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Turmoil at state regulatory agency grows. PSC lobbyist resigns; two staffers put on leave.

The Public Service Commission lobbyist who partied at the home of a power company executive resigned Tuesday and two more commission aides were placed on administrative leave as the controversy surrounding the state's utility regulators continued to churn.

The internal turmoil surrounding the agency also prompted Commissioner Nancy Argenziano to call for a grand jury investigation into legislative and utility company influence on the PSC. And Sen. Mike Fasano - saying a "disaster is in the making'' - called for a state Senate investigation into the PSC that would force the staff and commissioners to answer questions under oath.

The PSC is grappling with growing questions about its closeness to the utilities it regulates, even as two of the state's largest - Progress Energy and Florida Power & Light - seek rate increases of about 30 percent beginning next year.

In the last two weeks:

- The Florida Department of Law Enforcement began investigating the PSC for potential ethics violations.

- The Times/Herald revealed that an FPL executive had asked for and received private BlackBerry messaging codes for one commissioner and two staff members, a communication method that avoids a paper trail.

- FPL executives defied a PSC order to reveal how much the company pays its top executives.

- And, FPL chief Armando Olivera told the PSC that his company wanted to use part of its rate increase to buy a $31 million executive jet.

On Tuesday, Ryder Rudd, the PSC's director of strategic analysis who admitted attending a Kentucky Derby party at the Palm Beach Gardens home of FPL vice president Ed Tancer, submitted his resignation. After he told two commissioners and the Times/Herald that he had attended the party, the PSC removed him from any FPL issues and ordered the agency's inspector general to investigate.

Inspector General Steven Stolting found that Rudd used ''poor judgment'' and may have violated PSC rules by attending the party. But Rudd said he paid Tancer $50 in cash a day after the party for food and drink he had consumed but kept no receipt, so Stolting concluded there was no way to determine if rules were violated. Rudd had been at the PSC since 2007 and was paid $92,000.

Also Tuesday, Commissioner Lisa Edgar and commission Chairman Matthew Carter put their two top staff advisers on administrative leave, "pending further review," in the wake of a Times/Herald report that the staffers had given FPL the personal identification numbers, or PINs, to their BlackBerrys.

PINs made it possible for the utility to communicate with the regulatory agency without using the state e-mail system. The PSC keeps no record of instant messages sent via PIN, making it difficult to track what was written.

According to documents obtained by the Times/Herald, Edgar's aide, Roberta Bass - who earns $84,724 a year - supplied the PIN for Edgar's BlackBerry to FPL attorney Natalie Smith as well as the PIN for her own BlackBerry. Carter aide William Garner, who makes $88,924, gave Smith his own PIN.

Another aide - Larry Harris, who works for Argenziano - left the commissioner's staff Saturday after telling his boss he had provided Smith with his own PIN. Harris is now seeking reassignment within the PSC.

Under state law, a commissioner who discusses a pending rate case with utility officials, known as "ex parte communications," could face a $5,000 fine and removal from office. The law specifically excludes PSC staffers from the ban, however.

First Amendment Foundation attorney Barbara Petersen said she was "stunned'' the staff didn't raise any concerns about ex parte communication when they were asked to provide their PINs to FPL.

But, she said, "The bigger question is, 'Is it legal?' Because, if they are discussing public business through the use of PINs, then the use of PINs should be banned."

Argenziano said she hopes her call for the statewide prosecutor to convene a grand jury would mean "the entire utility regulatory scheme'' would be reviewed.

The former state legislator, appointed to the PSC in 2007 by Gov. Charlie Crist, thinks the biggest obstacle to PSC independence is the Legislature. It appoints the council that nominates commissioners, and lawmakers receive millions in campaign contributions from utility companies each election year.

Two seats - those held by Matthew Carter and Katrina McMurrian - are open. Crist could reappoint the commissioners or choose new ones.

Argenziano said legislators attempt to intimidate commissioners. She cited comments made last week by Rep. Carlos Lopez-Cantera, a Miami Republican, when he voted against Carter's reappointment. He disagreed with Carter's decision to require FPL to disclose its executive salaries and accused Carter of showing a lack of leadership.

Lopez-Cantera's comments "support my opinion that the PSC cannot act independently," she said. "The representative made it clear he was dissatisfied, not with the qualifications of the commissioner, but with the independent decision he made in a case."

Crist said Tuesday that he was "monitoring the situation'' at the PSC and supports Argenziano's call for an investigation. "It's incredibly important to me that the commission be independent and look out for the interest of the public - after all, they are called the Public Service Commission," he said.

Fasano, who last week called for the PSC to remove Rudd, has urged the governor to refrain from making appointments to fill the two PSC seats until the commission has completed its review of FPL's and Progress Energy's rate requests.

On Tuesday, the New Port Richey Republican urged Senate President Jeff Atwater to convene a Senate ethics committee so lawmakers can question PSC staff and commission members under oath. He noted the panel responsible for making billion-dollar decisions is "obviously skewed toward the utilities."

The hearings on FPL's $1.3 billion rate increase request lasted two weeks; a final day is scheduled for Sept. 16. The PSC began hearings Tuesday into FPL's and Progress Energy's requests to bill customers for the cost of building nuclear power plants. FPL wants to add 67 cents a month to the bill of a typical customer using 1,000 kilowatt hours and Progress Energy proposes adding $2.38 for every 1,000 kilowatt hours.

Miami Herald staff writer Cammy Clark contributed to this report. Mary Ellen Klas can be reached at