FERC Filings
MOTION TO INTERVENE AND PROTEST OF THE ELECTRIC POWER SUPPLY ASSOCIATION -GridFlorida LLC, Florida Power & Light Co.,Florida Power Corporation,Tampa Electric Co.-Docket No. RT01-67-000
a. The Board selection process is biased against the interests of the market stakeholders
Applicants propose that an independent search firm identify a slate of primary candidates with a list of four alternates, that these primary candidates be reviewed by a Selection Committee with some stakeholder participation, and by majority vote the Selection Committee can veto up to four of the primary candidates. The alternates hand picked by the search firm through an unspecified process become the final director for each vetoed primary candidate.
It is clear that the critical aspect of the selection process is the initial selection of the slate of candidates and four alternates, yet little detail is provided by Applicants on the degree of interaction of the Selection Committee with the search firm. For example who will specify selection criteria, desired backgrounds and experience? Who will assist the search firm in providing the guidance that all such firms seek throughout the search process? Generally, search firms are not only looking to meet the experience and background criteria, but also try to select a slate of candidates that are compatible with each other. This process usually occurs through interviews with each candidate and input from the group engaging the search firm. Search firms rarely, if ever, perform their selection process completely independent of their client.
Furthermore, it is unclear how well balanced the Selection Committee process would be even if it was included in all aspects of the engagement with the independent search firm. The Applicants propose the composition of the Selection Committee to include one representative from each of six ambiguously defined sectors plus as many additional representatives as have provided a Divestiture Notice. If FPL and TEC both issue a Divestiture Notice, all three Applicants will have one representative and one vote each since FPC or TEC would get the vote under the sector labeled “investor-owned utilities that are owners of transmission facilities in the markets served by GridFlorida and that have not provided a Divestiture Notice.”
As such, in addition to their potential ability to unduly influence the initial selection of the slate of candidates and alternates in the search firm process, together, they would be assured 3 of 8 votes to veto or block vetoes of candidates. There is no legitimate rationale provided for special voting privileges for the Applicants through this special category for transmission owners who have issued a Divestiture Notice nor does one exist if this Board is intended to be truly independent.
On balance, the extent of the Selection Committee’s participation in the search firm process is unduly ambiguous and the voting structure within the Selection Committee is skewed in favor of the Applicants. Much like the overly celebrated collaborative process, there is significant doubt as to the effectiveness of the proposed selection process in delivering a balanced result.