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FPL to make another push for rate increase as hearings wrap up

TALLAHASSEE — Florida Power & Light will get one more chance to persuade regulators to raise electric rates $1.3 billion starting next year when three final days of hearings resume today before the embattled Public Service Commission.

The commission, down to four members, has been in turmoil over allegations that some PSC commissioners and staff socialized, exchanged e-mails and phone calls, with near-daily contact with the utilities it regulates, particularly FPL, the state's largest electric company.

After the last round of hearings on the case in September, Gov. Charlie Crist declared it was time to "clean house," choosing not to reappoint Commissioners Katrina McMurrian and Matthew Carter.

McMurrian resigned early, Carter became a lame duck and Commissioner Nancy Argenziano — an outspoken critic who has accused the agency of being "too cozy'' with utilities — has been publicly accused by a business lobbying group and FPL ally of not being impartial.

"The rate cases in Florida are approaching operatic status," wrote Barclays Capital, a New York investment adviser, in its Oct. 15 industry overview for investors. The results, the company said, "threaten Florida's status as one of the better regulatory jurisdictions in the country."

Progress Energy — the second largest electric utility in Florida, which is seeking a $500 million increase in base rates — concluded its hearings two weeks ago, with a decision expected Dec. 1. But controversy continues to follow FPL.

Documents filed in the case on Monday indicate that the company appears to have stacked public hearings with a line-up of residential and commercial customers with favorable opinions of FPL. In preparation for the rate case, the PSC conducted five public hearings in South Florida last summer to get input from customers about the quality of FPL's service.

According to one of the documents submitted to PSC Commissioner Nathan Skop by an anonymous person claiming to be a fired FPL employee, the company asked 27 people to attend a West Broward hearing and confirmed that 10 would appear.

Next to the name of a commercial customer, the document says: "Formally with Dolphin Stadium now with Bank Atlantic Center. Very good long term relationship." Next to a residential customer and two other commercial customers, the document says: "Very satisfied with service provided by FPL."

Skop did not verify the authenticity of the documents but entered them into the record for FPL's pending rate case. FPL would not answer any questions about the documents and released a statement saying that it let "local contacts know they would have an opportunity to appear at the hearing."

In a statement provided by FPL on Tuesday, the company said it tallied up all the customers who spoke at the hearings, and concluded that "243 customers, or 58 percent, made positive statements about FPL's quality of service, and 54 customers, or 13 percent, discussed a negative service issue. The remaining 120, or 29 percent, made no mention of FPL's quality of service."

The PSC hearings today are expected to tie up loose ends for the Juno Beach-based utility's case. If the commission grants FPL the full 30 percent rate increase, the base rate would increase by an estimated $12.40 per month for the first 1,000 kilowatt hours.

But with lower fuel costs expected next year, FPL said customers would see a net decrease of $7 a month in 2010.

Opponents of the rate case — the attorney general, Florida retailers, large industrial power users and the Office of Public Counsel, which represents the public before the PSC — are also expected to grill FPL executives on issues including executive expenses and proposals to add additional fees for late payments, service reconnection and returned checks.

Since the previous hearings on the rate case ended in September, when commissioners ran out of time, FPL has decided to abandon its plans to have customers pay for its corporate jets and helicopters. But it has continued to refuse the PSC's demand that it disclose company salary data of the 440 employees who make over $165,000; it appealed the commission's ruling to the First District Court of Appeal.

The governor has asked the PSC to delay its vote on both Progress and FPL's rate cases until his new appointees take office. PSC staff members recommended on Monday that the commission try to complete its work by a Dec. 21 deadline but noted that it has until mid March to make a final ruling.

Commissioners will decide Oct. 27 whether to delay the cases and, if they do, whether FPL and Progress will be allowed to charge interim rate increases beginning Jan. 1, while the companies wait for a decision.

Mary Ellen Klas can be reached at [email protected]

FPL to make another push for rate increase as hearings wrap up 10/20/09 [Last modified: Tuesday, November 10, 2009 9:44am]
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