The Florida Public Service Commission on Tuesday voted 5-0 to approve a settlement with Florida Power & Light Co. to resolve a controversial rate-hike request denied by the commission earlier this year.
The PSC denial in January of a $1 billion rate hike request played a role in the Senate’s refusal in April to confirm two reform-minded PSC members appointed by Gov. Charlie Crist. Two other commissioners were ousted last summer by the PSC Nominating Council appointed by the Legislature.
In August, Attorney General Bill McCollum, FPL and other intervenors agreed to a settlement in the rate case. The agreement would freeze utility rates through 2012 while preserving the company’s return on equity.
Approval had been delayed by a legal challenge filed in September by FPL with the First District Court of Appeal. The utility sought to have Commissioner Nathan Skop removed from cases involving the utility. FPL says Skop, a former utility employee, has blamed them for the PSC Nominating Council’s decision not to nominate him for another term.
But the PSC asked the court to allow the rate case to move forward on the settlement agreement. FPL says the agreement would help its 4.5 million customers by allowing its rates to remain among the lowest in the state.
On Tuesday, representatives of the Attorney General’s Office, the Legislature’s Office of Public Council, the Florida Industrial Power Users Group, the South Florida Hospital and Healthcare Association, the Florida Retail Federation and FPL urged the commission to adopt the agreement.
Industry groups said the agreement would provide predictability for electricity rates through 2012.
The settlement was a result of numerous meetings, phone calls and drafts, said attorney Vicki Gordon Kaufman, representing the Florida Industrial Power Users Group.
“A lot of it wasn’t very pretty,” she said. But she added that the agreement is one “we all think is in the best interest of our clients and the state.”
Senior Assistant Attorney General Cecilia Bradley credited the utility for giving in on some issues. She said the agreement emphasizes the goal of the PSC to provide reliable energy at affordable rates.
“A lot of people are still struggling with the economy,” Bradley said. “And a rate freeze will be greatly appreciated, I think.”
Commission Chairman Art Graham called it “amazing” that the sides were able to reach an agreement and he said that the resolution makes it easier for the commission.
“I’m glad you guys did the fighting before we had to get involved,” Graham said.
Skop said the settlement agreement validates the commission vote earlier this year to reject FPL’s rate increase. The return on equity agreement, he said, is exactly what was ordered by the commission earlier this year.
“While that decision was criticized, history has shown … the commission made the right decision in light of the fact the utility is financially healthy, is earning a reasonable rate of return and is able to pay dividends,” Skop said.
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