Payback legislation against Florida PSC by electric utilities may come back to bite industry
UPDATE: This original posting indicated two chairmen of the House Energy & Utility Policy Committee and, indeed, the committee's own Web site still indicates co-chairs. However, there is only one chairman of the committee now, and this posting now reflects that correction.
Wake up and good morning. When the Florida Public Service Commission spoiled the electric utility party by denying major rate increases for Miami's Florida Power & Light and St. Petersburg's Progress Energy Florida, we figured it would be only a matter of time until the backlash began. Wall Street analysts and credit rating agencies already zinged the electric utilities for disappointing investors by failing to ram through the anticipated rate hikes early this year.
Wall Street, you see, had grown accustomed to Florida regulators' long history of kissing the ring of whatever electric utilities wanted, and this sudden sign of a PSC backbone was disturbing.
Then came legislation, cowardly introduced anonymously in Tallahassee, that seeks to gut the Florida PSC and give control of more utility rate decision to the state legislature -- a group that only too well enjoys the political contributions of the power industry. Read St. Petersburg Times columnist Howard Troxler's piece last week about the introduction of this "wicked" legislation and weep over the excessive power the electric utilities exercises over lawmaking in this state.
If we can't identify who introduced this legislative measure, we can at least show you who chairs the House Energy & Utility Policy Committee. That would be Stephen Precourt (photo, right), R-Orlando. He may be a good place to start asking questions.
For example, the measure requires a college degree of anyone appointed to the Public Service Commission, which is a transparent maneuver -- or "payback chicanery" according to the Tallahassee Democrat newspaper -- aimed at getting the PSC's tenacious Nancy Argenziano (no friend of utilities) off the independent regulatory board. Apparently it is okay to run for governor of the state without a college degree, but this legislation demands a college degree for a PSC bureaucrat. Go figure.
To his credit, Gov. Charlie Crist promised to veto the legislation, calling it a "gross power grab." Here's the story.
Meantime, Progress Energy Florida has come back at the PSC with a few complaints on the original rate denial. On Friday, Progress Energy Florida filed a motion for reconsideration seeking to correct what it calls "mathematical errors"in a March 5th order involving the calculation of depreciation expense, accumulated depreciation reserve, and as a result, revenue requirements. That's utility-talk that means Progress Energy thinks it should be allowed $36 million more in revenues that the $132 million the PSC approved and that became effective in July 2009 for repowering its "Bartow" plant when it was switched from oil to natural gas.
Also, Progress Energy Florida petitioned the PSC to adjust its order affecting depreciation accounting. The company's proposal, Progress Energy said, "makes it more likely" the Florida electric utility could earn its authorized 10.5 percent return on equity set by the PSC in the March 5th order. Here is the SEC filing outlining these two latest Progress Energy Florida proposals.
The anonymously introduced legislation to smack down the PSC may come back to haunt the electric utilities. They want to be able to raise rates in order to help pre-pay the costs of building hugely expensive nuclear power plants -- Progress Energy Florida's in Levy County (see rendering, left) and Florida Power & Light's in South Florida. That empowerment, generously approved by state legislators in the past, may not sit well with Floridians increasingly annoyed by imperious, backroom tactics by an electricity industry long accustomed to getting its way in Florida.
-- Robert Trigaux, Times Business Columnist