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.