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Opinion: Does the Public Service Commission truly serve the public?

0 Comments 18 October 2017

Integrity Florida’s mission is to promote integrity in government and expose public corruption. Our latest report, “Florida’s ‘Public Service’ Commission? – A Captured Regulatory Agency,” is intended to do both.

What we find in this report is a form of corruption — legal and institutional corruption, but corruption nonetheless.

Does the Public Service Commission truly serve the public? Among other things, the report finds the PSC meets the criteria for a “captured” regulatory agency.

What does that mean? Investor-owned utilities make significant campaign contributions in Florida legislative races and have a formidable lobbying presence. They use contributions and lobbying to affect the Legislature’s nomination and confirmation of PSC commissioners, as well as its oversight of the Office of the Public Counsel.

These actions lead an agency that has been “captured” by the utilities it is supposed to be regulating. The result can be PSC decisions not in the best economic interest of Florida’s families and businesses.

For most of its 100-year history, the agency was a three-member body elected statewide. In 1978, former Gov. Reubin Askew helped push the Legislature to make it a five-member appointed body. Askew wanted to take the complex job of utility rate making “out of the hands of politicians.” Well, 40 years later, exactly the opposite has happened.

The regulatory capture of the PSC was manifest in 2010 after four consumer friendly PSC commissioners voted to reject a rate hike request by Florida Power and Light.

FPL led a successful lobbying effort to refuse to confirm two commissioners appointed by then Gov. Charlie Crist. Later that year, the two other commissioners who voted against that rate hike were essentially fired — the PSC Nominating Council did not even interview them when they applied for another term on the Commission.

The PSC needs more independence from the Florida Legislature. The process for selection of PSC commissioners should be insulated from politics and lobbying.

In addition, the report finds:

  • The Office of the Public Counsel needs more independence, and should likewise be insulated from political considerations.
  • Residential energy customers need to be given priority. Groups representing residential customers are often outweighed by larger interests such as industrial users, retailers and hospitals.
  • Utilities and those objecting to their rate requests routinely work out differences behind closed doors in settlement agreements. Utilities appear to approach the process of negotiation much like a used car dealer who marks up the initial asking price, knowing they will eventually agree to a lower amount.
  • Policymakers should revisit the decision to move to an appointed PSC. They may well determine an appointed system still has merit, but additional steps should be taken to ensure the public is better represented in the nomination and appointment process.
  • If the Commission remains an appointed body, policymakers should broaden membership on the Nominating Counsel. Ohio, for example, has a broad-based nominating counsel that includes representatives of consumer groups, organized labor, the state bar, state accountancy board and other professional organizations.

The Florida Legislature should consider these actions to break the regulatory capture stranglehold the major investor-owned utilities have on Florida’s Public Service Commission. Such reform is long overdue.

Ben Wilcox is research director for Integrity Florida.

http://www.tallahassee.com/story/opinion/2017/10/13/opinion-does-public-service-commission-truly-serve-the-public/756293001/

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