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More PSC sniping as FPL pipeline decision nears

Tuesday, October 6th, 2009 by Dara Kam

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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Utility regulators to decide on delaying FPL $1.5 billion rate hike in 3 weeks

Tuesday, October 6th, 2009 by Dara Kam

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.

Crist to appoint 3 month stand-in to finish utility regulator’s term

Monday, October 5th, 2009 by Dara Kam

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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Crist may lack authority to halt FPL rate case

Friday, October 2nd, 2009 by Dara Kam

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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Crist asks utility regulators to hold off on FPL rate case

Friday, October 2nd, 2009 by Dara Kam

Gov. Charlie Crist is trying to put the brakes on two pending utility rate cases until his new appointees take office on Jan. 1.

Crist today asked the Public Service Commission to postpone any further hearings or decision on a proposed $1.3 billion Florida Power & Light rate hike and a $500 million Progress Energy Florida rate increase request.

Yesterday he named former newspaper editorial writer David Klement and Pensacola bar owner and accountant Benjamin “Steve” Stevens to the five-member panel that oversees the state’s public utilities.

The two will replace current PSC Chairman Matthew Carter and Commissioner Katrina McMurrian, whose terms end Dec. 31.

The PSC has been plagued by conflict of interest accusations for the past several months as the rate cases have progressed.

Crist cleans house at utility reg panel

Thursday, October 1st, 2009 by Dara Kam

Gov. Charlie Crist appointed two new utility regulators to the Public Service Commission, snubbing current Chairman Matthew Carter and Commissioner Katrina McMurrian.

Crist tapped former newspaperman David Klement and Escambia County Sheriff’s Office CFO Benjamin “Steve” Stevens and shaking up the status quo at the regulatory panel mired in controversy in the process of deciding on a proposed $1.3 billion Florida Power & Light Co. rate hike.

The ouster of McMurrian and Carter makes it likely that renegade Commissioner Nancy Argenziano, an outspoken critic of the PSC who accuses regulators of being too close to the utilities they oversee, will take over as chairwoman of the panel next year.

Crist put Argenziano, a former state senator, on the board two years ago to represent consumers and his picks today of two new commissioners who have no ties to utilities mark a decided shift from a PSC that has up until now been viewed as utility-friendly.

Crist to tap utility regulators before FPL rate hike vote

Tuesday, September 29th, 2009 by Dara Kam

Gov. Charlie Crist must appoint – or reappoint – two utility regulators to the Public Service Commission before the panel votes on a pending $1.3 billion Florida Power & Light Co. rate hike.

Crist said this morning he has been paying close attention to the scandal-plagued panel and will move forward with his picks, due to the Senate by the end of the week.

PSC Chairman Matthew Carter pushed back the FPL vote to Jan. 11 – ten days after his term and the term of Commissioner Katrina McMurrian ends.

“Intriguing, wasn’t it?” Crist said when asked about Carter’s decision, adding that it won’t impact the appointment process. “We still have the opportunity to make these selections. I still get to make the choice on behalf of the people of Florida.”
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NAACP jumps on the PSC critic bandwagon

Tuesday, September 29th, 2009 by Dara Kam

The Florida chapter of the nation’s largest civil rights organization is calling for a statewide panel to create a code of conduct for state officials, prompted by allegations of ethical improprieties at the Public Service Commission.

Florida NAACP president Adora Obi Nweze late yesterday evening asked state lawmakers, Attorney General Bill McCollum and Gov. Charlie Crist to convene an “Ethics and Transparency Task Force” to restore the public’s trust in government officials. Read Obi Nweze’s letter here.

The request comes after accusations of wrongdoing at the maligned PSC even as it is in the midst of considering nearly $2 billion in utility rate increases, including a proposed $1.3 billion Florida Power & Light Co. rate hike.

FPL officials last week told PSC Chairman Matthew Carter they would begin charging the first $900 million of the rate hike on Jan. 4 without the panel’s approval, as allowed by state law. They also promised to refund any difference in the rates after the panel’s vote on Jan. 11, also required by state law.
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Sink: FPL $900 million premature rate hike “outrageous”

Monday, September 28th, 2009 by Dara Kam

Chief Financial Officer Alex Sink weighed in on Florida Power & Light Co.’s plan to implement a $900 million base rate hike before state regulators vote on the proposed increase.

“I’m opposed to the FPL rate increase. And FPL’s attempt to implement the rate increase before the Public Service Commission makes a decision is simply unnecessary and outrageous,” Sink, a Democrat who is leaving office after one term to run for governor next year, told The Palm Beach Post today.

A lawyer for the state’s largest utility told PSC Chairman Matthew Carter last week that FPL would impose the rate hike on Jan. 4, as permitted by state law. The Juno Beach-based company would have to refund any difference in the rates after the PSC makes its final vote on the issue, scheduled for Jan. 11.

The decision comes after the terms of two commissioners – Carter and Katrina McMurrian – end. Gov. Charlie Crist threatened not to reappoint them if they vote in favor of the rate hike, raising fears in the investment community about a shift in Florida’s previously utility-friendly regulatory environment.

FPL’s rate hearing has dragged on far beyond its originally slated two weeks. The hearing, its first base rate request in more than two decades, has been bogged down in staff firings and suspensions, revelations about coziness between the regulators and the utilities they oversee and secret messages exchanged between PSC staff and FPL lawyer Natalie Smith.

Critics have also attacked FPL for proposing to use some of the $1.3 billion-a-year rate increase to purchase new planes for its air fleet now comprised of three fixed-wing aircraft and two helicopters.

And FPL is now fighting in court an order from the panel to make the salaries of its highest-paid executives and engineers public. FPL officials agreed to give the data to the panel but wanted it kept secret from the public.

FPL maintains that customers’ bills will go down $9 per month even with the rate hike because fuel charges will go down.

Company officials had this response to Sink’s comments:

“Floridians should not allow political grandstanding to create further uncertainty for customers and for FPL projects that will bring a lot of value to Floridians, now and in the future. Because of the delay that politics have caused, there are two paths forward here: a knee-jerk, short-sighted political response, which puts at risk thousands of construction jobs, hundreds of millions of dollars in new revenue for Florida communities and billions of dollars in capital investment at a time when all of this desperately needed; or a prudent, responsible and timely deliberation based on the facts and the merits of the case and its long-term impact,” FPL said in a statement.
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FPL to implement $900 million rate hike before PSC vote

Friday, September 25th, 2009 by Dara Kam

Florida Power & Light Co. plans to raise rates by more than $900 million beginning Jan. 4 without waiting for the Public Service Commission’s decision on whether to grant the requested increase, according to a letter from an FPL executive sent to the panel today.

Florida law allows the utility to implement the rate hike without the regulatory panel’s approval, but FPL would have to refund the difference to customers if the PSC authorizes a smaller increase. The regulatory board’s final decision is now scheduled for Jan. 11 because the rate case has run into overtime.

PSC Chairman Matthew Carter today refused to grant FPL’s requests from earlier this week to make a decision by Dec. 4.

Instead, the PSC will keep its schedule of finishing its hearing Oct. 21-23, voting Dec. 21 on the total amount FPL can collect and voting Jan. 11 on how that increase will affect different types of customers, such as homeowners and businesses.

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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.

Fired utility reg panel staffer reassigned to general counsel’s office

Thursday, September 17th, 2009 by Dara Kam

Public Service Commissioner Nancy Argenziano’s former aide Larry Harris is back at work at the utility regulatory agency in the general counsel’s office.

Argenziano fired Harris earlier this month for giving his secret BlackBerry personal identification number (PIN) to Florida Power & Light Co. attorney Natalie Smith.

The PINs allow BlackBerry users to exchange messages that can be impossible to trace.

Two other commissioners – including Chairman Matthew Carter – put their aides, who make at least $84,000 a year, on paid leave until investigations into the messaging mystery are resolved.

Carter also banned the use of the PINs or other types of communication that don’t leave a public record.

Harris was reassigned to the general counsel’s office as a senior attorney where he now earns $60,000 a year. The PSC’s general counsel Booter Imhof resigned Friday. He gave two weeks’ notice and said he is going back to work for the House of Representatives.

The PSC’s lobbyist Ryder Rudd resigned earlier this month after it was revealed that he attended a Kentucky Derby party at the Palm Beach Gardens home of FPL VP Ed Tancer. An internal investigation could not prove whether Rudd, who oversaw staff handling several FPL rate requests, broke state law or rules by going to the fete.

The musical chairs at the PSC takes place during a $1.3 billion proposed FPL rate hike hearing. Progress Energy Florida is also seeking a $500 million rate increase. That case is scheduled to resume next week.

Crist changes to utility regulation scaring investors, expert says

Wednesday, September 16th, 2009 by Dara Kam

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

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

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

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

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

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

“I think investors see this as a change in posture in Florida. The long tradition in Florida is one where the commission has been free to exercise its expertise in making decisions that it thinks serve the customers long term. When the political leaders insert their judgment, that’s the kind of thing that scares investors,” Avera said.
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Did Crist cross the line with PSC threat?

Wednesday, September 16th, 2009 by Dara Kam

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

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

Here’s an excerpt of today’s editorial:

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

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

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

Where are the BlackBerries?

Wednesday, September 16th, 2009 by Dara Kam

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

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

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

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

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

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

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

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

UPDATE: Utility regulatory panel sunshine not so transparent

Wednesday, September 16th, 2009 by Dara Kam

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

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

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

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

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

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

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

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

That’s a paradox, she wrote.

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

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

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.
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Utility regulators to consider plan to restore public trust

Monday, September 14th, 2009 by Dara Kam

The Public Service Commission tomorrow will discuss a proposal to require all communications between the regulatory panel and the utilities it oversees in writing.

The discussion comes amid a firestorm of criticism about commissioners’ aides swapping secret Blackberry codes with a Florida Power & Light Co. attorney that would allow them to communicate without creating a public record, even during hearings.

Commissioner Nancy Argenziano fired her aide for giving his Blackberry personal identification number – PIN – to FPL lawyer Natalie Smith and two other commissioners, including Chairman Matthew Carter, suspended theirs with pay for doing the same thing.

PSC Commissioner Katrina McMurrian

PSC Commissioner Katrina McMurrian

Commissioner Katrina McMurrian, who is not involved in the secret message melee, late Friday issued a proposal “to restore the public trust” as controversies involving the agency continue to make daily headlines.

Discussion of her proposal was added late this evening to the panel’s internal affairs agenda slated for tomorrow.

McMurrian is the target of a different conflict-of-interest criticism. An intervenor in FPL’s proposed $1.3 billion base rate hike case asked that she be disqualified from voting because she had hobnobbed with FPL executives during a conference in New York earlier this year.

FPL rate hike hearing to go on, regulators decide

Monday, September 14th, 2009 by Dara Kam

Florida Power & Light’s proposed $1.3 billion rate hike hearing will resume Wednesday as planned despite a powerful GOP senator’s request that that case and another be put on hold.

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

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

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

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

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

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

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Utility panel chairman: No one should tell us how to vote

Monday, September 14th, 2009 by Dara Kam

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

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

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

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

The FPL rate hearing is scheduled to resume on Wednesday.

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

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

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

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