Florida Regulations 25-6.109: Refunds
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(1) Applicability. With the exception of deposit refunds and refunds associated with adjustment factors, all refunds ordered by the Commission shall be made in accordance with the provisions of this Rule, unless otherwise ordered by the Commission.
(2) Timing of Refunds. Refunds must be made within ninety (90) days of the Commission’s order unless a different time frame is prescribed by the Commission. Unless a stay has been requested in writing and granted by the Commission, a motion for reconsideration of an order requiring a refund will not delay the timing of the refund. In the event that a stay is granted pending reconsideration, the timing of the refund shall commence from the date of the order disposing of any motion for reconsideration. This rule does not authorize any motion for reconsideration not otherwise authorized by Fl. Admin. Code Chapter 25-22
(3) Basis of Refund. Where the refund is the result of a specific rate change, including interim rate increases and the refund can be computed on a per customer basis, that will be the basis of the refund. In such cases, refunds may by made by either recalculating the affected customer’s bill or by applying an appropriate refund factor to the consumption used by the customer during the refund period. However, where the refund is not related to specific rate changes, such as a refund for overearnings, the refund shall be made to customers of record as of a date specified by the Commission. In such case, refunds shall be made on the basis of consumption. Per customer refund refers to a refund to every customer receiving service during the refund period. Customer of record refund refers to a refund to every customer receiving service as of a date specified by the Commission.
(4) Interest.
(a) In the case of refunds which the Commission orders to be made with interest, the average monthly interest rate until the refund is posted to the customer’s account shall be based on the thirty (30) day commercial paper rate for high grade, unsecured notes sold through dealers by major corporations in multiples of $1,000 as regularly published in the Wall Street Journal.
(b) This average monthly interest rate shall be calculated for each month of the refund period:
1. By adding the published interest rate in effect for the last business day of the month prior to each month of the refund period and the published rate in effect for the last business day of each month of the refund period divided by twenty-four (24) to obtain the average monthly interest rate;
2. The average monthly interest rate for the month prior to distribution shall be the same as the last calculated average monthly interest rate.
(c) The average monthly interest rate shall be applied to the sum of the previous month’s ending balance (including monthly interest accruals) and the current month’s ending balance divided by two (2) to accomplish a compounding effect.
(d) Interest Multiplier. When the refund is computed for each customer, an interest multiplier may be applied against the amount of each customer’s refund in lieu of a monthly calculation of the interest for each customer. The interest multiplier shall be calculated by dividing the total amount refundable to all customers, including interest, by the total amount of the refund, excluding interest. For the purpose of calculating the interest multiplier, the utility may, upon approval by the Commission, estimate the monthly refundable amount.
(e) Commission staff shall provide applicable interest rate figures and assistance in calculations under this Rule upon request of the affected utility.
(5) Method of Refund Distribution. For those customers still on the system, a credit shall be made on the bill. In the event the refund is for a greater amount than the bill, the remainder of the credit shall be carried forward until the refund is completed. If the customer so requests, a check for any negative balance must be sent to the customer within ten (10) days of the request. For customers entitled to a refund but no longer on the system, the company shall mail a refund check to the last known billing address except that no refund for less than $1.00 will be made to these customers.
(6) Security for Money Collected Subject to Refund. In the case of money being collected subject to refund, the money shall be secured by a bond unless the Commission specifically authorizes some other type of security such as placing the money in escrow, approving a corporate undertaking, or providing a letter of credit. The Commission may require the company to provide a report by the 10th of each month indicating the monthly and total amount of money subject to refund as of the end of the preceding month. The report shall also indicate the status of whatever security is being used to guarantee repayment of the money.
(7) Refund Reports. During the processing of the refund, monthly reports on the status of the refund shall be made by the 10th of the following month. In addition, a preliminary report shall be made within thirty (30) days after the date the refund is completed and again 90 days thereafter. A final report shall be made after all administrative aspects of the refund are completed. The above reports shall specify the following:
(a) The amount of money to be refunded and how that amount was computed;
(b) The amount of money actually refunded;
(c) The amount of any unclaimed refunds; and
(d) The status of any unclaimed amounts.
(8) With the last report under subsection (7) of this rule, the company shall suggest a method for disposing of any unclaimed amounts. The Commission shall then order a method of disposing of the unclaimed funds.
Rulemaking Authority Florida Statutes § 350.127(2), 366.05(1) FS. Law Implemented 366.03, 366.04(1), (2)(f), 366.06(3), 366.07, 366.071 FS. History-New 8-18-83.
Terms Used In Florida Regulations 25-6.109
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
(3) Basis of Refund. Where the refund is the result of a specific rate change, including interim rate increases and the refund can be computed on a per customer basis, that will be the basis of the refund. In such cases, refunds may by made by either recalculating the affected customer’s bill or by applying an appropriate refund factor to the consumption used by the customer during the refund period. However, where the refund is not related to specific rate changes, such as a refund for overearnings, the refund shall be made to customers of record as of a date specified by the Commission. In such case, refunds shall be made on the basis of consumption. Per customer refund refers to a refund to every customer receiving service during the refund period. Customer of record refund refers to a refund to every customer receiving service as of a date specified by the Commission.
(4) Interest.
(a) In the case of refunds which the Commission orders to be made with interest, the average monthly interest rate until the refund is posted to the customer’s account shall be based on the thirty (30) day commercial paper rate for high grade, unsecured notes sold through dealers by major corporations in multiples of $1,000 as regularly published in the Wall Street Journal.
(b) This average monthly interest rate shall be calculated for each month of the refund period:
1. By adding the published interest rate in effect for the last business day of the month prior to each month of the refund period and the published rate in effect for the last business day of each month of the refund period divided by twenty-four (24) to obtain the average monthly interest rate;
2. The average monthly interest rate for the month prior to distribution shall be the same as the last calculated average monthly interest rate.
(c) The average monthly interest rate shall be applied to the sum of the previous month’s ending balance (including monthly interest accruals) and the current month’s ending balance divided by two (2) to accomplish a compounding effect.
(d) Interest Multiplier. When the refund is computed for each customer, an interest multiplier may be applied against the amount of each customer’s refund in lieu of a monthly calculation of the interest for each customer. The interest multiplier shall be calculated by dividing the total amount refundable to all customers, including interest, by the total amount of the refund, excluding interest. For the purpose of calculating the interest multiplier, the utility may, upon approval by the Commission, estimate the monthly refundable amount.
(e) Commission staff shall provide applicable interest rate figures and assistance in calculations under this Rule upon request of the affected utility.
(5) Method of Refund Distribution. For those customers still on the system, a credit shall be made on the bill. In the event the refund is for a greater amount than the bill, the remainder of the credit shall be carried forward until the refund is completed. If the customer so requests, a check for any negative balance must be sent to the customer within ten (10) days of the request. For customers entitled to a refund but no longer on the system, the company shall mail a refund check to the last known billing address except that no refund for less than $1.00 will be made to these customers.
(6) Security for Money Collected Subject to Refund. In the case of money being collected subject to refund, the money shall be secured by a bond unless the Commission specifically authorizes some other type of security such as placing the money in escrow, approving a corporate undertaking, or providing a letter of credit. The Commission may require the company to provide a report by the 10th of each month indicating the monthly and total amount of money subject to refund as of the end of the preceding month. The report shall also indicate the status of whatever security is being used to guarantee repayment of the money.
(7) Refund Reports. During the processing of the refund, monthly reports on the status of the refund shall be made by the 10th of the following month. In addition, a preliminary report shall be made within thirty (30) days after the date the refund is completed and again 90 days thereafter. A final report shall be made after all administrative aspects of the refund are completed. The above reports shall specify the following:
(a) The amount of money to be refunded and how that amount was computed;
(b) The amount of money actually refunded;
(c) The amount of any unclaimed refunds; and
(d) The status of any unclaimed amounts.
(8) With the last report under subsection (7) of this rule, the company shall suggest a method for disposing of any unclaimed amounts. The Commission shall then order a method of disposing of the unclaimed funds.
Rulemaking Authority Florida Statutes § 350.127(2), 366.05(1) FS. Law Implemented 366.03, 366.04(1), (2)(f), 366.06(3), 366.07, 366.071 FS. History-New 8-18-83.