Fla. lawmakers likely to look into FPL settlement

Snubbing of state consumer advocate in FPL rate deal likely to get legislative, court scrutiny

Associated Press

TALLAHASSEE, Fla. (AP) -- The Public Service Commission's unprecedented decision to approve a rate settlement for Florida's biggest electric utility over opposition from the state's consumer advocate is likely to draw scrutiny in the courts and from the Legislature.

Public Counsel J.R. Kelly says the agreement approved Thursday is a bad deal for most of Florida Power & Light Co.'s 4.6 million customers. It also undercut Kelly's role as the legal representative of all consumers because FPL negotiated the deal with three groups representing only industrial, health care and federal government customers. The agreement is expected to increase monthly base rates for a typical residential customer by nearly $10 over the next four years.

Kelly said he is considering an appeal to the Florida Supreme Court but won't decide until after the commission issues a formal order.

"I would say it's highly probable," Kelly said Friday.

He contends that the commission violated state law because his office wasn't a party to the agreement. The panel and FPL say that's not necessary because other consumer groups agreed to the settlement. They are the Florida Industrial Power Users Group, the South Florida Hospital and Health Care Association, and Federal Executive Agencies. The Florida Retail Federation joined Kelly in opposing the agreement.

The senior citizens advocacy group AARP did not intervene in the case but is calling for the Legislature to remove any doubt that the public counsel must be part of a settlement before it can be approved.

"Lawmakers should make it clear that the Office of Public Counsel should have a real role to play in any negotiated settlement," AARP state director Jeff Johnson said in a statement. "No utility company should be able to cut a side deal with a few customers at the expense of all its customers unless Sunshine State consumers have a bona fide say in the agreement."

A consumer-oriented coalition of about half a dozen lawmakers who are interested in utility and energy issues is ready to pursue such legislation, said Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee.

"If it's not explicit enough, let's make it explicit," Rehwinkel Vasilinda said.

Another coalition member, Rep. Mike Fasano, R-New Port Richey, said he plans to work with Kelly and the AARP to come up with language to accomplish that goal.

"It's just so disappointing here in an economic time when people are struggling," Fasano said. "It was all done without an agreement with those who represent them."

Kelly said such legislation would help his legal argument because it would show the Legislature intended for his office to be a party to any settlement.

Commissioner Lisa Edgar on Thursday said she was disappointed Kelly's office didn't sign on to the agreement because it will benefit consumers as well as FPL with predictable rates and an increase in return on investment to help pay for more efficient power plants that will reduce fuel consumption.

The commission asked for revisions in the initial proposed settlement and gave the parties about an hour to submit a new one. The final version calling for a $350 million base rate increase effective in January was $28 million less than the original proposal. Kelly again objected and said an hour wasn't enough time for meaningful negotiations.

"I believe that there have been months and months and months for the opportunities for negotiation," Edgar responded.

Subsequent increases could bring the total increase to about $900 million as three new power plants go into service over the next four years.

If the agreement had been rejected, the commission then would have considered FPL's original request for a $690 million increase in 2013 as well as Kelly's counter proposal to reduce current rates by $253 million. The utility then would have had to file separate requests for additional rate increases for the new plants as they came on line.

Kelly earlier had asked the Supreme Court to block the commission from considering the settlement, but the justices sent the case to a lower court. The 1st District Court of Appeal rejected Kelly's request without explanation, but both courts left the door open for him to make his argument in a future appeal.

In Kelly's filing, he cited a 1976 Supreme Court ruling that reversed a commission decision to exclude the public counsel from participating in a Gulf Power Co. rate hearing.

"That office was created with the realization that the citizens of the state cannot adequately represent themselves in utility matters, and that the rate-setting function of the commission is best performed when those who will pay utility rates are represented in an adversary proceeding by counsel at least as skilled as counsel for the utility company," the justices wrote.

That case did not concern a settlement, but Kelly contends the same principle should apply.

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