Customer Input Integral to PSC Ratemaking
Process
This spring Florida Public Service Commissioners (PSC) traveled the state to hear
from local customers of an investor-owned electric utility that is requesting a
rate increase. Customer comments are an integral component of the PSC’s rate case
procedures. By presenting testimony about a utility’s proposed rate increase and
its service quality at PSC customer service hearings, customers provide valuable
input for our decision-making process.
During the customer hearings, we heard from hundreds of consumers whose testimony
touched on several issues. Testimony addressed quality of service, billing, customer
service, and the timing of the requested rate increase. Many customers highlighted
the economic downturn of the past several years and compared that against the utility’s
planned capital expenditures. These concerns are factors that must be weighed in
rendering our decision.
According to the Edison Electric Institute, utility capital expenditures are expected
to reach $82 billion in 2012. Utilities’ current expenditures include generation
additions, investments to meet environmental requirements, replacing aging infrastructure,
and smart grid investments.
While company investments are necessary to keep the lights on and the water running,
each state’s public service commission is charged with making sure utility costs
are prudent before deciding on any proposed increases. Florida statutes protect
customers by requiring that the rates of regulated utility companies be fair, just,
and reasonable; that the service they provide be safe, adequate, and reliable; and
that those utilities have the opportunity to generate revenues to keep them operational.
In recent months, Florida’s PSC has decided on several rate case requests for both
water and electric utilities. In these cases, Florida law allowed the PSC to protect
customers by rejecting and/or reducing tens of millions of dollars in requested
rate relief while also making sure the utilities could operate efficiently. This
sitting Commission has a record and clear commitment of balancing the interests
of ratepayers and utilities under Florida statutes.
The Ratemaking Process
When a utility company files a rate increase application with the PSC, it must detail
the need for the requested increase. Its petition must be accompanied by minimum
filing requirements (MFRs), which are schedules and reports containing the operational,
financial, economic, and rate information needed by PSC staff to evaluate the company’s
revenue increase request, rate structure, and quality of service.
The utility also forecasts the money needed to cover next year’s expenses. This
filing includes the company’s proposed return on its assets -- such as power plants,
electric lines, or gas mains -- which are used to pay interest on borrowed money
and to compensate investors. Each of these costs are scrutinized by the PSC to ensure
that only prudently incurred expenses are passed on to ratepayers. Costs found to
be imprudent are not borne by the customers, they are absorbed by the utility.
As mentioned previously, public comment is essential to the ratemaking process.
The PSC urges consumers to get involved because the amount of customer interest
indicates the degree of concern or support. Even if you are unsure about testifying
when you attend a public hearing, I invite you to come anyway. You’ll have a chance
to meet consumer groups from your area and to meet Florida’s Public Counsel who,
by law, represents consumers' interests in utility rate cases before the PSC.
You might still ask, “Why should I testify before the Commission? I don’t know much
about utility regulation.” Since you use electricity or gas and water, you are an
expert about your utility’s service. Moreover, since you are in charge of your budget,
you certainly know how the proposed increase will affect your ability to pay.
If you do not wish to comment publicly at a hearing, you can also write your comments
and send them to the attention of a specific docket number at the PSC, 2540 Shumard
Oak Blvd., Tallahassee, Florida 32399-0850. You may also call the PSC’s toll-free
number, 1-800-342-3552, fax comments to 1-800-511-0809, or file comments electronically
at: contact@psc.state.fl.us. Both oral and written comments become part of a utility
case and are considered by the Commissioners in making their decision.
When the PSC staff prepares its final recommendation on the utility’s proposed rate
request, and the Commission makes its decision, we issue a written order. Any party
may ask the PSC to reconsider its decision on the issues. After the reconsideration,
the Public Counsel, the utility, or any other party involved in the proceeding may
appeal the Commission’s decision to the Florida Supreme Court.
Occurring within the 8-month statutory requirement, our complex process of lengthy
hearings and hours of decision-making is often boiled down to the media’s 30-second
sound bite, which, unfortunately, doesn’t capture the full story. As a Commissioner
who’s been on the road lately, listening to consumers, I urge you to stay involved
and be assured that your voice is being heard by real people who understand!
There are five
ways to contact us:
Complete an online complaint form at www.floridapsc.com
E-mail contact@psc.state.fl.us
Call our toll-free number, 800-342-3552
Fax information to us toll-free, 800-511-0809
Send a letter to: The Florida Public Service Commission
2540 Shumard Oak Blvd., Tallahassee,
Florida 32399-0850
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In July,
PSC staff will address an interconnection complaint by BellSouth Telecommunications
against Halo Wireless, Inc. on July 12-13 ♦ A PSC Commission Conference is
on July 17 ♦ PSC staff will hold a Customer Meeting in Leesburg for Utilities,
Inc. of Pennbrooke's rate request on July 18 ♦ PSC staff will hold a rule
revision workshop for Rule 25-12.045 on July 19 ♦ Commissioners will attend
and participate in the National Association of Regulatory Utility Commissioners
summer meetings on July 23-26.
June Press Releases
Customer Meeting Set for Regency Utilities, Inc. 6/5/2012
PSC Commissioner Lisa Polak
Edgar Nominated as NARUC’s Second Vice President 6/7/2012
PSC Customer Service Hearing
Set for FPL Rate Request in Daytona Beach 6/8/2012
PSC Customer Service Hearing
Set for FPL Rate Request in Melbourne 6/11/2012
PSC Customer Service Hearing
Set for FPL Rate Request in West Palm Beach 6/12/2012
Customer-Owned Renewable
Energy Continues to Grow in Florida 6/15/2012
PSC Reduces Gulf Power Company's
Fuel 6/19/2012
PSC Customer Service Hearings
Canceled in Miami, Miami Gardens, Plantation, and Ft. Lauderdale 6/25/2012
Notable FPSC Orders
Filed From June 1 - 25, 2012
Aqua Utilities Florida, Inc.
Docket No. 100330-WS
Order No. PSC-12-0259-FOF-WS
Granting Aqua’s motion for reconsideration; reconsidering and correcting errors.;
except for corrections noted in order, all other aspects of the final order are
reaffirmed.
♦ ♦ ♦
Tampa Electric Company
Docket No. 120038-EI
Order No. PSC-12-0303-PAA-EI
Approving TECO’s proposed modification to vegetation management plan.
♦ ♦ ♦
Florida Power & Light Company
Docket No. 120015-EI
Order No. PSC-12-0261-PCO-EI
Suspending FPL’s request for permanent base rate increase and associated tariffs;
docket is open pending final PSC determination.
♦ ♦ ♦
Florida Power & Light Company
Docket No. 120079-EQ
Order No. PSC-12-0264-PAA-EQ
Approval of facility charges to interconnection customer-owned renewable generation
of Tropicana Manufacturing Company, by FPL.
♦ ♦ ♦
Florida Telecommunications Relay Inc.
Docket No. 040763-TP
Order No. PSC-12-12-0314-CO-TP
Consummating Order making FTRI’s 2012-2013 budget maintaining $0.11 monthly surcharge
for telecommunications relay services effective and final.
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