Despite an increasing number of calls to investigate the executive compensation practices of Duke Energy Florida, the Florida Public Service Commission (PSC), which regulates Florida’s utilities, today said they currently have no reason nor intention to look further into the matter.
The controversy stems from questions raised by the Better Jobs Coalition (BJC), an out-of-state watchdog group, pointing out that over the past decade Duke has apparently failed to properly account for executive compensation pursuant to a 2010 order requiring them to do so by the PSC. The group alleged that Duke may have overcharged customers as much as $300 million, which they reiterated in a second letter to the PSC sent this week.
“While adjustments were recorded for other parts of the 2010 order,” the original letter read, “for example, adjustments dealing with Directors and Officers liability insurance and parent company debts – we could find no line-item adjustments for incentive compensation.”
The first letter was received by the PSC just days before regulators were scheduled to vote on a proposed rate hike by Duke Energy Florida. The issue was not brought up by the Office of Public Counsel, which represents Duke customers, nor was it raised by Commission members. Duke’s rate hike proposal was approved on May 4th without objection. The lack of interest in the matter prompted a second letter from the BJC, which urged regulators to suspend their approval of Duke’s rate hike settlement pending further investigation.
The call for a deeper look into the matter was seconded by the Florida-based consumer advocacy group People Over Profits.
“I am concerned that Duke may not be following the law as it relates to executive compensation,” said People Over Profits founder Sean Shaw, a former state representative. “Specifically, the PSC and the Legislature need to make absolutely sure that Duke, and all Investor Owned Utilities, are not charging customers for executive compensation. In fact, I am so concerned about this issue that I am giving serious thought to intervening in all appropriate rate cases to make sure this issue is raised.”
The Office of Public Counsel, charged with representing customers in the matter, did not respond to a request for comment.
However, Florida’s Senate President, Wilton Simpson, and House Speaker, Chris Sprowls, both said they were aware of the issue, but deferred to the Public Service Commission for the time being.
“President Simpson is aware of the letter,” his office said via email. “He believes the PSC will review the issues raised and make a determination as to whether or not additional action is necessary. We will monitor to see how the issue is addressed by the PSC.”
“This is a matter under the purview of the Public Service Commission,” said a spokeswoman for Sprowls. “The House will be monitoring the issue as it moves through the PSC process.”
The PSC, however, rejected calls for further investigation.
“Absent an express order on appeal from the Florida Supreme Court overturning the Commission’s Final Order and remanding for further consideration on this or any other matter related to the order, the Public Service Commission has no present intent to review its decision,” said PSC spokeswoman Cindy Muir.
Muir also stated that Duke has been permitted to charge customers for the cost of executive compensation since a 2013 rate settlement, but it is not clear exactly how much has been charged to customers.
Duke did not immediately respond to questions seeking that information, but previously rejected allegations that customers were improperly charged.
“We strictly follow the spirit and letter of the law with respect to compensation,” said Ana Gibbs, a spokeswoman for Duke. “The timing of inquiries like this is interesting, coming from a Colorado-based dark money group at a time when a well-connected hedge fund is trying to break up Duke Energy for the benefit of its own investors.”
Gibbs’ mention of a “well-connected hedge fund” is a reference to Elliott Investment Management, one of Duke’s largest shareholders, which has grown significantly more vocal over the last month, leveling allegations of general mismanagement at Duke.