The Florida Supreme Court ruled Thursday in a unanimous decision that the Florida Public Service Commission did not violate the constitution when it approved a settlement agreement with Florida Power & Light that failed to include the legal offices that represents the public in rate cases. Download Sc13-144
The case was argued in September of last year after the PSC approved a $350 million rate case with FPL in 2012 based on a settlement that was reached without the input of the Office of Public Counsel, the legislatively appointed lawyer whose office represents customers in rate cases.
The settlement allowed for the initial rate increase to be expanded to include automatic rate increases of $236 million and $217.9 million, respectively, as FPL completed modernization projects for its Riviera Beach and Port Everglades plants in 2014 and 2016.
Public Counsel J.R. Kelly had opposed the rate increase, saying that FPL’s financial projections indicate that rates should be reduced not increased. He also objected to the settlement because it allowed the company to receive a future automatic boost in revenue without having to immediately justify its expenses.
It was the first time the PSC had approved a settlement without the public counsel’s consent, so Kelly, and his office, filed suit. They asked the court to invalidate the rate increases and require the PSC to start over.
Writing for the court in a 62-page opinion, Chief Justice Jorge Labarga concluded that state law allows the PSC to independently determine rates of public utilities and that is not dependent on the approval of the Office of Public Counsel.
The commission's ability "to fix fair, just, and reasonable rates pursuant to section 366.06(1), Florida Statutes, is not conditioned on the OPC’s approval or absence of the OPC’s objections," Labarga wrote.
The court also rejected their arguments that the settlement violated the due process rights of more than 99 percent of FPL’s 4.6 million customers who received a rate increase while the company’s commercial users, who comprise less than one percent of the customer base but use a proportionately higher amount of electricity, got a rate reduction.
Lawyers for FPL joined with the PSC’s staff to argue that the public counsel had plenty of opportunity to challenge the settlement agreement last year and address the many related financial issues.
The court agreed, noting that the public counsel participated in hearings regarding the proposed settlement agreement "by submitting prefiled testimony, participating in discovery, presenting evidence in opposition to the settlement agreement, and filing post-hearing briefs. Thus, the OPC was not precluded from zealously representing Citizens, but was provided multiple opportunities to urge the public’s position on FPL’s petition and subsequent settlement agreement."
In short, the court said, "Citizens’ due process rights were not violated because it received proper notice and was fully represented in all hearings."
Citing the testimony of numerous FPL witnesses and staff, the court also concluded that the rate increase was substantiated by the evidece.
"Based on the foregoing, Citizens has not demonstrated that the Commission violated the essential requirements of the law or committed a material error in procedure by approving the negotiated settlement agreement over Citizens’ active objection, Citizens’ due process rights were not violated, and the Commission’s findings and conclusions are supported by competent, substantial evidence and are not clearly erroneous,'' the court concluded. "For these reasons, we affirm the Commission’s final order approving the settlement agreement authorizing FPL to adjust its rates."
Jusitices Barbara Pariente, R. Fred Lewis, Charles Canady, Ricky Polston and James Perry agreed. Justice Peggy Quince concurred in the result only.
The decision outraged energy conservation activists.
"Some members -- big energy users -- can go in and cut a deal for power rates at the expense of all consumers and the Supreme Court just said that's fine by them,'' said Susan Glickman, Florida director of the Southern Alliance of Clean Energy. The organization last year lost an appeal to the Florida Supreme Court challenging the PSC decision to allow power companies to charge customers for nuclear power plants that may never get built.
"If you are not mad, you are not paying attention,'' she said. "They have yet to deny a request from any of the utilities to build nuclear power plants, approved all rate increase requests and set dismal conservation goals. Every single aspect of utility regulation is stacked against the consumer. The public should be rallying around this and heading to tallahassee with pitchforks."
FPL president Eric Silagy commended the ruling.
“We’re extremely pleased by the court’s unanimous decision, which affirms an important rate agreement that was developed and supported by key customer advocacy groups and thoroughly examined by the PSC,'' he said in a statement. "The agreement is benefiting all FPL customers."