PSC delays action on electricity rate hikes
TALLAHASSEE (AP) – The state Public Service Commission agreed Tuesday to delay voting on major rate increases sought by Florida’s two biggest power companies, allowing both of Gov. Charlie Crist’s two new appointees to take part in those decisions.
Crist, who asked for the delay until his second appointee takes office in January, opposes each utility raising its base rate by about 30 percent. He called the postponement “good news for Florida consumers.”
“The economy is what the economy is,” Crist said. “Trying to charge more people more money at this time is the wrong thing to do.”
The five-member panel unanimously rejected a staff recommendation to keep on its current schedule. Instead, it reset key rate decisions from November and December until January. That will push anticipated January effective dates for the new rates back at least two months.
Florida Power & Light Co. wants to raise rates by nearly $1.3 billion a year while Progress Energy Florida is asking for a $500 million increase.
The delay, though, will let Progress raise rates on an interim basis Jan. 1, subject to a refund. That would be about $8 a month for a typical residential customer using 1,000 kilowatt hours.
FPL cannot impose an interim increase because of a prior agreement with the commission.
Both utilities opposed the delays. FPL lawyer John Butler said putting off the rate decisions would “unfairly prejudice” his company and make it more difficult to attract investors.
The commissioners urged Progress to minimize the effect of the delay on customers, but company lawyer R. Alexander Glenn said the utility is losing money because of dropping power consumption and may have no choice under state law.
A utility can raise its rates if the commission fails to act for eight months after the new rates have been proposed. But it must refund the difference with interest if the state panel later votes on a lower rate. If the panel takes a year or more, no refund is needed.
The 12-month deadline for FPL is March 18 and for Progress Energy it’s March 20. The commission agreed to rule on Progress Energy’s revenue needs on Jan. 11 and set its rates on Jan. 28. The comparable dates for FPL are Jan. 13 and Jan. 29.
The debate over the rate increases has been politically charged, with the commission being accused of being too cozy with the utilities it regulates. Crist declined to reappoint two sitting commissioners. Instead, he picked a pair of newcomers without ties to utilities or prior regulatory experience.
One of the new appointees, David Klement, took office last week and the delay was his first major vote.
“I know there’s a lot riding on this decision,” Klement said. “I’m aware that this matter is now entangled in politics, which is unfortunate for all parties concerned.”
The first January votes will come just a week after the other new appointee, Benjamin “Steve” Stevens of Pensacola, takes office. Stevens, co-owner of a bar and former financial officer for the Escambia County Sheriff’s Office, will replace Commissioner Matthew Carter, now the panel’s chairman.
Klement is a former newspaper editorial page editor from Bradenton who directed the University of South Florida’s Institute for Public Policy and Leadership before his appointment. He replaced former Commissioner Katrina McMurrian, who resigned early so Klement could participate in the rate cases.
The delay will give Klement and Stevens time they need to review videotapes of more than 20 days of hearings and thousands of pages of transcripts and other documents. The only difference is Stevens won’t get a state paycheck as he won’t take office until January.