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With Klement On Board, PSC Delays Vote on Rate Increases

On its first vote with one of Gov. Charlie Crist’s new appointees, the Public Service Commission on Tuesday acquiesced to the governor’s request that it put off votes on proposed rate increases for Florida’s two biggest power companies until his overhaul of the panel is complete.

PSC Commissioner David Klement, sworn in last week, joined the unanimous vote to push back decisions on a $1.25 billion requested rate increase from Florida Power & Light and a $499 million proposed hike for Progress Energy until January. The decision now will not be issued until January 28 and 29, weeks after a second new appointee, Commissioner-designate Benjamin “Steve” Stevens, joins Klement on the PSC.

Crist had requested the delay after he effectively fired former Commissioner Katrina McMurrian and PSC chairman Matthew Carter. McMurrian quit the panel after she wasn’t reappointed, but Carter remains until January and he also voted in favor of the delay. That means he’ll be off the panel by the time it decides on the proposals.

The decision also means Progress Energy can impose its rate increase without the PSC approval on Jan. 1 under state law, but the rate hike would be subject to refund if it is ultimately voted down by the PSC.

FPL, with current rates that are the result of a 2005 settlement agreement approved by the PSC, will have to wait for the panel to weigh in before it could begin charging a new rate.

The delay was ostensibly to give the new commissioners time to get up to speed on the cases, which have been before the panel since March, but Klement said Tuesday that he could look at the records of the case and “evaluate them as most ordinary people would, as a common sense assessment while respecting the law.”

“I know there’s a lot riding on this decision today,” Klement told his new colleagues. “I’m aware that the governor wants those matters to be delayed. I’m aware that this matter is now entangled in politics, which is unfortunate for all parties concerned, and I’m aware that the staff recommends against a postponement.”

State law requires the PSC to make a decision on rate increases within 12 months of opening them or risk not having a say in rates, giving the panel deadlines of March 18 for the Progress case and March 20 for FPL’s. Klement said he did not think pushing back the decision would imperil the due process of either side of the case, though he said catching up on the case would require reading 9,699 typed pages, 829 pages of exhibits and 23 days worth of hearing videos.

“I can’t speak for Commissioner-elect Stevens, but I can I speak for myself,” Klement continued. “I believe I can get up to speed in time to meet the statutory requirements and provide due process to both utilities, and I commit to do so.”

Opponents of the rate increase argued the delay was only fair because it would allow the participation of Crist’s new pick, who he appointed after saying publicly he wanted more consumer-friendly members of the commission.

The utilities argued that the schedule had long since been set and should be followed so they can accurately plan fiscally.

PSC Commissioner Nathan Skop said the new member should have a large say in whether to delay the votes.

“I’ll be very deferential to our new commissioner…to the extent that he would have the most work to do,” Skop said.

Skop said setting the votes so close to Stevens Jan. 2 start date on the PSC would put the Stevens on “constructive notice” that he needed to get up to speed as quickly as his fellow appointee who got a three-month head start on the panel.

Carter said the learning curve was part of the job.

“When I was sworn-in, it was about 9:30 and I think about 11:30 we were voting on some significant issues,” Carter said. “I left my prior employment 3 months early and I came over. It would be incumbent upon any commissioner knowing that on day one you’ve got to work. It can be done. That’s just the nature of the beast.”

Commissioner Lisa Edgar appeared initially hesitant to delay the vote, saying that it could possibly allow at least one of the companies to raise rates around the holidays without the approval of regulators.

“I fully recognize that ‘subject to refund’ is built into the statute as a protection to ratepayers and also a protection to the companies, but yet, right after Christmas putting in rates…that could be above what the rates are that we ultimately approve gives me great pause. It’s just a scenario that if we can avoid, I would prefer to avoid.”

Even though FPL had asked the commission to stick to its original schedule, the company said after the vote that it was glad the PSC took the middle ground and left enough time for the rate decision to take effect before the statutory deadline.

“All we have asked is that the Commission vote on the facts and merits of our proposal in a timely fashion,” FPL spokesman Mayco Villafana said in a statement provided to the News Service. “Now we look to the commission to move forward and that its vote provides an outcome that will allow us to continue to invest to make the electrical infrastructure stronger, smarter, cleaner and more fuel efficient.”

Crist praised the PSC for bowing to his wishes and not deciding the Progress Energy hearing in November, as had been scheduled, and the FPL case in early January.

“I thank the Public Service Commission for voting today to delay the decision on whether to allow rate increases in certain service areas,” Crist said in a statement. “The additional weeks will afford the newly appointed commissioners the much needed opportunity to bring fresh eyes and a new perspective to the process, and I know Commissioner Klement and Commissioner-Designate Stevens appreciate the extra time to review the details of the case, as do the consumers who await their decision. In my view, today’s action is good news for Florida consumers.”

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