Former U.S. Sen. Mel Martinez, who left office last year before finishing out his first term, has joined the board of directors of the state’s second largest utility.

Martinez, 63, was elected to Raleigh, N.C.-based Progress Energy’s board earlier this month.

Progress Energy operates Progress Energy Florida, which provides power to nearly 2 million customers in the Tampa Bay area. State utility regulators recently turned down the utility’s $500 million rate hike request.

Not a bad part-time gig for Martinez. The annual pay for outside directors like him is $80,000 including $30,000 towards a deferred compensation plan, according to the company’s federal SEC filings.

Prior to his election to the U.S. Senate in 2005, Martinez was the mayor of Orange County and was on the Orlando Utilities Commission. He’s been lobbying as a partner with the law firm DLA Piper since leaving office last year.

Martinez’s early retirement set off a political cascade in Florida and paved the way for Gov. Charlie Crist to take his place.

Crist appointed his own former chief of staff George LeMieux as a place-holder to fill in for Martinez until the November election. Crist is running in a GOP primary for the seat against former House Speaker Marco Rubio.

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

FPL President Armando Olivera is at the meeting.

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

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

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

Public Service Commissioner Nancy Argenziano

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.

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

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

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

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

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

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

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

The refunds are normally spread out over one year.

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

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

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

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

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

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

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

Enough already.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Florida Power & Light Co. made a second multi-million dollar concession this morning in hopes of nailing down a $1.3 billion rate hike.

The state’s largest utility is scrapping about $37 million in executive pay from its proposed base rate increase, letting customers off the hook for the pay.

FPL already backed off $16 million in aviation costs this morning, lowering its $1.3 billion rate hike by about $53 million.

The company is challenging in court the PSC’s demand that the names of the 440 employees earning more than $165,000 per year be made public.

Read FPL attorney Susan Clarke’s statement at the hearing after the jump.
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Public Service Commission Chairman Matthew Carter wants everyone to leave him and his colleagues alone so they can get on with their jobs and has no plans to ask for an internal investigation into charges of possible conflicts of interest or bias against Commissioner Nancy Argenziano, he said today.

“Right now I plan on getting through this hearing,” Carter told reporters during a break in a nuclear cost recovery meeting now ongoing.

The panel is scheduled to vote later today on requests from Florida Power & Light Co. to charge customers $63 million for what the utility’s expenses on nuclear power plant construction and a similar $236 million request from Progress Energy Florida.

Yesterday, Associated Industries of Florida President Barney Bishop asked that PSC’s inspector general look into thousands of BlackBerry messages exchanged between Argenziano and her aide Larry Williams over the past two years. Bishop accused Argenziano of potentially breaking laws barring ex parte communications between regulators and the utilities and of breaking her oath of office in unflattering comments aimed at her colleagues.

Read about FPL’s link with AIF’s press release here.

AIF’s demand is yet another distraction for the panel also poised to vote on about $2 billion in base rate increases - $1.3 billion sought by FPL and $500 million by Progress.

Ten days ago, the panel turned down a $1.6 billion request from FPL to build a natural gas pipeline through 14 counties.

State Attorney Willie Meggs said recently that his investigators have found no evidence of criminal wrongdoing at the agency. And several internal investigations resulted in similar findings.
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State Rep. Carlos Lopez-Cantera joined the call for an internal investigation into BlackBerry messages sent by utility regulators.

Lopez-Cantera, R-Miami, serves on the Public Service Commission Nominating Council that selects who gets to serve on the regulatory panel. The governor makes the final picks.

“The PIN messages sent and received by Commissioner Nancy Argenziano and released by the PSC, coupled with their discussion of private emails so far unreleased and sent to non-public accounts in an attempt to evade public scrutiny, raise serious questions about Commissioner Argenziano’s impartiality and her ability to give a fair hearing to those appearing before her,” Lopez-Cantera wrote in a statement distributed to the media.

Earlier today, Associated Industries of Florida President Barney Bishop demanded the PSC’s inspector general check out Commissioner Nancy Argenziano’s BlackBerry PIN messages.

Bishop said Argenziano may have broken rules restricting communications between the regulators and the utilities and may have acted in a manner unbecoming a commissioner, a violation of her oath of office.

It’s no surprise that Lopez-Cantera has jumped on the Argeziano attack wagon.
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Here’s the latest installment in the seemingly perpetual Public Service Commission drama.

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

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

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

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

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

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

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

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

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

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

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

Gov. Charlie Crist will replace Katrina McMurrian, who abruptly resigned from the Public Service Commission this morning, to fill out the less than three months remaining in her term.

Crist effectively fired McMurrian and PSC Chairman Matthew Carter, both appointed by Gov. Jeb Bush in 2006, last week by refusing to reappoint them to the panel when their terms run out Dec. 31.

Crist’s general counsel Rob Wheeler asked the Public Service Nominating Council for a list of three recommendations to fill McMurrian’s place.

Wheeler asked the council’s lawyer Jay Vail to hurry up with the recommendations “so that there is no membership gap in representation on the Commission.”

There will be a membership gap beginning tomorrow, when the PSC - minus McMurrian, whose resignation was effective immediately - is scheduled to take a vote on a Florida Power & Light Co. proposed $1.5 billion, 300-mile natural gas pipeline.
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Public Service Commission lawyers are checking into whether Gov. Charlie Crist has any standing in asking for a temporary halt to two utility rate cases until his two new regulatory commissioners take over on Jan. 1.

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

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

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