The consumer watchdog wants stricter rules of contact between utilities and the Public Service Commission.
By LOUIS HAU
Published June 3, 2004
An internal Tampa Electric Co. memo is raising hackles in the Office of Public Counsel, which says it reveals a troubling level of behind-the-scenes contact between the utility and the Florida Public Service Commission.
The memo recounts Tampa Electric's many conversations last year with PSC staff members who were reviewing the utility's coal-transport contract with TECO Transport. Tampa Electric said the conversations were a routine part of the regulation process.
But public counsel Harold McLean said Tampa Electric's memo suggests a level of contact that raised the potential for undue influence and demonstrates the need to strengthen rules regarding conversations between PSC staffers and the companies the commission regulates.
"The public's perception of the regulatory process is bad, and this is precisely why it's bad," McLean said.
State regulations bar PSC commissioners from discussing pending cases with any involved parties outside of a public forum, but there is nothing to stop regulated companies from talking with PSC staff members and commissioners' aides. It is a loophole that utilities try to exploit, McLean said.
The public counsel's office, which represents the interests of Florida utility consumers before the PSC, is challenging Tampa Electric's new five-year contract with its fellow TECO Energy Inc. subsidiary to deliver coal by boat to the utility's Big Bend power station in Hillsborough County.
The PSC is reviewing the contract to see if it had been properly bid, since its costs are passed on to Tampa Electric customers.
The three-page Tampa Electric memo, titled "Waterborne Transportation Process 2003," was written by TECO regulatory affairs vice president Dee Brown and was part of a mountain of documents and exhibits exchanged by the utility and parties challenging the contract.
The memo, which was distributed last week during the PSC's hearing on the pact, provides a rare glimpse of a utility's behind-the-scenes communications with the PSC.
The first two entries from "early 2003" and "summer 2003" recount how TECO Transport alerted Tampa Electric that PSC staff members were "making unsolicited telephone calls to a (transport) competitor seeking their interest in transporting coal" for the utility.
A PSC staff supervisor later testified that the phone calls were a routine part of its staff's efforts to gauge market conditions in coal transport. But Brown recounted in her memo that a company official contacted the PSC staff about "this inappropriate activity and, to the company's knowledge, it ceased."
Brown could not be reached for comment Wednesday. Tampa Electric spokesman Ross Bannister said the memo "reflects conversations that are entirely appropriate and procedural in nature, nothing more than that."
McLean agreed that the memo did not describe any communications that are prohibited under state statute. But he argued that the commission should consider strengthening the rules, perhaps by barring interested parties from having contact with commissioners' aides. McLean also noted that while commissioners who have improper contact with interested parties are subject to removal from their posts and a fine of up to $5,000, no such penalties exist for outside parties who violate the rules.
Last year, McLean himself was involved in a controversy over instructions he conveyed to PSC staff members. Commissioners Rudy Bradley and Charles Davidson had directed McLean, who was general counsel of the PSC at the time, to ask staffers to take a neutral position on the size of a Progress Energy Florida rate refund. The staff responded by changing its initial position in favor of a larger refund.
Earlier, Bradley and Davidson's offices had received briefing materials from the St. Petersburg utility, but the two commissioners denied having seen the documents.
PSC commissioners "are as close to judges as you can get" when they are deciding a case, McLean said, noting that any lawyer who approaches a judge or judicial assistant to sway the outcome of a case would face harsh penalties.
Such communications between the PSC and the utilities they regulate, McLean said, "shows a level of familiarity that I believe is improper to the process and erodes public confidence in the process."
