Florida Government and Politics Weekly Update

Utilities Regulation: Ethical Issues Create Turmoil at the Florida Public Service Commission
Questions regarding contacts between Florida Public Service Commission (PSC) staff members and representatives of regulated utilities have created a chaotic situation for the regulatory agency.

On September 8, 2009, the commission’s Director of Strategic Analysis and Governmental Affairs, Ryder S. Rudd, resigned after a review of his attendance earlier in the year at a Kentucky Derby party at the home of a Florida Power & Light Co. (FPL) executive. Mr. Rudd stated that he had paid for the food and drink he consumed at the party, but the commission’s inspector general found that he had used “poor judgment.” The inspector general said he could not determine whether Mr. Rudd violated PSC rules by attending the event.

During the week, it also was revealed that several PSC staff members had given their private BlackBerry^® personal identification numbers (PIN) to an FPL representative. The use of a PIN enables a person to send or receive messages on the handheld device without going through the state e-mail system. The First Amendment Foundation, a media-funded organization that monitors compliance with Florida’s public records laws, commented that the use of PINs may allow officials to communicate about public business without creating a public record and may allow inappropriate ex parte communication between PSC staff and utilities with issues before the commission.

Three commissioners’ staff aides have admitted to sharing their PINs with FPL representatives. One of those aides resigned, and two have been placed on administrative leave. On September 10, 2009, Commission Chair Matthew Carter ordered that all PSC messaging systems other than email be disabled pending further action by the full commission.

In the wake of these developments, Public Service Commissioner Nancy Argenziano requested that the statewide prosecutor convene a grand jury to review “the entire regulatory scheme.” Senate President Pro Tem Mike Fasano (R-New Port Richey) urged Commissioner Carter to postpone action on rate cases currently before the commission, and requested that Senate President Jeff Atwater (R-North Palm Beach) convene Senate hearings on the commission’s ethical issues. On September 8, 2009, Governor Charlie Crist said he was “monitoring the situation.”

Legislature: October Special Session Unlikely
Senate President Atwater has announced that a special session of the Legislature to address the new Seminole Tribe gaming compact in October 2009 is “highly unlikely.” In a memorandum to members of the Senate, Senate President Atwater said:

An initial review has raised questions regarding some of the terms of the Compact. I have directed Senate staff to work with the Governor’s office to receive additional clarification … .This is a complex issue and conducting a thorough analysis will take time. We have a responsibility to exercise due diligence to ensure we understand the long term ramifications of the proposed Compact.

Gov. Crist had urged the Legislature to take up the gaming compact in an October session.

The memo also addressed another matter that has been widely discussed as a potential special session issue: offshore oil drilling. Senate President Atwater appeared to cast doubt on the Senate’s willingness to consider the issue in a special session, stating:

[T]his issue involves a series of complex conversations with a variety of interests and impacts throughout our State. There are policy decisions to be considered that are not well served by undue haste. If, or when, the Senate takes up this I issue it will be in a manner that allows for sufficient time to debate the facts and the merits of such policy. The citizens of Florida deserve a thoughtful and deliberative process that establishes a factual baseline for our conversations.

If and when the Legislature convenes a special session, property insurance also may be on the agenda. Rep. William “Bill” Proctor (R-St. Augustine) and Sen. Michael “Mike” Bennett (R-Bradenton), who sponsored the “Consumer Choice” property insurance bill that Gov. Crist vetoed earlier in the year, have said that a special session may be the appropriate time to return to the question of a partial deregulation of the property insurance market. Sen. Bennett said, “In a special session we can work together to come up with a compromise. I think it’s some minor tweaks. The question is, can we find the tweak?”

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