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FPL agrees to shift costs of executive pay, jets at rate hearing

TALLAHASSEE — After taking the Public Service Commission to court to keep its executive pay confidential, Florida Power & Light agreed to halve the amount of executive salaries and bonuses paid for by its electric customers.

The salary decision was the second major concession FPL made on Wednesday, as hearings resumed on its request to raise rates by $1.3 billion a year — or 30 percent — starting in 2010. The company also agreed customers should not have to pay for its corporate jets and helicopters for two years, a reduction of about $15 million, reducing the total requested increase by about $52 million to $1.25 billion.

The company said it will reduce the amount of executive salaries that comes from electric bills from $72 million to $37 million and rely on shareholders earnings to pay for the salary and aviation costs in 2010 and 2011.

FPL attorney Susan Clark said the salaries "represent only a small fraction of FPL's overall rate request, and we're concerned that they have the potential to become a very time-consuming distraction."

But opponents to the rate case, who want state regulators to reject the increase in base rates, said the concessions would have a minimal impact on customer bills.

"It's a nice gesture, but it doesn't get there," said Scheff Wright, an attorney for the Florida Retail Federation.

Retailers have joined with the state's largest industrial power users, the Florida Hospital and Healthcare Association and the Office of Public Counsel to urge the PSC to prevent FPL from charging customers for what they believe are excessive pay and incentive packages.

In 2008, FPL paid 12 executives more than $1 million each, including three officers who made $3 million. Lewis Hay, the chief of FPL's parent company, FPL Group, made more than $10 million, $7.5 million of which came from FPL.

In comparison to salaries at other utilities, the wages of FPL "are very reasonable and prudent," said Kathleen Slattery, compensation director for FPL.

The PSC has ordered FPL to make public the salaries and titles of the 419 employees who earn more than $165,000 but the company has refused and appealed the ruling to the 1st District Court of Appeal. FPL argues that disclosing the salary details would put it at a competitive disadvantage.

Mary Ellen Klas can be reached at meklas@MiamiHerald.com.

FPL agrees to shift costs of executive pay, jets at rate hearing 10/21/09 [Last modified: Tuesday, November 10, 2009 9:44am]
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