Utility's Expansion Found to Be Uneconomic Duplication of Facilities

Abstract

The Gulf Power Company, an investor owned utility, and Gulf Coast Electric Cooperative, a rural electric cooperative, each sought to provide service to a new subdivision. After the cooperative had filed a petition with the Public Service Commission (PSC) seeking resolution of the dispute, Gulf Power spent $200,480 extending power lines to reach the subdivision and building a substation. The PSC found that the cooperative's costs to provide similar service would be about $27,000 because its existing facilities were closer to the subdivision. The PSC concluded that Gulf Power's expenditures were an uneconomical duplication of electric facilities prohibited by Florida law and awarded the right to serve the subdivision to the cooperative. In an appeal, the Supreme Court of Florida concluded that state law gave jurisdiction over the development of Florida's utility services to the PSC and that costs incurred by Gulf Power constituted a statutorily proscribed uneconomic duplication of facilities.