Miami Herald: Public Service Commission reviews old grand jury recommendations

After 17 years and another black eye, the PSC makes moves to adopt 1992 grand jury report.

BY MARY ELLEN KLAS
Miami Herald–November 25, 2009

TALLAHASSEE — A 1992 grand jury report that proposed ways to improve the integrity of the Public Service Commission was dusted off and embraced as a good idea Tuesday by consumer advocates and lawyers for electric customers, nearly two decades after state regulators rejected most of the ideas.

The state’s consumer advocate, lawyers for the AARP and the state’s largest industrial power users all said that it is time to make sure communication between the utility regulators and the utility companies is done in the open.

“The more we make the process transparent to the public, the more [the public] will understand, the less confusion there will be,” said J.R. Kelly, head of the Office of Public Counsel who represents the public in rate cases.

Two PSC commissioners who attended the staff workshop, Nathan Skop and Matthew Carter, agreed that it is time to require all staff communications be made public but disagreed over how far to go.

Skop said the grand jury findings “go a long way to addressing the systemic problems that tend to appear at the commission.” Carter said that instead of banning all behind-the-scenes conversation between utilities and staff members, the conversation should be recorded in writing.

The recommendations surfaced in the first in a series of workshops the commission has scheduled to recommend rule changes and legislation amid complaints that the PSC and its staff have become too cozy with the utilities it regulates.

The issue came to a head this fall as the PSC began considering major rate increase requests sought by the state’s largest utilities, Florida Power & Light and Progress Energy Florida.

Commission staffers were disciplined after the Herald/Times reported that they had given their private BlackBerry PINs — personal identification numbers that allow direct messaging between BlackBerry users — and those of some commissioners, to utility lobbyists. The commission’s lobbyist also resigned after disclosing that he attended a Kentucky Derby party at the home of an FPL executive.

The Leon County state attorney and the Florida Department of Law Enforcement investigated. Each concluded there was no criminal wrongdoing. The FDLE released its final report Tuesday, confirming that conclusion but revealing that its investigation began Aug. 4 in response to a complaint by Commissioner Nathan Skop.

Skop “expressed concerns” that the exchange of PINS “created the appearance of impropriety” and could potentially be in violation of the state’s public records and Sunshine laws, the report said. He supplied investigators with the e-mails in which aides “were exchanging their BlackBerry” PINs and the PINs of PSC commissioners with FPL officials.

CRIST’S MOVES

The incidents prompted Gov. Charlie Crist to conclude that it was time to “clean house” at the commission. He replaced Carter and Commissioner Katrina McMurrian with two new appointees who had no ties to the utility industry. Commissioner David Klement was sworn in in October and Benjamin “Steve” Stevens will begin his four-year term on the commission in January, when Carter’s term ends. The commission staff will conduct another hearing in December and have a final recommendation for rule changes and proposed legislation in January.

Kelly urged the commission take the grand jury reforms further, completely removing staff members from decision-making and eliminating their power to recommend how the PSC should vote on utility cases. He suggested they offer only advisory opinions and options as regulatory staff members do in Pennsylvania, California and New York.

“The commissioners are vested with the power, more importantly, the responsibility, to make the final decision,” Kelly said.

`INTRIGUING IDEA’

Jon Moyle, an attorney who represents customers such as the Florida Industrial Power Users Group, called Kelly’s suggestion “an intriguing idea.” He estimated that the commission approves 85 percent of the staff recommendations because “it’s probably not easy” for commissioners to challenge them.

Utility companies try to establish a relationship with staff so they can influence the outcome of the recommendation, said Earl Poucher, a chief analyst with the Office of Public Counsel. He said there is a constant stream of phone calls and visits between PSC staff members and utility officials.

“That’s how they do their business and that’s why they’re not here,” he said, noting the absence of utility officials in the audience.