New Florida Bill Would Change PSC Membership, Rate-Making Process

With a key legislator behind it, a proposal (PCB EUS 17-01 ) that would revamp regulation of Florida's electric utilities – with respect to both the composition of the Public Service Commission and the process for rate-making – passed by a vote of 11-2 on March 8 in the State House of Representatives, according to a report by the Sarasota Herald-Tribune.

The as-yet unnamed bill would require that members of the Florida Public Service Commission be appointed from five different regions of the state;  would move the Consumer Advocate's office under the administration of the State Attorney General,; and would create a performance-based incentive system for utilities.

"I believe it injects some much-needed fresh thinking into how we regulate utilities in this state," House Energy & Utilities Chairwoman Kathleen Peters (R-District 69) told the local news outlet.

More Diversity?

The proposal would affect the future makeup of the PSC – a five-member panel that regulates utilities. It would require commissioners to be appointed from different regions that would mirror the map of the state's five district Courts of Appeals. Commission members, who are appointed by the governor after a nominating process, do not currently face geographic restrictions, and Peters said the proposed change would increase the diversity of the commission.

In addition, the Herald-Tribune reported, the bill would bar lawmakers from serving on the commission within six years of leaving the Legislature. Two current commissioners, Ronald Brise and Jimmy Patronis, are former House members.

The bill also would move the state Office of Public Counsel, which represents consumers in utility cases, under the Attorney General. The office, headed by Public Counsel J.R. Kelly, is an arm of the Legislature, and the proposal stirred debate during the May 8 meeting.

Jon Moyle, an attorney for the Florida Industrial Power Users Group, which frequently intervenes in utility cases at the Public Service Commission, questioned the need for the change.

"I did not hear any criticism or questions with respect to the job is doing,'' Moyle, who represents businesses that use large amounts of electricity, told the House members. "I think that is because he's doing a good job."

But Jack McRay, a lobbyist for the senior-advocacy group AARP, which also takes part in utility cases, supported moving the public counsel under the Attorney General. McRay said the Attorney General is responsible for consumer protection and that the Office of Public Counsel should answer to one official instead of to 160 lawmakers, the local news outlet reported.

Questions on Rate-Making

The measure also drew questions about potential changes to the rate-making process for utilities, according to the news report.

The PSC periodically takes up requests from utilities to raise base electric rates. As an example, the commission late last year approved a settlement in a rate case filed by Florida Power & Light. The settlement included $811 million in base-rate increases spread over three years.

The commission also is scheduled to start a hearing March 20 on a proposal from Gulf Power to raise base rates.

Under the new proposal, the commission would approve utility rate plans that would last at least three years; and the commission would be mandated to set utility performance standards that would address issues such as system reliability, customer service, power-plant performance, and costs.

The commission then would evaluate the performances of the utilities each year as excellent, good, adequate or unsatisfactory, with the utilities having financial incentives to achieve excellent or good ratings.