PSC To Power Companies: Show Me The Money!
With the state's two largest public utilities both asking the Public Service Commission to allow them to raise rates, the PSC ruled Tuesday that it has the right to ask power companies how much they pay their highest-compensated employees.
Both Florida Power & Light and Progress Energy Florida have pending rate cases before the PSC and both companies objected to disclosing how much their top executives are paid, arguing that it could invade employees’ privacy and negatively impact the companies’ ability to keep those workers. But the PSC, led in the matter by Commissioners Nancy Argenziano and Nathan Skop, unanimously decided the information was essential to deciding whether FPL’s requested $1.3 billion rate increase (Docket No. 080677-EI) and Progress’ $500 million request (Docket No. 090079-EI) are justified.
However, in a concession to the concerns raised by the companies, the PSC decided to only require disclosures from employees making at least $165,000 and use job descriptions and title to identify workers instead of names. About 400 employees are expected to be impacted by the ruling.
Skop said the power companies’ arguments had “a lot of merits” and suggested raising the bar for disclosures to $250,000 in addition to forgoing employee names. But the concessions did not draw any interest in a compromise from the companies, which Skop said “enjoy the privilege and the benefits of being a publicly-regulated monopoly.”
“If these were private companies, we wouldn’t even be thinking about this,” Skop said, lamenting the fact that it took a separate PSC proceeding to compel the power companies to comply with the request. “I was offering up (the higher bar) to see if it got any movement out of the utilities, but there is none. Having utilities dictate what they will provide and the manner in which they will provide is not regulation.”
Argenziano, who lobbied most vocally for the disclosures prior to and during Tuesday’s meeting, agreed. She pointed out that $165,000 was more than the governor and Cabinet members are paid and also took issue with the power companies’ steadfast refusal to divulge salaries.
“The companies have fought tooth and nail not to give us the information we asked for and I’m not inclined to make concessions to such obstructionism,” Argenziano said before the vote.
Commissioner Katrina McMurrian also supported the requirement, but was more sympathetic to the power companies’ point of view. Even requiring full titles could still invade employees’ privacy, McMurrian said, supporting generic descriptions like “manager” and “supervisor.”
“If you go with the title, their neighbor knows they’re the director of human resources for FPL and now their neighbor knows what they make,” McMurrian said. “I do think we need to weigh that.”
The commission ultimately decided to use generic titles in reports made available to the general public, but require specific titles in confidential documents.
But even as he touted Florida Power & Light’s “long history of cooperation with respect to information that the commission requests,” FPL attorney Barry Richard said the PSC should not have access to the companies’ salary structures. Richard said it was just as important to have privacy within the company, which provides electricity to South Florida and most of the Atlantic Coast, as it was to shield employees’ pay from the general public.
“A lot of companies believe in the maintenance of a better workplace relationship if employees don’t know each other’s compensation,” Richard told the commission.
Progress Florida attorney Alexander Glenn agreed, saying that forcing the company, which provides electricity to about 1.6 million homes in 35 Big Bend, central Florida and Tampa Bay area counties, to disclose salaries would cause it to “incur real tangible direct and indirect costs.”
“You could have competitors coming in and cherry picking our best employees, who we’ve trained in many cases for years,” Glenn told the PSC. “These aren’t CEOs, whose salaries are publicly disclosed already. These are people who run nuclear plants, who train new employees, who unconditionally work overtime or Christmas.”
But that’s precisely why Skop said the intra-company jealously argument was not persuasive.
“Those people are mobile; they can go places should they need to,” Skop said. “I think the rank and file is where (friction between employees over salary) would manifest itself. If Joe the lineman was making $65,000 and Billy Bob the lineman was making $70,000, then I think you’d see some consternation.”
PSC chairman Matthew Carter called the case one of the most interesting to come before the panel during his entire tenure, but after the ruling, Florida Power & Light spokesman Mark Bubriski was not as impressed. Bubriski said the company was disappointed in the PSC’s ruling and planned to appeal.
“We continue to be concerned that publicly disclosing the names, titles or compensation of specific nuclear engineers, electrical engineers, distribution and transmission experts and other highly trained individuals responsible for operating and securing critical infrastructure would drive up compensation costs and force the loss of highly trained, specialized utility personnel to competitors,” Bubriski said in a statement. “This will ultimately result in increased rates for FPL customers. In addition, this is clearly a violation of the employees’ privacy and could create safety and security issues.”
PSC technical hearings about the FPL rate case are scheduled from Aug. 24 – Sept. 4 and Sept. 21-Oct. 2 in the Progress Energy case. Final rulings are expected in November and the new rates would take effect in January 2010.