The likelihood of Florida electric customers getting a fair shake when utility companies seek a rate increase is about as low as seeing a Florida panther, and the odds may soon get worse. The Public Service Commission is packed with industry-friendly commissioners, and Gov. Rick Scott has recently reappointed three of the incumbents. That leaves the public counsel, who represents ratepayers before the PSC, as the lonely voice battling Goliaths such as Duke Energy and Florida Power & Light when they want more from consumers' pockets. Now a case before the Florida Supreme Court could weaken the public counsel's hand when rate increases are negotiated in back-room deals and rubber-stamped by the PSC. The court should affirm the public counsel's ability to protect the public by requiring his approval on rate case settlements.
The deck is badly stacked against average utility customers. The Legislature and the PSC routinely acquiesce to the state's major utilities even when they seek to pass on the costs of their own mismanagement. Prime examples are Duke Energy's (formerly Progress Energy) botched repairs on the closed Crystal River nuclear power plant, and its abandoned plan to build a nuclear power plant in Levy County. The company's customers will be soaked for billions of dollars for these avoidable mistakes, and the PSC's claim that its hands are tied by state law is a convenient excuse to look the other way.
The dispute heard this month by the Florida Supreme Court involves the $350 million rate increase for FP&L approved by the PSC in 2012. The approval is being challenged by public counsel J.R. Kelly, the attorney who represents ratepayers as a consumer watchdog before the PSC.
Kelly has valid reasons to question the settlement. The process was flawed. Rather than provide a full rate hearing, the PSC approved a settlement that had been negotiated by FP&L and the utility's major industrial users. Meanwhile, 99 percent of FP&L's 4.6 million customers were not a party to the agreement but would get socked with higher electric bills.
Rates would go up in 2013 and then automatically in 2014 and 2016 as new power plants become operational. The public counsel objected, but for the first time the PSC approved the settlement over those objections. The danger is that the PSC will be allowed to rubber-stamp deals that benefit powerful interests and are opposed by the public counsel without the transparency or accountability of a full rate hearing. In this case, the public counsel analyzed FPL's financial projections and found that rates should be reduced, not increased. But that didn't sway the regulators.
Arguably, there is enough wiggle room in the public counsel's legal authority to ensure that he signs off on agreements that short-circuit the normal process for approving rate increases. The court should read this authority in the broadest possible light. The people's voice at the PSC should not be silenced. It should be amplified.