Court Opinion

ID: 4922170
Source: CourtListenerOpinion
Date Created: 2021-09-22 00:35:30.220289+00
Date Added: 2024-06-11T08:14:05.575021
License: Public Domain

BY THE COMMISSION.
Southern Gas & Electric Corporation, a corporation doing business under the laws of Florida, is a public utility under the laws of Florida and as such is engaged in furnishing manufactured carburetted water-gas to consumers in Manatee and Sarasota counties under franchise held by the company in Sarasota, Sarasota county, Bradenton and Palmetto in Manatee county, and also in furnishing carburetted water-gas to consumers along route 301 connecting said cities.
The utility has filed with the commission a petition seeking authority: (1) to furnish its customers propane air gas containing not less than 840 thermal units per cubic foot in lieu of the carburetted water-gas presently furnished which contains only 525 thermal units per cubic foot; (2) to compensate for volumetric loss resulting from the use of gas with increased heating value by applying multiplying factor of 1.6 to consumption indicated by customer’s meter; and (3) to apply existing rates and charges to all such volumetric readings so adjusted.
Prior to 1950 Southern Gas & Electric Corporation’s plant facilities were old and worn out — the facilities were running at more than capacity and were constantly in danger of service failure during the peak winter months. As a result the utility in 1950 received authorization from the municipalities from which it had received franchises to change from carburetted water-gas to propane air gas. Acting on this authorization the utility built a propane air gas plant in early 1951 prior to the passage of chapter 366, Florida Statutes. The propane air gas plant was built at a cost to the utility of approximately $75,000, which cost will be charged off as an expense item over a reasonable period. If a plant were built to replace the present carburetted water-gas plant it would cost between $250,000 and $300,000 — which would be required to be included in the Rate Base.
After converting the production plant to propane air gas, a gas will be produced which will contain aproximately 840 BTU’s per cubic foot; however, under all its franchises and all *42rate structures presently authorized and in effect the utility is required to furnish gas containing 525 thermal units per cubic foot. The value of the gas to the consumer depends not upon the volume,- but upon the heat units which the gas contains. The gas consumer is primarily purchasing heat units and is not concerned with the price per cubic foot and the heating value of the gas as separate factors, but is concerned only with the cost per heat unit delivered.
In order to avoid service failures during the coming and successive winter seasons, the utility’s capacity must be increased. The most reasonable, efficient and least expensive method of increasing its production capacity so as to meet maximum requirements is by converting to the manufacture of propane air gas — and applying a multiplier to volumetric consumption. One thousand cubic feet of gas containing 840 BTU’s per cubic foot is equivalent to 1,600 cubic feet of gas containing 525 BTU’s per cubic foot — or, stated in another way, 840 BTU’s per cubic foot of gas bears a ratio of 1.6 to 525 BTU’s per cubic foot of gas.
The application of a multiplier to volumetric consumption is a method of adjusting for a change in the number of heating units delivered without disturbing the rate structure. The use of the multiplying factor, 1.6, by the utility herein will neither increase nor decrease the actual amount of money payable by its consumers for gas, but will result in the consumer paying an identical amount of money for the same number of heat units presently consumed through the use of the lower rated gas.
From our investigation herein, it is our opinion and we find that the Southern Gas & Electric Corporation should be authorized to convert to the manufacture and distribution of propane air gas as described herein so as to furnish gas containing not less than 840 thermal units per cubic foot and that upon said conversion, said utility should be authorized to apply the multiplying factor of 1.6 to all volumetric readings of customers’ meters and then apply the utility’s presently authorized and existing rates and charges to all volumetric readings so adjusted.
We further find that said utility should maintain a monthly average heating value of the propane air gas furnished by it at not less than 840 BTU’s per cubic foot with as little deviation as practicable, and to this end the average total heating value on any one day should not exceed or fall below by more *43than 2 percent the monthly average standard of 840 BTU’s per cubic foot.
We further find that the conversion hereinbefore referred to will be a new venture for this utility and that charges for the new gas should not be based permanently upon past costs experienced in connection with the supply of manufactured carburetted water-gas. The commission should, therefore, retain jurisdiction in this matter for the purpose of investigating and giving further consideration to the effect that the conversion and change in billing practice will have on the revenues and expenses of the petitioner and to the relation between consumption and heating value of said new gas. Jurisdiction should be retained for a full year from the time of this order and if it develops at the end of the first full year’s operation under the new process and billing practice that the effect upon customers is such that a revision of the method of billing herein prescribed or a change in applicable rates is required, the commission will on its own motion require such relief as may be authorized under the circumstances.
It is therefore ordered that the petition be and the same is hereby granted and the utility is authorized and directed to furnish to its customers gas containing not less than 840 thermal units per cubic foot, making such conversions in its plant and manufacturing process as may be necessary to enable it to comply with this order within the shortest reasonable period of time.
It is further ordered that said utility be and it is hereby authorized to change its billing practice at such time as it begins to furnish gas containing 840 thermal units as herein required by applying the multiplying factor of 1.6 to all readings of customers’ meters and then assessing the presently authorized and existing rates and charges on the basis of the adjusted meter readings so as to compensate the utility for volumetric loss resulting from the use of gas containing higher heating value.
It is further ordered that jurisdiction be and the same is hereby retained by the commission over the matter and things involved in this proceeding for a period of one year for the purpose of making such investigations and entering such orders as may be justified by the effects of this order upon the utility’s earnings and upon the service rendered hereunder to its customers.