April 20, 2005
Does FPL deserve it all?
The issue today before the Florida Public Service Commission is simple: Florida Power & Light believes that the state's largest utility should be able to recover $533 million in hurricane-related repair costs from consumers, while the Office of Public Counsel -- which represents consumers -- believes that the company should be able to bill only $128 million.
In fact, FPL's customers began paying in February. The utility is seeking formal approval of the $2.09 monthly surcharge, which would last for three years and raise the $533 million. FPL has estimated the total repair cost from Charley, Frances and Jeanne at more than $1 billion, but some has been recovered. The half-billion-dollar-plus balance is what FPL believes is necessary to replenish its reserve fund.
FPL spokesman Bill Swank says the utility "met the extraordinary challenge of three back-to-back hurricanes" by amassing 17,000 workers who restored power "to 90 percent of our customers within five days." Since FPL can't appeal to the Federal Emergency Management Agency, Mr. Swank says "a temporary charge of about 8 cents per household per day is a fair price to restore the storm fund so we can respond as quickly in the future as we did last year."
As a regulated monopoly, FPL is allowed to ask for the surcharge. As regulators, though, the five commissioners do not have to agree. Today, finally, the regulators should press FPL to show why the utility deserves the $533 million. Public Counsel Harold McLean will argue that FPL has recovered more costs than the company is claiming. "If they were paying somebody for 46 hours of work," Mr. McLean said, "don't send me a bill for 70 hours." He also will contend that the repair work will benefit FPL stockholders, not just the ratepayers; as such, those stockholders should bear some of the costs. Finally, he will contend that FPL has been assessing customers routinely for depreciation, and that some of that money should replenish the reserves.
Even after two public hearings last week, FPL has not made its case. The utility may claim that since so few consumers spoke against the surcharge, public sentiment is on its side. In fact, consumers -- noting that the PSC refused to block the record phone-rate increase -- cynically may believe that FPL will get no hard questions. Here's a thought for commissioners: Surprise those consumers.
Florida Power and Light (FP&L), from my Florida PSC record requests spanning over four years, has had many complaints for lack of maintenance. This was before and up to last year's hurricanes.
FP&L, since it has decided to expand on Florida, and challenged and fought to keep Duke Energy from coming into it's protected Florida, shouldn't have it both ways. Most insurance carriers do not expand coverage in Florida, because sometimes payments for "claims" will exceed their reserves.
There was an opportunity for our Florida Governor Jeb to allow merchant plants into FLorida by promoting the energy 2020 council's
report. Merchant plants, because they are not under regulation, cannot make Florida residents bear the burden of costs for new plants. Our Governor chose a secret clandestine meeting with power officials AND our Commissioner Lila jaber. This occured at Amelia Island convention August 2001 and Jaber, Jeb and power officials from FP&L, Florida Progress and Gulf Power arrived at a secret deal to keep out merchant plants (like Duke and Calpine) to allow "home grown power plants ONLY to expand and build new plants.
It is interesting to see Harold McLean's "about face", in the light of former denials from depositions of Florida Progress staff rec changes and state ex employee depositions taken, to finally sustain the Florida citizens as his sole fiduciary duty. He actually, as General Counsel of Florida's Psc, ALLOWED ALOT OF THE
fp&l et all FAVORS FROM BILLS THE PSC WROTE FOR FAVORABLE POWER LEGISLATION TO PRO-POWER INDUSTRY PSC DOCKETS. The power companies must be very confused. This "regulatory maytag repairman" in his new position is now trying to create a great chasm between his old and new job.
The concept to challenge the depreciation in contra accounts against retired equipment that no longer exists is what Charlie Beck, OPC deputy Director and I discussed four years ago on a Florida PSC Telecom docket. The same "inflation" is in existance with Billion dollar phone companies. The FCC did an audit and found that 25-30% of Babybells still had depreciation on the books (a contra account) to equipment that had been retired. That is why our Bellsouth and Verizon phone companies can inflate the cost of access fees.This creates the impression that residential phone service is $25. It is not.
The reason that the Office of Public Counsel is having a hard time with this challenge before his "old friends" at the Florida PSC? There are laws stacked up against the OPC that he helped create for four years as the PSC's general counsel.
All this information is courtesy of a Sunshine Law Florida PSC records request from 29 employees' emails on Microsoft Outlook format.I took time to read in the last one and a half years. Try to keep the doors to truth open..."Reach out and READ someone..."
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