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FPL doubts whistleblowers' authenticity, defends tax set-up

Florida Power & Light accounting chief responded to allegations that the company used the tax credits of its non-regulated utility, NextEra, to benefit the parent company while charging FPL customers at a higher tax rate. Download Davis response to December 2009 FINAL

Mike Davis, vice president of accounting, said in a letter to Public Service Commissioners that the allegations show that the letter-writer or writers are misinformed because all Florida utilities and "the overwhelming majority of the electric utilities in the country" use that same tax calculations for ratemaking purposes.

He said the same allegations have been made before and dismissed by the PSC staff and by the Third District Court of Appeal and speculated that the "true intent" of the inflammatory letter is to "be yet another effort to deceptively incite negative media coverage in order to distract from the facts of FPL's base rate proceeding.''

The PSC will vote on FPL's request to raise its rates by $1.3 billion a year at its Jan. 13 meeting.

"I strongly doubt that this letter in fact was authored by anyone at NextEra,'' Davis wrote. "It contains so many misstatements and fundamental misunderstandings of NextEra's and FPL's businesses, and the tax laws and regulation applicable to those businesses, that it is hard to believe anyone working at NextEra -- senior management or not -- could be so misinformed.''

Davis referred to a September 2006 PSC hearing on storm costs in which he was questioned by Chris Kise, then counsel for Attorney General Charlie Crist, over the fact that FPL was charging its customers 10 percent more for taxes than its parent company, FPL Group, was paying. Davis said FPL Group was able to lower its tax bill because of huge federal tax credits offered to NextEra, its unregulated subsidiary, because of NextEra's wind generation division.

Kise, who now represents FPL as a lawyer in private practice, said Tuesday that he pursued that line of questioning in cross examination during the storm cost case to raise doubts about FPL's the storm recovery numbers, not because he believed there was a substantial tax issue involved. "It really was a non-issue, incidental to the purpose, and a rabbit trail,'' he said. He commended then-chairwoman of the PSC, Lisa Edgar, for giving him "extraordinary latitude on cross-examination" that allowed those questions to be pursued.

Comments

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fpl sucks

NextEra is the result of Green Mountain energy being exposed as a 12 million dollar rip-off.FPL created NextEra as a result of their green energy program being a ratepayer ruse telling people pay us 9.95 a month to buy green energy Solar in fact.Guess What? they never did.12 million paid for office supplies and salaries.The worst part they didn't give the money back.FPL is true scum.

John

I worked for NEXTERA and it is regular practice for their leaders to differ maintenance well beyond acceptable cycles. They have a culture that squashes personel who bring to light such practices and promotes the ones who keep things under wraps and apply the bandaids. I reported abuses to HR and was setup and pushed out. This company is well beyond greedy and manipulative.

David Emanuel

If NextEra had an operating loss and FPL group's overall taxes were thereby lowered, the utility's rates would not get lowered. The same logic applies to NextEra's tax credits - it is all legal - end of story.

For the record, I am a former NextEra employee - got the boot 2 weeks ago. I cannpt say I'm happy about it as I think the folks who gave me the boot are bad managers and completely deaf to the problems I was trying to fix and was prevented from fixing. Even so, I have to call things the way I see them. Also for the record, I am a former finance professor but by no means an authority on tax practice.

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