Gaetz’s utility bill passed by committee

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A Florida Senate committee has approved Sen. Don Gaetz’s legislation that would significantly reform the state’s Public Service Commission (PSC), expanding its membership and imposing stricter requirements on utility rate cases. The bill, which aims to increase transparency and accountability in determining utility rates, passed with bipartisan support.

Commission Expansion and New Requirements

The Senate Regulated Industries Committee voted 5-2 to approve Senate Bill 354. The legislation would expand the utility regulatory commission from five to seven members and establish specific professional qualifications for commissioners. Under the proposal, one commissioner must be a certified public accountant and another a chartered financial analyst.

Additionally, the bill would implement new requirements for how the commission determines utilities’ return on equity – a key factor in rate setting that directly impacts consumer costs.

Addressing a “Black Hole:” Senator Gaetz partnered with Senator Jennifer Bradley, Chair of the Regulated Industries Committee, to introduce the legislation after Florida Supreme Court Chief Justice Carlos Muñiz described the PSC’s decision-making process as a “black hole” in December.

“If the Florida Supreme Court Chief Justice can’t understand the PSC’s decision-making process, how can average citizens be expected to know why their utility bills keep rising?” Gaetz said during my interview with him last month.

Increased Transparency for Monopoly Utilities

A central component of the bill requires greater transparency from utility companies regarding the factors driving proposed rate increases. Since Florida utility companies operate as government-granted monopolies, Gaetz argues they should be held to higher disclosure standards.

“If you’re asking for a rate increase, if you’re asking for the government to mandate a rate increase about which the customers have nothing to say… then if executive compensation is a cost driver, the Public Service Commission needs to know what those costs are,” Gaetz stated.

The legislation would also require utilities to provide return-on-investment analyses to ensure ratepayers understand what benefits they receive from their payments. As Gaetz noted, “Not every dollar pumped into resilience produces a dollar’s worth of results.”

Consumer Advocacy Support: Zayne Smith, senior director of government relations for AARP Florida, expressed support for the legislation, telling committee members that the bill comes after the commission has approved high returns on equity that increase costs for customers. “This is a chance to rein that in.”

Path Forward: The bill must clear two more Senate committees before it can advance to the full Senate for consideration. As of now, a House version of the legislation has not been filed.

The News Service of Florida contributed to this post.

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Gaetz’s utility bill passed by committee

Commission Expansion and New Requirements

Increased Transparency for Monopoly Utilities

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