TALLAHASSEE — Sparks flew during the first day of hearings on Florida Power & Light’s proposed rate increase Monday as state regulators ordered a conflict of interest investigation into their own staff and FPL turned over confidential documents detailing what it pays 400 top executives.
Minutes into the hearing, Public Service Commissioner Nathan Skop called for the resignation of Ryder Rudd, the commission staff lobbyist, based on a phone call he had received from Rudd over the weekend. Rudd told Skop he had attended a Kentucky Derby party in May at the Palm Beach Gardens home of Ed Tancer, FPL’s general counsel and vice president.
Skop said the behavior violated commission rules that staffers are not allowed to accept anything of value from regulated industries or talk to them about pending cases.
“Such inexcusable conduct undermines the public trust and confidence in the regulatory process and impugns the integrity of this commission,” Skop said. “I would hope that the resignation of this employee would be forthcoming in the immediate future.”
FPL is asking permission to raise its rates for basic service about 30 percent and Monday’s hearing is the first in what is expected to be weeks of testimony and cross-examination of the state’s largest utility.
But the discussion over potential conflicts by PSC staff raised the specter that the commission may face questions about its own independence.
Sen. Mike Fasano, R-New Port Richey, chided the commission Monday for failing to fire Rudd after he admitted socializing with FPL officials.
Fasano said Rudd “should go’’ and that he first violated PSC ethics rules during the last legislative session when he lobbied on behalf of Commissioner Lisa Edgar, who was seeking Senate confirmation for her reappointment to the commission.
“That is not what he is paid to do,” Fasano said. “I can’t believe the commission even hesitated. He should have been removed right away.”
Rudd was one of 19 PSC staff members who got retroactive pay increases in June totaling $48,000. His salary rose from $85,000 a year to $92,000, an 8 percent increase.
The salary increase was not approved by commissioners in a public hearing but was quietly approved by commission members in private meetings, said PSC Director Mary Andrews Bane.
Only Skop opposed the salary increase. Fasano believes the pay hike was pushed by Edgar and other commissioners.
“The 10 percent pay raise is a quid pro quo’’ for Rudd’s help in Edgar’s confirmation, Fasano said.
Commissioner Nancy Argenziano, who had also received a call from Rudd, agreed he should be investigated and that the investigation should also include other staff and PSC commissioners.
“This should prompt a thorough investigation of the whole place and that means commissioners,” she told the Herald/Times. She said she believes that some staff members and some commissioners are “too cozy’’ with those they are charged with regulating.
Commissioner Edgar was in the building during the hearing but did not attend the meeting or address witnesses.
Commission Chairman Matthew Carter said the revelation was the first he had heard of the issue and immediately called for a recess before he received the staff recommendation to order the investigation.
“We want rate-payers to know the process is fair,” he said.
Rudd told the Herald/Times last week that he and his wife were in Miami for the weekend and stopped in “briefly’’ at Tancer’s party as part of his attempts to gather information about the industry issues.
“I do as much information-gathering as possible,” Ryder said. “It was a good opportunity to meet people who are pushing some of the issues I’m following.”
Rudd said he did not consider it a conflict of interest and that he “had no role in the rate case.”
PSC general counsel Booter Imhof recommended that Rudd be removed from all FPL-related issues pending an investigation by the inspector general, as required by commission rules and said that Rudd’s behavior posed “no impediment to the rate case moving forward.”
Meanwhile, FPL agreed to release salary data for more than 400 executives who make over $165,000 — information the PSC ordered released last week.
But the information will remain confidential pending FPL’s appeal to the Florida Supreme Court.
Last week, the PSC voted unanimously to force the company to release the information so it can decide whether FPL is paying excessive salary and bonus packages and whether it should be charging consumers for those salaries.
The company will continue to appeal the order, said FPL spokesman Mayco Villafana, because once the information makes it into the files of the PSC “it can become a public record and that puts us at a disadvantage in the human resources marketplace.”