By KEITH LAING
THE NEWS SERVICE OF FLORIDA

www.newsserviceflorida.com

THE CAPITAL, TALLAHASSEE, Nov. 5, 2009……….As Gov. Charlie Crist’s opponent for the Republican U.S. Senate nomination tries to sear the picture of him hugging President Barack Obama into the minds of conservative voters, the governor tried late Wednesday to put some distance between himself and the president by saying he never supported the president’s stimulus package.

Crist, who famously – or infamously to conservatives – hugged the president after campaigning for the stimulus with him in February in Fort Myers, was asked Tuesday by CNN’s Wolf Blitzer if Crist regretted supporting the stimulus since it appears to be fueling the rise in the race of former House Speaker Marco Rubio.

“Well, I didn’t endorse it,” Crist said. “I – you know – I didn’t even have a vote on the darned thing. But I understood that it was going to pass and I wanted to be able to utilize it for the benefit of my fellow Floridians.”

But before the stimulus passed, when lawmakers were facing a shortfall that was projected to be as high as $6 billion, Crist did not appear to be so reluctant about the federal money.

“We’ve had to cut about $7 billion the past two years and we haven’t raised taxes and we’re still in balance. But to be candid, it’s getting harder every day,” Crist said as he introduced Obama in Fort Myers in February. “It’s getting harder every day and we know that it’s important that we pass this stimulus package. It is important that we do so to help education, to help our infrastructure, and to help health care for those who need it the most – the most vulnerable among us.”

Crist became one of the most prominent Republicans to publicly call for passage of the stimulus at a time when congressional Republicans uniformly opposed the plan, a role he appeared to relish before it was signed into law.

“And let me finish by saying, Mr. President, we need to do it in a bipartisan way,” Crist said in his Fort Myers speech. “This issue of helping our country is about helping our country. This is not about partisan politics. This is about rising above that, helping America and re-igniting our economy.”

After being introduced by Crist in Fort Myers, Obama seemed excited about the governor being a stimulus supporter. Obama heaped praise on Crist for bucking his party.

“When the town is burning, you don’t check party labels,” Obama said. “Everybody needs to grab a hose and that’s what Charlie Crist is doing right here today.”

Obama said then that Crist may have supported the stimulus more than his Republican colleagues in Congress because he was a governor.

“The thing about governors is they understand our economic crisis in a way that maybe sometimes folks a little more removed don’t understand,” Obama said in his speech. “They’re on the front line dealing with the economy every single day. They’re having to make choices every single day. They know what it means to have to balance a budget when revenues are short and more and more people are asking for help.”

That seemed to be true when, even after the stimulus was passed, Crist continued to be effusive about the plan. Unveiling a budget proposal that used $4.7 billion in stimulus money, Crist said the stimulus was “an enormous shot in the arm, and a shot in the arm again and a shot in the arm again.”

“I think it’s fantastic, are you kidding me?” Crist said when he was questioned by reporters about why he supported the stimulus over the strong objection of most of his party. “We don’t have to raise taxes, we might be able to cut property taxes some more, we have more money for education funding so we can increase the per-student funding, we can spend more money on our roads and infrastructure. It’s remarkable.”

Florida Democrats slammed Crist Wednesday for the apparent contradiction in his recent words from his public statements about the stimulus in the spring.

“After trying to run from the mess he created as governor, it isn’t shocking that Charlie Crist would continue running from his record, as Crist attempts to appease the extreme right wing of the Republican Party,” Florida Democratic Party spokesman Eric Jotkoff said. “Unfortunately for Crist, the people of Florida know the truth about Charlie Crist always putting his political ambition above doing his job.

And Crist’s primary opponent Rubio continues to try to use the stimulus against Crist, launching a website this week called www.charlieandobama.com that features only a large picture of Crist and Obama and a solicitation for campaign donations.

“This site is a stark, moving and motivating reminder of what’s at stake in this election,” Rubio campaign spokesman Alex Burgos said in a statement this week. “It’s simple and demonstrates how a picture worth 787 billion words can deliver a powerful message.”

Officials in Crist’s office didn’t respond to a request for comment from the News Service Thursday.

-END-
11/5/09

By KEITH LAING
THE NEWS SERVICE OF FLORIDA

www.newsserviceflorida.com

THE CAPITAL, TALLAHASSEE, Nov. 4, 2009……….A former leader of the legislative black caucus lamented the lack of diversity on the Florida Public Service Commission Wednesday, pointing out the panel will have no minorities when Chairman Matthew Carter is replaced early next year.

“I think the (PSC nominating) commission does a wonderful job vetting candidates… I have real concerns right now,” Rep. Joe Gibbons, D-Hallandale Beach, said during a meeting of the House Energy & Utilities Policy Council. “Based on the people who’ve been submitted, there will be no diversity on the Public Service Commission. I think that is not a good thing for the state because we’re a very diverse state, and we’re becoming more diverse everyday.”

Attention to the selection of PSC commissioners increased this fall when Gov. Charlie Crist picked two new members of the panel amid a swirl of allegations that regulators were too close to the companies they oversee. Carter and former PSC Commissioner Katrina McMurrian applied for second four-year terms on the panel, but both were effectively fired by the governor who declared it was time for a shake-up at the agency.

Crist got a fair amount of attention by arguing for more diversity in Florida courts earlier this year, but his shake-up of the PSC resulted in the panel’s lone African-American and one of its three women being replaced with two white men – David Klement, who has already joined the PSC, and Benjamin “Steve” Stevens, who will assume Carter’s seat in January.

At least two lawmakers, Sens. Mike Fasano, R-New Port Richey and Dan Gelber, D-Miami Beach, have announced plans to file legislation to change the way PSC members are picked, and Wednesday, the topic was on the agenda of a key House committee that oversees utility regulation.

After hearing a summary on the current selection process from PSC Nominating Council General Counsel Christiana Moore, Gibbons said that in the future he hoped the group would do more to make sure the five members of the PSC looked more like the Florida.

“I think any commission should reflect the state,” Gibbons said.

But Rep. Dave Murzin, R-Pensacola, who also chairs the Nominating Council, said the council always keeps diversity in mind when it sends names to Gov. Charlie Crist, even if it does not end up being reflected in the governor’s choices.

“The nominating council did put forth names to the governor which reflected diversity,” Murzin said. “At this point, it’s up to the governor to make the selections as he sees fit. We’ve discussed, in the past, geographic diversity, racial diversity, and all the rest, and there’s only so many ways to slice the pie.”

So far the talk of legislation to change the PSC nominating process has taken place mostly in the Senate, but Energy & Utilities chairman Rep. Stephen Precourt, R-Orlando, said Wednesday’s discussion was the first step in House action on the subject.

“It’s not clear at these early stages of our deliberations what the final direction, decree or mechanism is by which we’ll be moving forward, however this is a serious issue and one that calls for a well-thought out approach,” he said.

The Energy & Utilities Committee also heard Wednesday from PSC Executive Director Mary Bane, Florida Public Counsel J.R. Kelly, and Florida NAACP lawyer David Honig, who urged the panel to consider creating a new task force to implement a code of conduct for all state agencies, not just the PSC.

“The NAACP is highly interested in the ethical and governance issues surrounding the Florida PSC and other state agencies because, during this time of economic turbulence, all of our citizens rely on agencies like the PSC to follow their mandate and engage in good government,” Honig said in a statement prepared for the hearing. “Immediate action is needed to help restore the public trust and to get the Public Service Commission refocused on protecting the public interest.”

Honig told the lawmakers that the NAACP has no vested interest in particular cases before the PSC, but does have reasons to care that its proceedings are fair.

“In performing this critical watchdog role for Florida’s consumers, a top priority is to protect the poor – especially those living in older energy-inefficient homes in inner cities,” he said.

-END-
11/4/09

By KEITH LAING
THE NEWS SERVICE OF FLORIDA

www.newsserviceflorida.com

THE CAPITAL, TALLAHASSEE, Nov. 2, 2009……….Opponents and supporters of the controversial offshore drilling proposal that is shaping up to be one of Legislature’s big fights next session have been talking about the plan at every turn lately – and influential lawmakers have been listening.

But Monday the academic community dug into the hot topic in the effort to provide an “honest broker” in the debate.

The Florida State University Institute for Energy Systems, Economics and Sustainability hosted a symposium on offshore energy, focusing on oil and gas. It’s expected to be the first part of two such gatherings, with a January meeting scheduled to focus on alternative energy.

Panelists drawn from the oil and gas industry, state and federal regulatory agencies, and from public and private research programs discussed energy resources and development, the economics of the issue, environmental issues, and the technology of oil and gas drilling.

In a sharp contrast from the black and white certitude on both hardening sides of the drilling debate – supporters say drilling will immediately improve gas prices, opponents say it will hardly make a dent – the scholars gathered in Tallahassee sat comfortably in the murky gray area.

“There may be oil and gas, but it may be uneconomical in the present circumstances to produce it,” FSU oceanography professor Ian MacDonald told reporters after speaking on a panel titled “Technical and Environmental Challenges.” “There are always more unknowns than knows.”

But in news likely to be cheered by supporters of the proposal, which emerged late in the 2009 session and appears to be gathering steam in advance of 2010, several of researchers that joined MacDonald on the panel said there are reasons to believe drilling would be fruitful.

“All I know is that off the Panhandle, you have production on shore and you have discoveries seaward of state waters,” oceanographer Kenneth Schaudt told reporters. “I would assume… if you have it shoreward of the state waters and you have discovers seaward of state waters, they might be connected in between. That’s a normal assumption.”

Texas A&M University Ocean Sciences of the Geochemical and Environmental Research Group director Norman Guinasso Jr. agreed, saying “you could look at the maps that show the federal lease areas and you could see that all the dots stop at the eastern zone.”

“The eastern zone is what’s offshore of Florida,” Guinasso said. “They all stop at that line and that’s your state line way out there 200 miles offshore. You could think that those little green dots are pretty dense in the central region and there’s no reason for them to stop at that line.”

However, MacDonald warned that production in the rest of the Gulf of Mexico may be an imperfect predictor.

“The discoveries if they do occur in Florida waters will be different from what was found in Louisiana, Texas and Mexico,” he said. “This is a different region, a carbonate platform without the major sedimentation that we see on the central Gulf of Mexico and without the history of wildcat discoveries that categorized…the famous discoveries of Texas.”

The researchers also discussed the safety risk presented by possible oil spills, which have long been raised by environmentalists as reason enough to leave the Florida coastline unexplored for oil.

“The number of accidents (in drilling internationally) has gone down dramatically,” said University of Bergen in Norway geobiology adjunct professor Martin Hovland, who is also a consultant with Norwegian oil company Statoil. “Our last blowout was in 1985. We decided then to do a big study to prevent new accidents from happening and we’ve succeeded. We haven’t had blowouts since then.”

Guinasso agreed, saying “you see a gradual increase in the engineering level that goes into the design of these platforms and pipelines. They’re designed to react well in hurricanes. They’re design to not spill oil.”

But MacDonald added that it would take more than just better technology to ensure that drilling did not cause damage to the environment.

“It’s also enforcement,” he said. “The standards have to be maintained at a high level and they have to be raised.”

However, Schaudt said the unexpected could still happen in a hurricane-prone state like Florida.

“Hurricane Katrina immediately coming after Ivan was inconceivable,” he said. “We measured 70 odd foot tall waves during Camille, and no one in my side of the business, which is predicting the design waves, thought we could have 90 plus foot waves in a hurricane.”

Schaudt quickly added that the drilling industry has historically learned quickly from its mistakes.

“The early platform, people though the waves couldn’t get much over 60 feet at the shelf break,” he said. “That was common practice — it was state of the art 40 years ago. Conditions evolve, knowledge evolves.”

Other panels at the FSU drilling symposium included “Economic Challenges” and “Law and Policy Changes.” Panelists included Michael Celata, chief of resource studies for the U.S. Minerals Management Service, Gulf of Mexico region, and Mark Kaiser, a Louisiana State University professor and director of the research and development division for the school’s Center for Energy Studies.

At the beginning of the symposium, FSU president T.K. Wetherell said the drilling issue was too important for the university to ignore.

“We believe it’s one of the most important issues the state will have to deal with over the next year, not just from an economic standpoint, but simply from a policy standpoint of what the state needs to do,” Wetherell said. “It’s part of our obligation as a flagship graduate public research university to bring these issues to the fore.”

-END-
11/2/09

By KEITH LAING
THE NEWS SERVICE OF FLORIDA

www.newsserviceflorida.com

THE CAPITAL, TALLAHASSEE, Oct. 22, 2009……….The Panhandle’s controversial new international airport will provide Northwest Florida travelers more options when it opens in the spring of 2010, but some are worried the airport’s take off could also end up causing a rocky landing for air travel to the capital.

With flights into Tallahassee’s regional airport often a pricey premium, some capital air passengers already drive about two hours east to catch cheaper flights at the Jacksonville International Airport. But when the first flight takes off from the newly-named Northwest Florida – Panama City International Airport next May, those passengers will also have the option of driving about the same distance in the opposite direction in search of affordable airfare.

Exacerbating the fears of advocates of increasing flight service to the state capital, like state Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee, low cost airline Southwest Airlines announced this week that it would fly eight flights a day from Panama City to Nashville and Baltimore-Washington International.

Vasilinda, who has proposed ending the 6.9 cents per gallon fuel tax on flights to Tallahassee as a way to spur flight options to the capital, told the News Service of Florida that she did not know for sure the Panama City airport would cause airlines that already are reticent to fly into Tallahassee to send their planes there instead. But she said she was concerned about the possibility.

“I’m looking into it,” said Vasilinda, D-Tallahassee. “I was hoping that the aviation fuel tax might have been able to lure Southwest here.”

Vasilinda’s fuel tax plan ran out of gas last year when local officials said it might negatively impact Tallahassee’s ability to contribute to a state aviation grant pool – as well as the amount of money the city can take out of the pool. But Embry-Riddle Aeronautical University College of Business Dean Daniel Petree said Vasilinda’s concern about the future relationship between the international airport in Panama City and the regional airport in Tallahassee was merited.

“It’s a perfectly legitimate question,” Petree said. But he quickly added, “I don’t think anyone can predict the impact with any kind of certainty.”

Petree said Southwest’s decision to fly into Panama City – the airline already flies from Jacksonville – was not necessarily a harbinger of airlines overlooking Tallahassee when they are looking for Panhandle destinations.

“I’m guessing they’re counting on seasonal travelers – the Spring Break kind of crowd,” he said. “I doubt other carriers will mimic that business model. Southwest is kind of an entity all to itself in the airline industry, so I wouldn’t necessarily say that Southwest deciding to fly in there means other carriers like Delta and Continental or some of their regional carriers will decide to.”

As an international airport, Panama City will be sure to have more flights coming in and out than a smaller regional airport like Tallahassee’s, but Petree also said that airport size alone did not determine the number of take-offs and landings.

“The timing matters in all these decisions,” he said. “The truth is that everybody is down. They’re down because commercial aviation has drastically cut back capacity because that’s the only way they can survive this trough in the economy.”

Petree added that was unlikely to change even as the economy begins to rebound, saying “I don’t see airlines adding a lot of capacity back fast.”

“They’ve got to build back up their capacity and discipline their business model, so it will remain competitive, particular for regional airports,” he said.

Tallahassee Airport assistant director Philip Inglese agreed that the capital airport, which averages between 720,000 and 750,000 passengers per year, would remain viable when Panama City’s facility opens. Inglese said the capital airport had studied the impact of larger facilities nearby often and found there were different clientele likely to utilize the two airports.

“Historically because we’re a business market and they’re a leisure market, there’s no impact,” Inglese said. “They’re bringing people in from other regions of the country for the beaches, whereas Tallahassee attracts people trying to get to the Capitol to do business or go from the Capitol. Some do, but business travelers are generally not looking to travel two to three hours to catch a flight.”

The Panama City airport’s relocation and expansion, which is expected to cost $330 million, has been in the works since the late 1990s and resulted from a successful effort from local environmentalists to block a proposed runaway expansion of the existing airport. Land conservation groups don’t like the planned new facility much either, but the airport says it will be the first new international airport in the U.S. since the Sept. 11, 2001 terrorist attacks rocked the nation’s aviation industry.

Airport officials said last month that the new facility was 73 percent complete and hailed the development in a statement about the new name last week.

“With each milestone we pass, we move closer to the day the new airport will deliver on the goals this community established 10 years ago: better and more competitive air service and the establishment of an economic development engine for the region,” said airport authority Vice Chairman Bill Cramer in a statement. “We look forward to welcoming visitors to the region at the new Northwest Florida – Panama City International Airport in May 2010.”

-END-
10/23/09

By KEITH LAING
THE NEWS SERVICE OF FLORIDA

www.newsserviceflorida.com

THE CAPITAL, TALLAHASSEE, Oct. 20, 2009……….Backers of the existing South Florida commuter train Tri-Rail may be hoping a proposed special session to deal with rail issues will give them an opportunity to get financial assistance from the state for the beleaguered system, but Gov. Charlie Crist said Tuesday that he wasn’t sure the train would be included on such an agenda.

Tri-Rail supporters tried last year to amend legislation that would have allowed the Orlando SunRail commuter trail by tacking on a $2 rental car surcharge in Palm Beach, Broward and Miami-Dade Counties that would have gone to Tri-Rail. But as talk of a special session to once again try to approve SunRail intensifies, Crist said Tuesday that the Tri-Rail proposal may remain parked.

“That remains to be seen,” Crist said when asked whether the surcharge would be included in the possible special session. “Certainly we would want to look at all the possibilities to make this productive and useful.”

The special session talk this week centers on the state’s three applications for some of the $8 billion that is available in the federal economic stimulus package for high speed rail. Senate President Jeff Atwater said this week that the feds are looking for action on other rail projects in Florida before they consider approving the state’s $2.5 billion application for the first leg of the long proposed Tampa-Orlando-Miami bullet train.

The state also has stimulus applications in for $70 million for Atlantic Coast Amtrak passenger service between Jacksonville and Miami and $432 million for buying tracks for SunRail from CSX Corp. However, the SunRail deal may not go through without the Legislature’s approval of the plan’s liability agreement, which the freight rail company has tied to the sale of the tracks. The plan has been stymied in the Senate for two years.

A decision on the applications is expected by the end of the year, forcing lawmakers to consider reconvening early if they want to show the federal government the state is serious about rail.

But Tri-Rail was left out of the stimulus mix – and so far has been left out of the special session talk. Tri-Rail supporters have long argued that the only way for the system to become financially solvent is for it to have a recurring revenue source such as the rental car surcharge, which was projected to generate $180 million for the train.

The rental surcharge went down to defeat alongside SunRail during the 2009 session, so Tri-Rail is using funds normally reserved for building and maintaining tracks and stations for operations this year to keep its trains running at full capacity. The system had considered eliminating half its current 60 trains per day and cutting weekend or holiday service altogether, but threw the brakes on the plan because it would have caused the system to default on a $256 million grant from the Federal Transit Administration that was used for a double tracking project completed in 2006.

Bonnie Arnold, a spokeswoman for the South Florida Regional Transportation Authority, which oversees Tri-Rail, told the News Service that the panel was watching the special session talk “very carefully,” but she did not predict whether or not the system would be an agenda item if a session is called.

“Our position right now is we’re in a holding pattern,” Arnold said. “We’re waiting for the call to be issued and we’re waiting to see what’s in it.”

However, the Senate sponsor of the rental car surcharge last year, Sen. Jeremy Ring, D-Margate, told the News Service of Florida Tuesday that he was confident Tri-Rail would be included in any special session to discuss rail, even if SunRail dominates the headlines.

“President Atwater clearly indicated that we would be looking at rail as a whole,” Ring said. “I know it’s been branded as SunRail, but it’s really rail initiatives for the whole state. The federal government has really put a stake in the ground and said that if the state wants high speed rail, it has to support commuter rail.”

Ring, who has said previously that he planned to introduce the rental surcharge as a standalone bill next year, predicted the proposal would fare better than it did last year when it was attached to the SunRail plan if lawmakers come back to Tallahassee early.

“If the state doesn’t support commuter rail, you won’t see any high speed rail money,” he said.

-END-
10/20/09

By KEITH LAING
THE NEWS SERVICE OF FLORIDA

www.newsserviceflorida.com

THE CAPITAL, TALLAHASSEE, Oct. 14, 2009…….Some observers of the Florida Public Service Commission have worried that Gov. Charlie Crist’s picks to replace two sitting members of the panel next year do not have obvious backgrounds in regulation or in the industries the panel oversees. But one commissioner-designate thinks that makes him ideal for the trying times at the PSC.

“In my background as a journalist and editorial writer, I looked at particular issues that impacted the public,” former journalist David Klement told the News Service Wednesday. “The Public Service Commission impacts many publics. I’m qualified to be a generalist. I thought they needed generalists who understand Florida.”

Klement, 69, will join former Escambia County Sheriff’s Department Chief Financial Officer Benjamin “Steve” Stevens on the PSC next January.

Crist earlier this month effectively fired PSC Chairman Matthew Carter and former Commissioner Katrina McMurrian, who were both in the running for second four-year terms on the panel. McMurrian has already left the commission, and Crist is seeking an interim member until January – though Klement and Stevens may be among the choices for the interim role.

Klement, who currently heads the University of South Florida’s Institute for Public Policy and Leadership, comes to the panel just as the state’s largest power company, Florida Power & Light, is nearing the end of a year-long rate case. Klement says he’s followed the rate increase request only through media coverage.

Klement said he tracked the story from afar, but never discussed it with Crist or the PSC nominating council.

“We didn’t get into those specifics and I wouldn’t have been comfortable getting into them,” he said. Klement insisted the governor – who has publicly slammed utility rate hike requests, including the current FPL request – didn’t ask him his position on the $1.3 billion issue.

Having commissioners who are unfamiliar with the intricacies of the case making the decision on what utilities charge for power was among the reasons a leading financial rating agency said recently that the politics that led to Klement’s ascension to the PSC could dim the power companies’ ability to get credit.

But tight deadlines don’t scare former journalists, Klement said as he eyes his next career as utility regulator.

“For 30 years, I had to look at what was on the agenda on any given day and I was tossed the most complex issues imaginable and I’d be expected to turn out thoughtful, provocative pieces by the end of the day,” he said. “I couldn’t have survived in that job for 30 years if I didn’t get up to speed quickly.”

Klement said he believes a recent flurry of bad boldface type about the PSC benefited outsider candidates like himself and Stevens.

“Each day I grabbed the three newspapers I read everyday and I looked for stories about the PSC and noticed that they had changed the momentum,” he said. The commission has been embroiled in questions about whether staff and commissioners have been too close to the industries the panel regulates. Questions have also arisen about how staff and commissioners communicate, with some PSC staffers having faced scrutiny for seeking to exchange instant text messages with utility officials, which could allow for secret communications.

Earlier this year, before conflict of interest allegations began flying so freely around the PSC, Crist quietly re-appointed another commissioner, Lisa Edgar, despite her being assailed by critics as being not consumer-friendly enough. Klement said when he applied for the PSC in June, he did not necessarily expect to be appointed, even if he always thought he would be good for the job.

“I thought I was a long-shot,” he said. “I thought in my heart that I had the ability, but I understood the politics of having two incumbents being re-appointed were pretty strong.”

Few winds shift as quickly as political ones however, so as Klement shifted from long shot PSC applicant to commissioner-designate, he sounded notes similar to those struck by Crist when he remade the panel earlier this month.

“I want to be as objective as I can possibly be,” he said. “One of things I emphasized (when applying for the PSC) is that being an editorial writer for 30 years, I’ve taken a lot of unpopular stands while keeping the respect of the community and those I write about.”

Klement added that contrary to those who argue for a more consumer friendly utility regulation or those who want the panel to be pro-business and rule in favor the utilities, the choices before the PSC are not binary.

“The PSC serves many constituencies,” he said. “Not just two.”

In light of the recent scandals, one choice the journalist-turned-utility regulator has already made is to be careful in who he talks to, especially electronically.

“You have to be very careful in how you use BlackBerrys and cell phones,” Klement said when asked if he’d learned anything from the firestorm.

That should be easy for now, he quickly added, because he doesn’t own a BlackBerry.

“I still rely on the old-fashioned pen and paper,” he said. “I carry index cards to write down important reminders.”

However, recognizing that life will be different as a member of the PSC, Klement said of his basic phone existence “I supposed that will have to change.”

Klement, who lives in East Manatee with his wife, Jo Anne, a realtor and former journalist herself, said he planned to visit the PSC’s Tallahassee headquarters next week.

-END-
10/14/09

By KEITH LAING
THE NEWS SERVICE OF FLORIDA

www.newsserviceflorida.com

THE CAPITAL, TALLAHASSEE, Oct. 7, 2009……..A leading financial rating agency said Wednesday that the highly-charged political environment at the Florida Public Service Commission could dim the credit future of the state’s largest electricity providers.

In the wake of Gov. Charlie Crist ousting two sitting commissioners and several senators seeking to change state law about how members of the PSC are selected, Moody’s Investors Service said that the increased involvement from elected officials could cause the plug to be pulled on credit lines for Florida utilities.

“Moody’s views the highly politicized atmosphere surrounding the base rate proceedings of Florida Power & Light Company and Progress Energy Florida, Inc. as negative to the credit quality of both utilities and an indication that the political and regulatory environment for investor-owned utilities in Florida may be deteriorating,” the company said in a statement. “Moody’s views political intervention in the utility regulatory process as detrimental to credit quality, sometimes resulting in adverse rate case outcomes.”

Citing similar situations in states such as Maryland and Illinois, the rating agency warned that “in some cases, this has led to multi-notch credit rating downgrades of utilities in states where this has occurred.”

Moody’s noted Crist’s decision not to re-appoint PSC chairman Matthew Carter and former Commissioner Katrina McMurrian, who resigned early this week. It also dinged the governor for leaning heavily on the commission to deny FPL and Progress Energy separate $1.3 billion and $500 million rate increase requests. The agency also noted that in its first major decision since Crist shook-up the panel, the PSC voted against a proposed $1.6 billion gas transmission pipeline FPL argued was necessary to keep up with future natural gas demand.

“Moody’s notes that such intervention is highly unusual for the state of Florida, which has traditionally been one of the more constructive utility regulatory jurisdictions in the nation, characterized by fair and balanced regulatory proceedings with little to no political interference or controversy,” the company said.

Moody’s also worried that Crist’s PSC appointees, former Escambia County Sheriff’s Department Chief Financial Officer Benjamin “Steve” Stevens and former journalist David Klement, had no obvious background in regulation or in the industries the panel oversees.

“The turnover…heightens the level of uncertainty surrounding utility rate proceedings because of the lack of an established track record, the limited experience of new commissioners, and the challenges that many new commissioners face in quickly coming up to speed on often complicated utility rate matters,” the company said. “The replacement of experienced and seasoned commissioners on the FPSC with newcomers well after the rate proceedings have begun and most hearings have been completed increases the possibility of a rate case outcome that is negative to utility credit quality.”

Perhaps stinging from Tuesday’s PSC vote against its pipeline plan, FPL said that it was not opposed to utility regulation, but echoed Moody’s warning that it could become overbearing.

“Over the years, utility regulation in Florida has been constructive, in turn helping keep our credit rating strong,” the company said in a statement. “Like other companies, we are entering one of the most significant construction cycles in our history. As we go to the market for our capital needs, debt and equity investors are keenly focused on the Florida regulatory environment. A perception of greater regulatory risk means capital will be more expensive.”

The company said that its good credit rating had allowed it to borrow money at reasonable rates, which helps it keep electric rates low.

The News Service learned of Moody’s opinion on Florida utility regulation late Wednesday afternoon and the governor’s office could not immediately be reached for comment. But a frequent Senate PSC critic said it was not a surprise that a credit rating agency with strong business ties would look negatively on more stringent regulation of utilities, though he said that should not be a factor in decisions on rate increases.

“Moody’s has a great relationship with these analysts on Wall Street. They have a great relationship with the executives of major companies,” Sen. Mike Fasano said. “We shouldn’t ignore what Moody’s says, but we want to also be aware of the close relationship of the utility companies and their executives who may be lobbying Moody’s.”

Fasano, R-New Port Richey, added that he thought Florida Power & Light and Progress Energy were credit worthy even if the PSC denies them their rate requests.

“These are two utility companies that are well-established, that are sound and solid, that are guaranteed a rate of return, no matter what happens,” he said. “Whatever the commission decides, they are going to guarantee there’s some sort of rate of return. We hope it’s not going to be that great, but they’re going to be guaranteed a profit. Now if Moody’s is going to downgrade them for that, what other company is guaranteed a profit, other than a monopoly?”

One of the elected officials most vocal about the PSC, Fasano has said he plans to file a bill to end appointments to the panel altogether in favor of statewide elections. He cheered the PSC vote against FPL’s pipeline project yesterday and said he hoped the Moody’s analysis would not cause the panel to be less likely to vote no on the rate increases.

“I think the Public Service Commission realizes that the customers cannot continue to pay for everything the utility company wants to do,” Fasano said. “It’s time for the stockholders — it’s time for the investors to pay for the projects that they want to build, not the customers. Customers can’t afford it.”

-END-
10/7/09

By KEITH LAING
THE NEWS SERVICE OF FLORIDA

www.newsserviceflorida.com

THE CAPITAL, TALLAHASSEE, Oct. 5, 2009…….Saying that she heard loudly and clearly the message sent by Gov. Charlie Crist when he appointed someone else to her seat on the Florida Public Service Commission instead of reappointing her, Public Service Commissioner Katrina McMurrian said Monday that she would resign immediately.

McMurrian, one of two commissioners ousted last week by Crist, sent a letter to Crist saying that her replacement should come earlier, rather than later, to start moving the commission in a different direction.

“The commission has been asked to delay our vote on major cases until the new commission is in place,” McMurrian said in a resignation letter sent to the governor Monday. “I respect this request and want to ensure that the new commission is positioned to set the course for the agency, one guided by different leadership.”

While Crist had already named a replacement to take her seat in January, officials in Crist’s office said Monday that state law requires appointing an interim commissioner and said they’d start searching for one.

Crist’s appointees to replace McMurrian and PSC chairman Matthew Carter, Escambia County Sheriff’s Office chief financial officer Benjamin “Steve” Stevens, 44, and David Klement, 69, a former journalist who heads the University of South Florida’s Institute for Public Policy and Leadership, are not scheduled to be sworn-in until January of next year. After effectively firing McMurrian and Carter, Crist urged the PSC to postpone action on to hold off on making final decisions on rate hikes requested by Florida Power & Light and Progress Energy until the two newly appointed commissioners join the panel.

The turnover in the PSC comes amid criticism about appearances that the panel is too close to the companies it regulates. The cloud has mostly been over staff interactions with company officials, though McMurrian did take some heat for attending a dinner with an FPL executive as the company was requesting its rate increase, and for speaking at a utility-sponsored conference.

She defended her actions but acknowledged the political reality of the firestorm that has engulfed the PSC in recent months.

“There are rules that govern all aspects of the commission process,” McMurrian said. “I know the rules, and I have followed them. But members of the public have spoken, and the governor has spoken. They want a new set of rules… and new leadership.”

Crist’s office asked the PSC nominating commission to compile a list of candidates to serve the remaining three months of McMurrian’s term.

“We respectfully request that the council provide Gov. Crist with a list of at least three nominees to complete the term of Florida Public Service Commissioner McMurrian as soon as possible so that there is no membership gap in representation on the commission,” Crist’s general counsel Robert Wheeler wrote Monday afternoon to the Senate lawyer who advises the nominating council.

Last week, in reaction to Crist’s decision to reshape the PSC, McMurrian appeared nostalgic about her long PSC career, which spanned work as a regulatory analyst, a commissioner’s aide and ultimately commissioner.

“I’ve been here since I graduated college,” McMurrian said. “I’ve enjoyed every bit of my public service here.”

But in the statement accompanying her early resignation Monday, McMurrian acknowledged the flipside of that history, which may have been her undoing this fall as Crist responded to the increasing scrutiny of the PSC by turning to a pair of applicants with no obvious background in regulatory work or the industries the panel oversees.

“No doubt, I am an insider,” she said. “I started out at the commission in 1994. I  grew up in this process.”

Elsewhere, a stringent Senate PSC critic who had urged Crist to appoint any of the other outside candidates to the commission said that he wanted a commissioner the governor re-appointed earlier this year to follow McMurrian’s lead. Sen. Mike Fasano, R-New Port Richey, said that Commissioner Lisa Edgar, who consumer advocates have said sides too frequently with utilities in rate cases, should do the “honorable thing” and resign as well.

“With Commissioner McMurrian’s decision to resign prior to the expiration of her term I believe the governor’s desire to clean house at the Florida Public Service Commission (PSC) has begun in earnest,” Fasano wrote Monday in a letter to Edgar. “As a sitting commissioner who has been privy to the ongoing day-to-day operations of the PSC, you know better than anyone that the PSC lacks leadership in this time of turmoil and crisis. With the governor’s appointment of two new commissioners he has sent a clear signal that the time has come for a top-down rebuilding of the PSC.”

“The PSC and its mission is far more important than any single individual’s continued employment,” added Fasano, who opposed Edgar’s re-appointment this spring.

The unexpected early vacancy in McMurrian’s seat on the PSC means the panel will be a member short when it takes up a proposed $1.6 billion Florida Power & Light fuel transmission line on Tuesday morning. The PSC has already held an evidentiary hearing about the proposed 300 mile pipeline from Bradford County in northeast Florida to Martin and Palm Beach Counties, a third such portal for transmitting natural gas in the state, but the panel will meet Tuesday to determine if it is necessary.

The commission will also continue this month considering separate rate increases for the two largest power companies in the state – a $1.3 billion proposal from Florida Power & Light and a $500 million plan from Progress Energy. The first of the two votes on those rate increases is expected in December.

-END-
10/5/09

(Recap and analysis of the week in state government)

By KEITH LAING
THE NEWS SERVICE OF FLORIDA

www.newsserviceflorida.com

THE CAPITAL, TALLAHASSEE, Oct. 2, 2009……..As he hopes to do in next year’s U.S. Senate race, Gov. Charlie Crist went national this week, taking to the cable airwaves to chat up his record in the Sunshine State and put down national Democratic efforts to involve the federal government in the U.S. health care system.

Looking to shore up his right flank against a hardline conservative challenge from former House Speaker Marco Rubio during the preview of Mr. Crist Goes to Washington, the normally middle-of-the-road governor this week was running against government involvement in health care as he seeks to replace his former campaign manager in the U.S. Senate.

But a successful state program that subsidizes health care for children that has been supported by Crist and other Republicans, became a bit of an awkward success story for the would-be senator this week.

Part of the federal Children’s Health Insurance Program initiative, KidCare has been broadly trumpeted as a successful program that has reduced the number of uninsured children in Florida. But as the national debate on health care hinges in part on what role the government should play in running and paying for health care, GOP supporters of existing government health care programs like KidCare are finding themselves having to explain why they support government health care for some, but not others.

It’s a tightrope Crist tried to walk this week as nationwide television audiences looked on. When Crist was asked by CNN’s John Roberts why he supports government health care for children in Florida, but is campaigning against allowing government paid health care elsewhere in the nation for adults, he said the government-run care for kids was “limited” and noted “it’s a program that I inherited. It’s a program that was already here.”

But while seeming to distance himself from the KidCare program during his national TV star turn this week, Crist has touted it in the past as helpful to families and was in the Senate in 1998 when the bill creating Florida’s program passed 39-0 with Crist voting for it.

Democrats criticized Crist for running from the success of a program they say members of both parties have generally been proud of. And one of the most prominent advocates working in Tallahassee to increase the reach and success of KidCare the last decade, Karen Woodall, said Crist has worked to make KidCare work better and should be proud of that.

“The inconsistency is very blatant,” Woodall said. “He’s been very supportive of KidCare and I think that’s a good thing. It’s not something to back away from.”

Perhaps recognizing he was tying himself in rhetorical knots, the governor changed the subject, launching into details of Cover Florida, a private sector health care program that he has also championed. The program was created by Crist’s administration as a way to decrease the number of uninsured by encouraging enrollment in cheaper private health insurance programs that are free of some state mandates.

Crist noted on TV that enrollment is now around 4,000, but his opponents, including fellow Republican Rubio, said that doesn’t put much of a dent in the state’s uninsured population, estimated at more than 3.6 million.

Continuing his national star turn, Crist also stood by his recent political prognostication during his interviews, saying on the cable shows as he said at a Republican event in Michigan that President Barack Obama was going to be a one-term commander-in-chief. But in a response straight out of an elementary school playground, Crist’s main opponents from the U.S. Senate next year tweaked the governor-turned-Senate candidate’s own electoral history.

“Charlie Crist’s prediction about President Obama being destined to be a one-term president is spot on,” a missive fired off by former House Speaker Marco Rubio’s campaign said. “As the consummate one-term elected official himself, Gov. Crist should know one when he sees one.”

Rubio spokesman Alex Burgos pointed out that Crist served single terms as education commissioner and attorney general and noted that the popular populist is the first Florida governor to not seek reelection since that’s been an option. The campaign also stoked speculation that the U.S. Senate would be a stepping stone for Crist to run for Obama’s current address.

Likely Democratic nominee Kendrick Meek also jabbed Crist about his presidential fortune-telling, saying “Gov. Crist is angling for the next race before he has secured a primary victory in this one.”

“He is a serial campaigner who prefers to run for office than sit in one and is using this Senate race to jumpstart his 2012 run,” Meek said. “Floridians don’t need perennial candidates who jump from office to office to represent them in the U.S. Senate.”

P-S-SEE YOU LATER

Gov. Crist was not just talking national politics during his busy week; he was also remaking the Florida Public Service Commission. Crist ditched two sitting PSC commissioners in favor of outsiders with no background in regulatory work or the industries the panel oversees, a move hailed by consumer advocates.

Crist gave the heave-ho to PSC Chairman Matthew Carter and Commissioner Katrina McMurrian, denying both a second four-year term on the panel by appointing Escambia County Sheriff’s Office chief financial officer Benjamin “Steve” Stevens, 44, and David Klement, 69, a former journalist who heads the University of South Florida’s Institute for Public Policy and Leadership to the commission instead.

Crist’s housecleaning at the PSC came as the panel considers sweeping proposed rate increases for the state’s two biggest power companies, and with the commission embroiled in a firestorm of allegations about potential conflicts of interest between commissioners and staffers and publicly-regulated utility representatives.

Carter and McMurrian, both appointed by former Gov. Jeb Bush in 2006, had applied to be reappointed and were in the running after being approved by the PSC’s nominating council.

But the outsiders’ lack of background in electricity, telecomm, or other regulated industries may have tipped the scales in Klement and Stevens’ favor with the PSC having come under fire for reports of staffers socializing with and exchanging cell phone messaging information with employees at the state’s largest power company, Florida Power & Light, allegations which emerged as the company was asking for a record rate increase.

Some observers said another factor in Klement and Stevens’ favor was the governor’s ongoing campaign for the U.S. Senate. The odd people out of the sweep of the PSC, Carter and McMurrian both told reporters this week that they were not surprised by the governor’s decision and Carter said it was politics as usual

“The governor did what governors do. He exercised his prerogative,” Carter said. “These things happen. This is the political season and political things happen during the political season.”

Another beneficiary of Crist shaking up the roster of the five-member PSC this week was Commissioner Nancy Argenziano, who is expected to become chairman of the panel next year with Carter and McMurrian gone. A former state senator, Argenziano has long cultivated a reputation as a firebrand and has drawn the ire of both members of the industries the PSC regulates and sometimes her fellow commissioners.

“I’m not sure I even want to be PSC chair,” Argenziano said earlier in the week. “I’m 55 years old and I’m not impressed by titles. But some people are squirming right now, and trying to smear me as best they can, and they happen to be utility lobbyists.”

Likely also squirming this week was Dr. Alan Mendelsohn, a Broward County ophthalmologist who has raised millions of dollars for Florida politicians. Mendelsohn was arrested in a case that will probably reverberate in Tallahassee this week as part of a federal corruption investigation. He was charged by a federal grand jury with orchestrating a fraudulent political fundraising and lobbying scheme “through which he secretly diverted to himself more than $350,000 from contributions to political organizations he controlled,” according to the Justice Department.

Mendelsohn, 51, of Hollywood, was also charged with concealing payments he allegedly had his lobbying clients make, including sending money to his children’s schools for their tuition, in an effort to get around the lobbying disclosure law that would have required him to disclose payments from the clients.

STORY OF THE WEEK: During a spate of national television appearances, Gov. Charlie Crist appeared reticent to admit the success of a government run health care program he and many other Republicans have supported as he campaigns. However, the governor did not hesitate to effectively fire two sitting PSC commissioners this week, choosing not to re-appoint them to the panel next year.

QUOTE OF THE WEEK: “I think he’s a very good politician. On some days, he’s very good on our issues. On other days, he’s with someone else on our issues,” Christian Coalition executive director Bill Stephens, about Crist generally, but in a way that summarizes a week when Gov. Charlie Crist appeared to be for government health care for kids in Florida before he was against it for adults elsewhere in the nation.

-END-
10/2/09

By KEITH LAING
THE NEWS SERVICE OF FLORIDA

www.newsserviceflorida.com

THE CAPITAL, TALLAHASSEE, Oct. 2, 2009…..In choosing to remake the Public Service Commission this week by not re-appointing two sitting commissioners, Gov. Charlie Crist hewed to his populist tendencies and sided with consumer advocates who have said for months, if not years, that the PSC is too cozy with industries it regulates.

But earlier this year, before reports of staffers socializing with and exchanging cell phone messaging information with employees at the state’s largest power company made daily headlines, Crist quietly re-appointed a third commissioner, Lisa Edgar, who was assailed by critics during her contentious Senate confirmation hearings as being not consumer-friendly enough.

With the governor in an ongoing race for the U.S. Senate, it’d be easy to dismiss the difference in Crist’s PSC picks as politics as usual. And this week, at least one ousted commissioner did.

“This is the political season and political things happen during the political season,” PSC Chairman Matthew Carter told reporters who gathered during a sleepy rate hearing to ask his reaction to effectively being fired by the governor.

And with the benefit of a few hours of hindsight, political observers agreed there was likely some politicking in the governor’s PSC picks.

“A couple of months ago, no one was paying attention to the PSC,” former state Senate Democratic Leader Steve Geller said Friday. “A couple of months ago he didn’t have Marco Rubio nipping at his heels.”

Geller added that like most Capitol observers, he was not entirely surprised about Crist’s decision to appoint Escambia County Sheriff’s Office chief financial officer Benjamin “Steve” Stevens, 44, and David Klement, 69, a former journalist who heads the University of South Florida’s Institute for Public Policy and Leadership to the commission instead of returning Carter and Commissioner Katrina McMurrian to the panel.

“The governor has always been a populist and he always goes where the voters want him to be,” Geller said. “The PSC has been in the headlines lately and heading into an election, the governor wants to be seen as a person looking for out the little people.”

Asked if Crist let himself open to political attacks for re-appointing Edgar in the same year he appeared to want to turn over the PSC, Geller said “what would Rubio say? You appointed only two outsiders instead of three? I don’t think there’s anything there.”

Geller added that Crist had already raised the specter of the PSC appointments when he said he would basically only re-appoint Carter and McMurrian if they voted against a proposed $1.3 billion rate increase from the state’s largest power company. The PSC put off a vote until after Crist’s PSC designees will be sworn-in, a move some said was an attempt by Carter to force Crist’s hand on re-appointment, which had to be completed this week.

“He made it an issue when he said “I’m not going to re-appoint you if you vote to raise rates,’” Geller said. “He’d built it up to where he couldn’t back off.”

At least one consumer group that lobbies the PSC on electricity rate cases, Tampa-based Florida Consumer Action Network, urged Crist to consider the politics of the appointments before they were announced. FCAN executive director Bill Newton told the News Service of Florida that making Commissioner Nancy Argenziano PSC chair by dumping Carter and McMurrian would be a “a bold move” that would “cement his consumer bona fides.”

And a poll released Friday showed the optics of the PSC picks may work in Crist’s favor. A nationwide telephone survey of 1,000 likely voters conducted by Rasmussen Reports showed that for the first time in nearly two years, voters were more concerned about government ethics and corruption than the economy. Eighty-three percent of poll respondents said they view ethics as “very important,” while 82 percent cited the economy.

-END-
10/2/09