Crist urges rejection of FPL charge

FLORIDA - In a controversial move, Attorney General Charlie Crist asked state regulators to reject a request by Florida Power & Light Co. to charge customers $10 million for costs related to a natural gas storage project in Alabama, despite a recommendation for approval from the regulatory panel's own technical staff.

FPL is trying to collect the $10 million, which covers a variety of expenses such as storage of natural gas, insurance, carrying costs and other items, under a rule allowing it to recover fuel costs directly from customers.

But Crist, who is running for governor, said in a statement that the $10 million is really an increase in base rates, or the fees it charges to generate and deliver electricity, and not a fuel charge. Passing along the $10 million in charges to customers would be prohibited according to an agreement FPL made last year on base rates with the Attorney General's Office, the state's consumer advocate and groups representing FPL customers, Crist said. The accord essentially froze FPL's base rates until the end of 2009, while allowing the firm to charge customers for fuel used to generate power.

"FPL agreed not to raise its base rates, and we need to hold the company to that agreement," Crist said. "Calling an increase something else just to pass the cost along is not the way to treat the millions of loyal Florida customers who depend on this company for their electricity."

Mayco Villafaa, an FPL spokesman, said this isn't a "new form" of cost recovery and "FPL is not violating the existing base rate agreement as Mr. Crist would have you believe."

"This practice, known as hedging, has been in place long before the 2005 base rate agreement cited by Mr. Crist and it is in the best interest of customers since it helps reliability," he said. FPL burns natural gas in most of its generating plants and it gets gas from suppliers on the Gulf Coast.

Florida's consumer advocate, Public Counsel Harold McLean, said FPL's petition was contrary to last year's base rate agreement and said his office will oppose its approval at today's meeting.

"They're prohibited from coming in to ask for base rate changes so they're trying to shove this through the fuel recovery clause," McLean said. "When you squeeze a balloon on one side, it bulges somewhere else."