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                                  T H E   C A B I N E T
                             S T A T E   O F    F L O R I D A
               _____________________________________________________
 
                                      Representing:
 

                              STATE BOARD OF ADMINISTRATION
                                 DIVISION OF BOND FINANCE
                                  DEPARTMENT OF REVENUE
                          FINANCIAL MANAGEMENT INFORMATION BOARD
                       FLORIDA LAND & WATER ADJUDICATORY COMMISSION
                 BOARD OF TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST FUND
 

                         The above agencies came to be heard before
               THE FLORIDA CABINET, Honorable Governor Bush presiding, in
               the Cabinet Meeting Room, LL-03, The Capitol, Tallahassee,
               Florida, on Tuesday, August 26, 2003, commencing at
               approximately 9:45 a.m.
 
 

                                       Reported by:
                                    KRISTEN L. BENTLEY
                                 Certified Court Reporter
 
                            ACCURATE STENOTYPE REPORTERS, INC.
                                2894 REMINGTON GREEN LANE
                          TALLAHASSEE, FL  32308   (850)878-2221
 
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               APPEARANCES:
                         Representing the Florida Cabinet:
                         JEB BUSH
                         Governor

                         CHARLES H. BRONSON
                         Commissioner of Agriculture
                         CHARLIE CRIST
                         Commissioner of Education
                         TOM GALLAGHER
                         Treasurer
                                          * * *
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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                                        I N D E X
               STATE BOARD OF ADMINISTRATION
               (Presented by Coleman Stipanovich)
               ITEM                ACTION                        PAGE
               1                   Approved                      34
               2                   Approved                      34
               3                   Approved                      34
               4                   Approved                      35
               5                   Approved                      35
               6                   Approved                      36
               DIVISION OF BOND FINANCE
               (Presented by Ben Watkins)
               ITEM                ACTION                        PAGE
               1                   Approved                      37
               2                   Approved                      37
               3                   Approved                      37
               4                   Approved                      38
               5                   Approved                      38
               6                   Approved                      38
               DEPARTMENT OF REVENUE
               (Presented by Jim Zingale)
               ITEM                ACTION                        PAGE
               1                   Approved                      40
               2                   Approved                      40
               3                   Approved                      40
               4                   Approved                      41
               5                   Approved                      70
               FINANCIAL MANAGEMENT INFORMATION BOARD
               (Presented by Martin Young)
               ITEM                ACTION                        PAGE
               1                   Approved                      71
               2                   Approved                      71
               FLORIDA LAND AND WATER ADJUDICATORY COMMISSION
               (Presented by Theresa Tinker)
               ITEM                ACTION                        PAGE
               1                   Approved                      72
               2                   Approved                      72

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               BOARD OF TRUSTEES
               (Presented by David Struhs)
               ITEM                ACTION                        PAGE
               1                   Approved                      114
               2                   Approved                      115
               3                   Approved                      116
               4                   Approved                      117
               5                   Approved                      117
               6                   Approved                      118
               7                   Withdrawn                     118
               8                   Approved                      118
               9                   Deferred                      119
               10                  Approved                      119
               11                  Approved                      120

               CERTIFICATE OF REPORTER
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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          1                            PROCEEDINGS
          2           (The agenda items commenced at approximately
          3    9:45 a.m.)
          4              GOVERNOR BUSH:  We now have a vote for the parole
          5         commissioner.  On May 13th, the cabinet meeting, we
          6         appointed Monica David as chair of the Parole
          7         Commission and also appointed a new parole
          8         qualifications committee to fill the vacancy on the
          9         Parole Commission.
         10              The parole qualifications committee process is set
         11         out by statute and consists of five people who serve
         12         for a two-year period as needed.  The current committee
         13         is made up of Deputy Sheriff Ed Spooner, Judge Merrill
         14         Olowos (phonetic), Police Chief Osadeo Oligo
         15         (phonetic), state attorney Jerry Blair, and sheriff Don
         16         Hunter.  Their purpose is to advertise and receive
         17         applications for parole commission vacancies and then
         18         forward three names to the governor and cabinet for
         19         consideration.  I would like to thank all of them for
         20         their efforts.  The three people that we had a chance
         21         to visit with all were, I think, very well qualified to
         22         take on this responsibility.
         23              The three names are Mr. Patrick Donaldson,
         24         Ms. Tina Pate and Mr. Robert Woody.  Our vote today
         25         will fill the vacancy for the term left by Commissioner
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          1         Henry that expires the end of June 2004.  And Ken is
          2         passing out the ballot.
          3              (Ballots are distributed.)
          4              (Pause.)
          5              TREASURER GALLAGHER:  Governor, as opposed to
          6         doing a ballot, I'd just like to move Robert Woody and
          7         request the others go along.  I believe that Robert
          8         Woody is, one, very highly qualified, having his
          9         Master's degree from Rollins College.  Two, he has the
         10         experience necessary.  And, three, he also happens to
         11         be an African-American.  Which, without him being named
         12         to this very important position, we would be lacking
         13         for the first time in many, many years an
         14         African-American representation on the Parole
         15         Commission.  And that, I think, would be a mistake.
         16              If you look at what we have in regards to -- in
         17         black males, white males, there is a 32 percent white,
         18         66 black.  If you look at the female area, you end up
         19         with 33 percent black female.  50 percent -- where am
         20         I.  I had the female one here.  Anyway, there is a
         21         large disparity among what's in the prisons as
         22         opposed -- and we all recognize this problem -- as
         23         opposed to in our society.  I think it's extremely
         24         important we have a very qualified African-American and
         25         that that African-American is certainly one that would
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          1         have an excellent opportunity at it.
          2              So I would move that we hire Robert L. Woody.
          3              GOVERNOR BUSH:  Well, I think the procedures are
          4         to have a vote.  And I will just tell you that I'm
          5         voting for Tina Pate.  We've never had someone who has
          6         had a track record of focusing on victims.  And 100
          7         percent of the crimes committed in our state have a
          8         victim attached to them.  And so I think it's more than
          9         appropriate to have that expertise.  Robert Woody is a
         10         friend of mine.  He serves in my administration.  He's
         11         a very talented man.  He's, to put it completely in
         12         perspective, he's been the cochairman of my campaign.
         13         And I have enormous respect for him.  But I think Tina
         14         Pate is the proper person.  All three of them actually
         15         were very well qualified.  The other gentleman does
         16         great work in the Department of Corrections.
         17              GENERAL CRIST:  I would echo the Governor's
         18         comments.  I also have voted for Ms. Pate.  I think her
         19         experience, particularly as it relates to victim
         20         services, is critical.  And as the Governor so well put
         21         it, every crime does have a victim and we are very
         22         fortunate today that we have three extremely qualified
         23         people for this position.  And Mr. Woody has been a
         24         friend of mine as well and continues to be.
         25              And, Patrick, had the chance to visit with you
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          1         this morning and was very impressed and appreciate the
          2         fact that you applied.  But I think Ms. Pate offers a
          3         great breadth of diversity as relates to her experience
          4         and background and I think would really serve the
          5         people of Florida very well so I voted for her as well.
          6              GOVERNOR BUSH:  I'm assuming you're voting for
          7         Mr. Woody, right?
          8              TREASURER GALLAGHER:  That's correct.
          9              GOVERNOR BUSH:  So it's a 2-2 vote which I think
         10         is the first time under the new cabinet rules that the
         11         governor must be on the prevailing side.  And Tina Pate
         12         is the new parole commissioner.  Thank you all very
         13         much.
         14              Now, by law the appointment to the position of
         15         executive director of the Department of Law Enforcement
         16         is made by the governor with the approval of all three
         17         cabinet members subject to confirmation by the Senate.
         18         After advertising nationally and speaking to many
         19         qualified candidates, I'm pleased to announce the
         20         appointment of Guy Tunnell, sheriff of Bay County, for
         21         the position of executive director, beginning October
         22         1st.
         23              I asked the cabinet's approval for my appointment
         24         subject to a background review which has already begun.
         25         And, of course, subject to confirmation by the Florida
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          1         Senate.
          2              MR. WOOD:  Governor, I just wanted to let you know
          3         that there are citizens here from Bay County who oppose
          4         that appointment based on findings of the federal court
          5         and evidence that show Sheriff Tunnell is not qualified
          6         and I ask for just one minute to be heard.
          7              GOVERNOR BUSH:  Mr. Wood, you can come for one
          8         minute.
          9              GENERAL CRIST:  Governor, while he's coming, would
         10         you entertain a motion?
         11              TREASURER GALLAGHER:  Sure.
         12              GENERAL CRIST:  I would move that the cabinet
         13         approve the appointment of Sheriff Guy Tunnell as
         14         commissioner of the FDLE effective October 1, 2003.
         15              TREASURER GALLAGHER:  Second.
         16              GOVERNOR BUSH:  There's a motion and a second.
         17         Now, Mr. Wood, if you could, please -- you promise a
         18         minute.
         19              MR. WOOD:  I promise a minute.
         20              I provided to Mr. Gallagher a copy of the letter
         21         that has been submitted.  I asked that that letter be
         22         entered into the record today prior to the vote in this
         23         case.  Attached to that is a federal order by Federal
         24         Judge Steven Mickle which has identified substantial
         25         evidence of racism on the part of Sheriff Tunnell
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          1         involving an African-American business in Panama City,
          2         Florida.
          3              And I don't believe that this material has before
          4         been considered by whoever was considering the
          5         appointment or, of course, by the members of the
          6         cabinet.  And I think it needs to be considered.
          7              Sheriff Tunnell, according to the evidence and
          8         according to the federal judge, is a blatant racist.
          9         And I believe that this evidence should be made public
         10         and that people should know about this prior to his
         11         appointment.  I know I'm probably outnumbered 200 to
         12         one here.  But in our form of democracy, sometimes one
         13         voice can bring to the attention material that needs to
         14         be considered before important decisions like this are
         15         made.
         16              To have a blatant racist to be the head of Florida
         17         Department of Law Enforcement is wrong and you should
         18         not allow it to happen today.
         19              GOVERNOR BUSH:  Thank you.  And just for the
         20         record, you've sent me more information, my office more
         21         information.  We've had all of this.  It's not news.
         22         It's not new and it's not newsworthy in my personal
         23         opinion.  All this has been looked at.
         24              MR. WOOD:  You still have refused to order an
         25         investigation in Bay County and that's why we have a
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          1         problem.
          2              TREASURER GALLAGHER:  Governor, I'd like to say a
          3         couple of things if I may.
          4              GOVERNOR BUSH:  Sure.
          5              TREASURER GALLAGHER:  First of all, let me just
          6         tell you that I think Guy Tunnell is an excellent
          7         sheriff.  I had a chance to spend a little time with
          8         him yesterday after you told us who you had chosen.
          9         And I truly believe that he will make an excellent
         10         person in charge of FDLE.  I would also say that in the
         11         future I would ask that your staff would do the
         12         background check prior to bringing someone up.  I mean,
         13         there's not a sheriff in this room that would hire a
         14         deputy that would not do the background check prior to
         15         naming them.
         16              So I know it's a formality, but it's a very
         17         important formality that we all have to do.  I'm
         18         certainly going to vote for him because I like him and
         19         was very interested in months ago that he would get
         20         this job.  So I'm certainly for him.  I just would like
         21         us to sort of get things in the right order in the
         22         future if we could.  And I know that's not your fault,
         23         it's a staff issue.  But maybe this will have the staff
         24         do it in the right order.  And so therefore, I'd be
         25         most happy to vote in favor of the sheriff.
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          1              GOVERNOR BUSH:  I can tell you that Guy Tunnell is
          2         as good a cop that this state has and we've got a ton
          3         of good ones.  And he's a person of unimpeachable
          4         integrity and he has the support -- the broad support
          5         of law enforcement all across the state.  And there has
          6         been proper checking.  It is a formality and I
          7         apologize if you feel uncomfortable about it.  But I am
          8         completely comfortable with my choice and I would urge
          9         a unanimous vote.
         10              TREASURER GALLAGHER:  You have a unanimous vote
         11         because you have a second and I'm certainly agreeing
         12         with it.  And I'm sure the background check will come
         13         in just fine.  But I did feel an obligation to at least
         14         mention that.  So hopefully staff will put it in the
         15         right order in the future.
         16              GENERAL CRIST:  If I might.  I think I need to
         17         give a friendly amendment to my motion to support the
         18         sheriff to add the salary of $124,000.  And look
         19         forward to the unanimous vote.
         20              GOVERNOR BUSH:  There's a motion.
         21              TREASURER GALLAGHER:  I'll second that.
         22              GOVERNOR BUSH:  Second.  Any other discussion?
         23         All in favor say aye.  All opposed.
         24              Sheriff, you want to come up and speak?
         25         Congratulations.
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          1              (Applause.)
          2              SHERIFF TUNNELL:  Good morning.  Obviously this is
          3         a very exciting and important day in my life.  Needless
          4         to say, a few of my friends are here today and I'd like
          5         to take the liberty to introduce them.  I think, like
          6         me, although for probably different reasons, they are
          7         having a hard time believing that this is actually
          8         taking place this morning.  So if I may, I'd like to
          9         introduce my lovely wife, Patty.  And I'd like to ask
         10         the other members of my family who are here to stand,
         11         please.
         12              (Applause.)
         13              I'd also like to ask my extended family, many of
         14         the fine men and women of the Bay County Sheriff's
         15         Office, my sheriff's office, who are here this morning
         16         to support me to stand too, please.
         17              (Applause.)
         18              And certainly last but not least, I brought my
         19         heavy handers with me this morning.  A number of my
         20         fellow sheriffs are here and I'd certainly like to
         21         appreciate them for their support and being here.
         22         Thank you.
         23              (Applause.)
         24              Governor, thank you so much for this opportunity
         25         and the confidence you placed in me in making this
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          1         nomination.  Gentlemen of the cabinet, Commissioner
          2         Bronson, Treasurer Gallagher, General Crist, thank you
          3         too for your support.  I look so forward to working
          4         with you, gentlemen, and your staffs, your respective
          5         staffs in the job that has to be done.
          6              Obviously my predecessor, recently retired
          7         Commissioner Tim Moore of the FDLE, is a class act.  A
          8         tremendous leader, proven leader.  Definitely I've said
          9         this, if I've said it once, I've said it a hundred
         10         times in the last 48 hours, his shoes, as big as my
         11         feet are, will be difficult to fill.  But I pledge to
         12         you, along with the fine men and women of the FDLE, to
         13         endeavor to do the very best job that I can, to raise
         14         the standard for public safety for the citizens and the
         15         visitors of the great state of Florida.  God bless you
         16         and thank you so much.
         17              (Applause.)
         18              GOVERNOR BUSH:  Treasurer?
         19              TREASURER GALLAGHER:  Let me mention that this is
         20         the first time in a long time that we've had a head of
         21         FDLE that has come -- actually, the first time ever, I
         22         think, that's actually come from the Florida sheriffs
         23         and with the support of the Florida sheriffs.  And I'm
         24         thrilled that you chose one of the Florida sheriffs
         25         because there's always been a little bit of contention
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          1         between the two and I think this is going to eliminate
          2         that.  And, in fact, I don't think, I know it will.  I
          3         think that's a really good thing for law enforcement in
          4         Florida.  And I know Guy is going to do a great job in
          5         having a good relationship with his whole team and the
          6         different sheriffs throughout the state.  That's going
          7         to be a really good thing for Florida law enforcement
          8         and for the people of Florida.
          9              I know that they'll also work with our respective
         10         agencies.  You have quite a few law enforcement that
         11         work in different -- for your secretaries, Commissioner
         12         Bronson does, I do.  Charlie, you have some, I think,
         13         sworn deputies that do certain things.  So it's going
         14         to be good for all of us.  So you've made an excellent
         15         choice.  We thank you.  I know the sheriffs, they
         16         wouldn't be here in the large quantity if they didn't
         17         fully agree to that.  So I thank you for the choice you
         18         made.
         19              GOVERNOR BUSH:  Thank you, Tom.  And I'd also like
         20         to thank Darryl McLaughlin for doing a great job in the
         21         interim.  FDLE is a great organization with really
         22         highly trained, capable people.  And Darryl has done a
         23         fine job in these months and I have enormous respect
         24         for him as well.  So I'm excited about this.
         25              Next we have a presentation for -- from the
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          1         Florida Reliability Coordinating Council.  Ken Wiley is
          2         here.  And Lila Jaber who's the chairman of the PSC.
          3              Sheriffs, you don't want to stick around and hear
          4         about how our grid is much better than the rest of the
          5         country?
          6              (Laughter.)
          7              Apparently not.  It's a riveting subject.  I'm
          8         just shocked that you want to leave.
          9              TREASURER GALLAGHER:  I think the celebration is
         10         starting now.
         11              GOVERNOR BUSH:  This is an important subject given
         12         what happened with the blackout.  I don't know if
         13         anybody has seen the satellite picture of the blackout
         14         night where there was a chunk, a third or maybe a fifth
         15         of the country, almost in a triangle form that was
         16         totally black.  And the rest of, thankfully, Florida,
         17         was totally lit.  So it's important to get a review, I
         18         think, of where we stand and why is Florida a little
         19         bit different than Ohio.
         20              MS. JABER:  Thank you, Governor Bush and members
         21         of the cabinet.  We appreciate the invitation to be
         22         here certainly.  And I think the request is timely.
         23         And we hope that between Ken and I we can give the
         24         appropriate assurances and be available to answer
         25         whatever questions you may have.  Recognizing the
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          1         amount of work you have to do after this, we will keep
          2         our comments brief.
          3              I wanted to try to answer the obvious question
          4         everyone has, Can the kind of blackout that the
          5         northeast encountered be possible for Florida.  And
          6         while Ken and I are not going to say that anything is
          7         100 percent reliable or 100 percent guaranteed, I think
          8         that there are, as the governor mentioned, some factors
          9         that exist within the state that make it far less
         10         likely for the kind of blackout that the northeast
         11         experienced to occur in Florida.
         12              The first and perhaps the most important factor to
         13         point out is just the very geography of the state of
         14         Florida.  We are a peninsular state which means quite
         15         frankly that our import capability from other states is
         16         limited.  We are connected to what's called the eastern
         17         inner connection grid by a series of transmission lines
         18         into Georgia.  But the reality is we only have an
         19         8 percent import capability in the very optimal
         20         conditions and that equates to about 3600 megawatts.
         21              Because of that, Florida has had to be
         22         self-sufficient, self-generating.  And there is a
         23         reasoned, incremental, very thoughtful approach to
         24         understanding how much generation the state needs.  And
         25         we do that as an organization, as the commission, and
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          1         with conjunction of and the assistance of the
          2         utilities, DEP, and the Florida Reliability Council, by
          3         looking at a ten-year plan that we require the
          4         companies to submit every year.  And that ten-year plan
          5         gives us not only the demands and the generation
          6         facilities for the year that we're looking at, but also
          7         ten years out in the future.
          8              That's a very thoughtful approach to understanding
          9         population growth, impact on electricity from other
         10         factors such as industry, just people moving to Florida
         11         generally.  And we look at the ten-year site plans
         12         every year.  We have, the Florida PSC, has a statutory
         13         authority to require improvements or construction based
         14         on whether we believe the plan is adequate.
         15              In addition to that, but related to those two
         16         topics, is the notion that Florida utilities have
         17         agreed to a 20 percent reserve margin, an excess
         18         capacity that goes to serve load during peak times.
         19         Now the national normal is 15 percent.  But Florida
         20         utilities that contribute to 75 percent of the state's
         21         electric needs, Florida Power & Light, Progress Energy
         22         Florida and TECO, have agreed to a 20 percent reserve
         23         margin.
         24              The third point, but also equally important,
         25         relates to the transmission infrastructure.  The
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          1         Florida companies have roughly 6,700 circuit miles of
          2         transmission capacity and these are 230 kv lines or
          3         higher transmission lines according to the Florida
          4         Reliability Council load and resource plan.  Peninsular
          5         utilities -- those are the three largest Florida
          6         utilities -- are planning to add another 500 circuit
          7         miles of high capacity kv lines over the next ten
          8         years.  The PSC recently approved for Florida Power &
          9         Light a 240 kv line that's making its way to the
         10         governor and cabinet.
         11              GOVERNOR BUSH:  Is that -- what percentage
         12         increase is that in terms of our capacity that's being
         13         planned for the next ten years?
         14              MS. JABER:  I don't know what the percentage
         15         increase would be, Governor.  We can certainly look
         16         that up and get back to you.  But that in and of
         17         itself, Governor, is probably not the complete picture.
         18         What I did yesterday, to try to understand more of our
         19         transmission infrastructure upgrades, I asked FP&L to
         20         give me just a rough estimate of what they've spent in
         21         the last couple of years on upgrades and that will give
         22         us a better picture.
         23              FP&L has invested $420 million the last four years
         24         on transmission facilities.  The next four years, they
         25         expect to spend another 750 million.
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          1              Gulf Power, I asked the same question.  And for
          2         the year 2000 they spent 180 million.  And for 2002
          3         they spent 37 million.  These are important numbers
          4         because if you recall reading some of the fallout from
          5         the blackout in the northeast, the accusations are that
          6         the companies are not spending any money on upgrades
          7         and infrastructure construction.  So our companies are
          8         doing both.  Certainly we'll get back to you in terms
          9         of what that adds in percentage numbers to capacity.
         10              Finally, complicated systems like power grids,
         11         it's very, very important to design a system where a
         12         single disturbance won't affect the rest of the
         13         customers that are served by other Florida companies.
         14         This has been tested in Florida just last year.  JEA
         15         had a major power outage in their area.  The Florida
         16         Reliability Council, again, with the assistance of the
         17         Florida investor-owned utilities, were able to spot
         18         that quickly.  They shut JEA down in terms of access to
         19         the grid and the problem was isolated to that area
         20         alone and no other customer in the Florida area saw any
         21         effect of the outage.
         22              Just to give you an idea of generation capacity
         23         added, Governor, similar to the question you just asked
         24         on transmission, the Florida PSC in the year 2002, we
         25         approved an additional 2700 megawatts of generation
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          1         capacity.  And the governor and cabinet sitting as the
          2         siting board approved those.
          3              And the year before that we approved collectively
          4         almost 1800 megawatts and we intend to keep looking at
          5         those costs and those constructions prudently, again,
          6         in the context of a planning process which we are
          7         finding out other states really don't have.
          8              With that, I'm going to introduce Ken Wiley from
          9         the Florida Reliability Coordinating Council for a more
         10         detailed presentation.
         11              GOVERNOR BUSH:  Good morning.
         12              MR. WILEY:  Good morning, Governor and Cabinet.
         13         Thank you, Chairman Jaber.  The fact that Lila and I
         14         are standing here together at the podium talking to you
         15         about reliability in this state is indicative of the
         16         fact that this industry and the Florida Public Service
         17         Commission have been going hand in hand over the past
         18         two to three decades worrying about and watching out
         19         for the reliability of the transmission system in this
         20         state.
         21              I know the question in the forefront of our mind
         22         here today is, Can this happen in Florida?  And as Lila
         23         indicated, we're not going to say it never can, but I'm
         24         hoping to give you some assurances today that we at the
         25         Florida Reliability Coordinating Council and the Public
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          1         Service Commission have been diligent and are diligent
          2         in looking after this affair.
          3              First, let me explain who the Florida Reliability
          4         Coordinating Council is.  Acronym is FRCC.  It's all
          5         the players that utilize the electric transmission grid
          6         in peninsular Florida.  We have 29 members' companies.
          7         We're a non-profit corporation.  Our membership
          8         includes all the investor-owned utilities, the
          9         municipal utilities, the electric co-ops, the power
         10         marketers and generators, independent generators.
         11              We have existed in one form or the other for four
         12         decades.  Our responsibility is primarily to set the
         13         reliability standards for the transmission grid in the
         14         state and to set the policies and procedures that all
         15         users of that grid must follow whenever they operate in
         16         peninsular Florida.  We have an extremely close
         17         relationship to the commission as you're aware.  They
         18         have the statutorial responsibility over reliability.
         19              One way that they -- we and they work together is
         20         that their staff participate in the day-to-day type
         21         activities when we're discussing reliability and
         22         operating matters in this state.  They don't vote, but
         23         they certainly have their input and they hear what
         24         we're doing and we have very close coordination with
         25         the commission staff.
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          1              You've probably read in the news lately that in
          2         Congress there's a big push for Congress to enact some
          3         national reliability legislation.  That's one of the
          4         titles in the energy bill that is now in the conference
          5         committee in Congress.
          6                The purpose of the reliability section is to
          7         empower a national organization known as North American
          8         Electric Reliability Council -- you've read that in the
          9         news, NERC is the acronym -- with the ability to set
         10         the standards and to have the mandatory capability to
         11         enforce the compliance with those reliability
         12         standards.
         13              The enforcement mechanism that they would utilize
         14         is to delegate to the ten regions such as the FRCC in
         15         North America the power to enforce the particular --
         16              GOVERNOR BUSH:  Doesn't that bill also require us
         17         as taxpayers to subsidize in essence the utility
         18         companies in areas of the country where they've not
         19         made the same kind of investment in capacity and
         20         transmission lines?
         21              MR. WILEY:  I'm speaking specifically to the
         22         reliability title.
         23              GOVERNOR BUSH:  I'm speaking about since we
         24         invest -- you-all have invested in capacity that goes
         25         into the rate base and transmission line investments
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          1         have kept pace in our state -- contrary to what
          2         happened in other places -- we've paid for that
          3         investment as ratepayers and now the solution to do
          4         something is that we all, and as a nation, are now
          5         going to have to pay for the places where that
          6         investment didn't take place.
          7              MS. JABER:  Governor Bush, there are aspects of
          8         the bill that absolutely the Florida Public Service
          9         Commission has sent comments to the Florida delegation
         10         and other members of Congress that have participated in
         11         that bill.  And absolutely, you're right, there are
         12         places where it calls for cost shifting.  We've opposed
         13         that.  We've sent alternative language.
         14              With regard to the reliability part of the
         15         legislation, the Florida PSC has said, We have to
         16         preserve our state jurisdiction in that regard.  While
         17         the goals are admirable with regard to a national
         18         reliability standard, you have to defer to the state's
         19         jurisdiction because quite frankly, we can impose
         20         stricter standards and more efficiently.
         21              So absolutely, it's not a perfect bill.  We
         22         understand that some parts of the bill may be
         23         compromised out.  We're anxiously awaiting to see what
         24         parts.
         25              GOVERNOR BUSH:  Okay.
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          1              MR. WILEY:  Actually, there's been some discussion
          2         of taking the reliability section of the bill and
          3         pulling it out of the energy bill and passing it
          4         separately.  But at this point there's a lot of
          5         speculation of whether or not that will happen.  And
          6         certainly the FRCC has been fully supportive of the
          7         reliability part of the energy bill and that's the only
          8         thing that we get involved in.
          9              GOVERNOR BUSH:  But, I mean, we already have it.
         10         So why would you want to federalize something that we
         11         already do and we do apparently well enough to avoid
         12         the problems that the midwest and the mid Atlantic
         13         states faced?
         14              MR. WILEY:  Well, I'm hoping the remainder of my
         15         discussion here will tend to answer that question,
         16         Governor.  But we certainly do not want anything to
         17         happen at the national level that preempts Florida.
         18              As a matter of fact, I've personally been involved
         19         in drafting that national legislation just for the
         20         reliability part of it and we have insisted and insured
         21         that no preemption of state's authority, such as we
         22         have in Florida, would ever happen.
         23              The FRCC region does not cover the entire state of
         24         Florida.  It covers the peninsula.  The area over in
         25         the Panhandle which is where a few co-ops and Gulf
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          1         Power serve are a part of the Southern Company which is
          2         another reliability region.  And electrically, they're
          3         just not tightly tied to the peninsula.  They are very
          4         tightly tied to the north.  And that's why they're not
          5         a part of the FRCC.
          6              GOVERNOR BUSH:  Can I just simplify this?
          7              MR. WILEY:  Yes, sir.
        &nb