Monday, June 28, 2010

THE ARROGANCE OF POWER II: FPL Arrogantly Refuses to Disclose Which Former Regulators Now Work for the Utility

FPL refuses to tell the state which former regulators work for the utility
> Posted by Julie Patel on June 23, 2010 01:30 PM
Ft. Lauderdale Sun-Sentinel

Two major Florida utilities reported to the Public Service Commission this week which former PSC employees they have hired, how much they're paid and other information.

But Florida Power & Light, Progress Energy Florida and Gulf Power are fighting the PSC's request for the information.

Gulf Power said that the costs for hiring former PSC employees or firms that employ former PSC employs are minimal so they are not "material to either Gulf's earnings or its customers' rates." FPL and Progress said they don't have to provide the information because the commission's review of their rate hike requests are over.

Wade Litchfield, FPL's vice president and general counsel, wrote in a letter to the PSC that "retroactive ratemaking" – or setting customer rates based on actual expenses instead of forecasted expenses – is not allowed under state law.

PSC Executive Director Tim Devlin had requested the information in part because the costs associated with hiring former regulators could impact utilities' earnings, which in turn could impact customers' rates.

But consumer advocates have another concern with the practice: They say it can create an unfair playing field for utility customers by allowing utilities to buy insight into the state's oversight strategy and access to the former regulators' colleagues.

Sen. Mike Fasano, R-New Port Richey, proposed sweeping PSC reform legislation this year that would have barred PSC members and their aides from lobbying on behalf of regulated groups for four years after leaving the commission. But the bill failed due to disagreements with the House on key provisions.

Last year, the Sun Sentinel identified 18 former regulators and government officials that were hired as employees, consultants or lobbyists for FPL, and a couple of others joined the utility as consultants since then.

They are among a fairly small community of utility experts and were hired for their knowledge and experience, an FPL spokesman had said.

Litchfield wrote that the PSC's request "could unintentionally convey an impression of impropriety."

"Individuals engaged in the utility industry typically exercise their right to seek and even change employment, working for different employers today than when they began their careers," he wrote, adding the former regulators also work for the state Legislature or groups that represent utility customers that often oppose utility rate hikes. "We view this as a healthy aspect of this process. It helps build understanding among parties and constituents, creates relationships that often are essential in working through complicated and sometimes controversial issues."

Tampa Electric Co. and Florida Public Utilities Co. provided a list of the former PSC employees that either work for them or work for firms they've done business with since 2000 but they have asked the commission to keep the amount they paid the employees and firms confidential for competitive reasons.

There are 17 former PSC employees on the combined lists for Tampa Electric, FPUC and their affiliates.

They include five former commissioners: Lila Jaber, Susan Clark, Terry Deason, Braulio Baez and Jose "Joe" Garcia – whose terms ended within the past ten years. Garcia resigned from a post with the Obama administration this year to run for a U.S. Congress seat which represents part of Miami and other areas.

The utilities hired two as employees: Calvin Favors, who worked in the telecommunication and regulatory affairs for the PSC as recently as 2000, was hired as an FPUC employee in 2003. Wilbur J. Stiles, II, a chief aide for Clark who was hired by Tampa Electric in 2003, three years after he left the commission.

The utilities both have hired Akerman Senterfitt law firm, whose employees have included Jaber and Beth Keating, who left the PSC in 2005, Matthew Feil, who left in 1993, and JoAnn Chase, a former aide to Jaber who is back at the PSC.

Other former PSC employees who have worked at firms hired by FPUC include:

Norman Horton Messer, who was a PSC attorney until 1982, and has worked at Caparello & Self, which FPUC has hired since before 2000.

Joe McGlothlin, who works at the Office of Public Counsel – the state's advocate for utility customers – and has also worked at the PSC and at McWhirter Davidson, which often represents large utility customers opposing utility rate increases. FPUC hired the firm from 2004 to 2005.

Tampa Electric also hired firms that have employed former PSC employees.

Harold McLean, a former PSC General Counsel and head of the Office of Public Counsel, who has worked for the company since late 2008 and briefly worked for FPUC a few months earlier;

David Swafford, a former executive director of the PSC until 1993, who was a Tampa Electric consultant for 10 years until January;

Todd Bohrman, who worked at the PSC about nine years ago, and joined CSX Corporation, Inc., which the utility has hired since July 2008;

Jorge Chamizo, who was a chief aide for Baez , left the agency more than five years ago, and now works at Floridian Partners lobbying firm, which the company has hired since 2005; and

Wayne Makin, a former PSC regulatory compliance employee until about eight years ago, also consulted for Tampa Electric until last year.

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