Animosity lingers over how FPL rate deal went down

Animosity continued to fester Monday over regulators' approval of a $350 million rate increase for customers of Florida's largest utility, a deal that critics say bypassed the state's top consumer advocate.

Florida Power & Light, which serves much of South Florida, defended the deal reached with the Public Service Commission, saying state public counsel J.R. Kelly was given the opportunity to discuss the utility's rate proposal, but he declined.

"The president of our company tried to sit down with J.R. Kelly and he refused," FPL spokesman Mark Bubriski told the Tampa Bay Times on Monday.

Kelly, who represents consumers before the PSC, said he is always willing to meet with the parties involved in utility rate cases and denied ever refusing to discuss the matter. FPL ultimately handed him a settlement agreement and said "sign this or else," he said.

The notion that FPL gave him an opportunity to meet and negotiate "is a flat-out lie," Kelly said. "I have never refused to sit down with anybody."

On Thursday, the PSC approved a base rate increase for FPL's more than 4 million customers, totalling $350 million. But customer bills will run about 37 cents per 1,000 kilowatt hours of usage lower beginning Jan. 1 due, in part, to reductions in the volatile fuel rate.

FPL customers currently pay $94.62 per 1,000 kilowatt hours of usage. Their rate drops to $94.25 for 2013 — the lowest among the state's three largest investor owned utilities.

Progress Energy rates will be the highest among the three at $116.06, followed by Tampa Electric at $102.58. Lower natural gas prices have helped lower the rates for all three utilities.

Despite the lower overall rate, Kelly says FPL customers have little to celebrate.

Any increase in natural gas prices — combined with the $350 million increase in the base rate — could cause a spike in monthly bills. Kelly said he had hoped to negotiate a better agreement, but FPL took the unprecedented step of entering a settlement agreement with large power users while excluding his office.

The big power users, including the Florida Industrial Power Users Group and the South Florida Hospital and Healthcare Association, opposed FPL's initial rate proposal.

They dropped their opposition after FPL, among other things, agreed to allow them millions of dollars in credits.

Those credits are another source of contention.

Kelly says his office calculated that the companies would realize a total of about $50 million in credits.

Bubriski says the number is $20 million, as indicated in documents he sent to the Times. FPL worked hard to ensure that all of its customers received some benefits, which shows in the lower overall rate rather than simply looking at the $350 million base rate increase, he said.

FPL's initial agreement with the big power users prompted Kelly to file a lawsuit with the state Supreme Court to block the PSC from considering the agreement. He argued that the commission should not be allowed to consider any agreement without the state-designated consumer advocate. The court sent the case to the First District Court of Appeal, which denied Kelly's petition without explanation.

On Thursday, the PSC agreed to the rate increase, at a lower level than that first proposed by FPL.

The decision prompted AARP and some state lawmakers to criticize the PSC for favoring the utilities over Floridians. The critics attributed the positive treatment of FPL to the campaign contributions the utility has given to politicians in Tallahassee.

Bubriski denied any particular favoritism. He said the commission often disagrees with the public counsel's office. But, in this case, he said, the deal was a win for everyone.

"This agreement was developed after months of negotiations," Bubriski said. "In the end, this is a good deal for all of our customers to help keep their bills the lowest in the state, to continue to provide clean and more efficient energy."

Ivan Penn can be reached at ipenn@tampabay.com (727) 892-2332.

Animosity lingers over how FPL rate deal went down 12/17/12 [Last modified: Monday, December 17, 2012 9:35pm]

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