Reduce the power of state’s utilities

Before Hurricane Irma, many Floridians may have forgotten about the Public Service Commission. Still others may not know the agency at all.

The five-member commission sets almost all electric rates in the state. Soon the commission will review the performance of Florida Power & Light and the other investor-owned utility companies before, during and after the storm. It also will decide how much those companies can charge you to fix the damage.

Coincidental with this new public awareness comes a report this week from Integrity Florida, which describes itself as a “research institute and government watchdog.” The group previously has issued reports on ethics, campaign finance and contracting, among other things.

The new report calls the Public Service Commission a “captured” agency, meaning it is effectively controlled by the companies it regulates. We agree with that conclusion.

The commission has consistently sided with the company for the past five years, with one slight exception. Last year it reduced FPL’s proposed $1.3 billion rate increase to $811 million.

As we see it, because of their investments in politics, utility companies control the choice of who serves on the PSC. This reality became clear after four members turned down rate increases for FPL and Progress Energy in 2010. The Senate refused to confirm the two new appointees, and the nominating council refused to renominate the others.

Since then, the PSC has acquiesced. In 2014, it allowed FPL to enter the unregulated world of natural gas drilling, a benefit to stockholders that was subsidized by ratepayers. The Office of Public Counsel, which represents ratepayers, successfully appealed to the Florida Supreme Court and got a refund.

And in 2015, the PSC made no changes in a fuel-hedging program that cost Florida’s four investor-owned utilities roughly $6 billion over 12 years, according to the public counsel. For its bad trades, the utilities paid no penalty, though customers overpaid billions.

The question is not just how to fix the problem. The question is whether state politicians acknowledge the problem and want to fix it.

FPL, its parent company — NextEra Energy — and company executives donated $1.3 million in the 2014 election cycle to Gov. Rick Scott, his election committee and the Republican Party of Florida. The governor appoints the commissioners, whom the Florida Senate must confirm, to four-year terms.

Not surprisingly, Integrity Florida proposes the state could go back to electing the commissioners. That was the system until 1978. The Legislature made the change to prevent utilities from financing campaigns and thus making the winners beholden to industry. Another proposal would be to create a commission of appointed and elected members.

To prevent utilities from bankrolling campaigns and making the winners beholden to them, Integrity Florida recommends a ban on contributions from regulated industries. Georgia, Alabama and Mississippi, the report says, have such bans.

Still, some very qualified candidates wouldn’t want to become politicians to get the job. The same holds true for potential judges who will seek the bench only through appointment.

A better target for reform is the nominating council that screens and interviews applicants to the Public Service Commission. It is a creature of the Legislature. Six members must be current legislators; legislative leaders appoint all the members. And it shows.

In 2014, the council named as a finalist then-state Rep. Jimmy Patronis, even though he had no relevant experience and had been fiercely anti-regulation in Tallahassee. He joined the amen chorus of the utilities. Gov. Scott recently promoted Patronis to chief financial officer.

This year, the nominating council chose finalists for three vacancies. Among the applicants was Robert Milligan, the retired, three-star Marine general who served as state comptroller from 1995 to 2003 before voters created the position of chief financial officer.

Milligan was a paragon of ethical behavior. For his first race, he took no money from the industries he might oversee. He won despite being outspent tenfold.

But the nominating council didn’t even grant Milligan an interview. Among the finalists, the council chose — and Scott appointed — was former state representative Ritch Workman.

As The Miami Herald reported, Workman did the utilities’ bidding in 2014 by helping to kill a proposal that would have increased incentives for solar energy. Despite him, the proposal reached last year’s ballot and voters passed it overwhelmingly.

Not only was Workman seen as an industry-friendly guy, after trying to bring back the “sport” of dwarf tossing, he was not viewed as a serious public servant. Yet this is the person Gov. Scott believes will best watchdog increases in your electric bills.

Workman told the Herald that he intends to “make the skeptics very, very proud ... . ” Consider us skeptical.

Reforming the nominating council would mean replacing legislators with outside representatives chosen by groups that represent customers. Such a change, of course, would require the Legislature to relinquish some power.

Given the utilities’ clout in Tallahassee, reform is likely to go nowhere. But perhaps the storm over power failures will make reform possible, especially after customers see another new storm charge on their monthly bills.

Editorials are the opinion of the Sun Sentinel Editorial Board and written by one of its members or a designee. The Editorial Board consists of Editorial Page Editor Rosemary O’Hara, Elana Simms, Andy Reid, Deborah Ramirez and Editor-in-Chief Howard Saltz.