Florida Consumers Face 31% Rate Hike While Regulators Party with Utility Execs; PSC Staffer Removed from Cases

by Deb Cupples |  Ryder Rudd, a top staffer at Florida's Public Service Commission (which regulates utility companies) was removed from all cases involving Florida Power and Light (the state's largest utility) until after an ethics investigation. 

Why?  Apparently, Mr. Rudd openly bragged that he and his wife had gone to a swank party a few months ago at the home of Florida Power and Light (FPL) executive Ed Tancer.

Despite our nation's shaky economy, FPL has been fighting to hit South Florida consumers with a 31% rate hike, which requires PSC approval.

PSC Commissioner Nathan Skop raised the issue of Mr. Rudd's questionable socializing at yesterday's hearing.  Skop commented: 

"Such inexcusable conduct undermines the public trust and confidence in the regulatory process and impugns the integrity of this commission....  These are not allegations, but admissions by this employee." [Orlando Sentinel]

Yes, it does undermine the public's confidence when regulatory staff gets chummy with the very people whom they are paid (by us taxpayers) to regulate.  

This reminds me of ex-President Bush's Interior Department scandal last year, when we learned that staffers accepted gifts from and "partied" (had sex, drank, took cocaine) with oil company execs.  The Interior Department regulates some aspects of the oil industry.

This is not the first time such potential conflicts of interest have been raised at Florida's PSC.

In June, a St. Pete Times blog reported:

"[S]elf-described Public Service Commission investigator Steve Stewart reports that PSC Commissioner Katrina McMurrian has repeatedly raised conflict of interest questions with her attendance at both utility-sponsored events and private dinners. Both events were closed to the public and officials from the utility companies she regulates were in attendance. Take a look.

"We can't vouch for the balance of the report -- there is no obvious response from McMurrian -- but it's clear Stewart has solid documents and his timeline raises serious questions about McMurrian's judgment that the commissioner should answer."

Let me emphasize that Ms. McMurrian is an actual commissioner -- one of the five top dogs at the PSC.  Ms. McMurrian was appointed by our industry friendly ex-Governor Jeb Bush. 

Current governor Charlie Crist tried to balance the PSC by appointing two consumer-friendly commissioners: Nancy Argenziano and Nathan Skop.  Unfortunately, they are a voting minority in the five-member PSC.

It'll be interesting to see how the PSC deals with Mr. Rudd's apparent ethical lapses.

Comments

[cloth shopping]

Really memorable and unforgettable moments are captured in this blog.

[Steve Bandoh]

I'm not for corporate price gouging but can someone please explain this to me, why is it on one hand we scream for more regulation in the energy industry but on the other hand we complain when we pay higher prices to a small group of energy providers? It's not rocket science people the more you regulate the higher the barriers of entry are to get into an industry thus when it comes time for consumers to pay you have a growing number of people demanding the same resource from a fairly small pool of providers. That in addition to the fact this article fails to provide any financial justification for why the rate hike was proposed is why I've started to laugh off articles like this on bucknaked. I haven't had a chance to look at FPL's operational costs but I'm willing to bet there's a pretty damn strong correlation between a rise in their operational costs and the proposed rate hikes. I don't condone corporations taking advantage of consumers but anyone who suggests it's good for corporations to sacrifice profit in the name of what the public decides is good clearly doesn't know their history.

[entertainment source]

A lot of useful information in those links, thanks. I feel that it might even be too much for me to “digest” in just one week.

[Steve Bandoh]

True their is a lot of useful information in those links but ultimately what is it that you're trying to say Deb? Is it that a 31% rate hike is excessive? Is it that regulators shouldn't be friends with those they keep in check? Or is it that we need more "consumer friendly" regulators(whatever the heck that means)? Because if it's the 31% rate hike you're sounding off about there very well might be one, but I failed to see where you pointed out why it's excessive. And sorry tough economic times don't give you a pass give me facts that show they are clearly charging a rate way in excess of what the market rate should be.

Or if your point is that regulators shouldn't be friends with those they keep in check show how in this case it's led to them being permissive of shady business. Is it then wrong for me to be friends with police officers, judges, IRS agents, ect.? If not it would be kind of hypocritical to suggest that it's OK for you to do it but when it's them it's wrong. I'm not naive enough to say there isn't a correlation between the relationships and them permitting the energy co. do as they please but I'd suggest that it's a personal issue. Saying regulators can't be friends in the industries they regulate to me is analogous to saying you can't have gay's in the military. True in both cases whether allowing gays or allowing regulator/industry friendships it might lead to some adverse consequences but the two don't necessarily follow. That's why in my opinion in BOTH cases there is no problem and the relationships aren't that big of a deal. If there is clear evidence that the relationships are effecting the quality of their work then by all means remove the individuals who can't handle themselves professionally at work but don't make blanket statements like insider relationships are bad.

Finally, I wondered if you were trying to say that we need more consumer friendly regulators? What does that even mean to you? To me consumer friendly means doing what is best/most sustainable for the consumer. If low prices are what you consider consumer friendly I'm sorry but maybe you should go back to economics 101. Let's pretend that in your consumer friendly world the regulators capped the price of energy at a certain rate. As long as the equilibrium market price is below that rate nothing happens but once it's above that price ceiling yet remains artificially capped you have something called a shortage. Essentially, you'd be mandating BIG ENERGY to sell power at a rate lower than what the market(composed of millions of individuals like yourself) have determined it should be. Simple human nature states if you can get something for cheaper than what you value it at YOU WILL USE MORE OF IT! Hence the reason why Wal-Mart is such a huge success. At a lower mandated price Big Energy would exhaust their supply even quicker (releasing all those green house gasses I'm sure you hate) at a lower profit thus giving them incentive to either leave the industry for something more profitable or only supply to the areas it's cheapest to deliver to. So as the consumer is it really in your best interest to get artificially undervalued energy at the cost of shortages and only being offered service in certain areas? Lol think it through before passing judgment on on "it depends ethics" and totally ignoring the big elephant in the room that runs the world and should be the main focus of all policy decisions. MONEY