FPL head says cozy relationships with PSC were 'embarrassing'
Florida Power & Light chief Armando Olivera said Thursday that he was embarrassed to learn that his top officials sent personal Blackberry messages and socialized with staff at the Public Service Commission, tarnishing the company's image as it awaits a ruling on its $1.3 billion rate increase request.
"I was embarrassed by the appearance of impropriety," Olivera told the Miami Herald editorial board on Thursday. "I think it undermines the public's trust."
Olivera said the company is mounting a campaign to "tell our story'' and "build public confidence'' before the PSC's decision in January.
FPL has asked the PSC, which regulates utilities, to approve a 30 percent increase in customers' base rates beginning next year. The increase would pay for modernizing FPL's existing oil-fired power plants, developing new nuclear power generators, strengthening power lines and expanding the company's transmission grid, Olivera said.
The increase will cost the average residential customer $8.85 more per month in 2010 and another $2.71 in 2011, he said.
But if the PSC rejects the company's request, he warned, some improvement projects already approved by regulators will have to be put on hold, and layoffs may be inevitable."We can't spend money that we don't have, so we absolutely have to, at minimum, slow down," he said. "We will have to shut down some of the projects we currently have been developing and that also will mean loss of jobs."
Opponents of the rate increase, such as the attorney general, the state's consumer advocate, the Florida Retail Federation and the Florida Industrial Power Users Group, have urged regulators to reject the hike, arguing that the company has sufficient revenues and cash flow to complete its projects without raising the cost to consumers.
Gov. Charlie Crist and Chief Financial Officer Alex Sink have also said that because of the declining economy, they do not believe the PSC should grant FPL a rate increase.
Olivera took responsibility for failing to do a better job explaining to the public the need for the rate increase. He said the effort has been overshadowed by revelations that the company's senior staff members exchanged Blackberry PIN messages with PSC commissioners and their staff, and a PSC lobbyist attended a private party at the home of an FPL vice president. Blackberrys have PINs -- or personal identification numbers -- that allow private texting.
"I did not know they were doing PIN-ing back and forth because obviously it is a way not to have anything on the record," Olivera said, adding the incident undermines the company's attempt to provide the public with "transparency in everything we do."
Two PSC staff members were put on paid leave and one resigned as a result of Miami Herald/St. Petersburg Times reports about the communication. But the Florida Department of Law Enforcement and the PSC inspector general concluded no laws had been broken.
Olivera said he asked former Attorney General Bob Butterworth to review company practices and advise him how to improve the company's image.
He said Butterworth is helping the company decide "how do we rebuild some trust with the public in particular and make sure they're getting a fair shake and the utility is getting a fair shake."
Olivera said that he is open to settling the rate case but believes that in the current ‘‘heated'' environment, that is unlikely.
"I would have loved to have had a settlement," he said, noting that settlements of two previous rate cases were beneficial to both the company and customers. "There's just been a lot less willingness because it has become so politicized and, quite frankly, I think people are afraid that any settlement that is signed will be criticized."
Rick McAllister, director of the Florida Retail Federation, and Public Counsel J.R. Kelly, the lawyer who represents the public in rate cases, each said they have not been approached by FPL to settle to the case.
"If they'd love one so much, why haven't they offered one?" McAllister asked.
Olivera attended the meeting with Eric Silagy, vice president for development, and Tim Fitzpatrick, vice president of corporate communications.