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PSC blasted for allowing rate increase without including Public Counsel

State regulators came under fire this week following their decision to approve a major utility rate increase without including the state's top consumer advocate in the deal.

In news releases Thursday and Friday, the AARP and some state lawmakers said the Public Service Commission overstepped its bounds by excluding the state-appointed consumer agency — the Office of Public Counsel — from a utility rate agreement.

The PSC reached an agreement with Florida Power & Light, the state's largest utility, that allows it to increase its customers' rates by $350 million. By excluding the public counsel, PSC critics said, the commission has set a dangerous precedent by essentially ignoring the people in favor of the power companies.

"It's time for the Florida Legislature to shed light on this issue," AARP Florida state director Jeff Johnson wrote in a statement. "Lawmakers should make it clear that the Office of Public Counsel should have a real role to play in any negotiated settlement of a rate case.

"No utility company should be able to cut a side deal with a few customers at the expense of all its customers unless Sunshine State consumers have a bona fide say in the agreement," Johnson added.

Rep. Dwight Dudley, D-St. Petersburg, followed the AARP statement with one of his own: "Where is the neutral, detached arbiter for the ratepayers? It certainly isn't the PSC. They appear poised and ready to rubber-stamp anything that the utilities shove in front of them."

The commission has been criticized for favoring the state's utilities, such as FPL and Progress Energy Florida, over ratepayers. The utilities donate millions to political campaigns, and critics say many local and state lawmakers will not publicly oppose the influential power companies.

Critics say influence played a big part in the FPL rate case.

The utility had proposed a big rate increase. Big power users, including the Florida Industrial Power Users Group and the South Florida Hospital and Healthcare Association, opposed the increase.

They dropped their opposition after FPL agreed to give them $50 million in credits.

The deal excluded the public counsel.

Public Counsel J.R. Kelly filed suit with the state Supreme Court to block the agreement, arguing that the commission should not be allowed to consider any agreement without the state-designated consumer advocate. The court sent the case to the 1st 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.

After the FPL decision Thursday, commissioners defended the move.

"Our decision today reflects agreement on all issues heard throughout this lengthy process and is in the public interest," said PSC Chairman Ronald A. Brisé. "Ensuring rate stability and reliability for FPL's customers — including industrial customers — will help create jobs and grow Florida's economy."

Commissioner Lisa Edgar, who seconded the motion to approve the new agreement, said, "We gave all parties time to participate, and this resolution is in the public interest, based on the record of evidence. It provides rate predictability for customers now and in the future and benefits the local economy and businesses looking to expand."

Prior to Thursday's decision, a bipartisan group of four state lawmakers urged the commission to reject any agreement that did not include the Office of Public Counsel.

"We want to make sure the Public Service Commission's hearing process is working for consumers," said Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee. "Considering the rate case through the normal process in January will better serve the public interest."

In the end, the lawmakers said the commission's decision was another win for utilities at the expense of Floridians.

"I think we have a lot to be concerned about, if this is a precedent for how rates are going to be decided," said Dudley, who won election to the House of Representatives last month in large part by campaigning against an advance fee Progress and FPL collect for proposed nuclear projects.

"There's no end in sight because there's nobody who's fighting it," he said. In the PSC, "we have the weak lapdog" of the industry, he said. "It's just really annoying and frustrating."

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

PSC blasted for allowing rate increase without including Public Counsel 12/14/12 [Last modified: Friday, December 14, 2012 10:21pm]

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