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Scott reappoints Lisa Edgar to Public Service Commission

Friday, September 21st, 2012 by Dara Kam

Gov. Rick Scott has selected Public Service Commissioner Lisa Edgar, the longest-serving member on the panel, from a short list of four nominees to serve another four-year term, Scott announced in a press release tonight. The appointment is subject to Florida Senate confirmation.

“I am grateful for the governor’s confidence and I am excited about working with my collegues on behalf of Florida’s ratepayers and Florida’s future,” Edgar said.

Edgar, 49, has served on the commission since 2005. Gov. Jeb Bush first appointed her to the $130,000-a-year job. She was reappointed by Gov. Charlie Crist.

“During her eight years on the Public Service Commission, Lisa has demonstrated the ability to review complex issues and show fairness in considering those issues,” Scott said in a statement. “I am confident her experience will allow her to continue to be an effective commissioner.”

Edgar weathered a PSC dust-up involving BlackBerry messages exposed during a proposed Florida Power & Light rate hike in 2009. Edgar was cleared of wrongdoing by the Florida Commission on Ethics after in investigation into whether she broke state law by communicating through her aide with a Florida Power & Light Co. executive during a hearing. The ethics panel found no probable cause that Edgar violated state ethics laws.

PSC critic Sen. Mike Fasano, a New Port Richey Republican running for the state House, urged Scott to reject Edgar, saying she represented the “old guard” with ties too close to the utility industry.

Utility regulators scrutinize energy giants’ nuclear energy plans

Wednesday, August 10th, 2011 by Dara Kam

In the wake of Japan’s Fukushima nuclear plant disaster, utility regulators will again start looking into an expansion of nuclear power in Florida and decide how much of the bill will be shouldered by rate payers.

Florida Power & Light and Progress Energy are asking the Public Service Commission to sign on off their proposals to pass off about $355 million in nuclear energy-related costs to residents and businesses. The money would go to upgrade existing power plants, including one in St. Lucie County, and two cover the costs of new nuclear reactors that may not begin operating for at least another decade.

Hearings on the nuclear cost recovery plans are scheduled to begin this morning at 9:30 a.m in Tallahassee and can be viewed live on the internet at www.floridapsc.com or The Florida Channel’s website at www.thefloridachannel.org. The meeting will begin with a discussion of which documents will remain secret.

Juno Beach-based FPL is asking for about $196 million next year to help upgrade nuclear plants in St. Lucie and Miami-Dade counties and to move forward on a plan to build two new reactors at the Miami-Dade site known as “Turkey Point.”

The energy companies and many state lawmakers the expansion of nuclear power is necessary to wean the state off fossil fuels and to save money for customers.

But attorneys for large businesses, consumers and environmental groups question the methodology the energy companies are using and whether customers will actually benefit in the long run.

The state Office of Public Counsel, which represents consumers, argues that FPL’s decisions to “fast track” the new reactors led to inflated costs – an argument FPL disputes.

If approved, FPL’s request would result in a $2.09 increase next year for residential customers, based on 1,000 kilowatt hours of electricity usage.

- The News Service of Florida contributed to this story.

Where’s the public records link on Public Service Commission site?

Friday, February 25th, 2011 by Dara Kam

Sen. Mike Fasano is demanding that a public records link be reinstalled on the Public Service Commission Web site.

The link disappeared after new chairman Art Graham took over the regulatory panel in January.

Fasano, a harsh critic of the PSC for years, wrote Graham a letter asking that the link to the public records requests and the agency’s responses go back online.

“Given the systemic problems over the past few years regarding the demonstrated lack of access to public records, the wrongful denial and unacceptable delays in providing such public records, and the questionable conduct of some who have served on the commission, this is not the time to remove the general public’s access to commission records,” Fasano, R-New Port Richey, wrote.

The PSC was embroiled in a BlackBerry scandal two years ago involving messages exchanged between the PSC and an FPL attorney that sparked a myriad of ethics complaints and an investigation that found no laws were broken.

T

Argenziano quits utility reg panel, endorses Sink

Tuesday, October 12th, 2010 by Dara Kam

Nancy Argenziano resigned from the Florida Public Service Commission to endorse Alex Sink for governor, she told reporters this afternoon.

The life-long Republican and former lawmaker said today would be her final day on the utility regulatory panel, where she was appointed by Gov. Charlie Crist nearly four years ago.

A fired-up Argenziano, an outspoken critic of GOP leaders of the Florida Legislature, said she was quitting so she could speak out in favor of Sink, a Democrat.

“I cannot imagine a more noxious mix of government than that which the legislative leaders and Rick Scott concoction would produce,” Argenziano said. “I’m terrified if Rick Scott became governor…With Alex Sink, I do believe she has integrity.

Argenziano was passed over for reappointment by a panel of lawmakers that give a list of candidates to the governor for appointment. Her term would have ended in three months.

Crist taps two new utility regulators

Tuesday, September 21st, 2010 by Dara Kam

Gov. Charlie Crist selected two new utility regulators, including West Palm Beach assistant city administrator Eduardo Balbis, to fill upcoming vacancies on the Public Service Commission.

Crist also tapped Julie I. Brown, a former city attorney for Tampa.

Balbis, 38, is an environmental engineer who has worked for West Palm Beach since 2008. He’s also a member of the Treasure Coast Regional Planning council and serves as chairman of the East Central Regional Water Reclamation Facility Board.

Brown, 35, is associate legal counsel for First American Corporation and also is the sole owner of J.T. Swann Realty Inc.

The new commissioners will fill the seats of current PSC Chairwoman Nancy Argenziano, a former state senator, and Nathan Skop, an engineer, attorney and MBA. Skop and Argenziano, whose terms expire in January, were outspoken critics of the PSC and were not among the candidates selected by the PSC Nominating Council for reappointment.

Crist passed over Sen. Lee Constantine, R-Altamonte Springs, who led the PSC Nominating Council until he resigned to apply for one of the PSC posts, and former PSC Executive Director Mary Bane.

Bane was in charge during a PSC scandal involving staffers sending secret BlackBerry messages to utility employees during rate increase hearings last fall.

The Senate must confirm Crist’s new hires. Last year, they refused to confirm two of his picks – Benjamin “Steve” Stevens, a Panhandle bar owner and accountant and David Klement, a newspaper editorial writer.

Senate Prez-to-be hires former utilities regulator

Wednesday, September 1st, 2010 by Dara Kam

Matt Carter, the former chairman of the Public Service Commission, is now the staff director for the Senate Communications, Energy and Public Utilities Committee.

Carter’s taken the place of Diana Caldwell, who was let go last month by Senate President-elect Mike Haridopolos. Haridopolos, R-Melbourne, and his newly appointed chief of staff and general counsel Steve MacNamara are making a clean sweep of high-paid staff whom Haridopolos accused of behaving like “the 41st senator” and having too much influence over public policy.

Carter chaired the regulatory panel during a bleak period marked by investigations into secret BlackBerry messages swapped between utility lobbyists and PSC staff and revelations that the PSC’s own lobbyist partied at the home of a Florida Power & Light executive during a Kentucky Derby fete. Carter, who was not involved in the BlackBerry message investigations, put an end to the use of the electronic devices.

Carter’s term ran out in December and he was not reappointed by Gov. Charlie Crist.

UPDATE:Senate sends Crist’s Public Service Commissioners packing

Tuesday, April 27th, 2010 by Dara Kam

UPDATE: Read Commissioner David Klement’s response saying “this whole process is a farce” after the jump.

The Florida Senate refused to confirm two of Gov. Charlie Crist’s utility regulators after a heated debate on the Senate floor this afternoon.

The Senate’s action means the two will not fill out the remainder of their Public Service Commission terms, unlike other gubernatorial appointees, and came in the shadow of Crist’s veto of GOP-backed SB 6, the controversial teacher merit pay plan.

Lawmakers will have 30 days to meet and provide another list of three names for each PSC slot and give them to Crist, who makes the final selection.

Opponents of Benjamin “Steve” Stevens, a Panhandle accountant and co-owner of a bar, and David Klement, a former newspaper editorial writer, said the two are not qualifed to serve on the commission that sets billions of dollars in utility rates.

(more…)

Guv’s utility regulators could be sent home

Tuesday, April 20th, 2010 by Dara Kam

GOP Senate leaders refused to sign off on two of Gov. Charlie Crist’s appointees to the Public Service Commission and the likelihood of the pair getting confirmation from the Senate required for them to stay on the job is dim.

Committee chairman J.D. Alexander, who is also the Senate’s powerful budget chief and has long been at odds with Crist, abruptly called an end to the meeting this morning with three minutes left on the clock as the panel was in the midst of interrogating Commissioner David Klement.

That drew the wrath of Sen. Mike Fasano, a Crist supporter who has been a vocal critic of the PSC but praised Crist’s latest appointees. An irate Fasano, R-New Port Richey, said Alexander was “rude” and “inappropriate” to cut off the meeting before voting on the appointees.

Alexander denied that the failure to confirm Crist’s appointees was political retribution against Crist, who alienated GOP leaders with his veto of SB 6 and increasing speculation that he is going to break away from the Republican Party and run as independent in the U.S. Senate race against primary opponent Marco Rubio.

Alexander’s committee isn’t scheduled to meet again before the session ends on April 30, and the budget chief doesn’t appear interested in keeping Crist’s picks on the panel.

He said that Klement, a former editorial writer, and Benjamin “Steve” Stevens, a Panhandle bar owner and accountant, are unqualified to regulate billions of dollars in utility rate because they lack financial expertise.

The committee unanimously approved nearly four dozen other gubernatorial appointees before taking up the PSC appointments but left Klement and Stevens for last.

“I think we need more time to consider whether these folks are qualified. I don’t think these folks are qualified,” Alexander, R-Lake Wales, said.

Senate signs off on Crist PSC picks – for now

Wednesday, April 14th, 2010 by Dara Kam

The Senate Communications, Energy and Public Utilities Committee gave a preliminary nod to Gov. Charlie Crist’s two latest picks for the Public Service Commission, David Klement and Benjamin “Steve” Stevens.

But, judging from the questions and comments at this morning’s hearings, the new utility regulators who helped kill two proposed rate hikes – including Florida Power & Light Co.’s requested $1.2 billion increase – have a ways to go.

“This is the first step in a very long process,” said chairman Alex Diaz de la Portilla, R-Miami.

The committee gave the pair a preliminary nod with an 8-1 vote. Sen. Chris Smith, a black Democrat from Ft. Lauderdale, voted against the appointees because, he said, there are no minorities on the panel.

Sens. Mike Haridopolos and Joe Negron peppered the pair with questions that mirrored the investor-owned utilities dissatisfaction with the regulators that turned down nearly $2 billion in proposed rate increases since they joined the panel this year.

Negron asked Stevens, a Pensacola bar owner and accountant, about the regulator’s statements during a January hearing in which Stevens said he would oppose a rate increase in the future.

Negron, a Republican lawyer from Stuart, wanted to know if Stevens has already made up his mind about future votes.

“I’m not predisposed. I’m open-minded but I do recognize that I’ve got technical guys here, technical guys there and they’re very smart and we have to make a decision,” Stevens said.

Haridopolos was even more pointed. He said that the PSC’s refusal to grant the rate hikes has made it harder and more expensive for the utilities to borrow money.

Haridopolos also grilled both regulators on whether they feel pressure from Crist to vote a certain way after Crist threatened to fire any commissioners who supported the rate hikes.

“We expect you to call balls and strikes. And we expect not to hear about the legislature should do this or that. We expect you to do your job. We move away from the obvious politics that are being played,” Haridopolos, R-Indialantic, said. Lawmakers want commissioners “who don’t care what the governor thinks, don’t care what the legislature thinks, and look at the long term view,” he went on.

“I will take the long-term view,” Stevens assured him.

The Senate Ethics and Elections Committee must vote on the appointees before a full Senate vote.

Senate committee grills PSC appointees as governor watches

Wednesday, April 14th, 2010 by Dara Kam
Gov. Charlie Crist waits to ask a state Senate panel to approve his appointees to the Public Service Commission. Michael C. Bender/The Palm Beach Post

Gov. Charlie Crist waits to ask a state Senate panel to approve his appointees to the Public Service Commission. Michael C. Bender/The Palm Beach Post

Gov. Charlie Crist cooled his heels for more than an hour as the Senate Communications, Energy and Public Utilities Committee grilled his two Public Service Commission appointees, Steve Stevens and David Klement, but left before the committee took a final vote.

Crist left shortly before 11 a.m. (Lt. Gov. Jeff Kottkamp took his place) to attend a bill signing after being kept on ice by committee chairman Alex Diaz de la Portilla who took up two other bills before getting to the appointment confirmations.

The full Senate must approve the appointments once the committee signs off on them, if they do.

“Both of these men are men of great integrity,” Crist told the committee before the interrogations began. “That’s why I chose to appoint them from the pool that was given to me from you. I believe the Public Service Commission is a great panel. It can do very good work., and I know that these two men are dedicated to doing this. That’s all I wanted to say.”

But that wasn’t enough for Sen. Chris Smith, a black Democrat from Ft. Lauderdale who has raised concern in the past about the lack of diversity on the panel.

(more…)

Senate passes Public Service ethics bill

Wednesday, March 3rd, 2010 by Dara Kam

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.

Senate considers utility regulatory changes

Tuesday, March 2nd, 2010 by Dara Kam

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.

Crist goes to bat for consumer advocate JR Kelly

Wednesday, February 10th, 2010 by Dara Kam

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.

PBC Commish Koons wanted FPL rate hike

Thursday, January 14th, 2010 by Dara Kam

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.

FPL vote a win for the consumer, Crist says

Thursday, January 14th, 2010 by Dara Kam

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.

FPL will halt all projects that could have created 20,000 jobs

Thursday, January 14th, 2010 by Dara Kam

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.”

Read the full story here.

FPL gets just $75 million rate hike out of $1 billion request

Wednesday, January 13th, 2010 by Dara Kam

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.

FPL prez: ‘Politics trumped economics’

Wednesday, January 13th, 2010 by Dara Kam

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.

Utility regulators reject FPL profit-making request

Wednesday, January 13th, 2010 by Dara Kam

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.

Another $150 million lopped off FPL’s $1.2 billion rate hike request

Wednesday, January 13th, 2010 by Dara Kam

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.”

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