A water utilities veteran who has spent a career navigating the water wars of Tampa Bay was named Florida’s next public service commissioner late Thursday by Gov. Rick Scott.
Donald Polmann, 59, who has twice been on the short list of nominees to come before the governor, will replace Lisa Edgar for the four-year term on the state utilities board beginning Jan. 2. Edgar, 53, is retiring after 12 years on the board.
Polmann is Scott’s fourth appointment to the influential five-member panel that has the power to raise or lower customer utility bills. The four-year term pays $131,000 a year.
For the first time, the governor did not select a legislative insider or incumbent to the post, as he did when he reappointed Edgar in 2012 and subsequently reappointed PSC Commissioners Art Graham and Ron Brisé to second terms, and named former state Rep. Jimmy Patronis to an open seat. All were candidates preferred by the state’s politically powerful utility giants, which were among the largest contributors to Scott’s re-election bid in 2014.
Polmann, a Dunedin resident who is self-employed as a consultant in civil and environmental engineering, was one of the finalists recommended in 2012 when Scott reappointed Edgar and again in 2013 when the governor reappointed Brisé and Graham.
“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,’’ he said in an interview with the Herald/Times. “I feel comfortable coming to this space, and my approach will be one of balance and thoroughness. I look forward to it very much.”
Polmann received his bachelor’s degree from Rensselaer Polytechnic Institute, his master’s degree from the University of Florida, and a doctorate in civil engineering from Massachusetts Institute of Technology. Polmann served as director of science and engineering at Tampa Bay Water, a regional water supply authority. He has spent most of his 30-year career focused on drinking water regulation and protection.
Polmann had the support of Sen. Jack Latvala, R-Clearwater. In a letter of recommendation, Latvala said that he had known Polmann, a constituent, for 15 years and that Polmann “was a major player in the transformation of Tampa Bay Water from the previous agency, the West Coast Regional Water Authority.”
Latvala was an outspoken critic of Edgar, who was first appointed to the post by former Gov. Jeb Bush in 2004, reappointed by former Gov. Charlie Crist in 2007 and by Scott four years later.
Scott chose Polmann over two other candidates, Gainesville City Commissioner Todd Chase and Florida SouthWestern State College professor Cynthia Wilson Orndoff. He must be confirmed by the Florida Senate for his term to be official.
In his interview before the PSC Nominating Council on Aug. 18, Polmann said his “family heritage in construction and blue collar work” as well as his experience as a water manager will inform his outlook.
“On one hand, I’ve witnessed the struggles of making ends meet, both at home and in the family business, in a tough economy,” he said. “How can we possibly raise utility rates with those conditions prevalent in so many places in our communities? On the other hand, we find infrastructure in our cities and towns throughout our state sorely in need of repair, replacement, upgrade, and yes, expansion, as our state’s economy grows. ...
“We’ve been seeing more water breaks, sewer plant overflows, power outages, etc. — quality of service — and reliability must be addressed.”
He added that his expertise in water and environmental resource management; operations research, risk and uncertainty; regulatory and policy compliance; quality assurance and strategic planning; and the state’s Sunshine law will serve him well to find the balance between competing issues and interests, including utility investors.
The five-member PSC is in the midst of a $1.3 billion rate case with Florida Power & Light.
The PSC is an agency that reports to and is funded by the Legislature, but commissioners are appointed by the governor after receiving recommendations from the PSC Nominating Council, which is dominated by legislators.
Meet the new 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 leaving 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,” he said. “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 contributions 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 with 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 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 acquainted 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 customers 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 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 said 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 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 an 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 alternative 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 sunshine 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 is something that can be implemented 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 an 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 affect 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.”
Q: Have you met with any officials 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 their 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.”
Mary Ellen Klas