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TENSE EXCHANGE AT PSC ON ETHICS

Two commissioners spar over a dinner meeting as rules to gain trust are urged.

In an emotional appeal, a utility regulator apologized Tuesday for casting a cloud over the Public Service Commission, but insisted she broke no rules in dining with an executive of Florida Power & Light as it sought a $1.3 billion rate increase.

Commissioner Katrina McMurrian sounded choked up after Commissioner Nathan Skop suggested she had engaged in "completely unacceptable" behavior by having a meal with FPL treasurer Paul I. Cutler in New York before a March 10 utility conference.

The tense exchange came as the PSC proposed rules to restore public trust in an agency that has been rocked by investigations and allegations of too-cozy ties and private discussions with the powerful utilities it regulates. FPL and Progress Energy are asking for rate increases of about 30 percent.

The ripple effect of the PSC's troubles spread beyond the agency Tuesday, with Attorney General Bill McCollum announcing that his agency would retain all of his employees' BlackBerry text messages - a hard-to-track public record that came under scrutiny at the commission.

Among the PSC proposals discussed to win the public's trust: limit or ban travel to conferences sponsored by utilities; ban all gifts; prohibit or disclose all private discussions with utilities; and make the PSC fall under the judicial branch of government.

The commission could vote on the new rules at an Oct. 5 meeting.

McMurrian said Tuesday that she would "like to be able to talk more freely" about the dinner she shared in New York with Cutler and others but said she couldn't because a citizen had filed an official motion Monday demanding that she recuse herself from deciding the FPL rate case.

The recusal motion, filed by consumer advocate Steve Stewart and citizen Richard Unger, doesn't accuse McMurrian of breaking the rules or the law. It just questions her impartiality.

McMurrian and PSC Chairman Matthew Carter are up for reappointment this year, and Gov. Charlie Crist said Monday that they might not keep their jobs if they approve the FPL rate increase. Crist also said that he thought McMurrian's dinner wasn't appropriate, but added Tuesday that it shouldn't disqualify her. McMurrian said she'll soon respond in writing to the recusal motion. If she refuses to recuse herself, the complainant can appeal to the Florida Supreme Court and potentially delay the rate case.

The commission is considered a quasi-judicial body, but its members aren't traditional judges, and they answer to the Legislature and the governor. The governor appoints them to four-year terms.

Commissioner Nancy Argenziano, a former state senator, said the Legislature, too, needs reform. She said that utilities are among the top contributors to political parties, campaigns and candidates each year.

She, too, has come under fire during the continuing turmoil at the PSC. Critics have said she owns out-of-state property with a lobbyist representing a municipal electric company that isn't regulated by the PSC but sometimes intervenes in rate cases.

On Tuesday, Skop recommended the commission propose that citizens change the state Constitution to place the PSC under the judicial branch of government - an idea endorsed by most commissioners.

Skop read from a 1992 grand jury report about the PSC that said "a judge cannot meet with one party alone to discuss an issue of importance if the judge is the final arbitrator of that issue. Judges are required to avoid even the appearance of impropriety."

Never mentioning McMurrian by name, Skop talked about the "transgressions" of the past and said it was inappropriate for commissioners to serve on boards or speak at conferences on the recommendation of utilities.

McMurrian had been recommended by FPL to sit on an energy grid advisory board, funded by utilities.

"The commission is going through some challenging times," Skop said. "We are under a lot of controversy. And rightfully so."

McMurrian, her voice breaking, said she wasn't sure if the comments "were aimed at me or not. ... But give me the benefit of the doubt."

Skop said he did not mean to get personal. Argenziano recommended the commission focus on reform.

"Let's not get too warm and fuzzy," she said, "because the people out there think we suck."

Steve Bousquet contributed to this report. Marc Caputo can be reached atmcaputo@miamiherald.com.

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