO argues that 
the difference in the two utilities’ costs demonstrates that those costs are not 
substantially equal.   
The parties agree that in order to provide service to Freedom Walk, Gulf 
Power would have to extend its existing three-phase utility line that runs along Old 
Bethel Road by 2,130 feet in order to reach the Freedom Walk area.  The existing 
utility line would be extended at a cost of $89,738.  Gulf Power offered testimony 
that this line extension project is the only investment or upgrade necessary to 
extend electric service to Freedom Walk that is independent of existing facilities 
and planned upgrades.  Ultimately, the Commission determined that $89,738 is the 
total cost that Gulf Power would incur in order to extend service to Freedom Walk.  
 
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However, CHELCO contends that the Commission erred when it excluded a 
$40,000 transformer upgrade cost from Gulf Power’s total cost to extend service to 
Freedom Walk.  The record indicates that Gulf Power planned a large substation 
conversion project that would occur over the course of several years.  One aspect 
of the project would upgrade Gulf Power’s Airport Road substation.  Although the 
Airport Road substation upgrade would eventually serve Freedom Walk, the 
completion of the conversion was not dependent on Gulf Power being awarded the 
right to serve the development.  Gulf Power estimated that the Airport Road 
substation upgrade would happen between the years of 2011 and 2015.  However, 
in the event that the project became delayed, Gulf Power acknowledged the 
possibility that it would need to upgrade three single-phase transformers at the 
Airport Road substation at a cost of $40,000 in order to meet Freedom Walk’s 
electricity demand.     
The Commission concluded that the $40,000 cost should not be attributed to 
Gulf Power’s cost to extend service to Freedom Walk because Gulf Power would 
only incur that cost if the large conversion project did not proceed as planned.  The 
Commission stated: “We believe that the transformer replacement project is not a 
project that Gulf intends to complete, but was identified for the purposes of this 
docket in order to obtain a clear picture of Gulf [Power]’s existing facilities and 
how their currently planned projects would impact their ability to serve the 
 
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Freedom Walk development.”  In re Petition to Resolve Territorial Dispute with 
Gulf Power Company in Okaloosa County by Choctawhatchee Electric 
Cooperative, Inc., Docket No. 100304, Order No. PSC-11-0340-FOF-EU, 2011 
Fla. Puc. Lexis 239, 2011 WL 3646464 at 38 (F.P.S.C. Aug. 15, 2011) (“Order”).  
The Commission reached its findings and conclusions as to Gulf Power’s actual 
cost after considering extensive testimony from both parties, and we will not 
disturb the Commission’s determination that $89,738 is Gulf Power’s cost to 
extend service to Freedom Walk.     
CHELCO also maintains that even if Gulf Power’s cost is only $89,738, 
because CHELCO would not incur any additional cost to extend service to 
Freedom Walk, the Commission erred when it concluded that the two utilities’ 
costs were substantially equal.  CHELCO contends that two of our prior cases 
support its argument: Gulf Coast Elec. Coop. Inc. v. Clark, 674 So. 2d 120 (Fla. 
1996), and Gulf Power Co. v. Pub. Serv. Comm’n, 480 So. 2d 97 (Fla. 1985).   
In Gulf Power, the earlier of the two cases, Gulf Coast Electric Cooperative 
(Gulf Coast) filed a petition seeking to resolve a territorial dispute between it and 
Gulf Power, as both utilities “sought to provide electrical service to [a 
subdivision].”  480 So. 2d at 98.  After the petition was filed but before the 
Commission ruled on the dispute, Gulf Power extended its utility lines a distance 
of 2.2 miles in order to reach the subdivision and built a substation that would 
 
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allow it to satisfy the subdivision’s anticipated power needs.  Id.  The cost to Gulf 
Power was approximately $200,480.  Id. 
 
The Commission found that the cost to Gulf Coast to extend service to the 
subdivision amounted to approximately $27,000, and that the reason for the 
difference in the two utility providers’ costs (approximately $173,480) was the 
closer proximity of Gulf Coast’s existing facilities to the subdivision.  Id.  The 
Commission concluded that Gulf Power’s “relatively extravagant expenditures in 
providing service” were “reckless and irresponsible” and resulted in “an 
uneconomic duplication of electrical facilities.”  Id.  Consequently, the 
Commission awarded Gulf Coast the right to provide electric service to the 
subdivision.  Id.  On appeal, we rejected Gulf Power’s invitation to reweigh the 
evidence and substitute our judgment for that of the Commission.  Id.  (stating that 
“. . . Gulf Power’s attacks on the [Commission’s] analysis represent a thinly veiled 
attempt to have this Court reweigh and reevaluate the evidence presented to the 
[Commission].  This we cannot do.”).  
We subsequently compared the difference in costs in Gulf Power with the 
$14,583 difference in another electric service territorial dispute and concluded that 
the smaller amount was “de minimis in comparison.”  Clark, 675 So. 2d at 123.  In 
Clark, the Gulf Coast cooperative spent $14,583 to upgrade a single-phase line to a 
three-phase line to enable it to provide service to a new prison.  Id. at 122.  The 
 
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Commission found that the upgrade was uneconomic and relied in part on this 
factor in awarding competitor Gulf Power the right to serve the prison.  Id. at 
122-23.  This Court concluded that competent substantial evidence did not support, 
among other findings, that the $14,583 difference in costs was considerable.  Id.  
This Court said: 
Compare, for instance, the costs incurred for the upgrade in this case 
with the costs incurred in Gulf Power Co. v. Public Service 
Commission, 480 So. 2d 97 (Fla. 1985) (difference between Gulf 
Coast’s $27,000 cost to provide service and Gulf Power’s $200,480 
cost to provide service found to be considerable).  The cost 
differential in this case is de minimis in comparison to the cost 
differential in that case. 
 
Id. at 123. 
We decline to simply apply the costs discussed in Gulf Power and Clark as 
firm indicators for what differences in costs are de minimis and what differences 
are excessive.  Despite CHELCO’s reliance on these cases, we are mindful of the 
highly fact-specific nature of the territorial disputes that come before the 
Commission.  As a result, Gulf Power and Clark do not provide a one-size-fits-all 
formula for evaluating costs, nor do they mandate the conclusion that Gulf Power’s 
and CHELCO’s costs to extend service to Freedom Walk are not substantially 
equal.2
                                         
 
2.  Moreover, even if the costs in Gulf Power and Clark provided absolute 
parameters for determining whether a difference in costs is significant, the $89,738 
difference at issue in this case is almost in the middle.  However, by a margin of 
  Consequently, we affirm the Commission’s findings and conclusions. 
 
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Capability to Provide Adequate and Reliable Service 
CHELCO also argues that Gulf Power is not capable of providing Freedom 
Walk with adequate and reliable service because it must build additional facilities 
and incur the costs of doing so.  Under rule 25-6.0441(2)(a), the Commission may 
consider “[t]he capability of each utility to provide reliable electric service within 
the disputed area with its existing facilities and the extent to which additional 
facilities are needed.”  Fla. Admin. Code R. 25-6.0441(2)(a) (2010). 
The Commission evaluated the overall ability of each utility to provide 
Freedom Walk with adequate and reliable service and concluded that each one was 
similarly capable of doing so.  The Commission considered the nature of each 
utility’s existing facilities and the extent to which each would need additional 
facilities.  We note that the language of rule 25-6.0441(2)(a) provides for the 
Commission’s consideration of “the extent to which additional facilities are 
needed” and find this language instructive because it highlights the Commission’s 
duty to weigh the evidence in light of the facts of each dispute.  Id. 
Moreover, the Commission properly considered each utility’s history of 
providing adequate and reliable service.  The record reveals that both utilities have 
provided service in the local area for decades and have responded to utility outages 
                                                                                                                                   
$5,107, the cost in this case is actually closer to the “de minimis” $14,583 cost 
differential in Clark.     
 
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in a reasonable manner.  Moreover, both utilities have adequate resources in the 
vicinity.  Competent substantial evidence supports the Commission’s 
determination that both utilities are capable of providing adequate and reliable 
service to Freedom Walk, and we will not disturb the Commission’s findings and 
conclusions.   
Uneconomic Duplication 
CHELCO also challenges the Commission’s conclusion that awarding Gulf 
Power the right to serve Freedom Walk would not result in uneconomic 
duplication of facilities.  The Florida Legislature has emphasized the 
Commission’s duty to avoid uneconomic duplication in section 366.04(5),which 
provides as follows: 
 
The commission shall further have jurisdiction over the 
planning, development, and maintenance of a coordinated electric 
power grid throughout Florida to assure an adequate and reliable 
source of energy for operational and emergency purposes in Florida 
and the avoidance of further uneconomic duplication of generation, 
transmission, and distribution facilities. 
 
§ 366.04(5), Fla. Stat. (2010).  We have observed that certain factors are relevant 
to a determination of whether uneconomic duplication is likely to occur.  These 
factors, which are not exclusive, include the utilities’ costs to provide service, “lost 
revenues for the non-serving utility, aesthetic and safety problems, proximity of 
lines, adequacy of existing lines, whether there has been a ‘race to serve,’ and other 
concerns . . .”  Clark, 674 So. 2d at 123.  A utility’s historical presence in an area 
 
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may also be relevant to the Commission’s analysis.  W. Fla. Elec. Coop. Ass’n, 
Inc. v. Jacobs, 887 So. 2d 1200, 1205 (Fla. 2004).   
Not all duplication of facilities is “uneconomic.”  Id.  Where some 
duplication of facilities may occur, the duplication may nonetheless avoid being 
deemed uneconomic if the difference in costs between the utilities is de minimis.  
Id.  However, there is no bright-line rule for evaluating whether a difference in 
costs is de minimis, and the Commission evaluates the cost differential within the 
context of other case-specific factors.  
 
The Commission considered whether an award to either CHELCO or Gulf 
Power would result in uneconomic duplication.  In doing so, the Commission 
considered each utility’s existing facilities and planned upgrades.  Notably, the 
Commission considered that if awarded the right to serve Freedom Walk, Gulf 
Power would have to extend its existing utility line and spend $89,738 to do so, 
and determined that this project is solely triggered by the prospect of Gulf Power 
providing electric service to Freedom Walk.   
CHELCO raises three issues relating to uneconomic duplication: (1) Gulf 
Power will duplicate existing CHELCO facilities; (2) the Commission failed to 
consider all elements necessary to determine whether duplication of facilities is 
uneconomic; and (3) CHELCO’s historical presence is relevant to determining 
uneconomic duplication.  We examine each argument in turn.  
 
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Duplication of CHELCO Facilities 
 
CHELCO argues that Gulf Power’s extension of its three-phase utility line 
along Old Bethel Road will result in an uneconomic duplication of existing 
CHELCO facilities.  The Commission concluded that some duplication of facilities 
would result if either utility was awarded the right to serve Freedom Walk: 
The record is clear that both CHELCO and Gulf have had lines 
close to the Freedom Walk development for more than 40 years.  
CHELCO’s three-phase line is on Old Bethel Road at the northern 
boundary of the development.  In addition, CHELCO has a single-
phase service line, with a 1967 easement, that previously served a 
residence within the Freedom Walk property, but unrelated to the 
development.  Gulf’s three-phase line is 2,130 [feet] from the 
Freedom Walk development; however, Gulf has had a single-phase 
line within 30 feet of the eastern boundary of the development since 
1955.  Further, CHELCO’s single-phase line running along Old 
Bethel Road appears to run parallel with Gulf’s three-phase line which 
serves the schools.  Based on these facts, it appears that Gulf’s 
existing lines are in the immediate vicinity of CHELCO’s existing 
lines.  Further, because of the close proximity of the lines, the 
provision of service to the development by either CHELCO or Gulf 
could result in a further duplication of facilities. 
 
Order, 2011 WL 3646464 at 47. 
The Commission received competent substantial evidence in the form of 
witness testimony and detailed exhibits that depicted the location of each utility’s 
existing lines relative to the location of Freedom Walk.  CHELCO argues that the 
Commission’s analysis of uneconomic duplication should not have included 
CHELCO’s single-phase utility line that runs parallel to Gulf Power’s three-phase 
line.  CHELCO argues that the location of these utility lines is too removed from 
 
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Freedom Walk to be relevant to the determination of uneconomic duplication.  
This argument improperly asks this Court to substitute its judgment with that of the 
Commission on a matter that is clearly within the Commission’s expertise.  This 
we will not do.  The Commission determined that the locations of specific utility 
lines are relevant to its analysis of uneconomic duplication; its judgment is entitled 
to deference by this Court.   
 
CHELCO also contends that uneconomic duplication results from the 
$89,738 difference in the two utilities’ costs to extend service to Freedom Walk.  
CHELCO challenges the Commission’s conclusion that the $89,738 difference in 
the two utilities’ costs is not significant and argues that the difference in costs is 
especially egregious because, as the Commission found, CHELCO would not incur 
any additional costs in order to extend service to Freedom Walk.   
The Commission considered four tests that were testified to at length by 
Theodore Spangenberg, Jr., a Gulf Power witness: (1) “the magnitude of the cost to 
extend facilities to the development in contrast to the total investment to serve 
Freedom Walk”; (2) “the [cost of the] investment to extend service to Freedom 
Walk as a percentage of the estimated annual non-fuel revenue Gulf [Power] 
expects to gain from serving the development”; (3) “the ratio of total investment, 
including the investment required for facilities within the disputed area, to Gulf 
[Power]’s estimated annual non-fuel revenue from Freedom Walk”; and (4) 
 
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“whether the facilities that might initially be perceived as duplicative would have a 
reasonable prospect for future use in addition to just serving the area in dispute.”  
The Commission concluded that each of the tests demonstrated that uneconomic 
duplication would not occur if Gulf Power was awarded the right to serve Freedom 
Walk.   
CHELCO contests the Commission’s reliance on the four tests.  However, 
the Commission’s conclusion did not solely rely on the tests.  The Commission 
also considered whether service by either CHELCO or Gulf Power could result in 
duplication of facilities, whether each utility would be able to serve Freedom Walk 
with existing facilities, whether the existing facilities will be used “regardless of 
which party is approved to provide service to Freedom Walk,” and whether either 
party would have a stranded investment if not awarded the right to serve Freedom 
Walk.  Additionally, although the Commission did not find the factor weighty as to 
either party, it did take into consideration each utility’s historical presence.  We 
will not disturb the Commission’s findings and conclusions.      
Evaluation of Necessary Factors 
 
CHELCO also argues that the Commission failed to consider all of the 
necessary factors in determining whether uneconomic duplication would result 
from awarding Gulf Power the right to serve Freedom Walk.  We reject 
CHELCO’s assertion that the Commission’s order was inadequate.  Our review of 
 
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the order revealed that in considering uneconomic duplication, the Commission 
evaluated the pertinent factors.  The Commission addressed the proximity of each 
utility’s lines to the other’s and concluded that some duplication, but not 
uneconomic duplication, would occur if either utility was awarded the right to 
serve Freedom Walk.  The Commission also addressed the difference in each 
utility’s costs to extend service to Freedom Walk, lost revenues for the non-serving 
utility, the adequacy of each utility’s existing lines, whether each utility’s existing 
facilities would continue to be used regardless of which utility was awarded the 
right to serve Freedom Walk, whether either utility’s upgrades and plans were 
triggered by the Freedom Walk project, and whether any of the utilities’ existing 
investments would become stranded if not awarded the right to serve Freedom 
Walk.  CHELCO’s argument is without merit.       
Historical Presence 
 
CHELCO also contends that the Commission did not give the proper weight 
to CHELCO’s historical presence.  This Court has observed that “[t]he historical 
presence of one utility in an area thus may be relevant in determining whether 
uneconomic duplication would result from an award of service to another.”  
Jacobs, 887 So. 2d at 1205.   
 
CHELCO’s argument is without merit.  The Commission did not overlook 
historical presence; it considered the historical presence of both utilities.  
 
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Competent substantial evidence in the record demonstrates that both Gulf Power 
and CHELCO have utility lines in proximity to Freedom Walk.  Moreover, each 
utility has a decades-long historical presence in the area.  Although CHELCO 
argues that this case is similar to Jacobs, we disagree.  Unlike Jacobs, the record in 
this case does not indicate a disparate historical presence that favors CHELCO.   
In sum, we will not disturb the Commission’s findings and conclusions 
related to uneconomic duplication because they are supported by competent 
substantial evidence and are not clearly erroneous.     
Customer Preference 
CHELCO also challenges the Commission’s findings and conclusions with 
respect to customer preference.  Rule 25-6.0441(2)(d) provides that “if all other 
factors are substantially equal,” customer preference may be considered in 
resolving territorial disputes.  Fla. Admin. Code R. 25-6.0441(2)(d) (2010).  
CHELCO argues two points.  First, CHELCO contends that customer preference 
should not have been taken into account because the other factors considered by 
the Commission were not substantially equal.  Given our resolution of the issues 
already raised by CHELCO, we reject this argument at the outset.  Second, without 
conceding that customer preference was properly considered, CHELCO argues that 
the developer’s preference should not have been deemed customer preference for 
the purpose of rule 25-6.0441(2)(d).  This argument is also without merit.   
 
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The record reveals that in September 2008 and February 2011, developer 
Emerald Coast Partners, LLC, sent letters to Gulf Power indicating its preference 
that Gulf Power serve as the electric utility provider for Freedom Walk.  Both 
letters were sent to Gulf Power by the developer’s managing partner, Bruce Houle.  
The 2011 letter also indicated that Gulf Power remained the developer’s preferred 
utility despite the ongoing dispute with CHELCO.  Competent substantial evidence 
supports the Commission’s findings and conclusions as to customer preference.   
CHELCO also argues that developer Emerald Coast Partners, LLC, should 
not be a proxy for the customer because the interests of the developer and the end-
user customer might be inconsistent with one another.3
CHELCO urges this Court to reweigh and reconsider the evidence and to 
read additional requirements into the consideration of customer preference.  For 
  CHELCO points to the 
Commission’s reluctance in prior disputes to substitute the developer’s preference 
for end-user customer preference.  In this case, the developer was the only 
reasonable proxy for future Freedom Walk residents.  Based on the letters sent to 
Gulf Power, which were the only evidence in the record of customer preference, 
the developer expressed a preference that Gulf Power provide electric service to 
Freedom Walk.   
                                         
 
3.  Although CHELCO argues that the developer is not an appropriate proxy 
for the customer, CHELCO chief executive officer Leigh Grantham conceded at 
the hearing that a developer acts as an agent on behalf of the end-user customer.   
 
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example, CHELCO notes that other customer preference decisions discussed in the 
Commission’s order involved cases where the Commission considered developer 
preference as well as at least some end-user customer preference.  Where the facts 
demonstrate that a developer is the only reasonable proxy for the customer, we 
reject the invitation to limit the consideration of developer preference to situations 
where there is also end-user customer input.  CHELCO also invites this Court to 
examine the motives behind the developer’s preference for Gulf Power.  Again, we 
will not usurp the Commission’s proper role as the finder of fact.  The Commission 
did not depart from the essential requirements of law when it considered the 
developer’s preference for Gulf Power.  Competent substantial evidence in the 
record reflects that preference. 
CONCLUSION 
 
In sum, the Commission’s findings and conclusions are supported by 
competent substantial evidence and are not clearly erroneous.  For these reasons, 
we affirm the Commission’s order granting Gulf Power the right to serve the 
Freedom Walk development.   
 
It is so ordered.   
 
POLSTON, C.J. and PARIENTE, LEWIS, CANADY, and PERRY, JJ., concur. 
QUINCE, J., dissents.  
 
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND 
IF FILED, DETERMINED. 
 
 
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An Appeal from the Florida Public Service Commission 
 
Norman H. Horton  Jr. and Robert J. Telfer III of Messer, Caparello & Slef, P.A., 
Tallahassee, Florida; Marsha E. Rule and Martin P. McDonnell of Rutledge, 
Ecenia & Purnell, P.A., Tallahassee, Florida; and William B. Willingham and 
Michelle Hersehell of Florida Electric Cooperatives Association, Inc., Tallahassee, 
Florida, 
 
 
for Appellants 
 
S. Curtis Kiser, General Counsel, Samantha M. Cibula, Attorney Supervisor, and 
Kathryn G. W. Cowdery, Senior Attorney of the Florida Public Service 
Commission, Tallahassee, Florida; Steven R. Griffin, Jeffrey A. Stone, and Russell 
A. Badders of Beggs & Lane, LLP., Pensacola, Florida, 
 
 
for Appellees