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Utility's payback ends sticky dispute

By the time customers of Progress Energy Florida get their share of an $18-million refund ordered Wednesday by state regulators, they may wonder what all the fuss was about.

A typical household will get a credit of about $8 plus change on its electric bill by the end of October.

But the modest payback, and a seemingly routine unanimous vote ordering it by the state Public Service Commission, ended a messy dispute that included suspicions of improper lobbying by the utility.

Progress Energy Florida, which provides power to much of the Tampa Bay area, had issued $5-million in refunds in March. But the company vigorously disputed the state public counsel's contention that it had shortchanged its customers and owed them $18-million more.

The PSC's professional staff was ready to side with the public counsel and recommend the additional refund, but backed off and switched to neutral at the urging of two PSC commissioners, Rudy Bradley and Charles Davidson. A Progress Energy representative had contacted the offices of the two commissioners to press the company's case. All denied wrongdoing.

On Tuesday, everybody involved seemed eager to bring the very public dispute to an end. After months of taking a combative stance, Progress Energy Florida said it would not appeal the PSC's ruling ordering the refund.

Progress Energy Florida president Bill Habermeyer said the company had pursued "an argument that we felt at the time was compelling," but "we respect their decision and we'll move on."

Republican Attorney General Charlie Crist, who had intervened to push for the added refund, participated in the PSC discussion Wednesday and watched the vote from the witness table. "I'm just very pleased with the commission," he said afterwards. "I think the commission made a very responsible, reasonable, just decision today that benefits the people."

PSC Chairman Lila Jaber sought to downplay concerns about suspected ethical lapses by the power company or the commission.

"To the degree people believe Progress has acted in ill faith, I don't believe it," she said. "I really don't think this was malicious, I don't think . . . they tricked us or conspired with regard to what was presented."

Progress of St. Petersburg will be required to distribute an $18-million refund by its October billing cycle. The refund for a median household using 1,200 kilowatt hours of electricity will be at least $8. Only households and businesses that were Progress customers during the last quarter of 2002 will be eligible for the new refund.

The refund dispute stemmed from clashing interpretations of the fine print in a deal reached last year between Progress and a group of consumer advocates led by then-public counsel Jack Shreve. The agreement was intended to ensure the company's customers in Florida would share in cost savings that resulted from Carolina Power & Light's acquisition of Florida Progress Corp. in November 2000 to form Progress Energy.

The dispute over the role of Bradley and Davidson turned on state regulations barring commissioners from having contact outside a public forum with representatives of companies that have matters before the commission. Former PSC Commissioner Julia Johnson, whose clients now include Progress Energy, acknowledged that she had sent briefing materials on the dispute to the offices of Bradley and Davidson. But the two men said they never saw the documents that were received by their aides.

After joining in the unanimous PSC vote, Davidson said he had urged the staff to go neutral because "we can't come in prejudging" the matter. Bradley said the vote was "a fair conclusion to a controversial and highly contested issue."

Crist indicated that he didn't have any interest in pursuing the actions by the two commissioners further.

"It certainly doesn't look like it had any influence, if it happened at all," he said. "If it had, the vote would have been less than unanimous, I suspect."

The vote was an especially sweet victory for Shreve, who retired June 30 after serving for 25 years as public counsel and was credited by all sides as having been instrumental in reaching the settlement.

"I'm glad to get it over," Shreve said. "We knew they needed to stay with the contract we negotiated."

Jaber described the 2002 rate pact as "a model of a settlement" and concluded the hearing with a tribute to Shreve. "You are a class act," she said, "and you will be missed."

_ Louis Hau can be reached at hausptimes.com or (813) 226-3404.

Progress Energy's $18-million dispute

Nov. 30, 2000: Carolina Power & Light of Raleigh, N.C., completes acquisition of Florida Progress Corp. of St. Petersburg. The company is later christened Progress Energy Inc.

April 23, 2002: Florida Public Service Commission votes in line with PSC staff recommendation to accept Progress Energy rate-reduction settlement, negotiated between Progress and state public counsel Jack Shreve.

Feb. 24, 2003: Shreve files motion asking PSC to enforce 2002 settlement, accusing Progress of attempting to break it by offering less than a fourth of the $23-million refund Shreve says is required.

March: Progress Energy distributes $5-million rate refund to Florida customers.

April 24: PSC staff produces draft recommendation that PSC side with public counsel.

Early May: PSC general counsel Harold McLean tells PSC staff that commissioners Rudy Bradley and Charles Davidson prefer a staff recommendation that lays out alternatives but doesn't take sides. Bradley and Davidson were the only two commissioners whose offices received briefing materials on the case from Progress consultant and former commissioner Julia Johnson.

May 8: PSC staff offers final, noncommittal recommendation, with options including a "compromise" refund of $11.3-million, plus interest.

May 14: State Attorney General Charlie Crist files motion with PSC to intervene in refund dispute and "ensure that (Progress executives) honor the contract and pay the consumers."

May 19: Public counsel requests depositions from five Progress executives, including Progress Florida president Bill Habermeyer. PSC subsequently restricts scope of public counsel's inquiry to the question of whether improper contact took place between Progress and Bradley and Davidson. No further depositions are taken.

June 30: Bradley and Davidson decline request from consumer advocate Mike Twomey to recuse themselves from deliberations on Progress refund case.

July 9: PSC votes unanimously to reject Progress' interpretation of settlement and orders company to pay out added $18-million refund by its October billing cycle.

_ LOUIS HAU

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