FPL using tax break to cover Irma costs; bills will dip a bit
Florida Power & Light Co. said Tuesday that it will use its federal tax savings under the new tax law to wipe out $1.3 billion in Hurricane Irma-related costs.
As a result, FPL’s typical monthly residential bill would drop to $99.37 from the current $102.72, according to the utility. Without Irma storm surcharges of $4 to $5.50 monthly until 2020, FPL said its 4.9 million customers would save an average of $250.
FPL had planned to start collecting a new storm charge in March and later ask Florida’s Public Service Commission to approve additional charges until the electric grid restoration bill was paid.
“The timing of federal tax reform, coming on the heels of the most expensive hurri-
cane in Florida history, created an unusual and unprecedented opportunity,” said Eric Silagy, FPL’s president.
J.R. Kelly, Florida’s public counsel, said the Office of Public Counsel, as well as other parties that settled with FPL on rates in 2016, saw the corporate tax cuts coming, since they were part of the Trump administration's agenda, and included a provision in the agreement to address the issue.
On Jan. 9, Florida’s Office of Public Counsel petitioned regulators to open a docket to “investigate and adjust” base rates by investor-owned utilities due to the new tax law. The consumer watchdog agency said the regulator has “an obligation to take action to pass tax-reduction benefits of the [tax] act back to consumers.”
“Income taxes are calculated into the rates that consumers pay,” Kelly said. “It’s unfair for ratepayers to pay at 35 percent and FPL to only pay at 21 percent; that would be a boondoggle for shareholders.”
He said FPL would have risked having to refund money to customers had it moved forward with a new storm surcharge.
In complaints to the Florida Public Service Commission, FPL customers have questioned the utility’s spending of $2.78 billion to upgrade its grid since Hurricane Irma in September knocked out power to 90 percent of customers across the state. They have also criticized poor communication with customers about power restoration.
The Florida Public Service Commission said it expects to address Florida’s electric utilities performance in the storm this spring.
After Congress passed a $1.5 trillion rewrite of the tax code, President Donald Trump signed it in December. Since then, FPL joins other consumer companies across the nation and in South Florida, including Fort Lauderdale-based AutoNation, that have announced benefits for employees and consumers as a result of the new tax law.