Chief Justice Critiques Florida PSC’s Transparency in Utility Rate Decisions

TALLAHASSEE — Chief Justice Questions Utility Rate Approval Process

On December 12, 2024, during a hearing held in Tallahassee, Chief Justice Carlos Muniz of the Florida Supreme Court sharply criticized the state’s Public Service Commission (PSC) for what he described as a lack of transparency in their decision-making process. His remarks came in the midst of an appeal regarding a PSC order that approved rate increases for Florida City Gas, a natural gas provider serving more than 116,000 customers in various counties including Miami-Dade and Broward.

What Happened?

The PSC’s approval of the rate increase is currently being challenged by the Office of Public Counsel, which advocates for consumer interests. The office expressed concerns that the PSC did not sufficiently justify its decisions, particularly in rejecting recommendations made by its own staff. This appeal centers around complex accounting issues that involve depreciation rates and a surplus related to customer rates.

Why It Matters

Chief Justice Muniz characterized the PSC’s operations as resembling a “black box”, highlighting a significant gap in the clarity of their decisions. He emphasized that the commission merely regurgitates evidence without providing well-reasoned explanations for why certain choices are made. “How are we supposed to evaluate that?” he questioned, stressing that mere assertions of reasonableness do not suffice as justification in regulatory decisions.

The Back-and-Forth

As arguments unfolded, Florida City Gas attorney Lauren Purdy likened the PSC’s deliberations to a judge weighing expert testimony in a courtroom. However, this statement was met with skepticism from Muniz, who pointed out that decisions should not be obscured in bureaucratic language. “It’s supposed to be the opposite of a black box,” he asserted, arguing that reasoned explanations are essential for the public and for judicial review.

The discussions on Tuesday followed a September 2023 ruling by the Supreme Court, which criticized the PSC for not justifying a prior approval related to a settlement for Florida Power & Light. This resulted in the PSC issuing a more detailed order to explain its stance. Despite this, attorneys for the PSC maintain that they met regulatory standards in approving the four-year rate plan for Florida City Gas. They defended their actions by stating that the evidence presented justified their decisions.

What’s Next?

The case remains pending as arguments continue to evolve. Justice John Couriel interjected during the proceedings, suggesting it should not be too difficult for the commission to provide clearer explanations for their decisions, echoing Chief Justice Muniz’s concerns regarding transparency.

The dispute brings to light broader questions about the PSC’s role and effectiveness in regulating utility rates, ensuring fairness for consumers, and maintaining clear communication about their decision-making processes.

Conclusion

As this case unfolds, the focus remains on how regulatory bodies like the PSC can improve their practices to foster greater accountability and transparency, ensuring public trust in the decisions that impact the everyday lives of Florida residents.