FPL defends rate hike request [for New Nukes] as governor joins public opposition

TALLAHASSEE - Florida Power & Light Co. officials defended a $1.3 billion rate increase despite opponents' objections that it will pad the pockets of high-paid executives and reap bigger profits, even as Gov. Charlie Crist rebuked the hike as "excessive."

FPL CEO Armando Olivera insisted that the utility needs to raise customers' rates to make its operations more fuel-efficient and that the hike would keep customers' electric bills from climbing even more in the long run.

"We're trying to come forward with what we think is a balanced approach. I think that the fact that our rates are the lowest in the state is a reflection of what we are," said Olivera, who spent all day on the witness stand for the Public Service Commission proceedings.

It was the second day of the rate hearings scheduled to last two weeks. Juno Beach-based FPL, which serves 4.5 million customer accounts from northeast Florida to Miami, is asking for its first base rate increase since 1985.

"To suggest that we don't care about the customers and don't value the customer and try to do the right thing for the customer or, at best, are indifferent is an inappropriate characterization," he said.
FPL's justification for the rate hike includes the need to cover some of the costs of a proposed nuclear power plant.

The nuclear power plant would cost the FPL, the state's largest utility, up to $18 billion - more than the $15 billion it takes in from customers annually right now.

"So you're suggesting that even though the Legislature has allowed dollar-for-dollar cost recovery of pre-construction expense, that in 2010 Florida rate payers should begin to compensate Florida Power and Light for nuclear plans to build a plant that won't go into service until the earliest at 2018, and for which a decision to build a plant has even yet been made?" said Lino Mendiola, a lawyer representing the South Florida Hospital and Health Care Association. A PSC lawyer objected to the question.

Olivera argued that the PSC will be sending a message about the future of nuclear energy nationwide in its decision about the unrelated rate hike.

"You can send a signal that says we have a long term view and we recognize that for not just a company, but for our country, to develop nuclear power we have to have a very long term view, because it's going to take a very long time," he said.

On Tuesday, Gov. Charlie Crist joined two politicians vying to fill his office in urging regulators to reject the rate increase.

"Florida's families and businesses are hurting during these challenging economic times, and now is exactly the wrong time to approve excessive rate increases," Crist said in a statement. "I call upon the commissioners to respond to the needs of Floridians who cannot afford the higher rates by not overburdening consumers at this time."

Crist told reporters that the request is "not very compassionate for the people."

GOP Attorney General Bill McCollum and Democratic Chief Financial Officer Alex Sink also oppose the increase.

The rate request would give FPL a 12 percent return on equity - higher than the national average but lower than some companies opposing the proposal, including Wal-Mart and Publix.

The hearing was delayed Monday after it was revealed that PSC staffer Ryder Rudd, who oversees a unit making recommendations about a proposed FPL natural gas pipeline, attended a Kentucky Derby party at the Palm Beach Gardens home of FPL vice president and general counsel Ed Tancer. Rudd was removed from all FPL cases, and PSC Chairman Matthew Carter ordered an internal investigation into the possible ethical lapse.

Rudd's attendance at the party drew criticism from one of the many groups objecting to the proposed rate hike.

"Florida can't afford even the appearance of any impropriety in the consideration of these important issues," AARP Florida state director Lori Parham said in a statement.

By DARA KAM - Palm Beach Post Staff Writer - Tuesday, August 25, 2009
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