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Nathan Skop’

Utility regulator blasts FPL $1.2 billion rate hike request

Wednesday, January 13th, 2010 by Dara Kam

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 skip workshop on cleaning up their agency

Tuesday, November 24th, 2009 by Dara Kam

Three of the five Public Service Commissioners were absent today at a public discussion of how to clean up their beleaguered regulatory panel.

And one of the two who did bother to attend won’t be on the panel much longer – Chairman Matthew Carter’s term is up on Dec. 31 and Gov. Charlie Crist didn’t reappoint him.

Carter scheduled the staff workshop for today – two days before Thanksgiving because the PSC has a busy schedule and it’s a work week like any other, he said.


Utility regulators deal blow to FPL

Tuesday, November 3rd, 2009 by Dara Kam

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.


FPL $1.5 billion pipeline hearing advances

Tuesday, October 6th, 2009 by Dara Kam

After a lengthy discussion this morning, the Public Service Commission decided to move forward with a vote on Florida Power & Light Co.’s proposed $1.5 billion natural gas pipeline.

The state’s largest natural gas distributor, Florida Gas Transmission Co. LLC, asked that the case be terminated because of allegations of coziness between FPL and PSC staff. FGT wants to be the one to build the state’s third natural gas pipeline.

The PSC denied FGT’s motion but only after a review of an internal investigation into whether the staff was pressured into recommending that FGT’s request be turned down.

Adding to the confusion, the staff analysis recommended both approval and denial of the proposed FPL pipeline.

Commissioner Nathan Skop said he asked for an inspector general investigation into the matter because some PSC aides had complained to him that they were being “railroaded” into coming down on a particular side of the issue.

“Some staff said the discussions among staff in this case were unnecessarily hostile. One said, while conceding that arguments among staff are common, in this case SGA staff seemed to be trying to ‘censor’ views that differed from theirs and that the forceful tone of their argument was unprecedented,” Inspector General Stephen Stolting wrote in his Sept. 16 report.

The PSC’s director of the Office of Strategic Analysis and Government Affairs (SGA) Ryder Rudd abruptly resigned during the midst of the pipeline discussions on Sept. 7 after an internal investigation into his attendance at FPL VP Ed Tancer’s Kentucky Derby party.

“It is clear that the development of the staff recommendation in this docket was contentious and difficult,” Stolting concluded. “However, we found no basis to question the motivation of SGA staff or to support allegations of bias. Based on this conclusion, no recommendation is offered.”

Skop said Stolting’s report “watered down” some of the staff’s concerns but that it helped to balance the recommendations and that, without it, the alternative recommendation to deny the pipeline would not have been included.

“I don’t care how you want to cut it…that wasn’t going to happen. The likelihood was not promising,” Skop said.

FPL rate hearing adjourns after 13 hours

Thursday, September 17th, 2009 by Dara Kam

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.

Argenziano: The people think we suck!

Tuesday, September 15th, 2009 by Dara Kam

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.

Bob Butterworth or Rod Smith headed to PSC?

Tuesday, September 15th, 2009 by Dara Kam

There’s a job opening at the Public Service Commission since general counsel Booter Imhof quit on Friday while the regulatory panel is mired in controversy.

Commissioner Lisa Edgar proposed two well-known Democratic politicians to step in for Imhof: former Attorney General Bob Butterworth, who also served as Department of Children and Families chief under Gov. Charlie Crist, and former state Sen. Rod Smith, who ran a losing battle in the Democratic primary for governor in 2006.

“It’s time to untangle the spaghetti bowl in which we find ourselves,” said Edgar.

“The question is why would they want to come into the spaghetti bowl?” questioned Commissioner Nathan Skop.

Commissioner Nancy Argenziano suggested former statewide prosecutor Melanie Hines.

Whoever the commission picks, Chairman Matthew Carter repeatedly laid down the law in one regard.
“I want them to agree not to come before us for at least five years in any capacity representing any party. I can’t go for that,” said Carter.

Carter said he’d prefer to have the prospective general counsel promise to never come before the panel, but backed away from that.

“If we’re dealing with a perception problem, then certainly we need to make sure we don’t add to it. The best thing to do when you’re in a hole is to stop digging,” he said.

PSC staffer used “poor judgment” at PBC Kentucky Derby party

Wednesday, September 2nd, 2009 by Dara Kam

A Public Service Commission staffer used “poor judgment” but an internal investigation did not conclude that he broke the law by attending a Kentucky Derby party at the home of a utility company executive.

But at least one PSC commissioner, Nathan Skop, demanded that PSC Office of Strategic Analysis and Government Affairs Ryder Rudd resign anyway.

Rudd went to a party at the Palm Beach Gardens home of Florida Power & Light Co. general counsel and VP Ed Tancer. Rudd oversees a staff of 28, some of whom are working on two FPL cases – a proposed rate hike and a natural gas pipeline.

The panel learned on the first day of the rate hearing last Monday of Rudd’s attendance at the party. Rudd had called several members of the panel over the weekend. He was removed from the FPL cases while the agency’s inspector general conducted an investigation, the results of which were released today.

Meanwhile, Florida Department of Law Enforcement officials are looking into a complaint, spokeswoman Heather Smith said. But she said the agency was not conducting a formal investigation.

FPL rate hearing can go on

Monday, August 24th, 2009 by Dara Kam

A rate hearing to consider Florida Power and Light’s proposed $1.5 billion-a-year rate hike will continue, the panel overseeing the state’s utilities ruled.

The Public Service Commission hearing came to an abrupt halt earlier this morning when Commissioner Nathan Skop revealed that commission staffer Ryder Rudd had attended a Kentucky Derby party at the home of an FPL executive in Palm Beach County.

Skop asked that Rudd, who earns $92,000 a year, be removed from the case and other pending FPL dockets, including a $1.6 billion proposed natural gas pipeline.

Rudd had oversight of more than $4 billion in FPL cases pending before the panel, Skop objected. Skop also asked for Rudd’s resignation and questioned whether the current rate hike case should be dismissed.

PSC Chairman Matthew Carter ordered a recess and asked general counsel Patrick Imhof for advice on how to proceed.

Imhof told the panel that this morning’s rate hearing should continue but Rudd, who was never identified by name, should be taken off the case.

“Our recommendation is to remove the person in question from all FPL dockets pending review by the inspector general and review with the office of the general counsel,” Imhof said. But, he added: “There is no impediment to the rate case moving forward at this time.”

Carter ordered a lunch break so the commission, staff and lawyers representing the utility and consumers could have a “fresh start.”

The hearing is scheduled to begin again at 1 p.m.

PBC Kentucky Derby fete puts brakes on FPL rate hearing

Monday, August 24th, 2009 by Dara Kam

Palm Beachers love parties and a horse race is as good an excuse as any to host one for the county’s elite.

But the Kentucky Derby party at FPL vice president Ed Tancer’s Palm Beach Gardens home in the gated San Michele community has a Public Service Comission staffer in hot water.

PSC governmental affairs director Ryder Rudd and his wife attended the fete at Tancer’s home although Rudd is involved in hearings about FPL’s proposed natural gas pipeline.

PSC Commissioner Nathan Skop interrupted an FPL rate hearing this morning asking that Rudd be removed from the case and also asking for the employee to resign.

Rudd told Skop and PSC Commissioner Nancy Argenziano about the party over the weekend and tried to reach Commissioner Katrina McMurrian, the commissioners said.

McMurrian said she did not listen to his voice message left on her cell phone.

PSC Chairman Matthew Carter said Rudd did not contact him and was taken aback by Skop’s revelations.

Tancer, 46, is a vice-president and general counsel for the utility.

FPL is asking for a $1.3 billion-a-year rate hike for its 4.5 million Florida customers. The rate hearing is scheduled to last two weeks, but Skop suggested that he may ask that the case be dismissed because of Rudd’s possible misconduct.

The rate hearing is now in recess until the commissioners figure out what to do. They may hold an emergency hearing to decide on Rudd’s fate.

PSC employee possible misconduct halts FPL rate hearing

Monday, August 24th, 2009 by Dara Kam

A Public Service Commission executive staffer and his wife went to a party at a Florida Power and Light executive’s home this summer, possibly breaking rules.

The revelation brought an FPL rate hearing to a screeching halt before it began early this morning at PSC headquarters in Tallahassee.

As the rate hearing began, Commissioner Nathan Skop asked that PSC Director of Strategic Analysis and Governmental Affairs Ryder Rudd be removed from the case because he had attended the party while taking part in the $1 billion rate hike request.

Skop’s request took PSC Chairman Matthew Carter by surprise although Rudd apparently called Skop and Commissioner Nancy Argenziano over the weekend to give them a heads-up about the possible ethical lapse.

“I’m caught flat-footed,” said Carter, before ordering a recess.

Skop asked that Rudd, who has direct oversight of more than $4 billion in cases including a proposed natural gas pipeline pending before the commission, be taken off the FPL case and resign.

“Such inexcusable conduct undermines the public trust and confidence in the regulatory process and impugns the integrity of this commission,” Skop argued. “I cannot condone that conduct, the commission cannot condone that conduct.”

Skop, appointed to the PSC by Gov. Charlie Crist in 2007, is a former Palm Beach Gardens resident.

“I’ve got to tell you this is all new to me. It’s new to me,” said Chairman Carter. “If I had known that over the weekend I certainly would have called all the commissioners together for an emergency meeting pending this hearing.”

A room full of lawyers representing FPL and consumer groups is waiting to see if the hearing, scheduled for two weeks, will continue.

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