Water customers lament loss in court
Florida PSC required Florida Water Services' customers subsidize others

Residents who fought overpaying Florida Water Services now seem resigned to losing their money.

By JENNIFER FARRELL

St. Petersburg Times,
published June 11, 2001


As most Americans are planning how to spend federal tax-refund checks set to hit mailboxes this summer, more than 36,000 local customers of Florida Water Services can all but forget about a rebate on more than $6.87-million in overpayments to the utility in the early to mid 1990s.

In a May 24 ruling, the 1st District Court of Appeal found there is no way to force Florida Water to repay the 33,329 Spring Hill households that were overcharged an average of $151.72 and ended up subsidizing water users elsewhere.

In Citrus County, 3,327 Sugarmill Woods households paid an average of $543.85 more than their share.

The court's latest ruling may finally signal an end to the labyrinthine legal battle pitting customers against the utility for much of the past decade.

With little hope of winning on appeal, residents appear resigned to losing their money.

Longtime warrior Morty Miller of Spring Hill, whose battle partner Gordie Colvin died last year before the dispute was resolved, seemed ready to give up when contacted Friday.

"This has been a sorry mess from the beginning," he said. "It was a screw-up deal."

Roots of the case stretch back to 1992, when Southern States Utilities, now Florida Water, petitioned the state's Public Service Commission for permission to raise rates across its 127 water and sewer systems. Over the objection of residents, the commission approved the request but went a step further by ordering the utility to establish uniform rates throughout its systems.

Under the new rate plan, customers in Spring Hill and Sugarmill Woods paid more than the true cost of running their systems, while customers in other places paid less between September 1993 and January 1996.

The appellate court later struck down those rates, saying it was unfair to force residents of one system to help pay for another system that was not related.

Meanwhile, Spring Hill customers paid close to half of the millions of dollars collected annually in forced subsidies, said Mike Twomey, the Tallahassee attorney who represented the residents.

Twomey blames the commission's refusal to allow a stay of the uniform rates, pending a court appeal, for killing any chance his clients would later have to get their money back. Once the rates were in place and customers started paying the bills, Twomey argued, returning their cash would be next to impossible.

That argument proved prophetic, after early court victories suggested refunds were on the way.

At first, the commission ordered the utility to provide rebates to the customers who paid bills that were too high. But the decision was later reversed when the commission decided it would be unfair to hit other customers, some local, with a surcharge to raise money for the refunds.

Surcharges could have cost some residents several thousand dollars.

The commission decided there was no practical way to charge only those customers who benefited from the uniform rates because many had moved.

Calling the case "highly unique," the appellate court agreed with that reasoning in its May 24 ruling.

But Twomey, the lawyer, remains bitter about losing the long fight.

"To the extent that there's a bad guy in this situation, and there is, 100 percent of the blame falls on the shoulders of the PSC," he said. "It was a PSC decision to impose these rates when they weren't requested by the utility and were opposed by the customers. They fought us at every turn, and then when it came time to fess up and return the money, they washed their hands of it by saying it was too complicated and would be unfair to the customers that had to pay surcharges."

Commission attorney Mary Anne Helton, meanwhile, said she's glad the case appears to be finished.

"I think it's good that it looks like the case has finally come to resolution and people can go forward and move on with their lives," she said.

As for Twomey's charge that the commission, not Florida Water, is largely to blame for some residents losing money, Helton said: "Obviously, the commission made the decision that they thought was the right decision at the time. How can you go back and second-guess?"

As a result of the dispute, the Hernando County Commission took over regulation of Florida Water and must approve any future rate increases. In December, commissioners reached a settlement in a separate case with the utility that includes a dip in water rates and guarantees stable water and sewer rates for the next three years.

A year after losing her husband, Shirley Colvin said she tries not to dwell on Florida Water anymore.

"I let all those thoughts go behind me. It's too painful to think about," she said. "I think of all the hard work they put into it. To see it go this way, for me it's very heartbreaking."

Miller said he is frustrated, but not about the court's ruling.

"We took it on win, lose or draw," he said. "Knowing how it turned out, the only thing I'm disappointed in, frankly, is the lack of enthusiasm, the lack of support from the populace."

Recalling a bus trip to Tallahassee he and Colvin organized for Spring Hill residents interested in attending a public hearing on the matter, Miller said only 25 people showed up. Now, his last hope for a rebate rests with the state Legislature, which he and Twomey said could appropriate cash for refunds.

"The only way we'll ever get any money back is from the state," he said. "Where else you going to get it?"