Palm Beach County Commissioner Jeff Koons asked utility regulators to approve Florida Power & Light Co.’s $1.2 billion rate hike, saying the utility is the county’s largest employer and needed the extra money to help the state go green.

The Public Service Commission yesterday instead slashed FPL’s rate hike to just $75 million and limited the amount of profit the Juno Beach-based utility can earn to 10 percent, far less than the 12.5 percent return on equity it sought.

“While no one - especially in the current economy - looks forward to higher electric bills, FPL’s proposed rate increase is necessary in order to make a greater investment in green technology, energy sources that will ultimately protect the consumer from uncertainties and bill fluctuations in the future,” Koons wrote in a letter to commissioners on Jan. 5 expressing his personal opinion on the rate case.

FPL President Armando Olivera said the company will immediately halt modernization projects at its Riviera Beach and Cape Canaveral power plants and cease moving forward with most of its efforts to build two new nuclear reactors at its Turkey Point facility.

He said the projects could have brought 20,000 new jobs to Florida over the next five years.

Florida Power & Light Co. President Armando Olivera accused utility reagulators risking customers’ electrical service by slashing Florida Power & Light’s requested $1.2 billion rate increase by at least 90 percent.

“Today, politics trumped economics,” Olivera told reporters as he left the meeting still in progress at about 6:15 to return to South Florida on the corporate jet.

Olivera said the Juno Beach-based utility will immediately cease modernization efforts at its Riviera Beach and Cape Canaveral plants and halt work on a new nuclear plant that would have put 20,000 workers on the job this year.

The commission decided to limit FPL’s profits to 10 percent - far less than the 12.5 percent the company sought. Commissioner Nathan Skop said that FPL’s proposal was based more on a desire to increase cash flow than on substance.

That return on equity could be bad for the state’s largest utility’s 4 million customers, Olivera said.

“It’s conceivable our reliability will be impacted,” he said.

Olivera said the panel’s votes on more than 100 items today - still underway - coupled with a denial of Progress Energy Florida’s $500 million rate hike request Monday “sends a chilling effect on anybody who wants to invest in this state.”

Olivera said it’s too soon to say whether any of the utility’s 10,499 workers will be laid off but that “we’re going to be looking at every aspect of our operation.” He said that information would be revealed to employees before anyone else.

“The most immediate thing is not to spend money we don’t have,” Olivera said.

Public Service Commissioner Nathan Skop took a swipe at Florida Power & Light for requesting a $1.2 billion-a-year rate hike before the utility regulators broke for lunch.

“This rate case seems to be more about improving cash flow from operations and discretionary expenditures than substance,” Skop said.

“That’s clearly indicated by the substantial adjustments” PSC staff made to FPL’s request, Skop said. PSC staff suggested the Juno Beach-based utility be granted just $357 million of the $1 billion it asked for this year.

On Monday, the PSC denied any of Progress Energy Florida’s requested $500 million rate hike, going even lower than the staff’s recommendation of about $50 million.

And things aren’t going so well for FPL so far this morning. The panel turned down its request for a second year rate hike of about $300 million and discontinued its ability to make adjustments in the base rate without the PSC’s approval, taking about another $180 million off the table.

The most contentious part of FPL’s request is up for discussion after the panel, headed by consumer-friendly Chairman Nancy Argenziano, returns in about an hour.

That’s its return on equity - how much profit the state’s largest utility should be allowed to earn - and how much of that its customers should pay for.

FPL wants a 12.5 percent ROE, almost a 2 percent jump from what it’s currently earning.

FPL contends it needs the higher profits to be able to borrow more cheaply in the future and to invest in future projects.

“In the midst of our rate proceeding, our ROE was 10.7% (May 2009) and since that time our ability to earn a fair rate of return on equity has continued to deteriorate. Our position is that the Commission should authorize 12.5% as the return on common equity. Granting FPL’s requested return on equity will appropriately take into account overall utility industry risks, as well as FPL’s need to invest $16 billion (investments) to provide service over the next five years. Granting FPL’s common ROE is critical to maintaining FPL’s financial strength and flexibility and will help FPL attract the large amounts of capital that are needed to service its customers,” FPL spokesman Mayco Villafana said in an e-mail this morning.

Utility regulators began today’s proceedings on Florida Power & Light’s proposed $1.2 billion rate hike by saying “no” to two important items included in the 100-plus decisions related to the request.

The Public Service Commission refused to include a second year, 2011, in the Juno Beach-based utility’s proposal, knocking about $300 million off the rate hike request.

FPL was seeking a two-year increment in its base rate, about $1 million this year and $300 million next year.

Regulators said there is too much volatility in fuel prices and the banking industry to predict what will happen that far in the future.

The panel also turned down FPL’s request to continue making automatic adjustments in customers’ base rates when new plants or equipment other than solar or nuclear come on line. They said that gives the company too much leeway without oversight. A separate provision allows utilities to recoup construction costs for solar or nuclear plants outside of the base rate.

Still up for discussion: how much profit the state’s largest utility should be allowed to earn.

FPL President Armando Olivera is at the meeting.

The Florida Public Service Commission will spend the day deciding on how much - if any - Florida Power & Light Co. deserves of the $1.2 billion rate hike it seeks.

Today’s proceeding, expected to last until this evening, began with a discussion from Commissioner Nathan Skop about the Juno Beach-based utility’s requested 12.5 percent return on equity - profitability to shareholders - and how much money that would require for customers to pay.

Watching the debate today are a group of AARP seniors who traveled to Tallahassee from Daytona Beach. AARP opposes the rate hike.

Public Service Commission Chairwoman Nancy Argenziano began her first day as head of the utility regulatory panel by suggesting that her colleagues conduct themselves like judges.

Argenziano, a former state legislator, took over as chairwoman this morning and Panhandle accountant Benjamin “Steve” Stevens was sworn in as the newest commissioner as the panel prepares to vote on nearly $2 billion in power rate hikes next week.

Argenziano kicked off this morning’s meeting by handing out the code of judicial conduct to the other four members of the PSC in an effort to place more distance between the commissioners and their staff and the utilities they oversee.

She wants all communications placed in writing and entered into the public record in cases pending before the PSC.

The quasi-judicial panel is considering imposing changes to its own ethical standards while awaiting possible legislative changes to how the commission operates regarding communications between the utilities and the PSC.

But Argenziano, a Republican from Dunedin appointed to the PSC by Gov. Charlie Crist in 2007, wants broader changes in the way potential commissioners are selected by a committee comprised largely of legislators. Those suggestions are then given to the governor, who makes the final decision.

Argenziano objects to the legislature’s influence on the selections because, she says, House and Senate leaders are dependent on campaign contributions from the utilities.

She wants the panel to become part of the court system and have commissioners appointed by either the Cabinet or the attorney general or a smaller group that would be more accountable to consumers, she said.

But lawmakers are unlikely to cede their power over the PSC, Argenziano admitted.

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The Public Service Commission’s former general counsel Booter Imhof, who resigned after less than a year on the job during the fray over a proposed $1.2 billion Florida Power & Light Co. rate hike, is now heading a Senate committee dealing with other regulated businesses.

Imhof will take over as staff director for the Senate Regulated Industries Committee on Jan. 1, according to an e-mail distributed in the Senate this morning.

Imhof’s a familiar face in both chambers - he served in the same role in both the House and Senate committees.

Utility regulators are expected to make a decision on Imhof’s replacement soon.

At the top of the list: Curt Kiser, a long-time Republican who once served in the state Senate and who sat on the Public Service Commission Nominating Council for 17 years; Mike Twomey, a former PSC lawyer who later lobbied for AARP; and Bonnie Davis, a Tallahassee lawyer who represents utilities.

The Florida Public Service Commission created what could be yet another public relations nightmare for the state’s largest utility yesterday.

Utility regulators ordered Florida Power & Light Co. to refund $364.8 million in fuel surcharges in a one-time payment to customers because of a drop in fuel prices.

The refunds are normally spread out over one year.

But Commissioner Nathan Skop wanted customers to get the one-time break.

As a result, FPL customers’ January bills will be about $44 cheaper as a result of yesterday’s decision.

But the next month the bills will go back up, leading to instability for customers, FPL argues.

They want customers’ bills to be consistent from month to month so residents and businesses can plan for their utility expenses.

The power company also likely wants to avoid the fallout from the sticker-shock of a bill going up $44 from one month to the next.

“While today’s action was outside the normal process for dealing with these variations, we’re happy to be able to help customers, particularly in these difficult times. Moreover, 2010 bills will be going down as a result of greater fuel efficiencies and lower fuel costs even with the full impact of our rate request. That’s good news for customers since it combines lower bills with greater investment in making the electrical infrastructure stronger, smarter, cleaner and even more fuel efficient,” FPL said in a statement yesterday.

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UPDATE: Read the story from The Palm Beach Post on here

Enough already.

Public Service Commission Chairman Matthew Carter pronounced that Florida Power & Light Co.’s prolonged $1.2 billion rate hike case will wrap up tonight. Period.

“We will finish tonight, ladies and gentlemen,” Carter said before adjourning for lunch.

“Everything that needs to be said has pretty much been said. How many more times can you say the same thing?” Carter told The Palm Beach Post shortly after the lunch break began.

Expect some fireworks when the hearing resumes at 2:30.

FPL Group Controller Mike Davis is going to get a grilling on the utility’s proposal to charge customers $3.7 million of the $5 million it estimates it will spend to persuade the PSC to grant its rate hike.

Some of the expenses incurred so far include $1.4 million for consultants, $450,996 for legal services, $214,632 for lodging and $143,232 for meals over a nearly two-year period.

Carter can’t be blamed for wanting the FPL case, sidetracked by what he called “shenanigans” over allegations of conflicts of interest, to come to a halt.

He was absent yesterday because of complications from two back surgeries he’s had this year.

Carter’s got a little more than two months left in his term after Gov. Charlie Crist passed him over for reappointment earlier this month.

The panel will come back at 2:30, a half hour before the newest regulator, David Klement, is sworn in in Sarasota.

Klement, a former newspaper editorial writer, will be in Tallahassee on Tuesday to vote on whether the PSC should decide on FPL’s rate case this year or wait until another new Crist appointee - Pensacola accountant and bar owner/manager Benjamin “Steve” Stevens - joins the PSC on Jan. 1.

The Public Service Commission and opponents of Florida Power & Light Co.’s proposed $1.2 billion rate hike grilled the utility’s officials about stacking the deck at customer service hearings throughout the day and into the evening yesterday.

FPL Customer Service VP Marlene Santos conceded that the Juno Beach-based utility methodically rounded up dozens of commercial customers - many of whom were recipients of FPL’s charitable gifts - to attend the hearings to tell regulators how great FPL is and that the company deserves the boost.

But just before the hearing ended around 7:30 p.m., FPL lawyers produced documents showing that their opponents employed the same tactics.

Acting Chairwoman Lisa Edgar allowed the last-minute filings over the objections of rate hike opponents.

“We urge you to attend the hearing in your area and speak out against FPL’s requests,” read a June e-mail from the Florida Retail Federation to its members. AARP’s Florida director urged the same of that group’s members in an August article on the group’s Web site.

Today’s hearing kicked off on time at 9:30 but it’s unclear if it will finish up on time late this evening as scheduled.

(more…)

Five Florida Power & Light Co. executives brought in more than $1 million in 2008, an FPL official testified today.

FPL Director of Compensation Kathleen Slattery told the Public Service Commission that three of the utility’s highest paid executives earned $3 million each that year and paid its top earner $10 million, $7.5 million of which was picked up by FPL.

FPL’s proposed $1.3 billion rate hike case started back up this morning, the same day the Juno Beach-based utility took out three-quarter page ads in The Palm Beach Post and the South Florida Sun-Sentinel.

“In January, the lowest bill in the state will go even lower,” the headline on the advertisements reads.

Below that, a bar chart shows residential rates for a 1000 kilowatt hour bill for 32 companies.

The ad shows FPL’s projected December bill as the lowest at $110.72, and dipping lower to $101.76 in January 2010.

Here’s the latest installment in the seemingly perpetual Public Service Commission drama.

Sen. Mike Fasano today shot back at Associated Industries of Florida president Barney Bishop who yesterday publicly accused Fasano of interfering in the utility regulators’ business as the PSC considers three cases that could collectively cost Floridians up to $3 billion a year in extra energy costs.

Fasano yesterday asked Commissioner Lisa Edgar to resign because of an ethics complaint about her communicating with an FPL executive during a hearing. The ethics commission found no probable cause that Edgar, reappointed by Gov. Charlie Crist to the PSC last year, did anything wrong.

AIF supports Florida Power & Light Co.’s proposed $1.3 billion rate hike, and yesterday evening Bishop called out Fasano by name for trying to influence the outcome of that case and a proposed $500 million Progress Energy Florida rate increase.

“Any attempt by anyone to influence “due process”, whether they are an elected official or not, is inappropriate,” Bishop said in a statement.

That got to Fasano, who issued a statement demanding his own due process.

“Barney Bishop is a highly paid representative for utility companies throughout Florida. Mr. Bishop states that I am interfering in the due process that Progress Energy and Florida Power & Light are entitled to as the Florida Public Service Commission considers billion dollar rate increase requests. As anyone versed in the most elemental aspects of law should know, due process entitles one to face his or her accuser. Since Mr. Bishop, and Associated Industries of Florida, has stated that my involvement in this case is inappropriate, I challenge Mr. Bishop to publicly debate me on this issue,” Fasano, R-New Port Richey, wrote.
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The Public Service Commission will decide whether to give in to Gov. Charlie Crist’s request to put off about $2 billion in utility rate increases later this month.

Crist asked the panel to postpone hearings considering Florida Power & Light Co.’s proposed $1.3 billion base rate hike and Progress Energy Florida’s $500 million similar request until next his two new PSC appointees come on board on Jan. 1.

PSC Chairman Matthew Carter, whom Crist passed over for reappointment last week, told Crist in a letter sent this morning that the panel would discuss his request at its next publicly noticed meeting on Oct. 27.

“To avoid claims of violation of due process, the parties to both dockets should be permitted to address your request,” Carter wrote based on the recommendation of PSC attorney Mary Anne Helton.

The PSC is right now preparing to vote on a $1.5 billion FPL natural gas pipeline. The cost for the pipeline would also be added into FPL customers’ base rate, but Crist did not ask for a delay on that vote.

The FPL vote on the base rate hike is scheduled for Dec. 21 and the Progress Energy vote is slated for Nov. 21.

Public Service Commission lawyers are checking into whether Gov. Charlie Crist has any standing in asking for a temporary halt to two utility rate cases until his two new regulatory commissioners take over on Jan. 1.

Crist this morning asked Chairman Matthew Carter, one of the two current commissioners whom Crist passed over for reappointment, to delay the Florida Power & Light Co. $1.3 billion rate hike hearing and the Progress Energy Florida $500 million request until David Klement and Benjamin “Steve” Stevens take over.

Carter ordered his legal staff to figure out how to handle the governor’s request because he is not one of the intervenors in the case and may have no legal standing to ask for a delay.

(more…)

Gov. Charlie Crist is trying to put the brakes on two pending utility rate cases until his new appointees take office on Jan. 1.

Crist today asked the Public Service Commission to postpone any further hearings or decision on a proposed $1.3 billion Florida Power & Light rate hike and a $500 million Progress Energy Florida rate increase request.

Yesterday he named former newspaper editorial writer David Klement and Pensacola bar owner and accountant Benjamin “Steve” Stevens to the five-member panel that oversees the state’s public utilities.

The two will replace current PSC Chairman Matthew Carter and Commissioner Katrina McMurrian, whose terms end Dec. 31.

The PSC has been plagued by conflict of interest accusations for the past several months as the rate cases have progressed.

Chief Financial Officer Alex Sink weighed in on Florida Power & Light Co.’s plan to implement a $900 million base rate hike before state regulators vote on the proposed increase.

“I’m opposed to the FPL rate increase. And FPL’s attempt to implement the rate increase before the Public Service Commission makes a decision is simply unnecessary and outrageous,” Sink, a Democrat who is leaving office after one term to run for governor next year, told The Palm Beach Post today.

A lawyer for the state’s largest utility told PSC Chairman Matthew Carter last week that FPL would impose the rate hike on Jan. 4, as permitted by state law. The Juno Beach-based company would have to refund any difference in the rates after the PSC makes its final vote on the issue, scheduled for Jan. 11.

The decision comes after the terms of two commissioners - Carter and Katrina McMurrian - end. Gov. Charlie Crist threatened not to reappoint them if they vote in favor of the rate hike, raising fears in the investment community about a shift in Florida’s previously utility-friendly regulatory environment.

FPL’s rate hearing has dragged on far beyond its originally slated two weeks. The hearing, its first base rate request in more than two decades, has been bogged down in staff firings and suspensions, revelations about coziness between the regulators and the utilities they oversee and secret messages exchanged between PSC staff and FPL lawyer Natalie Smith.

Critics have also attacked FPL for proposing to use some of the $1.3 billion-a-year rate increase to purchase new planes for its air fleet now comprised of three fixed-wing aircraft and two helicopters.

And FPL is now fighting in court an order from the panel to make the salaries of its highest-paid executives and engineers public. FPL officials agreed to give the data to the panel but wanted it kept secret from the public.

FPL maintains that customers’ bills will go down $9 per month even with the rate hike because fuel charges will go down.

Company officials had this response to Sink’s comments:

“Floridians should not allow political grandstanding to create further uncertainty for customers and for FPL projects that will bring a lot of value to Floridians, now and in the future. Because of the delay that politics have caused, there are two paths forward here: a knee-jerk, short-sighted political response, which puts at risk thousands of construction jobs, hundreds of millions of dollars in new revenue for Florida communities and billions of dollars in capital investment at a time when all of this desperately needed; or a prudent, responsible and timely deliberation based on the facts and the merits of the case and its long-term impact,” FPL said in a statement.
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Florida Power & Light Co. plans to raise rates by more than $900 million beginning Jan. 4 without waiting for the Public Service Commission’s decision on whether to grant the requested increase, according to a letter from an FPL executive sent to the panel today.

Florida law allows the utility to implement the rate hike without the regulatory panel’s approval, but FPL would have to refund the difference to customers if the PSC authorizes a smaller increase. The regulatory board’s final decision is now scheduled for Jan. 11 because the rate case has run into overtime.

PSC Chairman Matthew Carter today refused to grant FPL’s requests from earlier this week to make a decision by Dec. 4.

Instead, the PSC will keep its schedule of finishing its hearing Oct. 21-23, voting Dec. 21 on the total amount FPL can collect and voting Jan. 11 on how that increase will affect different types of customers, such as homeowners and businesses.

(more…)

Florida Power & Light Co.’s proposed $1.3 billion rate hike hearing fizzled out at 10:55 p.m. this evening after a 13-hour marathon of testimony from FPL CFO Armando Pimentel.

Public Service Commissioner Nancy Argenziano, attending the hearing by telephone, spoke up before the panel was set to take a five-minute respite.

“I really think this is wrong. 10:44 at night is not a good time for people” to be asking important questions,” Argenziano said. “I’m sure everybody there wants to go home.
That’s just not the way to do this. I have strong feelings that we may have pushed it too far or too late.”

PSC Chairman Matthew Carter, who’s had two back surgeries earlier this year, was in such pain late this evening that he went home after being helped out of the room by an aide.

Commissioner Lisa Edgar had already vacated hours earlier.

That left Commissioners Katrina McMurrian, acting as chairwoman, Nathan Skop and Argenziano to decide.

Argenziano won out in the end over FPL’s objections. Pimentel wanted to finish up because he did not want to have to return for the next round of hearings in late October, his lawyer said.

“We all want to get done. We’ve been at it more than 13 hours today,” said Sheffel Wright, an attorney representing the Florida Retail Federation that opposes the hike.

“I tend to agree with a lot of what’s been said. I think we are at that stage and we are getting a little overly tired and anxious,” McMurrian said, stumbling over her words. “I can’t even string a sentence together.”

She adjourned the meeting. The panel will reconvene on Oct. 21.

Florida Power & Light Group Chief Financial Officer Armando Pimentel flew to Tallahassee on the corporate jet to appear before a panel considering the utility’s proposed $1.3 billion rate hike.

Pimentel spent the day being grilled about the Juno Beach-based company’s request and about its corporate jets. Commissioners and opponents of the rate hike demanded answers about why ratepayers should foot the bill for FPL executives, their wives and their guests to jetset to places like Martha’s Vineyard, Las Vegas and the Louisville during the Kentucky Derby.

After nearly 10 hours of testimony, attorney Jon Moyle, who represents the Florida Industrial Power Users Group, asked the CFO about traveling to Tallahassee on the corporate plane.

“Did you have a concern when you decided to take the corporate aircraft up to provide your testimony that that might send a bad signal or a bad message to fly on the corporate aircraft up here to provide testimony to support a $1.5 billion rate increase?” Moyle wanted to know.

Pimentel wasn’t flustered.

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Public Service Commissioner Nancy Argenziano’s former aide Larry Harris is back at work at the utility regulatory agency in the general counsel’s office.

Argenziano fired Harris earlier this month for giving his secret BlackBerry personal identification number (PIN) to Florida Power & Light Co. attorney Natalie Smith.

The PINs allow BlackBerry users to exchange messages that can be impossible to trace.

Two other commissioners - including Chairman Matthew Carter - put their aides, who make at least $84,000 a year, on paid leave until investigations into the messaging mystery are resolved.

Carter also banned the use of the PINs or other types of communication that don’t leave a public record.

Harris was reassigned to the general counsel’s office as a senior attorney where he now earns $60,000 a year. The PSC’s general counsel Booter Imhof resigned Friday. He gave two weeks’ notice and said he is going back to work for the House of Representatives.

The PSC’s lobbyist Ryder Rudd resigned earlier this month after it was revealed that he attended a Kentucky Derby party at the Palm Beach Gardens home of FPL VP Ed Tancer. An internal investigation could not prove whether Rudd, who oversaw staff handling several FPL rate requests, broke state law or rules by going to the fete.

The musical chairs at the PSC takes place during a $1.3 billion proposed FPL rate hike hearing. Progress Energy Florida is also seeking a $500 million rate increase. That case is scheduled to resume next week.