1. Florida Politics

Interview with Donald Polmann, new PSC commissioner

Donald Polmann, Gov. Rick Scott's second new addition to the powerful Public Service Commission, comes to the job with a commitment to "balance and thoroughness."

Here are excerpts from our interview:

Q: This is your third time applying, a testament to your interest in the job, explain that?

A: "I am committed to public service and i very much enjoy working and doing that type of work. I worked at Tampa Bay Water [formerly known as the West Coast Regional Water Supply] for 18 years and I always felt that it was important work, serving the public and delivering a vital service."

After he left Tampa Bay Water in 2012, Polmann applied for the first time to the Public Service Commission and has since been a civil and environmental engineering consultant.

"I've been looking to get back to government work since then. It's not that I don't enjoy consulting work. I very much enjoy public service. I really felt it was my place."

He said he left Tampa Bay Water after he felt he had "done my best work and had made significant contirbutions and it was time to move on and seek something else."

Q: What will you bring to the PSC?

A: "Tampa Bay Water is the largest water utility in the Southeast United States. It's a wholesale utility but nonetheless it's an entity that's very large with a very complex mission in solving the water supply challenge over a period of more than a decade."

The issues facing the utility were "a very difficult engineering problem wrapped inside a set of scientific and environmental issues. That's where I do my best work -- trying to find answers to an engineering aspect wth a scientific approach. You have to be able to understand all the data and do the analysis."

As an engineer, his approach is: "There is an answer. You are seeking a particular outcome and you need to reach it within a reasonable period of time."

Q: What approach will you take as a utility regulator?

A: "Utilities provide this important service to the public -- be that residence, business or industries who use water, electric power, natural gas and so forth. It's a vital service that they absolutely rely upon....To me, the challenge is: how do you find balance to make sure there is reliable quality service that supports a healthy economy and at the same time protects our natural resources\?"

Q: Floridians rely predominantly on electric utilities as their source of energy and they are regulated monopolies. How do you see the role of the regulator here?

A: "In regards to electric utilities, if I don't like my electric service, I can't say I'm going to buy it from someone else. I don't have that option. They are the monopoly with regard to the territory that they serve. I'm a captive customer and they are provided a right to serve and, as I see it, they have a duty to serve...

"As a customer, it's reasonable for me to expect that service to be high quality and reliable. I need to depend on that and it should be there. A utility has an obligation to deliver. There are exceptions of course -- when there's a storm and there will be outages. I want that outage to be as short as possible, but I need an oversight body to make sure and don't want there to be an unreasonable rates and charges."

"The oversight role of the Public Service Commission is to review the reliability and the quality of service, and to look at how the utility is performing. Is it maintaining and renewing the infrastructure, planning for growth to make sure within the service area they are doing the best they can?"

He said he is well-acquiainted with Florida's Sunshine Law and he emphasized the need for clear communications with the public

"It's critical. There needs to be public communication. I don't believe that it is the job of the Public Service Commission to provide that communication to the public. I believe they provide an arena, through the hearing process, about why a rate increase is appropriate or inappropriate. And, through the hearing process, they require the utilities to provide information to their customers about what they are doing and what it costs.

"Those utilities should be transparent to their customerse in terms of their rates so the customers understand. Since these are private enterprises, investor-owned utilities, they expect a fair return. Fair is a concept is a concept for the commission to have an opinion on -- and they do an analysis."

"Of course, the customers don't want the rates to go up at all, but there needs to be justification for a rate adjustment. We're not going to let the utilities earn an unrealistic rate, but if they don't earn a fair rate they don't have the investment."

He said he believes there are "private utilities around the state that have simply failed because they don't provide reliable service" but, he added, he could not cite specifics.

Ensuring reliable, quality service, is "within the jurisdiction of the PSC. Failure of the privately-owned utility is in nobody's best interest. When they fail, what happens? Publicly-run utilities have to come in and provide the service so that's a public burden."

Q: What is your view of conservation and alternative energy in the electricity arena?

A: "I believe there is a cultural dependence on electricity as a primary component of energy. I have no reason to think that in the near term the way the general population's uses energy will not use less electricity. I don't see that as shifting. So whatever we are talking about regarding alternative energy sources, it's alternative source to generate electricity. Then, it's a question in my mind of scale, a question of how much electricity do we generate by substitution of source type and what entity is going to take on that challenge? I believe every major electric company is under way to do that or researching the most economic way to do that, because people expect and demand it. There is a shift in that direction toward alterative sources of energy but when people say energy I believe they mean electricity.

"As for the technology related to solar energy, it becomes a question of how well that can be implemented in Florida. We call ourselves the Sunshine State, but how much sunshinne do we have on a daily basis that can be turned into electricity and at what scale? I don't know the answer to that, but i believe an entity like the PSC should be asking those questions as they review the long term mix of energy sources.

"Have we looked at all the reasonable alternatives? Technology is changing. Reasonable something that can be implemnted at a scale that makes a difference. My intention as a commissioner is to make sure we are looking at every problem thoroughly, examining each case in a fair and unbiased way."

Q: Many of the issues before the PSC are about how much risk and innovation should be funded by customers and how much by investors, do you have any thoughts on that?

A: "From my time at a government agency, Tampa Bay Water, for more than a decade, that agency ended up with more than $1 billion of debt and a AA credit rating or better. It's an outstanding result. However, it's a public entity. Then again, it's similar to a private utility in the sense that they have captive customers who will buy and pay for the product that they deliver. It is an operating monopoly, so the utility produces water and the customers buy the water and pay the rate.

"In the case of a public utility, elected officials set the rates but anytime the rate is going to go up there is a public outcry. At Tampa Bay Water, it went up because there was a need to rebuild new facilities and replace old facilities for planning and for future growth because of the changes in the type of source and because certain facilities were old.

"There is an analogy in investor owned electrical power They have new source types that they are considering and in some sense constructing. There is consideration of a rate increase and how is that best implemented. So, when you look at different sets of consequences in the financial market, if the investors make an investment in that and there's a negative outcome it can effect their company and their bond rating and their ability to operate their business...then those costs are going to be passed on to their customers....Bond market and debt market is difficult to explain...

"The charge of the commission is to interpret and pass judgment on it. I'm sure there are disagreements but, ultimately, there has to be a decision. The job of the commission is public service. It's important public service. The whole thing needs to move forward in in order for the utility to be able to operate with certainty They can't be able to operate under the cloud of uncertainty. I believe that it's better to resolve these cases and move forward than to have cases drag on for extended periods of time with uncertainty."

Q: Have you met with any offficials of the state's largest utilities?

A: "I know who the folks are at the four electric utilities and I've been introduced by telephone. We do not have any detailed discussion about thier positions or what their philosophy was....It was more of an introduction by name."

He said the lobbyists had looked at the votes from the Public Service Commission Nominating Council, in which he had the most votes of the selections and "they realized I was pretty serious about wanting this position."

"I'm coming to this with a technical background but with the experience of working in a government agency a knowledge of government in the sunshine, of working in the public arena and an awareness of public communications. I feel comfortable coming to this space and my approach will be one of balance and thoroughness. I look forward to it very much."