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- 2012 - October - 19th -

FPL rate proposal challenged in Supreme Court

by Jim Saunders, The News Service of Florida

In a highly unusual move, a state consumer advocate asked the Florida Supreme Court on Wednesday to block regulators from considering a controversial rate settlement proposed by Florida Power & Light.

Public Counsel J.R. Kelly, whose office represents consumers statewide in utility issues, wants to halt the Florida Public Service Commission from acting on the proposed settlement, which was announced in August by FPL and some major power users.

Kelly said in a petition filed with the court that a settlement should not proceed forward without his office agreeing to it.

"The purported settlement agreement, which was executed on behalf of only an extremely small number of FPL's 4.6 million customers, is invalid in view of OPC's (the Office of Public Counsel's) non-participation and active opposition to it,'' the petition said.

The petition came after two months of battling about the proposed settlement agreement, which FPL and the major power users released just days before the Public Service Commission started a hearing on an earlier proposal by the utility to raise base electric rates by $690.4 million next year.

Under the proposed settlement, FPL would increase base rates by $378 million but also would be able to collect additional amounts during the next four years to cover costs related to new power plants, according to Kelly's petition. Also, the public counsel said the settlement included rate concessions for major power users that would have to be offset by other customers, including residential customers.

Kelly's office has argued for months that FPL's base rates should drop by as much as $253 million next year — not increase.

The Public Service Commission in August went ahead with hearing arguments about the original $690.4 million rate proposal but also has scheduled a hearing from Nov. 19-21 to take testimony about the proposed settlement. It remains unclear how regulators will handle the different proposals.

Cindy Muir, a PSC spokeswoman, said in an email Wednesday evening that the commission's attorneys had not yet reviewed the Supreme Court petition. Mark Bubriski, an FPL spokesman, said the utility had only received a news release from Kelly's office and said the PSC should be able to move ahead with considering the proposed settlement.

"Inexplicably, the public counsel steadfastly refused to participate in the negotiating process that led to this fair and reasonable settlement,'' Bubriski said in a prepared statement. "Regardless, we believe the PSC is well within its rights to conduct a hearing to gather all the facts and to consider this thoughtful compromise that provides benefits for all customers. Compared with current rates for Florida's 55 electric utilities, our residential customer bill is projected to continue to be the lowest in the state under the proposed four-year settlement agreement.”

Base rates are a major part of customers' monthly electric bills and receive heavy scrutiny from the PSC when utilities seek changes. FPL, the public counsel and business groups spent months preparing for the highly detailed hearing that the PSC held on the proposed $690.4 million increase. 

In the news release Wednesday, Kelly's office said he was asking the Supreme Court to "use a rarely invoked power provided by the Florida Constitution to prohibit the (Public Service) Commission from allowing FPL to use a controverted settlement proposal to bypass the rigorous ratemaking process established by state law."

FPL reached the proposed settlement with the Florida Industrial Power Users Group, a business organization that frequently intervenes in utility cases, the South Florida Hospital and Healthcare Association and federal agencies that are large power customers.

The Florida Retail Federation, which also frequently intervenes in utility cases, has sided with the public counsel.

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