PSC won't delay FPL rate hearing


As state regulators begin a review of FPL’s rate request, consumer advocates cry foul.

By The Numbers: FPL’s rate case

The Public Service Commission began hearings Monday on Florida Power & Light’s original rate increase request. Hearings are expected to last two weeks.

Last week, however, FPL, the state's largest electric utility, filed an agreement with its largest users — group’s representing industrial, health care and federal agency customers — for new rates that would go into effect next year.

Under FPL’s proposed settlement with its biggest users, base rates for 1,000 kilowatt hours a month — the average for residential use — would rise by $4.10 in January and $1.83 in June when the first of three new power plants goes on line. That would boost the total increase to $5.93. FPL, though, also expects fuel costs to drop, so total bills would increase by only 93 cents in January and 28 cents in June for a total of $1.21. June bills would total $95.83.

If the PSC approves FPL's original rate request, the June total would increase by $1.16 to $96.99.

A commercial customer using 1.1 million kilowatt hours would pay a total bill of $87,533 in June — a $29 decrease — under the proposed settlement.

SOURCE: The Associated Press

Herald/Times Tallahassee Bureau

Florida’s top consumer advocate tried and failed to get state regulators to postpone the hearing on a $690.4 million rate increase request by Florida Power & Light Monday, arguing that a last-minute settlement deal threatens to taint the proceedings.

FPL last week proposed to settle its rate case before the Public Service Commission by agreeing to keep flat or reduce the rates for large industrial users, hospitals, NASA and military operators — but raise rates for residential customers and other businesses over the next four years.

The agreement was rejected by the Office of Public Counsel which represents 4.6 million of FPL’s consumers. Also opposing the agreement: the Florida Retail Federation and AARP. They say it’s a bad deal for most of the company’s customers because it would allow for automatic rate increases of up $1 billion over four years. They argued that allowing the company to discuss the proposal during the two-week long rate case hearing gives FLP an unfair advantage.

“The FPL document is the elephant in the room and we’re asking you to remove that elephant before proceeding,’’ said Charles Rehwinkel, a lawyer with the Office of Public Counsel.

FPL is “trying to have it both ways,” he said, and asked the PSC to either reject the settlement offer, postpone the hearing until the settlement was rejected, or refrain from discussing the settlement during the rate case.

FPL’s lawyers forcefully disagreed, suggesting that it’s common practice for parties in a rate case to attempt to reach a settlement.

“Nothing could be further from the truth in terms of it being a separate or new proceeding,’’ said Wade Litchfield, attorney for FPL.

Commissioner Eduardo Balbis compared it to the prosecution agreeing to a settlement with the prosecution.

But PSC Chairman Ron Brisé urged the panel to reject the public counsel’s request to delay the proceeding and trust him not to allow the settlement discussion to come up. “I think the chair is quite capable of limiting the questions,’’ he said.

Balbis then joined the other PSC commissioners and voted unanimously to reject the public counsel’s requests, giving Brisé the authority to referee any disputes.

It was a short-lived promise. By afternoon, as lawyers for each of the parties made their opening statements, the issue of the settlement emerged again.

Jon Moyle, attorney for the Florida Industrial Power Users Group told regulators that his clients want the settlement so that they can increase the discount they get for agreeing to shut down their power usage during peak demand.

Lawyers for the Office of Public Counsel and the Florida Retail Federation objected, and asked Brisé to strike the statements from the record. Brisé overruled them.

It is the second request in three years by FPL to raise electricity rates to pay for new investment. It says it needs the additional money to draw capital to open new, more fuel-efficient power plants.

Since the last rate increase in 2009, the PSC has undergone a political and ideological overhaul.

Three years ago, the hearings dragged on for months as then-Gov. Charlie Crist replaced two of the commissioners for being too close to the utilities they regulated. All but $75 million of FPL’s $1 billion rate request was rejected.

State legislators ousted four of the five commissioners who rejected the FPL rate increase and the new commissioners installed a new staff director, Braulio Baez, a former PSC commissioner whose law firm had FPL as a client.

This time, FPL scaled back its request to $690.4 million and made the last-minute settlement offer with three of the eight parties in the case. The hearings are expected to continue for two weeks with a recommended order later this fall. The new rates would take effect in January.

Mary Ellen Klas can be reached at meklas@MiamiHerald.com. Follow her on Twitter @MaryEllenKlas

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