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.

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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.

Gov. Charlie Crist’s recent threats not to reappoint two Public Service Commissioners if they vote for a proposed $1.3 billion Florida Power & Light Co. rate hike could scare investors away from investing in the utility, an expert testified today.

Bill Avera, a financial analyst hired by FPL, said that the regulatory climate in Florida had changed under Crist and that credit rating agencies, including Moody’s and Fitch, were paying attention.

“The governor cautioned this commission to regard carefully the outcome of this case and even suggested that the tenure of the reappointment of some of the commissioners might be in question based on the outcome of this case. That is unusual. That is the kind of political change that rating agencies are very concerned about,” Avera told the panel during a marathon hearing slated to last 12 hours today.

Opponents of the rate hike grilled Avera throughout the day but those comments temporarily quieted attorney Sheffel Wright.

“Surely you don’t think that Gov. Crist wants the commission to do anything that would render FPL unable to cover its debt service?” Wright asked after a long pause.

“It doesn’t matter what I think,” replied Avera. What matters is what the credit rating agencies believe, he said.

“I think investors see this as a change in posture in Florida. The long tradition in Florida is one where the commission has been free to exercise its expertise in making decisions that it thinks serve the customers long term. When the political leaders insert their judgment, that’s the kind of thing that scares investors,” Avera said.
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The more nearly $2 billion hanging in the balance of two utility rate hearings is contributing to the cloud of suspicion engulfing the regulatory panel that will rule on the cases, Public Service Commission Chairman Matthew Carter said today.

Before hearing on Florida Power & Light Co.’s requested $1.3 billion rate hike resumed after lunch, Carter offered the following statement on the goings-on.

“I think it’s no accident that all these shenanigans and sideshows are happening because we have these two rate cases,” Carter told The Palm Beach Post.

The panel is also considering a $500 million rate increase proposed by Progress Energy Florida.

“Some groups benefit if the rate case is denied. Some group benefits if the rate case is granted. But we’re going to make a decision. As for me, I will not be intimidated,” Carter added.

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Gov. Charlie Crist crossed the line when he threatened two utility regulators’ jobs if they vote for a proposed $1.3 billion Florida Power & Light Co. rate hike, a Palm Beach Post editorial opined today.

“I think it would be nice to reject the increase. I’m trying to appoint members that would be sympathetic to the people and the economic challenge that they’re facing. So that’s a factor,” Crist said Monday.

Here’s an excerpt of today’s editorial:

“Imagine that the governor said: ‘I will base my decision on whether these commissioners approve what FPL wants. The company is very important to Florida, and its rates are the lowest in the state. FPL needs this money to make its plants more efficient, saving customers money and providing the electricity Florida will need to rejuvenate the economy.’

Hearing that, most people who don’t work for FPL or have a connection to the company would say, “How dare he?” And they would be right. Which is why it was just as wrong for Gov. Crist to say on Monday that he would reappoint Commissioners Matthew Carter and Katrina McMurrian only if they reject that $1.3 billion annual increase FPL wants.

The governor’s comment wasn’t just political grandstanding; it was borderline demagoguery, because it played on the public’s ignorance of the facts. When a seat on the Public Service Commission – which regulates power and phone companies – comes open, a 12-member nominating council accepts applications. The council screens and interviews those applicants, and recommends finalists. The governor must make his pick no more than 30 days after receiving the names.”

The Florida Power & Light Co. $1.3 billion rate hike hearing is droning on this morning as opponents to the increase grilled the utility’s expert witness Bill Avera on projected earnings and credit issues.

FPL reps sit in the audience, as they have each day of the hearing now more than a week into overtime above its planned one-week schedule.

But noticeably absent from the FPL pack is what until today had been their constant companions: BlackBerries.

Not only are their communication devices tucked away, their ever-present laptops sit idly inside their cases.

The change is likely due to the firestorm of controversy over secret messages called PINs exchanged between FPL attorney Natalie Smith and several of the commissioners aides. Critics fear Smith may have communicated with the aides during the hearings about the rate case under discussion.

FPL spokesman Mayco Villafana had this to say on the issue in an e-mail:

“Regarding pin communications what I can tell you is that Natalie Smith has never communicated via PIN with Commissioner Edgar or any other commissioner. With respect to PIN communications in general, these Blackberry-based text messages are not unusual nor any different than any other form of communication that isn’t paper-based such as a telephone call. In addition to those individuals you have cited, Natalie also has a PIN, for example, for Commissioner Argenziano’s chief advisor and had one for Commissioner Skop’s former chief advisor. Communication with staff members is a normal and appropriate part of the regulatory process in which all parties to any proceeding or issue regularly engage.”

Nancy Argenziano fired her aide Larry Williams for giving his PIN number to Smith. PSC Chairman Matthew Carter banned the commissioners and staff from using PINs or other types of messaging that don’t leave a public record.
He and Commissioner Lisa Edgar put their aides on paid leave indefinitely until a review of the PINs is complete. The panel is now considering requiring all communications between the PSC and the utilities be in writing.

Commissioner Katrina McMurrian’s response to have her recused from the case is now online.

This morning’s Florida Power & Light Co. $1.3 billion rate hike hearing got off to a murky start despite Public Service Commission Chairman Matthew Carter’s insistence yesterday that the regulatory panel wants to conduct its business in the sunshine.

Commissioner Katrina McMurrian, who was asked by an intervenor on the case on Monday to disqualify herself from the case, was a no-show when the hearing began at 9:30 a.m.

PSC staff were unable to say where McMurrian was or whether she planned to attend the hearing.

About an hour later, McMurrian showed up with no discussion of the motion to have her step away from the case.

McMurrian sat on the panel for about 20 minutes before a copy of her motion denying the request to have her removed was available. It was only available by request and was not on the PSC’s website.

Stephen Stewart objected that McMurrian couldn’t be objective because she had was a panelist at a New York conference at which financing and credit issues related to the FPL rate case were discussed. Utility representatives had attended the conference but no consumer advocates were present, Stewart argued, so McMurrian could not be impartial in her vote on the rate hike.

But McMurrian said Stewart’s logic would put commissioners in a bind: they are supposed to be technical experts but wouldn’t be able to use any information that wasn’t purely objective to learn more about the issues.

That’s a paradox, she wrote.

“The media, both broadcast and print, continuously feature discussions about the general effects of economic conditions on businesses and consumers,” McMurrian wrote. “Even if I recused myself…I would still be the recipient of an unending flow of information concerning these issues, none of which can be realistically expected to be perfectly objective.

“Accordingly, I believe that the paradox presented by the motion is better resolved with more information, rather than less,” she wrote.

Public Service Commissioner Nancy Argenziano summed up her view of the public’s view of the regulatory panel mired in controversy while considering a proposed $1.3 billion Florida Power & Light Co. rate hike.

“The perception of people out there – they think we suck,” said Argenziano, a former state senator who is asking for a grand jury investigation into possible misconduct in the regulatory agency.

“Is that a technical term?” asked PSC Chairman Matthew Carter.

“That’s my technical term,” retorted Argenziano.

Argenziano participated by telephone in the panel’s discussion about how to handle what they called a “spaghetti bowl” of ethical questions about the regulators’ relationships with the utilities they oversee.

Commissioner Nathan Skop offered an unlikely solution: move the agency out from beneath the governor, who now appoints the five-member panel.
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Florida Power & Light’s proposed $1.3 billion rate hike hearing will resume Wednesday as planned despite a powerful GOP senator’s request that that case and another be put on hold.

But Sen. Mike Fasano’s letter asking for the delay went into the case files, Public Service Commission general counsel Booter Imhof responded in a letter sent to Fasano today.

“It’s laughable. It’s laughable. You would think it would be a joke or a hoax if this wasn’t so serious,” Fasano, R-New Port Richey, said of Imhof’s response.

Fasano’s district is almost exclusively served by Progress Energy Florida, which is seeking a $500 million base rate increase.

“I think that’s a sad response when you hear about the coziness they have with the utility companies but they can’t respond in a better way to a sitting senator who has concerns about his citizens and the rate increase,” Fasano said.

Imhof is the latest PSC employee to jump ship. He resigned on Friday and is going to work for the Florida House. The PSC’s lobbyist Ryder Rudd resigned last week after an internal investigation could not prove he violated state laws or rules by attending a Kentucky Derby party at the Palm Beach Gardens home of FPL executive Ed Tancer.

Since then, the commission has fended off conflict-of-interest concerns concerning communications, conferences and dinners.

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Not even the governor should tell utility regulators whether to give the thumbs up to a proposed $1.3 billion Florida Power & Light Co. rate hike, Public Service Commission Chairman Matthew Carter said today.

“I don’t think anybody should tell us how to vote on a rate case. We have to make our decision based on the facts presented. Each case has to stand on its own merit. To do otherwise would be violating the statute,” said Carter, appointed by Gov. Jeb Bush in 2006 and up for reappointment by Gov. Charlie Crist next month. “I’m not going to do that for anyone.”

Earlier today, Crist said that the commissioners’ vote would impact whether he picks them for the panel. Two commissioners – Carter and Katrina McMurrian – are among the six finalists given to Crist by a nominating council.

“Let’s see what the commissioners want to do. Then I can have a better handle on who I want to appoint or reappoint,” Crist said.

The FPL rate hearing is scheduled to resume on Wednesday.

On Friday, Sen. Mike Fasano asked that it be indefinitely delayed until investigations into possibly too-cozy relationships between the regulators and the utilities they oversee are complete.

Carter hasn’t made up his mind yet on whether to halt the hearing and said Crist’s comments won’t sway him.

“I make my own independent decision. And I’m not intimidated nor am I persuaded by anyone else. I have to stay focused on the law,” he said. “I’m not going to g o into a war of words with the governor.”

An opponent of Florida Power & Light Co.’s proposed $1.3 billion rate hike wants a utility regulator who attended a conference in New York and had a steak dinner with an FPL executive disqualified from the case.

Public Service Commissioner Katrina McMurrian should recuse herself because, at a minimum, the events leave the impression that she won’t be impartial, according to a motion filed this morning by Stephen Stewart for Sarasota citizen Richard Unger, an intervenor in FPL’s rate case.

McMurrian, appointed by Gov. Jeb Bush to the panel in 2006, was a panelist at a Standard & Poors conference in New York in March that dealt with credit issues and their effect on the power industry. The night before the conference, McMurrian had dinner with, among others, FPL Treasurer Paul Cutler.

That leaves the impression that McMurrian won’t be impartial, Stewart said in the motion.

The hearing is scheduled to resume on Wednesday.

State law requires that commissioners “must avoid impropriety in all of his or her activities and must act at all times in a manner that promotes public confidence in the integrity and impartiality of the commission.”

McMurrian, whose term ends in January, is up for reappointment by Gov. Charlie Crist.

Crist earlier this morning threatened not to reappoint commissioners who vote for the rate hike. PSC Chairman Matthew Carter is also up for reappointment.

The future of two utility regulators depends upon their vote in a proposed $1.3 billion Florida Power & Light Co. rate hike, Gov. Charlie Crist said this morning.

Crist has until Oct. 1 to reappoint two commissioners – Chairman Matthew Carter and Katrina McMurrian – whose terms expire Jan. 1.

Crist said he wants them to just say no to the Juno Beach-based utility.

“Let’s see what the commissioners want to do. Then I can have a better handle on who to appoint or reappoint,” Crist told reporters this morning.

A reporter asked Crist if he heard the governor correctly – that the commissioners’ vote would affect their appointments.

“You did,” Crist answered. “I think it would be nice to reject the increase. I’m trying to appoint members that would be sympathetic to the people and the economic challenge that they’re facing. So that’s a factor.”

Sen. Mike Fasano on Friday asked Carter, appointed to the panel by Gov. Jeb Bush, to indefinitely delay the FPL hearing and a $500 million Progress Energy Florida rate case until a storm of controversies surrounding the regulatory panel clears.

Crist disagreed.

“I don’t know why we should postpone it,” he said.

Carter said this morning that he hadn’t seen Fasano’s letter because he was on bed rest Friday recuperating from two back surgeries earlier this year.

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Public Service Commission spokeswoman Cynthia Muir gave this response to Sen. Mike Fasano’s request today that Chairman Matthew Carter indefinitely delay rate hearings now underway for FPL and Progress Energy Florida.

“The Chairman is on bed rest today due to his recent back surgery and the strain caused from the long hours of sitting during the hearings. I can tell you that there are statutory time lines that must be followed for each rate case filing. If a Commission decision is not made within the required time frame, the rates requested by the company in its filing can be implemented, at the discretion of the company.

Florida Statue 366.06 provides detail on this.

Thanks,
Cindy”

Progress is requesting a $500 million rate hike. That hearing is scheduled to resume Sept. 21, and the FPL – which is seeking a $1.3 billion rate increase – case is slated to resume on Wednesday.

When asked specifically whether Chairman Carter would postpone the hearings and what the pertinent dates were in both cases, Muir gave the following reply:

“Florida Statute 366.06 spells out the time frame. The Chairman has not responded to the Senator’s letter yet, so there’s no way of knowing what he intends,” she wrote.

Under Florida law, the PSC must give a final order in the FPL case by Nov. 20 or the new rates can go into effect Jan. 1. The utility would have to pay customers back if the panel then rejected the rate hike.