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State regulators delay vote on Progress Energy, FPL rate increases

Handing Gov. Charlie Crist a win, state utility regulators voted Tuesday to delay a decision on large rate increases sought by Progress Energy Florida and Florida Power & Light.

The Public Service Commission will now vote on Progress Energy's $500 million base rate increase proposal Jan. 11 and decide FPL's proposed $1.25 billion base rate increase on Jan. 13.

Crist requested the delay after he decided not to reappoint two of the five commissioners in the midst of the rate cases. Crist said he needed to "clean house'' at the PSC, where commissioners and staffers have been under fire for coziness with utilities, particularly FPL.

The delay will give the new commissioners, David Klement and Benjamin "Steve'' Stevens, more of an opportunity to review the cases.

Klement has already begun serving on the PSC, filling in for Katrina McMurrian, who stepped down early after Crist chose not to reappoint her. Stevens will be sworn into office the first week of January, though he can begin reviewing the volumes of testimony and evidence in the cases now.

Klement said, "By my calculations in both cases, that would amount to 9,699 typed pages and 829 pages of exhibits along with viewing approximately 23 days' worth of videos at the hearings. Granted that's a lot of reading and viewing. Can we do it?"

Klement said he could.

FPL and Progress Energy had opposed the delays. Cherie Jacobs, a Progress Energy spokeswoman, said the company is "disappointed." FPL spokesman Mayco Villafana said the company could live with the decision and just wanted a fair hearing on the merits of the case.

Progress Energy was expecting a vote on its rates Nov. 19. FPL expected a vote Dec. 21. Both wanted the increases — about 30 percent — to begin Jan. 1. Progress Energy can temporarily increase rates by about $8 for the average residential customer, starting in January. If the commission ultimately votes to lower rates, the company would have to refund the extra money it collects.

FPL cannot approve a temporary rate increase due to an agreement with the PSC in a previous rate case.

Both companies said they need higher rates to provide some "certainty'' for planning and budgeting. FPL's John Butler noted that investors in the privately run utility are "a little bit unnerved by the delays."

Commission chairman Matthew Carter stopped him. Carter noted that the federal government has pumped billions of dollars into the financial system to fix the economy, but taxpayers have nearly nothing in return.

"My heart's not really bleeding for Wall Street right now. They've got a lot of work to do on their part," Carter said. "When Wall Street comes in crying crocodile tears, please understand Wall Street needs to be understanding about Main Street."

FPL also notes that even if its base-rate increase is approved, the average customer's bill will be lower next year due to lower fuel prices.

The company on Tuesday reported a drop in its stock price. During testimony last month, an FPL-hired analyst testified that Crist's involvement was damaging the company's bottom line.

Crist had called on the PSC to reject the rate increases and also decided not to reappoint Carter and McMurrian. Crist, running for U.S. Senate, has received campaign contributions from FPL. When he last ran for election, in 2006, he made a campaign issue of fighting a rate increase sought by phone companies.

Marc Caputo can be reached at mcaputo@MiamiHerald.com

State regulators delay vote on Progress Energy, FPL rate increases 10/27/09 [Last modified: Tuesday, October 27, 2009 10:45pm]
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