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Appeals court won't review utility case

The 1st District Court of Appeal has denied a request by the state Public Service Commission and Southern States Utilities to reconsider a decision in which the court held that the PSC lacked evidence and authority to approve uniform water and sewer rates for the utility.

In an opinion filed Tuesday in Tallahassee, the judges did not list reasons for their decision.

However, the legal battle, which already has been waged for two years, may be far from over.

"We're assessing what our next step is, but it appears we will ask for a hearing before the Supreme Court," said Tracy Smith, spokesman for Southern States in Apopka.

Residents in Spring Hill in Hernando County and Sugarmill Woods in Citrus County complained that the uniform structure, which was approved by the PSC in 1993, forces them to pay for capital improvements to Southern States systems in other counties. Further, they contend, the rate was adopted without proper notice.

After the appeals court threw out the rate structure, customers wanted rebates, the difference between their former stand-alone rates and the higher uniform, statewide charges, said Michael Twomey, the Tallahassee attorney who helped fight the case for Citrus and Hernando counties.

"There's someplace between $6-million and $8-million at stake here," Twomey said. "It's our opinion that Southern States has to make refunds of this amount."

"Hernando County's position is the PSC should immediately go back and reinstate the rates in effect prior to the uniform rates," said Hernando County Attorney Bruce Snow.

Noreen Davis, director of legal services for the PSC, said the PSC staff will determine as soon as possible whether Southern States must revert to a system of stand-alone rates, whereby water and sewer charges vary according to the costs and requirements of each of the utility's 127 systems.

After the PSC staff studies the issue, it will make a recommendation to the PSC commissioners. Davis said she did not know whether the PSC would order refunds or ask the utility to impose stand-alone rates.

"Of course we don't agree with the court's opinion, but it's our duty and responsibility to abide by it," she said.

Smith, Southern States' spokesman, said the PSC cannot force the utility to offer refunds. He said Southern States has no intention of issuing any rebates.

The original ruling that the PSC lacked evidence and authority to approve uniform rates came from the 1st District Court of Appeal in April. The court of appeal said then that the PSC lacked authority to approve a statewide rate because there was "no competent substantial evidence" that Southern States systems are "functionally related."

Morty Miller, president of the Spring Hill Civic Association, was surprised to hear the appeals court would not reconsider the case.

"Hooray!" Miller exclaimed after hearing the news.

He acknowledged that a long legal battle lies ahead to get refunds or revert back to stand-alone rates.

"I'd love to see us get rebates," Miller said. "But if we win and take the power away from the public disservice commission, I'll be happy."

The Hernando County Commission has been trying to wrest control of Southern States' rates from the PSC, but that effort was set back last week when the PSC decided that rate-making authority lies with it.

That decision also will be appealed in court.