Utility Regulation: Public Service Commission Approves Small Rate Increase for Florida Power & Light Company and Denies Rate Increase for Progress Energy Florida, Inc.
The Florida Public Service Commission (PSC) rejected a $499-million proposed rate increase from Progress Energy Florida, Inc. on January 11, 2010. Two days later, the PSC approved a $75-million increase for Florida Power & Light Company, which had filed for a $1.25-billion rate increase. Both votes were unanimous.
In both cases, the PSC rejected the recommendations of its staff. Progress Energy had requested rates that would support a return on equity of 12.54 percent, while PSC staff had recommended an 11.25-percent return on equity. Ultimately, the PSC voted to allow a 10.5-percent return on equity and no increase in base rates. The company will be able to file for a rate increase if return on equity falls below 9.5 percent, and consumers can seek a rate decrease if return on equity exceeds 11.5 percent.
Florida Power & Light had requested a profit margin of 12.5 percent, which PSC staff reduced to 10.75 percent. The PSC approved a 10-percent return on equity.
Florida Power & Light CEO Armando J. Olivera said that the PSC’s decision would force the utility to suspend efforts to increase generating capacity, including plans to expand the Turkey Point nuclear plant in Miami-Dade County, construction of a fuel pipeline, and modernization work on two other nuclear plants. Mr. Olivera said that these projects accounted for 5,000 direct jobs and 15,000 indirect jobs. Progress Energy Florida’s President Vincent M. Dolan said that the decision would reduce the reliability of the system and ultimately increase costs.
Governor Charlie Crist took credit for the PSC decisions. He described the Florida Power & Light decision as “obviously a win for consumers” and said that he did not expect the decision to result in job josses. Asked whether he thought his two recent appointments to the PSC made the difference in the Progress Energy Florida decision, he responded, “I would say they did. That’s probably an understatement. I’m happy for consumers.”
Politics: Year-End Campaign Finance Reports Reveal Five Million-Dollar Campaigns for 2010
Year-end campaign finance reports show that five state candidates have each raised more than $1 million for 2010 races.
In the campaign to succeed Gov. Crist, Chief Financial Officer Alex Sink, the likely Democratic nominee, reported contributions of $5,068,808. Ms. Sink had $4,323,523 in cash-on-hand as of the last day of 2009. Her likely Republican opponent, Attorney General Bill McCollum, reported contributions of $3,271,133 and cash-on-hand of $2,705,166.
Senate President Jeff Atwater (R-North Palm Beach), who is running for chief financial officer, reported contributions of $1,592,684 and cash-on-hand of $1,508,496. His primary opponent, Rep. Pat Patterson (R-Deland) raised $64,135 and had $47,269 in the bank. The likely Democratic nominee for chief financial officer, former Rep. Loranne Ausley (D-Tallahassee), reported contributions of $276,626. Ms. Ausley announced her candidacy on January 12, 2010, with endorsements from U.S. Sen. Bill Nelson, former governor and U.S. Sen. Bob Graham, U.S. Rep. Kendrick Meek (D-17th Congressional District), and Chief Financial Officer Sink.
In the race to succeed Charles Bronson as Commissioner of the Department of Agriculture and Consumer Services, U.S. Rep. Adam Putnam (R-12th Congressional District) reported $1,158.473 in contributions and cash-on-hand of $1,000,532. His primary opponent, Sen. Carey Baker (R-Eustis) has raised $495,471 and has $306,369 in the bank. On the Democratic side, likely nominee and former Tallahassee mayor Scott Maddox reported contributions of $194,410 and cash-on-hand of $186,392.
One legislative race has generated contribution levels comparable to these statewide races. In the Senate District 32 contest to replace term-limited Sen. J. Alex Villalobos (R-Miami), Rep. David Rivera (R-Miami) reported contributions of $1,031,103 and cash-on-hand of $997,797. His opponent, Rep. Anitere Flores (R-Miami) reported contributions of $390.280 and cash-on-hand of $336,293.
Economy: Florida Foreclosures Rose by 34 Percent in 2009
According to a report released by RealtyTrac, Inc., a California-based company that describes itself as the leading online marketplace for foreclosure properties, residential foreclosures in Florida increased by 34 percent in 2009.
During the year, 516,711 Florida residential properties were affected by foreclosure filings. Only California, with 632,573 filings, exceeded Florida’s total.
Florida’s foreclosure rate was third in the nation, with 5.93 percent of housing units subject to a foreclosure filing. Only Nevada, with a rate of 10.17 percent, and Arizona, with a rate of 6.12 percent, exceeded Florida’s foreclosure rate. California was ranked fourth, with a rate of 4.75 percent.
Florida accounted for 18.3 percent of the national total of 2,824,674 properties with foreclosure filings.
Gaming: House Committee Rejects Proposed Seminole Gaming Compact
On January 14, 2010, the House Select Committee on Seminole Indian Compact Review unanimously voted to reject the gaming compact between the state and the Seminole Tribe of Florida that Gov. Crist had negotiated with the tribe in August 2009. The compact would have allowed the tribe to operate blackjack and other banked card games at all seven of its casinos, given the tribe the exclusive authority to operate slot machines outside of Broward and Miami-Dade counties, and would have required the tribe to pay a minimum of $150 million a year to the state.
Legislation enacted in 2009 authorized the governor to negotiate a compact with the tribe, but set out parameters for the compact. Further legislative action was required when the agreement negotiated by the governor went beyond the terms of the legislation.
According to House Speaker Larry Cretul (R-Ocala) and Compact Review Committee Chair Bill Galvano (R-Bradenton), the next step would be for the federal government to close down the Seminole casinos that are currently operating blackjack and slot machines. A spokesman for the National Indian Gaming Commission said that the commission is not contemplating any immediate action.
Public Policy News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and our colleagues. If you have any questions about this alert or would like to discuss these topics further, please contact your Foley attorney or any of the following individuals:
Marnie George
Tallahassee, Florida
850.513.3398
[email protected]
Michael P. Harrell
Tallahassee, Florida
850.513.3373
[email protected]
Robert H. Hosay
Tallahassee, Florida
850.513.3382
[email protected]
Jonathan P. Kilman
Orlando, Florida
407.244.3256
[email protected]
Thomas J. Maida
Tallahassee, Florida
850.513.3377
[email protected]
Leonard E. Schulte
Tallahassee, Florida
850.513.3380
[email protected]
Marnie George of The George Group assists Foley on a variety of government and public policy matters as a consultant.