Duke Energy case and legislative bills could bring more secrecy

Duke Energy Florida was ordered last year to return $16.1 million to customers. It appealed the decision to the state Supreme Court.
Duke Energy Florida is appealing an administrative law judge's decision to the Florida Supreme Court. Pictured are Duke Energy workers in 2017. [CHRIS URSO  |   Times (2017)]
Duke Energy Florida is appealing an administrative law judge's decision to the Florida Supreme Court. Pictured are Duke Energy workers in 2017. [CHRIS URSO | Times (2017)]
Published April 23, 2021|Updated April 26, 2021

A legal case that paved the way for unprecedented secrecy around Florida’s utility regulation now sits before the state’s Supreme Court. And as Florida power companies head into a particularly high-stakes year for rate changes, a pair of bills could bring some of that secrecy to routine regulation.

Last year, an administrative law judge ordered Duke Energy Florida to return $16.1 million it charged customers for replacement power after its Bartow natural gas plant was damaged in 2012. That decision was upheld by the Florida Public Service Commission, the state’s utility regulator, in September 2020.

Duke, which was “disappointed” in the decisions at the time, opted to appeal the case to the Florida Supreme Court, where it is expected to progress throughout the year.

“Duke Energy Florida looks forward to the opportunity to present our appeal,” spokeswoman Ana Gibbs said.

Related: What does this Duke Energy case mean for utility transparency?

What was unusual about this case was its intense secrecy.

By law, the Public Service Commission must have hearings open to the public. But Duke argued that some parts of the case needed to be confidential to protect trade secrets about the design of the plant’s steam turbines. Normally, confidential information is talked around at a hearing or referenced by pointing to a particular part of a document that viewers can’t see. But the design information was considered so central to the hearing that the case was referred to the Department of Administrative Hearings so both sides could speak about it freely.

The case was almost entirely closed to the public. Consumer advocates at the time said that the unprecedented amount of secrecy afforded to the power company provided a “blueprint” for other utilities to follow suit, which would make it much more difficult for the public to understand how rates and decisions are made.

But pursuing secrecy will be even easier if two bills pushed by the Public Service Commission are signed into law. The Florida House and Senate heard HB 1311 and SB 7066 this week, which would give the commission the ability to make portions of hearings, recordings and transcripts confidential if they contain “proprietary confidential business information.” Both would take effect immediately after being passed.

“We look forward to some good results there,” Gary Clark, Public Service Commission chairman, said at a Tuesday internal affairs meeting.

Charles Rehwinkel, a lawyer with customer advocate Office of Public Counsel, said that the commission already has ways of dealing with proprietary information without shutting the public out.

“Public decision-making in Florida has one of the oldest traditions of being in the sunshine,” he said. “This (legislation) is taking the sunshine away from that decision-making.”

The effects of the bills could be seen as early as this year. Power companies are asking for billions of dollars in rate increases that they will defend to regulators this fall, offering an immediate opportunity for companies to ask for privacy.

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Tampa Electric Co. asked for a 19 percent rate hike to cover $295 million in new solar projects and the conversion of its Big Bend Power Plant to natural gas. Florida Power & Light requested nearly $2 billion in additional funds from customers. And Duke is asking for a hike that would increase customers’ bills by $195.4 million over three years in a proposed settlement that has the stamp of approval from customer and environmental advocates and the utility.

Related: Tampa Electric files for 19 percent rate hike

The rate cases will also be a test for customers’ main defender before regulators, the Office of Public Counsel. Its longtime leader J.R. Kelly resigned late last year after 2020 legislation imposed a term limit for his position. His successor, Richard Gentry, previously served as a lobbyist, and last year represented a utility-backed nonprofit.

Clarification: Duke is asking for a rate hike that would increase customers’ bills by $195.4 million over three years. The amount was unclear in an earlier version of the story.