September 19, 2013

Supreme Court weighs role of public advocate in rate cases

Florida's Supreme Court justices heard arguments Thursday in a case that could set the precedent for how much of a voice the office that represents customers in utility cases will have in influencing rate decisions before the state's utility board.

At issue is the $350 million rate increase approved in 2012 by the Public Service Commission for Florida Power & Light. The Public Service Commission circumvented a full rate hearing when it approved a settlement between FPL and the company's largest industrial users that allowed the company to charge customers higher rates in 2013 and automatically increase rates again in 2014 and 2016 when new power plants come online.

The agreement was approved by regulators despite the objections of the Office of Public Counsel, the legislatively appointed lawyer whose office represents customers in rate cases. 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 an automatic boost in revenue in the future without having to justify its expenses now. 

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 are asking the court to invalidate the rate increases and require the PSC to start over.

They say that state law gives the public counsel the same veto authority over a settlement agreement that a utility has and the settlement set a bad precedent and hurt customers. They also claim that the due process rights of more than 99 percent of FPL's 4.6 million customers were violated when regulators gave the advantage to the company's commercial users, who comprise less than one percent of the customer base but use a proportionately higher amount of the electricity. 

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August 28, 2013

No surprises: Brise and Graham stay on short list for PSC nomination

From the News Service of Florida

Two sitting members of the Florida Public Service Commission and a former lawmaker who had a short tenure on the commission are among six finalists who will be considered by Gov. Rick Scott for two upcoming openings on the utility regulatory board.

Commissioners Ronald Brise and Art Graham, whose terms expire in January, are seeking re-appointment to the seats. They made the short list after the Public Service Commission Nominating Council interviewed candidatesWednesday in Orlando.

The two positions attracted 23 applicants, with the list whittled to 11 last month. Along with Brise and Graham, the finalists for the $130,036-a-year positions are:

--- Kenneth W. Littlefield, of Wesley Chapel, a former state House member who briefly served on the PSC in 2007 and works as a funeral-home medical liaison.

--- James Baumstark, of Crystal River, a former vice president of central engineering for Con Edison in New York. A U.S. Naval Academy graduate, Baumstark started at Con Edison's Indian Point 2 nuclear-power plant and later oversaw 400 engineers responsible for New York City's transmission and distribution system.

--- Donald Polmann, of Dunedin, a former director of science and engineering for Tampa Bay Water. He earned a master's degree in engineering from the University of Florida and a doctorate in civil engineering at the Massachusetts Institute of Technology.

--- Frank Stubbs, of Fleming Island, a University of Richmond School of Law graduate who was deputy chief of staff for operations at Navy Medicine Support Command. He also was head of hospital operations at Naval Hospital Jacksonville. He is now an adjunct professor, teaching health-care human resources management and health-care marketing at the University of North Florida.

Scott has 30 days to make the appointments once the recommendations reach his desk.

Brise, a former state House member, and Graham, a former Jacksonville City Council member, were both appointed to the commission by former Gov. Charlie Crist in July 2010 and reappointed by Scott. Brise is the current the commission chairman.

Meanwhile, this is not the first time Scott will be asked to consider Littlefield.

Littlefield, who spent nearly eight years in the state House, was appointed to the PSC by former Gov. Jeb Bush in September 2006 but was replaced by Crist in January 2007 shortly after being sworn in. Crist contended Littlefield was not consumer-friendly enough.

Several tea-party groups unsuccessfully urged Scott to return Littlefield to the commission last year, imploring the governor to replace Commissioner Lisa Edgar, who faced criticism that she did not adequately represent ratepayers. Scott reappointed Edgar.

August 05, 2013

Despite dimming future for nuclear power, FPL asks to continue collecting for Turkey Point

Five years and more than $650 million into refurbishing and building nuclear reactors, Florida Power & Light officials told regulators Monday that it can’t guarantee what new reactors will cost consumers, when the reactors will deliver energy, or even if it will get a license to finish the job.

Despite the uncertainty, the state’s largest electric company asked regulators to allow it to continue to charge customers to pay for the prospective expansion of the Turkey Point plant on Biscayne Bay in south Miami-Dade County.

The monthly cost on every customer bill in 2014: 48 cents per 1,000 kilowatt hour on every customer bill, down from the $1.65 a month charged this year to pay for upgrades on the existing reactors.

The earliest conceivable date the project could generate power: 2022. Story here. 

PSC agrees to charge Duke Energy customers $108 million for shelved nuke plants

Duke Energy customers (formerly Progress Energy of Florida) spent $1 billion but never got an atom of energy from the Levy County nuclear power plant, nonetheless the Florida Public Service Commission agreed to let the company collect another $108 million a year through 2017 for the now shuttered Crystal River reactor and the canceled Levy County project.  

The decision by the PSC will add 89 cents a month for 1,000 kilowatts of energy to current bills for customers. The PSC also agreed to Duke Energy's request to defer approval of a proposed settlement agreement it entered into with the state Public Counsel's Office. The company agreed to end plans to build the Levy Plant and work out how to pay the $3.2 billion bill for ending that project and shuttering the Crystal River plant at a hearing next fall.

PSC Commissioner Eduardo Balbis raised doubts about the prudence of allowing the company to charge customers before providing evidence to regulators that the costs associated with the settlement are prudent and feasible.

But he and other commissioners concluded they had no other option, based on a state law that allows utilities to charge customers in advance for nuclear power plants, regardless of whether they are built or not, and a settlement agreement relating to the broken Crystal River plant. 

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Nuclear's future in Florida continues to dim, but will regulators let utilities keep collecting for it?

As the future of the nuclear energy industry in Florida appears to be dimming, the Florida Public Service Commission today takes up requests from Duke Energy Florida and Florida Power & Light to allow them to continue to ask customers to pay for projects they have no certainty of building.

Duke Energy Corp. on Thursday announced it had indefinitely postponed plans to build two new reactors in sparsely populated Levy County on the Gulf Coast, citing federal licensing delays and economic concerns. Those are topped by spiraling construction costs and uncertainty over whether Florida regulators and lawmakers will continue supporting controversial “cost-recovery’’ policies allowing utilities to bill customers in advance for plants with multibillion-dollar price tags.

The decision by the nation’s largest utility is the latest sign of cooling enthusiasm for nuclear power nationwide. It promises to increase scrutiny of Florida Power & Light’s plan to add two more reactors to its Turkey Point nuclear power plant on south Biscayne Bay.

Erik Hofmeyer, an FPL spokesman, said the utility constantly reviews changes in energy markets but remains committed to obtaining a license from the Nuclear Regulatory Commission for two next-generation reactors he said would save customers $78 billion in fuel costs over decades of operation. More here from Curtis Morgan.

Read more here:

May 03, 2013

Edgar wins reappointment to the PSC on 26-13 vote, after tough critique

The Florida Senate hit a snag late Friday as it the final day of session was winding down when a routine confirmation of Public Service Commissioner Lisa Edgar took a surprise turn as legislators spent a half-hour in vigorous debate before confirming her 26-13.

Edgar, who is seeking a third term on the board that regulates utilities, was criticized by several senators for too pro-utility while supporters said she was well-qualified and deserved another four years in the $130,000 job. She was appointed to the post by Gov. Rick Scott, after a commission dominated by legislators nominated her for a third term. 

Sen. Jack Latvala, R-Clearwater, led the opposition as supporters and opponents crossed party lines. As chairman of the Senate Ethics and Elections Committee, he had previously voted to confirm Edgar but decided he wanted to raise his concerns about her voting record. 

"She does not do an adequate job of representing the ratepayers and consumers of the State of Florida,'' he said. He said she could have been more aggressive in holding utilities accountable before allowing FloridaPower & Light and the former Progress Energy to charge customers for pre-construction costs for nuclear power plants.

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May 02, 2013

Supreme Court rejects clean energy advocate's challenge to nuke fees

On the same day the Florida Supreme Court upheld a nuclear fee on utility customers, Florida legislators sent to the governor new tools regulators can use to hold electric companies more accountable when collecting the money.

In a unanimous opinion, the Florida Supreme Court rejected the arguments of the South Alliance for Clean Energy which had claimed that the Public Service Commission exceeded its authority when it allowed the Florida Power & Light and Duke Energy (previously known as Progress Energy of Florida) to collect the nuclear fees for nuclear plants that may or may not be constructed.

The clean-energy coalition argued that the PSC decision was "arbitrary and unsupported by competent, substantial evidence.''  Download SCOFLA SACE ruling

The court ruled that the legislation provided sufficient guidelines that neither the agency nor the courts can determine whether the agency is carrying out the intent of the legislature. Citing a previous decision regarding AT&T, the court said there is “no indication that the legislative policy-making function has been usurped by or improperly transferred to the PSC.” 

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April 26, 2013

Senate passes rewrite of unpopular nuclear fee

The Florida Senate on Friday passed a bill that for the first time attempts to scale back the unpopular nuclear fee on customer utility bills by tightening oversight by the state’s utility regulators.

The bill, SB 1472, imposes new restrictions on the "early cost recovery" law passed in 2006 that allows electric companies to impose pre-construction costs for nuclear projects without any guarantee that the projects will be built. The bill passed unanimously with no discussion and will be sent to the House, which will take up a similar bill next week, the final week of the 60-day legislative session. 

"This significance of this is it creates a process that, for the first time, only allows rate recovery for the process of obtaining a license,’’ said Sen. John Legg, R-Lutz, who along with Sens. Wilton Simpson, R-Trilby, Jack Latvala, R-Clearwater and Jeff Brandes, R-St. Petersburg, are sponsors of the Senate bill. 

The Senate bill prohibits Progress Energy and Florida Power & Light from collecting the nuclear fees after July 1 unless they have shown proof of their intent to pursue a license for a nuclear reactor from federal authorities. The PSC has the power to determine how to interpret intent. 

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April 25, 2013

Senate amends nuclear fee bill

The Florida Senate on Thursday made minor changes to its plan to rework the unpopular nuclear fee on customer utility bills to tighten the oversight of the state’s utility regulators and make other changes with an amendment by Sen. John Legg, R-Lutz.

SB 1472 rewrites the nuclear cost recovery act enacted in 2006 that allows electric companies to impose pre-construction costs for nuclear projects. The amendment, added to the bill with no discussion, will give the Public Service Commission more discretion when reviewing the company’s justification for continuing to collect the nuclear fees from customers. It also requires that if Progress Energy of Florida Power & Light fails to show that it has committed enough money to a new plant, or if its intent is unrealistic, it can’t continue to collect the money.

The Senate amendment also prohibits Progress Energy and Florida Power & Light from collecting the nuclear fees after July 1 unless they have shown proof of their intent to develop the plant. The PSC has the power to determine how to interpret intent.

Since 2006, Progress Energy has charged customers more than $1 billion to expand the now-crippled Crystal River nuclear power plant and to start developing a new nuclear power plant in Levy County. The company terminated the Crystal River project but has kept $150 million of the money in profits from all its projects.

Florida Power & Light collected $530 million from the nuclear fee and used the money to finance expansions to its existing power plants at Turkey Point and in St. Lucie County. It has also proposed building two new reactors at Turkey Point but has not obtained a permit to do it.

Voter discontent with St. Petersburg-based Progress Energy’s troubled power plant has prompted four Tampa-area senators to take the more aggressive approach to revamping the law, although they have stopped short of repealing the proposal.

April 15, 2013

Senate committee grills, then approves, Edgar for third term on PSC

The Senate Ethics and Elections Committee grilled Public Service Commissioner Lisa Edgar about the regulatory board's role in charging customers a nuclear cost fee Monday and then voted to unanimously to approve her for a third term.

Edgar, who is the commission’s longest-serving member, said she believes that consumers have been well served by the commission and the 2006 law that allows consumers to be charged a fee to pay for nuclear plant development in advance of the plants being built. 

“If those projects go online, then consumers here in Florida will have saved millions and millions, and maybe even billions, over the course of the project,’’ she said.

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