The Senate quietly approved a measure designed to clean up the Public Service Commission with a 39-1 vote this afternoon.
The bill (SB 1034) would make public all communications between the utilities the panel regulates and the commissioners or their advisory staff.
It would also bar commissioners or high-level staff from going to work or lobbying for the utilities for four years after they leave the PSC, double the current two-year limitation, aimed at stopping the “revolving door” between the commission and the utilities they make billion-dollar decisions about.
The bill will make certain that former commissioners and staff “will not be able to continue what they’ve done in the past and for a change our consumers will be represented,” the bill’s sponsor Sen. Mike Fasano, R-New Port Richey, argued.
The changes come from a 1992 grand jury report that lawmakers largely ignored designed to keep regulators and utility representatives at arm’s length.
This year’s proposal came about in the wake of reports that PSC staff and a Florida Power & Light Co. lawyer were swapping secret BlackBerry messages. Other details about questionable relationships between FPL and the commission were revealed during Juno Beach-based FPL’s proposed $1.2 billion rate hike hearing.
On the opening day of FPL’s rate increase hearing last year, Commissioner Nathan Skop revealed that the PSC’s lobbyist, Ryder Rudd, had attended a Kentucky Derby party at the Palm Beach Gardens home of FPL Vice President Ed Tancer. Rudd later quit.
Since then, the agency has struggled through investigations into BlackBerry messages exchanged between the PSC and an FPL attorney, a myriad of ethics complaints and allegations of interference from political leaders, including Gov. Charlie Crist, who threatened to not reappoint any commissioners who voted in favor of the rate hike.
The bill would also require that the commissioners behave more like judges by applying the canons of judicial conduct, including refraining from inappropriate political activity and avoiding the appearance of impropriety.
Public Service Chairwoman Nancy Argenziano is backing the proposed changes.
The Senate considered some sweeping changes to Public Service Commission, the panel that oversees billions of dollars in utility rates, without voting on it.
The measure (SB 1034), which Senate President Jeff Atwater previously said he wanted passed out of the chamber today, is on the fast-track in the Senate but isn’t moving so quickly in the House.
The proposal, backed by five-member Public Service Commission and Public Counsel J.R. Kelly (who represents consumers), is aimed at injecting new ethical standards into the maligned regulatory agency entangled in secret messages swapped between staff and a Florida Power & Light Co. lawyer. That and other questionable actions did not break any Florida laws, a number of investigations found.
The changes, proposed by longtime PSC critic Sen. Mike Fasano, would require that all written and oral communications between commissioners and their aides, called ex parte communications, be put in the public record and placed online where everyone can see them.
“We had staff and commissioners that were communicating with multi-billion dollar utility companies and we didn’t know anything about it. Absolutely nothing. Now when anybody has access to them, we’re going to know within 72 hours after their transmission,” Fasano, R-New Port Richey, said.
The measure would also bar commissioners and their aides from going to work or lobbying for the utilities they regulate for four years, which would be twice the current restriction.
Senate Democratic Leader Al Lawson tried but failed to keep the limitation to two years, arguing that the restrictions surpass those of even lawmakers who control the state budget and who are barred from lobbying for just two years.
The bill would affect all the electric, water and gas companies that are regulated by the commission. Under the proposal, a company could be fined one-tenth of one percent of its annual operating revenue for violating the restrictions.
The Senate could vote out the measure as early as tomorrow.
Gov. Charlie Crist told lawmakers to keep the state’s Public Counsel J.R. Kelly, who represents consumers in utility cases, on the job.
Kelly’s tenure appears to be in question because the Joint Committee on Public Counsel Oversight last week decided to take applications for his post - on the heels of two high-profile wins for Kelly before the Public Service Commission that saved Florida consumers more than $1 billion.
Kelly, appointed by the legislature in 2007, is a “prepared, competent, and compassionate advocate for consumers,” Crist wrote to the committee in a memo released this evening.
“I want to commend him, not only for the preparation of the two significant cases before the Public Service Commission, but also for the outstanding work he has done over the years,” Crist wrote.
St. Petersburg Times columnist Howard Troxler linked Senate President Jeff Atwater with the move to oust Kelly, which Atwater denied when asked what he has against the consumer advocate.
“Nothing! Nothing at all,” Atwater, R-North Palm Beach, said this week. “There wasn’t any evidence to suggest that. Only that there was a committee that was acting in a certain way and so someone had to take the whack for it. And so sure enough, (Troxler) whacked me. I have not said one word to any member of that committee as to any displeasure or disappointment I would have of the sitting public counsel.”
Atwater said the committee could not have reconsidered Kelly for the job in the midst of the controversial rate cases, including Florida Power & Light’s proposed $1.2 billion rate hike. The PSC shot that down instead granted the Juno Beach-based utility a $75.5 million-a-year increase, viewed by many as a victory for Kelly.
“Imagine if that committee had gone in in November and chosen not to re-up him with those rate cases pending. Pow. Rockets. So. What the legislature did was not act. This is too important. This man is out there fighting as public counsel on behalf of the public. So delay your time,” Atwater said.
The committee, led by Sen. Lee Constantine, last week discussed the applications and the process of interviewing candidates, Atwater said.
“So once you start that process then the criticism comes that it’s about Mr. Kelly.…but for heaven’s sakes at some point you need to address the process. We’ve now concluded…that a two-year term for the public counsel is too short a period of time to be able to act independently and not be acting in a way that you might see that around every corner is the reappointment of your job,” Atwater said.
“There’s been no discussion in the senate to oust Mr. Kelly whatsoever. I would venture to guess that Mr. Kelly’s going to remain as public counsel,” he went on.
Atwater said he and others want to prolong the two-year term.
“So merely the discussion of that drew the conclusion from some that people wanted Mr. Kelly out. Certainly not myself. I’ve never expressed that to a soul. And I think Mr. Troxler had an opportunity and he took it. And I have no qualms about that. That’s how the process works. I sit in this seat,” Atwater said.
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.
“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.
Gov. Charlie Crist took credit for the Public Service Commission’s unanimous decision yesterday to grant FPL a $75 million-a-year rate hike, just a fraction of $1.2 billion the Juno Beach-based utility had sought.
Crist revamped the panel with two new appointments, Commissioners David Klement and Benjamin “Steve” Stevens,” late last year and appointed Chairwoman Nancy Argenziano and Nathan Skop in 2007. Crist’s appointments were intended to create a more consumer-friendly commission that in previous years when PSC votes were considered to lean more toward the utilities it regulates.
Asked if he had an impact on yesterday’s vote, Crist said: “It’s fairly obvious, isn’t it?”
The FPL decision came on the heels of a vote Monday in which the PSC denied Progress Energy Florida’s $500 million rate hike request and ordered them to repay $23 million in depreciation costs to consumers.
Crist last year effectively fired two commissioners by not reappointing them and the PSC delayed votes on the issues until the new commissioners took office this month.
Crist dismissed Florida Power & Light Co. President Armando Olivera’s assertion that the PSC vote will cost the state 20,000 new jobs from projects it is now putting on hold.
“Well we certainly don’t hope for that. I don’t think that’s going to be the case. I think that what happened is the Public Service Commission is an independent body that has a duty to perform their job. I think they did exactly that,” Crist said.
Florida Power & Light Co. President Armando Olivera said that utility regulators’ decision to grant the power company just $75 million of its requested $1 billion rate hike this year will cost the state 20,000 new jobs.
He accused the Public Service Commission of politicizing the proposed rate hike, eliciting this response from Commissioner Nathan Skop at the close of yesterday’s 11-hour proceedings.
“The commission’s worked hard to decide this case on the merits in a fair and impartial manner. We were very deliberate in the decisions that we made here today. The reality is that FPL is going to have to make do in difficult economic times,” Skop said. “I know that FPL today is a strong company and no doubt will be a strong company tomorrow. They have an ambitious capital program and will invest in Florida’s future and any suggestion that that should not be achievable would be a complete falsehood.”
The Public Service Commission granted Florida Power & Light a $75,470,948 annual rate hike - just a fraction of the $1 billion rate hike it sought for this year.
Based on a typical customer’s bill with 1,000 kilowatt hours of use, customers will pay 75 cents a month more than what they are now paying. That’s far less than the $8.85 the Juno Beach-based utility had sought.
“The reality is that FPL is going to have to make due in these tough difficult times,” Commissioner Nathan Skop said.
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.
The Public Service Commission dealt another blow to Florida Power & Light, this time unanimously rejecting a 12.5 percent return on equity sought in its $1.2 billion-a-year rate hike request.
The panel again went lower than their staff recommended, setting the return on equity - the amount of profit for shareholders - at 10 percent. PSC staff had recommended 10.75 percent.
FPL says it needs the higher return to allow it to borrow more cheaply to make investments in future projects.
But Commissioner Nathan Skop said this morning that the company already has other methods to recoup costs for construction and investment in power generation.
The commission has already slashed the staff’s recommended $357 million-a-year rate hike by more than half, cutting to nearly a tenth of what FPL had originally sought.
Commissioner Nathan Skop said the company could earn more than the 10 percent allowed if it “tightened its belt” elsewhere. The company also has very little risk because it is a geographic monopoly. And FPL also has a favorable debt-to-equity ratio, Skop said.
Finally, the bulk of what FPL charges its customers - more than 60 percent - come from other sources than the base rate, Skop said.
“Looking at that and looking at the current economic situation…utilities are just going to have to make due in these difficult economic times,” Skop said.
FPL says it needs the higher profit rate in part because the economy is continuing to deteriorate and it is getting more difficult to borrow money.
“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 just chopped off another $150 million from Florida Power & Light’s $1.2 billion rate hike request. So far, they’ve cut the staff’s recommendation on the utility’s rate request - $357 million - by more than half, leaving less than $160 million on the table.
The Public Service Commission split on the latest vote - how much customers should pay to let FPL save money in the event of a storm. They’ve already got $215 million in reserve in case of a catastrophic storm. And they’re collecting almost $2.60 a month from customers to pay for past storm damages.
FPL had asked for $150 million a year for five years for a total of about $650 million. PSC staff said they should get $50 million a year.
Commissioner David Klement, newly appointed by Gov. Charlie Crist, made a motion to reduce that to $25 million a year. That motion failed. Chairman Nancy Argenziano and Commissioners Nathan Skop and Benjamin “Steve” Stevens (also new to the panel) voted to grant the utility nothing.
“I’ve heard the voices of the consumers saying right now’s not the time to charge us for an unknown storm in the future. We can’t handle it right now. Current customers are still paying for the past storms. At a time when people can hardly pay their mortgages, I don’t think they can handle anymore. At this moment, my main concern…is that we alleviate what we can,” Argenziano said. “To say that we’re going to charge today for storms we don’t know are going to come to me is one I can take off the table right now and not have on the ratepayer.”
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.
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.
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.
A consumer-friendly former legislator with a reputation for bucking the system takes over as head of the panel that sets billions of dollars in utility rates, including a pending $1.2 billion Florida Power & Light Co. rate hike request, today.
Public Service Commissioner Nancy Argenziano will become chairwoman of the agency that will now bear the brand of Gov. Charlie Crist who selected four of the five members of the panel and reappointed one previously picked by his predecessor Jeb Bush.
Also new to the regulatory panel: Benjamin “Steve” Stevens, a Panhandle accountant and co-owner of a bar catering to the college crowd.
Stevens, Crist’s latest appointment, joins the PSC just a week before the regulators are set to make two important votes: the FPL rate increase and a $500 million Progress Energy Florida rate hike request.
Commissioner David Klement, a retired newspaperman who spent more than three decades as an editorial writer, joined the panel late in October.
Argenziano, a former legislator with a reputation as a feisty maverick unafraid of defying the status quo, has vowed to clean up the embattled agency blackened by allegations of improper communications and relationships between agency staff and representatives of the utilities they oversee.
The Florida Public Service Commission unanimously elected Nancy Argenziano as chairwoman today for a two-year term beginning Jan. 2, 2010.
Argenziano will be the head of the PSC when the panel votes on Florida Power & Light Co.’s proposed $1.2 billion rate hike shortly after she takes over.
The feisty Argenziano served in the legislature for more than a decade before Gov. Charlie Crist appointed her to the PSC in 2007.
“I appreciate the challenge and realize that the Chairmanship is purely an administrative charge. All PSC Commissioners are equal and independent appointees. Now, let’s get to work on the important decisions that lie ahead,” Argenziano said.
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.
Could Gov. Charlie Crist’s Public Service Commission appointee be trying to distance himself from the perception he’s actively involved in managing a bar where they offer “Free Beer Til Someone Pees” at “Bladder Bust” night every Tuesday? Where a flier reads, “Don’t Die Sober on Friday 13th”?
Caught at his home in Pensacola today, Benjamin “Steve” Stevens corrected a Post on Politics reporter’s question about Rick’s Cabana Nightclub to say he wasn’t a manager, he was a co-owner.
A little later, when Post on Politics asked a bartender at Rick’s for the manager, she asked, “Oh, Steve?” and dialed Stevens up.
Stevens continued to insist he was not the manager, saying that there was a day manager and a night manager and the day manager was out of town.
His main interest in the liquor store and lounge operations is the building itself, he implied.
“It’s a commercial real estate investment,” he said. “It’s being treated like that right now. Otherwise I’d be there 24/7.”
Stevens, 44, was Escambia County Sheriff’s Office chief financial officer until January, when newly-elected Sheriff David Morgan took office and brought a new management team in. According to his application papers for the PSC position, he hasn’t worked for anyone else since then.
His real estate/accounting office is across the street from the club and package store where a bar employee says he is a regular presence.
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.
Regulators voted unanimously to delay a decision on FPL’s rate hike, originally scheduled for Dec. 21, until Jan. 13.
Regulators rejected their staff’s recommendation that they vote on the rate hikes this year as originally planned to comply with state law.
Instead, they agreed to vote on the amount of FPL’s rate hike on Jan. 13 and Progress Energy’s on Jan. 11.
The votes on the breakdown of the rates among different classes of customers will come on Jan. 28 for Progress and Jan. 29 for FPL.
Crist asked the commission to defer the vote on FPL’s rate case and Progress Energy Florida’s proposed $500 million rate increase until after his two new panelists take office on Jan. 1.
One of Crist’s new commissioners, David Klement, got an early start at the PSC in time to participate in today’s crucial vote.
Klement, a former newspaper editorial writer, was sworn in on Friday to fill in for former Commissioner Katrina McMurrian, who quit her job earlier this month after Crist failed to reappoint her to a second term.
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