A strange and curious event took place last week.

Regulators actually denied a rate increase to Florida Power & Light, the state's largest utility.

FPL wanted to raise monthly electric bills so that it could build a $1.6 billion natural gas pipeline from North Florida to the Treasure Coast. On Monday, the Public Service Commission denied FPL's request by a unanimous vote.

It would be swell to report that the PSC acted from a hallowed tradition of protecting customers from being gouged, but it has no such tradition and that's not what happened. The PSC was basically shamed into denying the pipline request.

The agency is in the midst of a headline-grabbing scandal brought about by staff members becoming too chummy with the utilities. A criminal investigation has been initiated by the Florida Department of Law Enforcement.

Like many regulatory panels, the PSC is uncomfortable in a bright spotlight, and for good reason. Too many commissioners and staff members get cozy with the power companies because they envision future employment opportunities.

Some would rather play along with an FPL rate hike than jeopardize a juicy job offer somewhere down the line.

The problem was so chronic that in 1993 a law was passed forcing former PSC commissioners to wait two years before going to work for any of the utilities they were supposed to be regulating. A few ex-commissioners have waited to sign up, but others skate around the measure by joining law firms retained by the power industry.

Seventeen years ago, a statewide grand jury listed eight reforms it deemed necessary to make transparent the dealings between the PSC staff and the utilities. All but one of those recommendations was ignored by the Legislature, which is why the agency is in trouble again.

The new poster boy for dubious behavior is a man named Ryder Rudd. Back in May, the staff lobbyist for the PSC casually ``dropped by'' a Kentucky Derby party at the home of an FPL big-shot in Palm Beach Gardens.

Rudd, who'd recently received an 8 percent pay increase from Florida taxpayers, said he and his wife interrupted a vacation to attend the derby bash. He insisted his mission was innocent and noble: By schmoozing with the FPL guys, he could collect valuable information that would help the rate-paying public.

Nobody bought Rudd's lame excuse, and he lost his assignment as the chief analyst of FPL's gas pipeline rate-increase proposal -- the one that was rejected last week. Rudd resigned from the PSC, but don't be surprised if he resurfaces soon on a utility's payroll.

He's not the only one who has crossed the line. The Herald and the St. Petersburg Times reported that several PSC staffers gave their Blackberry PIN codes to an FPL lawyer, conveniently allowing text messages to be exchanged with no open record.

Logs from state-issued phones also showed that an aide to PSC Chairman Matthew Carter called an FPL lobbyist and two FPL attorneys 107 times between Feb. 23 and Aug. 20, including on weekends.

The flurry of chit-chat began soon after FPL and Progress Energy announced they would seek roughly a 30 percent base-rate increase from customers in 2010 -- a request now pending before the embattled PSC.

Carter, who is forbidden by law from directly communicating with any regulated utility, said his aide, William Garner, was probably just arranging travel logistics for upcoming hearings.

Really, Matthew? And that required 107 phone calls?

It's far more likely that Garner was acting as a conduit between his boss, the PSC chairman, and FPL strategists. But that's for investigators to determine.

Meanwhile, Gov. Charlie Crist has named two new PSC commissioners instead of reappointing Carter and Katrina McMurrian, who stepped down last week. The governor, who says he wants a more consumer-friendly PSC, has urged the agency to wait until his appointees take office in January before considering any new rate increases.

Unlike McMurrian, Carter says he won't resign early. That means he's got almost three months to atone for the pipeline vote and ingratiate himself with FPL.

If history is a guide, somebody in the utility business will find well-paying positions for Carter and his aide. Unless you're cursed with a conscience, the transition from public servant to corporate lubricator can be a breeze.

The dark side always pays better.

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