Opinion ID: 1846151
Heading Depth: 1
Heading Rank: 6

Heading: In-House Plant and Engineering Labor Expenses

Text: GTC challenges the PSC's disallowance of recovery for storm-related in-house plant and engineering and labor expenses in the amount of $43,068. The testimony of GTC's regional controller, R. Mark Ellmer, established that GTC's petition included costs for normal material and labor, costs of construction, wages and benefits, budgeted overtime labor, regular time labor, and overhead. Public Counsel's expert testified that because GTC submitted invoices of total costs, and not extraordinary costs over and above normal operating costs and normal capital costs, there was no way to verify the extraordinary costs that might be considered recoverable under the PSC's interpretation of the statute. The PSC disallowed these in-house labor and engineering expenses because it found that they were included within normal business operations and would have been incurred without the storm. The PSC concluded in its order that GT Com's in-house labor costs should not be included in the amount to be recovered through a storm charge as the Company is already recovering this amount through its normal business operations. Witness Ellmer agreed during cross examination that its in-house labor costs that were included in GT Com's storm cost recovery request amount, would have been incurred by the Company regardless of whether Hurricane Dennis had occurred. The cost included for in-house labor, therefore, was not incurred as an extraordinary amount related to Hurricane Dennis. Since the labor costs would have been incurred by GT Com regardless of whether Hurricane Dennis had occurred, it is not reasonable for the Company to recover these costs through the storm charge recovery mechanism. It should be noted that, although the PSC denied recovery of costs it found were included in normal business operations, it did allow recovery of expenses for contracted labor. GTC contends that the PSC should not be concerned with whether the costs sought are already covered by normal operating costs and expenses. GTC asserts that the possibility of double recovery is irrelevant under the statute because its rates are not based on rate base, rate of return regulation. We have already rejected this argument in construing the statute. Moreover, GTC presented no evidence that as a result of using in-house labor to make the extensive repairs, it suffered any additional costs or incurred overtime expenses over and above its normal costs. Therefore, in this case GTC failed to carry its statutory burden of establishing that the in-house labor and engineering costs and expenses are reasonable under the circumstances for the named tropical system. § 364.051(4)(b)(3), Fla. Stat. Other than advancing its interpretation of the statute as a basis for reversal, GTC has not overcome the presumption of correctness accorded to the PSC order or demonstrated how the PSC erred in disallowing in-house plant and engineering labor expenses that GTC did not show were over and above its normal expenses. The PSC's decision was based upon application of its construction of the statute to its factual findings, and those findings are supported by competent, substantial evidence.