Bill to reform public utilities advances in House committee

Legislation that would bring new measures of accountability to Florida’s Public Service Commission passed a House Committee on Tuesday.

Pinellas Republican Kathleen Peters’s bill (HB 7071) would create performance-based incentives for utilities by rating their reliability, customer service, power plant performance and costs. It also would bar lawmakers from serving on the commission within six years of leaving the Legislature. The five commissioners, who are appointed by the governor, would represent different regions of the state and be limited to two four-year terms instead of the current three. It would also move the Office of Public Counsel from being under the Legislature’s wing over to the Attorney General’s Office.

It is strongly opposed by the four biggest investor-owned utilities in Florida – Florida Power & Light, Gulf Energy, Duke Energy and Tampa Electric Company.

Susan Clark, a past counsel and chair of the PSC, represented the utilities in the hearing, said the changes would have a negative effect on electricity ratepayers.

“The main flaw in the legislation, is the premise that the utilities should be graded annually on performance, and then have their rates of return adjusted annually based on that performance,” Clark said. “That is designed uncertainty, that will result in credit rating downgrades, which will increase the cost of equity and debt, and lead to rate instability, neither of which is good for customers.”

The bill received three no votes from the House Appropriations Subcommittee on Government Operations and Technology. One was from Tampa Democrat Sean Shaw, who said that while he liked many parts of the bill, strongly disagreed with moving the Office of Public Counsel to the Attorney General’s office, saying it will “dramatically increase the politicization of that office.” Peters disagrees, saying that it should give the OPS more freedom.

Another dissenter was Villages Republican Don Hahnfeldt, who expressed serious concerns about the new performance evaluations of the utilizes (which would still be under the purview of the PSC). He also focused on what the changes might mean for ratepayers, asking if a higher utility performer get a higher return, which would be passed down to consumers?

“Yes, they can earn a little more,” Peters conceded, adding that depending on the utility, the maximum they can increase rates is by 11.5 percent.

Kissimmee Democrat John Cortes also acknowledged having some “agita” regarding whether the bill would raise rates for ratepayers.

Susan Glickman with the Southern Alliance for Clean Energy said that the Peters bill provides some important provisions, such as reducing the need for the utilities to build more power plants that she says the state doesn’t need. Although the proposal would ban lawmakers from serving on the PSC for six years after they leave the Legislature, Glickman said the bill should also place a moratorium on PSC staffers going to work for the utility companies.

This is the second committee that Peters’ bill has gone through. Currently, there is no Senate companion.