Critics say PSC's rushed hearings favor FPL in its big rate hike request

Florida's biggest utility wants a $1.33 billion rate hike, one of the largest ever requested of state regulators.

With that much money on the line for customers of Florida Power & Light, it might be expected that the Florida Public Service Commission would give the proposal's opponents plenty of time to weigh FPL's evidence justifying higher rates.

Instead, opponents say they are getting the bum's rush.

The tight schedule set up by the commission to consider FPL's rate hike for its 4.8 million customers has critics concerned that Florida regulators are yet again favoring utilities over consumers.

Officials at the Office of Public Counsel, the group representing consumer interests before the PSC, complain that the schedule imposed by the PSC to collect evidence and file legal briefs in the case is far too short, putting them at a disadvantage against a utility with far greater legal resources.

FPL serves some Tampa Bay residents outside of Hillsborough and Pinellas counties. But critics say customers of all utilities should pay attention to FPL's rate case because it may embolden other utilities, like Duke Energy, to seek aggressive rate hikes of their own.

Public Counsel J.R. Kelly said in an interview that he objects to a deadline that gives parties just 10 days to produce legal briefs after all evidence is submitted, and a hearing in the case ends on Sept. 2. He said that is far too little time for his lawyers to adequately review thousands of pages of highly technical evidence.

In FPL's 2012 rate hike case, parties got three weeks.

Deadline schedule rushed

Kelly also objects to other deadlines in the schedule. One of the worst, he said, is that parties have just four days after everyone presents rebuttal evidence on Aug. 8 to decide what additional evidence it might seek during discovery.

"So you've got three days to read it, soak it in, to add discovery requests, including any new depositions," Kelly said.

In 2012, the deadline gave parties about two weeks.

Kelly will ask the PSC next week to amend the schedule.

"This is not a fly-by-night case," said Kelly, noting the schedule is one of the tightest he has seen in a major rate case. "This is an extremely important case. It involves a tremendous amount of money. We really believe the schedule is unworkable."

And Kelly said an aggressive schedule benefits the utility far more than OPC.

Cindy Muir, a PSC spokeswoman, disagreed. She said it is similar to the schedule of previous rate cases.

"Discovery actions, rebuttal testimony, and all other deadlines follow the normal procedure in all rate case schedules," Muir said in a written statement.

But Kelly point out the FPL will "have a bank of probably 100 attorneys working on this. I'll have three."

FPL spokeswoman Sarah Gatewood said there is nothing unusual about the PSC schedule, and noted that it was formulated without any input from the utility.

"It's a tight time frame," Gatewood said. "But we expect that. This is similar to what we've seen in the past. It's what we prepare for and what we expect to see again."

Gatewood said FPL has to deal with the same difficulties as does OPC or any other party. The deadlines imposed affect everyone involved, she said.

"We follow the same schedule as they do," Gatewood said.

Making case for rate hike

FPL first notified the PSC in January that it would seek a rate hike of nearly 24 percent by 2019 to offset increased expenses and accommodate population growth. The utility provided testimony and other evidence last month.

The utility under state law is allowed a return on equity of between 9.5 and 11.5 percent. But FPL says it should be allowed a profit margin range that is 1 percentage point higher. Kelly said every point amounts to about $165 million in profit.

FPL bolsters its case for a rate hike by noting it has "the highest reliability and the lowest typical customer bills" when compared with other utilities in the Southeast.

Some critics say if the PSC approves the rate hike, it may embolden other utilities to do the same.

"If FPL gets this, it's not hard to imagine other utilities like Duke Energy will follow suit," said Susan Glickman, Florida director of the nonprofit Southern Alliance for Clean Energy. The group expects to intervene in the FPL rate case.

A hearing in the case is scheduled to open Aug. 22 and end Sept. 2. The PSC has until late December to decide the case.

Critics of the PSC say the agency consistently sides with the utilities over the interests of consumers and that the tight schedule is one aspect of that favoritism.

Stephen Smith, executive director of the Southern Alliance for Clean Energy, said the aggressive schedule imposed on this rate case, and others in the past, is one symptom of that.

"We're talking about more than a billion dollars of exposure for a very large segment of the population," he said. "The existing regulatory commission tends to rubber-stamp these things. Maybe they don't think they need the time to consider it. If they did their proper due diligence and didn't think it was already a foregone conclusion, maybe they'd take a go-slow approach. I don't see the need to hurry it through unless you're a shareholder of FPL."

Tallahassee attorney Jon Moyle, representing the Florida Industrial Power Users Group, did not criticize the schedule. But he said it is in everyone's interest to carefully consider evidence.

"My perspective would be, it's a lot of money that's at stake and that we need to have adequate time to conduct discovery and be well prepared for the case," he said. "It doesn't need to be done in a rapid way. It needs to be done so anyone can have access to all the information needed. It's only fair to have everyone prepared to go when the hearing starts."

At that hearing that opens Aug. 22 and ends on Sept. 2, commissioners hear evidence and testimony and arguments from lawyers.

At both FPL's 2012 rate case and again this year, the discovery schedule means parties may be delivering evidence to each other only after the hearing begins.

This story was originally published April 3, 2016 at 11:42 PM with the headline "Critics say PSC's rushed hearings favor FPL in its big rate hike request ."