After receiving challenges, regulators void FPL's Vero Beach request and order up October hearing

 

The Florida Public Service Commission put a temporary halt to Florida Power & Light's deal to buy the Vero Beach municipal utility Wednesday.

After receiving four challenges to its June 5 ruling, the PSC swiftly declared the order "null and void" and scheduled a hearing into the matter on Oct. 10-11.

The regulators had voted 3-2 to allow FPL to charge customers to recover the $185 million cost of buying the Vero Beach municipal utility -- including $116.2 million over the book value of the property. 

Four groups challenged it for various reasons and so the PSC put the brakes on it. 

"The Civic Association of Indian River County, Inc. filed its amended petition on July 20, 2018, and the Florida Industrial Power Users Group, Mr. Michael Moran, and Mr. Bill Heady filed petitions on July 23, 2018,'' the PSC wrote on Wednesday. "Accordingly, our PAA [proposed agency action] order is null and void and a de novo hearing is set for October 10-11, 2018, to consider the petitions."

Here's our story on the ruling. 

 

 

PSC delivers rare rebuke to FPL on nuke cost recovery issue

In a rare rebuke to Florida Power & Light, state utility regulators Tuesday rejected the company’s request to charge $49 million more for the planning of a nuclear reactor that the company cannot say will ever be built.

The 4-1 decision by the Florida Public Service Commission came Tuesday after months of hearings in which the state's largest utility urged regulators to let them charge customers in the future for costs of the postponed project — even without filing a “feasibility analysis” that would show if and when they intend to build two new nuclear reactors at their Turkey Point facility in south Miami-Dade County.

“This is a hard issue,”' said Commissioner Julie I. Brown, chair of the five-member panel, who voted to reject the request. “The whole country is watching the new fleet of nuclear deployments constructed or to be constructed around the country.” Story here. 

Report details how Florida's utility regulators have become 'captive' to the industry they regulate

The watchdog over electricity rates for most Floridians has been captured by the utility industry and the result is costing consumers, according to a new report released Monday by the independent research organization Integrity Florida.

The report analyzed dozens of decisions made by the Florida Public Service Commission in recent years and concluded that there is an “inordinate focus on what additional money a [utility] company wants, at the expense of attention to what the public interest needs.”

The report details what it calls “egregious voting and unfair ratemaking,” a selection process that allows the utility industry to heavily influence legislators and the governor — who appoint the regulators — through campaign cash and lobbyists, and a revolving door between the Florida Legislature, the PSC and the utility industry.

“Make no mistake, what we’re talking about today is corruption. It’s legal corruption,” said Ben Wilcox, director of Integrity Florida at a news conference Monday. “It’s institutional corruption but it’s corruption nonetheless.” Story here. 

Scott picks Ritch Workman over Ron Brisé for PSC post

Gov. Rick Scott rejected the re-appointment of Ron Brisé, a former Democratic legislator from North Miami, to a third term on the state’s powerful Public Service Commission Friday, replacing him with a former lawmaker from Melbourne.

Scott named David “Ritch” Workman, 44, a former state legislator who how serves as the director of business development at Keiser University, to the utility board, replacing Brisé, a former telecommunications consultant.

The appointment was one of three made by Scott to the five-member utility board that oversees regulation of the state’s electric, water and sewer industries.

Workman has worked as an Uber driver, served in the Florida Army National Guard, and received his bachelor’s degree from Appalachian State University. He has no utility industry experience. His term will expire Jan. 1, 2022.

Brisé, 44, had been a telecommunications consultant before he was first appointed to the Public Service Commission in 2010 by former Gov. Charlie Crist. He had been reappointed to the four-year term by Scott and was seeking a third term. When he represented North Miami, Brisé had been an outspoken critic of Florida Power & Light’s high voltage transmission lines and sought to give the community more input in the process.

Scott reappointed Art Graham, 53, of Jacksonville Beach, who was also first appointed by Crist in 2010. He has previously served as a city councilman for the City of Jacksonville Beach. His term also ends Jan. 1, 2022.

Scott also appointed Gary Clark, 49, of Chipley, to the shortest term on the commission. Clark, the deputy secretary of Land and Recreation at the Florida Department of Environmental Protection, will fill the seat vacated by Jimmy Patronis. The former Panama City legislator left the commission when Scott named him to be the state’s chief financial officer.

Clark received his bachelor’s degree from the University of Phoenix. His term began Friday and will extend through Jan. 1, 2019.

 

Regulators unanimously approve FPL request to raise rates $811 million over four years

Florida Power & Light customers will see their utility bills rise by $400 million beginning in January after state regulators approved a 2017 rate increase Tuesday, to be followed by $411 million in rate hikes in the next three years.

The monthly increase at the end of the four years for a customer that uses 1,000 kilowatt hours a month would be would be about $9.48, starting with $5 more next year. It is less than the $13.23 increase the company initially projected.

The unanimous ruling by the Florida Public Service Commission was part of a settlement of the rate case FPL agreed to with opponents in October, in which FPL backed off its $1.3 billion rate request in return for the four-year rate guarantees.

The agreement was endorsed by the Florida Public Counsel, the lawyers representing utility customers, the South Florida Hospital and Health Care Association and the Florida Retail Federation. Others, such as the Florida chapter of the Sierra Club, Wal-Mart stores, federal executive agencies which include the military and AARP -- opposed it.

Opponents argued that FPL has been charging customers to build expensive natural gas back-up plants it shouldn't need and the agreement allows it to build another 26 natural gas turbines. The Sierra Club contends, for example, that if the utility giant stopped fighting the expansion of rooftop solar and other alternative forms of energy, its customers would save money and FPL could wean its fleet from its dependence on climate change inducing fossil fuels.

The commission did not address any of the opponents’ concerns and instead lauded the agreement as good for the customers and good for FPL. Story here. 

FPL agrees to settle rate increase for $881 million, down from its $1.3 billion ask

As Hurricane Matthew bore down on South Florida last week, Florida Power & Light’s executives agreed to back off the $1.3 billion rate increase it was seeking for the next four years and instead signed off on a $811 million settlement.

The deal, signed by FPL CEO Eric Silagy and the lawyer who represents the public in rate cases, J.R. Kelly, must be approved by the state’s Public Service Commission. If regulators agree, FPL would start charging customers $400 million in additional base rates beginning in January and at least $411 million in additional rate increases over the remaining three years of the settlement.

After the first year, rates would rise $211 million in 2018, and another $200 million in 2019, when a new power plant in Okeechobee comes on line. The monthly increase at the end of the four years for a customer that uses 1,000 kilowatt hours a month would be would be about $9.48, starting with $5 more next year. It is less than the $13.23 increase the company initially projected.

Story here. 

 

Scott picks Tampa water utilities veteran as the next PSC commissioner

A water utilities veteran who has spent a career navigating the water wars of Tampa Bay was named Florida's next public service commissioner late Thursday by Gov. Rick Scott.

Donald Polmann, 59, who has twice been on the short list of nominees to come before the governor, will replace Lisa Edgar for the four-year term on the state utilities board beginning Jan. 2. Edgar, 53, is retiring after 12 years on the board.

Polmann is Scott's fourth appointment to the influential five-member panel that has the power to raise or lower customer utility bills. The four-year term pays $131,000 a year.

For the first time, the governor did not select a legislative insider or incumbent to the post, as he did when he reappointed Edgar in 2012 and subsequently reappointed PSC Commissioners Art Graham and Ron Brise to second terms, and named former state House Rep. Jimmy Patronis to an open seat. All were candidates preferred by the state's politically powerful utility giants which were among the largest contributors to Scott's re-election bid in 2014.

Polmann, was one of the finalists recommended in 2012 when Scott reappointed Edgar and again in 2013 when the governor reappointed Brise and Graham.

Polmann received his bachelor’s degree from Rensselaer Polytechnic Institute, his master’s degree from the University of Florida, and a doctorate in civil engineering from Massachusetts Institute of Technology. Polmann served as director of science and engineering at Tampa Bay Water, a regional water supply authority. He has spent most of his 30-year career focused on drinking water regulation and protection and is currently self-employed as a consultant in civil and environmental engineering.

Polmann, who is currently self-employed as a consultant in civil and environmental engineering, has the support of Sen. Jack Latvala, R-Clearwater. In a letter of recommendation on Polmann's behalf, Latvala said he had known Polmann, a constituent, for 15 years and that Polmann "was a major player in the transformation of Tampa Bay Water from the previous agency, the West Coast Regional Water Authority."

Latvala was an outspoken critic of Edgar's, who was first appointed to the post by former Gov. Jeb Bush in 2004, reappointed by former Gov. Charlie Crist in 2007 and by Scott four years later.

Scott choose Polmann over two other candidates, Gainesville City Commissioner Todd Chase and Florida SouthWestern State College professor Cynthia Wilson Orndoff. He must be confirmed by the Florida Senate for his term to be official.

In his interview before the PSC Nominating Council on Aug. 18, Polmann said his "family heritage in construction and blue collar work" as well as his experience as a water manager will inform his outlook.

"On one hand, I've witnessed the struggles of making ends meet, both at home and in the family business, in a tough economy,'' he said. "How can we possibly raise utility rates with those conditions prevalent in so many places in our communities? On the other hand, we find infrastructure in our cities and towns throughout our state sorely in need of repair, replacement, upgrade, and yes, expansion, as our state's economy grows."

"...We've been seeing more and water breaks, sewer plant overflows, power outages, etc. -- quality of service -- and reliability must be addressed,'' he said.

He added that his expertise in water and environmental resource management; operations research, risk and uncertainty; regulatory and policy compliance; quality assurance and strategic planning and the state's Sunshine law will serve him well to find the balance between competing issues.interests, including utility investors.

The five-member PSC is in the midst of a controversial $1.3 billion rate case with Florida Power & Light.

The PSC is an agency that reports to and is funded by the Legislature, but commissioners are appointed by the governor after receiving a list of recommendations from the PSC Nominating Council, which is dominated by legislators.

Week 2 of FPL's rate case: Is the rate hike an unwanted tax or a needed investment?

State regulators began the second week of testimony this week in Florida Power & Light’s quest to obtain a $1.3 billion rate increase and the focus remained: How much profit should the state’s largest electric utility be allowed to make from customer bills?

The company concluded the first phase of its rate case before the Public Service Commission, proposing that its rates should be increased over three years as the company is rewarded with $360 million in higher profits for its “superior performance.” The request includes giving FPL the ability to earn a bonus of $120 million, a so-called “incentive adder” that would be on top of the additional $240 million a year in allowed profit the company is asking regulators to approve over what is currently allowed.

As a regulated monopoly, FPL faces no natural competition for its giant fleet of nuclear, gas and solar energy production and most of its 9 million customers have nowhere else to go for electricity. So the Public Service Commission plays the role as surrogate, imposing financial limits and performance incentives that competition might naturally create.

But opponents argue that the company should not be allowed to make higher profits as a “reward” for good performance but instead should be required to give customers a refund in return for the favorable terms they have enjoyed since the last full rate hearing in 2009. Read more here.

FPL rate case: Should customers be treated liked shareholders and get refunds? Or charged $1.3 billion

Florida Power & Light’s proposal to increase customer rates $1.3 billion over three years will be on trial starting Monday as the state’s largest electric company asks permission to raise customer bills and be rewarded for “superior service” with the ability to earn higher profits.

But more than rates will be challenged as a long list of opponents ask state regulators to reject the rate increase and order FPL to refund at least $800 million a year, arguing that the company has earned excessive profits and should be returning cash to customers.

The opponents — from the AARP and the Sierra Club to the military, industry groups and the office that represents the public in rate cases — also want the Public Service Commission to stop allowing FPL to have customers pay for pipeline purchases, natural gas deals and other business decisions that they say investors should finance. And they want regulators to order the company to diversify its fuel mix to be more climate-friendly and less dependent on natural gas.

FPL is “asking for too much money,” said J.R. Kelly, head of the Office of Public Counsel, which represents the public in rate cases. “The bottom line is, they are asking to increase their profits at the expense of ratepayers.” More here.

Who pays for shuttered Duke nuclear plants? Customers do, PSC says: $51.7 million next year

via @JStockfischTBT

The average Duke Energy customer in Florida will pay roughly $1.57 a month next year in costs relating to the shuttered Crystal River nuclear power plant.

The state Public Service Commission agreed at its annual Nuclear Cost Recovery Clause hearing Tuesday that a request for $51.7 million by the utility was "reasonable and prudent." The money was spent on planned upgrades to the plant before damage was discovered in 2009 and the plant was shut down in 2013.

The nuclear cost recovery tab is just one element of the total rates charged to electric customers. Several other parts, including fuel — the largest component — will be filed with the commission in late August and early September.

The PSC meets in early November on those components, and after its decision, the total bill for 2017 will be known.

Duke customers are currently paying $1.76 on the average 1,000-kilowatt-hour bill for Crystal River costs. Last year, the PSC approved $56.5 million in costs. Next year, customers will be paying about 19 cents a month less. Story here.

Photo: Duke Energy nuclear power plant, Tampa Bay Times