This blog and its unique perspective comes courtesy of Nancy Argenziano. She served on the Florida Public Service Commissioner from 2007 – 2010 and in the Florida Legislature as a senator and representative from 1997 – 2007.
The Florida Public Service Commission may be one the most important state agencies that you’ve never heard of. It sets electricity rates, determines the need for new power plants and sets energy conservation goals for the state’s biggest power companies. It’s supposed to balance the interests of customers and the electric utilities that serve them. Instead, the Commission has become a wholly-owned subsidiary of the state’s biggest power companies. I know. I was a commissioner who dared to stand up for consumers.
After rejecting a base rate increase from the state’s largest power company, FPL, and setting conservation goals for the state’s two biggest power companies that required them to expand energy efficiency programs that help customers save money on their bills, I was not given an opportunity to reapply for my job. Neither was another pro-consumer commissioner.
As you might expect, the big power companies exert considerable political influence at the legislature and the governor’s office, and this fact has not been lost on the current set of commissioners. The examples of the Commission’s coziness with the power companies they’re supposed to regulate are numerous. My fellow commissioners approved meaningful energy efficiency goals for the state’s largest power companies in 2009 – requiring them to increase their efforts to help customers reduce energy use and save money on their bills. The current set of commissioners, essentially threw out the goals and let FPL and Duke continue their historically weak efforts on utility-sponsored energy efficiency programs.
Another case in point: A settlement agreement approved by the new commissioners allows FPL to collect more revenues from residential customers (primarily for the construction of power plants) than what the company had requested in its original petition. The deal was strenuously objected to by the Office of Public Council (OPC) – the statutorily created office mandated to look out for the interest of residential customers. No matter, the Commission approved it, and OPC has challenged it at the Supreme Court. According to OPC, the deal allows for major rate increases in 2014 and 2016 and $209 million more in earning and bonuses for normal routine that are already part of the FPL normal routine – shifting an additional $50 million dollars each year on to you, the residential customer.
Additionally, Duke Energy customers are being sacked with about $3 billion in nuclear project costs that never produced a kilowatt hour of power. The company’s shareholders walked away virtually unscathed from a botched upgrade at the existing Crystal River Unit 3 nuclear reactor. After the company cracked the containment wall several times, it decided to shutter the reactor. Customers are on the hook for over $1 billion dollars – all OK’d by the new commission. Customers never had a chance.
What does all this mean for you, the customer? The state’s biggest power companies are privately-owned and strive to maximize their shareholders’ value. It’s up to the Commission to regulate them so they don’t gouge customers. In the last several years it’s been like an episode of Utilities Gone Wild – getting everything they want from the commissioners – extra-favorable rate increases, gutting of efficiency efforts, and walking away from their own incompetence unscathed. That means the heaping of unnecessarily high costs on to customers, to the benefit of power company shareholders.
We need leadership at the highest level of state government to turn this ship around. Customers can’t bear any more financial burden from a Public Service Commission captive to power company influence.
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