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$8.5 million Florida Power refund asked

Associated Press Dispatch

TALLAHASSEE - An investigator hired by Florida's Public Service Commission today recommended that the PSC order the Florida Power Corp. to refund $8.5 million to its customers to settle alleged overcharges made in 1973-74.

Russell Troutman, former president of the Florida Bar and the American Bar Association, told the PSC that Florida Power failed to exercise reasonable care in investigating an alleged fuel oil "daisy chain". It has been charged that several oil distributors artificially inflated the price of fuel oil in numerous transactions before the oil reached Florida Power.

Troutman told the PSC that the Arab oil embargo in 1973-74 created a near-panic atmosphere at Florida Power, which is based in St. Petersburg, and that that attitude contributed to the overcharges. The firm serves 32 counties in Northwest and Central West Florida.

Troutman said Florida Power should have had some indication that the prices is paid for No. 2 and No. 6 fuel oil had been artificially inflated and should have made a reasonable effort to investigate the possible overcharges.

"Florida Power failed to investigate an alleged illegal daisy chain."

"The Florida Power Corp. should assume the responsibility of recovering for the consumers that sum of money found by you as an overcharge brought about particularly by poor management by Florida Power," Troutman told the PSC.

"They (Florida Power) should assume the burden of recovering the money," he said.

Troutman presented the commission a 72-page report which was the result of a four-month investigation he began after agreeing to probe the alleged overcharges for the PSC.

Trautman told the PSC that additional information may be developed and that if so he will make further reports.

Last month two former Florida Power executives and five Texas oilmen were indicted. The indictment accused them of conspiring to manipulate the prices of fuel oil sold to Florida Power to reap excessive profits.

From:
Sentinel Star
Thu., October 26, 1978