FPL to hit consumers with an average $4 price hike

Beginning in May, average customer will pay $103.02 to offset rising natural gas costs

Rising energy prices aren’t just hitting your wallet at the gas pump.

Florida Power & Light is about to hit consumers with an average $4 price hike beginning in May — just in time for fullblown air conditioning season.

Between May and December, an average FPL residential customer who uses 1,000 kilowatt hours will pay $103.02, an increase of $3.97 over the current bill of $99.05. Customers who consume more than 1,000 kilowatt hours will see larger hikes.

The increase, approved on Thursday by the Florida Public Service Commission, enables the utility to recoup what a PSC news release called “unexpected” increases in the cost of natural gas that FPL uses to generate most of the electricity it sells.

“These rising prices have been compounded by extreme cold weather and increased demand throughout the country,” FPL spokesman Bill Orlove said by email. “It is important to note that FPL does not make a profit on fuel costs, and the investments we have made to enhance the efficiency of our power plants help reduce the impact of these price increases.”

According to the U.S. Energy Information Association, the cost of natural gas for industrial uses increased 38.3% between August and January.

The price has followed a similar path as gasoline prices since November, attributed to increased demand by motorists and expectations by futures traders that COVID19 vaccines would propel an economic recovery this year.

U.S. production of natural gas and gasoline — sharply reduced during the early months of the pandemic — has not increased at the same pace as demand, which has kept inventories low and driven prices up for both, experts say.

Although FPL is required to obtain PSC authorization for billing rates for each calendar year based on projected costs of operation, mid-year corrections are allowed if its costs increase or decrease significantly during those years.

PSC rules require notification if fuel costs change by more than 10%.

Midyear corrections work the opposite way, too. A year ago, as energy prices plunged at the beginning of the pandemic, FPL passed along its savings by discounting customers’ May 2020 bills by 25%.