Regulators get too cozy with utilities

Published Monday, August 31, 2009

In May, the staff lobbyist for the Florida Public Service Commission "dropped by" a Kentucky Derby party at the home of a Florida Power & Light executive in Palm Beach Gardens. Ryder Rudd, the recent recipient of an 8 percent pay increase, claims he and his wife took time out from their vacation so he could mingle and gather information from the executives of the state's biggest electric utility on behalf of the ratepayers of Florida. But mint juleps, utility executives and PSC staffers should never mix.

Rudd is now appropriately under investigation by the PSC after the St. Petersburg Times/Miami Herald Tallahassee bureau asked questions about the Derby party. Rudd, who earns $92,000 a year, also has been removed from his role in vetting FPL's proposed $1.53 billion natural gas pipeline.

But Rudd's poor judgment, appropriately admonished by PSC Commissioner Nathan Skop at the start of base rate hearings for FP&L last week, is just the latest example of the arrogance and misguided loyalties that seem endemic to an agency whose regulatory power impacts every Florida household and business.

Tucked away in a south Tallahassee state office complex rarely visited by average Floridians, PSC commissioners and staff members spend much of their time interacting with utilities' staff members and seem to lose sight of ratepayers. Many of them leave the agency to go work for the utilities. Earlier this decade, several commissioners, who have since been replaced, were the subject of multiple ethics investigations for enjoying the perks of industry-sponsored conferences.

State Sen. Mike Fasano, R-New Port Richey, complained last week that such sensibilities have remained, noting that Rudd spent part of his time during the last legislative session making sure one of his bosses, Commissioner Lisa Edgar, was reconfirmed by the Senate.

But the spotlight on Rudd has uncovered another disturbing fact: The commission quietly granted pay increases to 19 staffers in June — just a month after the Legislature passed a state budget that froze wages for most state workers and as Florida's unemployment rate climbed to 10.6 percent. Such generosity to the staff, which consumers indirectly finance through regulatory fees paid by utilities, is the epitome of arrogance.

The real damage, of course, is to the public trust. Consumers have little confidence that the PSC truly has their interests at heart as the commission reviews requests from both FPL and Progress Energy for double-digit increases in their base rates.

To even be considering rate increases in this economy is cause for concern among consumers. But when it also looks as if at least some of the PSC staff is too cozy with the utilities they are supposed to regulate, there is reason to be suspicious about their objectivity and loyalties.

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