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With Court OK, PSC to Consider FPL Rate Settlement

By: Keith Laing, The News Service of Florida
By: Keith Laing, The News Service of Florida

THE CAPITAL, TALLAHASSEE, December 13, 2010 --

Four months after it was agreed to, a deal reached by the state’s largest power company and several consumer advocates to freeze base electric rates for the company for two years could be ratified by the Florida Public Service Commission Tuesday.

The PSC had been originally scheduled to rule on the deal Aug. 31, but it became wrapped up in protests from Florida Power & Light over alleged bias by Commissioner Nathan Skop.

The PSC had requested emergency permission to move forward with the question on the condition that FPL didn’t object, and the utility didn’t.

Issues involving FPL, which services South Florida and most of the Atlantic Coast, have been largely on hold for months as the company alleged that Skop was biased against it and should recuse himself from cases. Skop has repeatedly suggested that the utility played a role in the PSC Nomination Council's decision June 30 to reject his bid for a second-term on the panel, assertions the company said in its court documents should bar him from weighing their proposals.

But Skop refused to recuse himself, leading the company to take its case to the 1st District of Court Appeal.

The court has not decided the larger matter, so it still remains - though Skop will not remain after January. Since he was denied even an interview for a second term by lawmakers, Skop will be forced off the PSC when his current term expires.

A spokesman for Skop said Monday that the outspoken ousted commissioner could not comment on the court ruling since it dealt with an issue still pending before the quasi-judicial PSC – as well as ongoing litigation. FPL notes that it did not oppose the PSC considering the settlement, though it still wants a ruling in its case against Skop.

If the agreement (Docket No. 080677-EI) is approved Tuesday, it would lock in rates until the end of 2012, as well as hold the company's return on equity, or profit margin, at 10 percent. It would give FPL the power to ask the Public Service Commission to raise rates if the company's ROE dips below nine percent, while the consumer groups can initiate a rate proceeding if return on equity rises above 11 percent.

As part of the deal, FPL would drop its request that the PSC reconsider parts of its rejection of the company's request for a $1.25 billion rate increase earlier this year and wouldn’t appeal the overall decision.

The company said Monday it “would not speculate” on what action the PSC might take on the agreement, which FPL president Armando Olivera said when it was struck was a fair deal.

"We think this agreement is in the best interest of all of the parties involved, especially our customers," Olivera said in a statement when the deal was first announced. "Our typical residential customer bill is already the lowest of all 55 utilities in the state of Florida, and with this agreement, base rates will remain flat until 2013. We appreciate the willingness of those who represent Florida's electric consumers to work with us on an agreement that will help provide financial stability for customers and the company alike."

Rick McAllister, president of the Florida Retail Federation, which was one of the customer representatives with whom FPL reached the settlement, told the News Service of Florida Monday that the organization still supported the agreement.

But “who knows” how the PSC will view it, he quickly added.

“That was a negotiated settlement and we’re certainly holding up our end of the agreement,” McAllister said. “I assume they would approve it. I don’t know why they wouldn’t.”

McAllister said the Retail Federation and other parties to the deal, which included the Office of Public Counsel, the Florida Industrial Power Users Group, the South Florida Hospital and Healthcare Association, the Federal Executive Agencies and Associated Industries of Florida, were “staying clear” of the Skop-FPL clash.

Skop is scheduled to leave the PSC Jan. 1.


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