House targets changes in utility regulation

By JIM SAUNDERS
THE NEWS SERVICE OF FLORIDA

THE CAPITAL, TALLAHASSEE, March 8, 2017......... With a key lawmaker pointing to a need for "fresh thinking," a House panel Wednesday approved a proposal that would revamp regulation of Florida's electric utilities.

The bill would require that members of the Florida Public Service Commission be appointed from five different regions of the state, move a consumer advocate's office under the attorney general and 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," said House Energy & Utilities Chairwoman Kathleen Peters, a Treasure Island Republican whose subcommittee voted 11-2 to approve the measure (PCB EUS 17-01).

The proposal, in part, would affect the future makeup of the Public Service Commission, 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, but Peters said the proposed change would increase the diversity of the commission.

Also, the proposal would allow future commission members to serve two four-year terms, a reduction from a 2015 law that placed a limit of three terms. Also, 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 potential move drew debate during Wednesday's 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 Mr. Kelly 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 if it does not adequately represent consumers, instead of answering to 160 lawmakers.

McRay said he thinks Kelly does a good job as public counsel. "This is not an issue about J.R. Kelly, however," McRay said. "This is an issue about the Office of Public Counsel."

The bill also drew questions about potential changes to the rate-making process for utilities. The Public Service Commission periodically takes up requests from utilities to raise base electric rates, a complicated process that involves extensive technical evidence and lengthy hearings.

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. Also, the commission is scheduled March 20 to start a hearing on a proposal by Gulf Power to raise base rates.

Under the House proposal, the commission would approve utility rate plans that would last at least three years. Also, the commission would be required 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. Those incentives would involve the "rate of return," a measure of profitability, that utilities are allowed to earn.

Representatives of the state's major private utilities, Florida Power & Light, Gulf Power, Duke Energy and Tampa Electric Co., did not speak during Wednesday's meeting.