FPL rate settlement goes before PSC
Under the proposed deal, a typical customer will see their bill increase by $11.41 a month by 2020.
The Florida Public Service Commission is slated to consider an $811 million rate hike today in a proposed settlement agreement Juno Beach-based Florida Power & Light Co. reached with three groups representing customers.
Under the agreement , FPL would raise customers’ base rates $400 million in 2017 and $211 million more in 2018 — plus $200 million for its new Okeechobee power plant. All told, it’s still less than the $1.3 billion rate hike FPL initially asked for in January, which would have resulted in the typical customer’s bill increasing by $13.28 a month.
Under the proposed deal, a typical customer — defined by FPL as someone using 1,000 kilowatt hours of electricity a month — will see that bill increase by $11.41 a month by 2020. This coming January, the typical customer bill would rise to $98.77 from $91.56 a month, not including franchise fees. By January 2020, that bill would be $102.97.
To watch the 9:30 a.m. hearing, go to floridapsc.com and click on the camera icon.
T h e s e t t l e ment c a n n o t b e changed in any way, so the PSC must reject or approve it.
Nine parties participated as intervenors in the case and called more than 50 witnesses during nine days of hearings before the PSC that ended Sept. 1. Three intervenors — the Office of Public Counsel, the Florida Retail Federation, and the South Florida Hospital and Healthcare Association, along with FPL — signed on to the settlement.
Florida Public Counsel J.R. Kelly said he believes the proposed settlement is a “fair deal for everybody. “The increase is significantly less than what FPL had sought and will save customers $2 billion over the four years, he said.
FPL spokesman Mark Bubriski called the settlement innovative and constructive and said it will enable FPL to continue to deliver superior value for customers in the years ahead.
AARP, the Sierra Club and Alexandria and Daniel Larson of Loxahatchee oppose the settlement. The Federal Executive Agencies, Wal-Mart and the Florida Industrial Power Users Group have not publicly stated a position.
At the hearing, FPL plans to call four witnesses who will testify about items in the settlement such as termination of financial hedging for natural gas purchases and plans for a battery storage pilot program for solar energy.
A major issue is what FPL’s rate of return on equity, or profits, should be.
Documents obtained through a public records request show that the PSC staff was going to recommend that FPL be allowed mid-point ROE of 10.25 percent. Its current ROE midpoint is 10. 5 percent.
The settlement would permit an ROE of 10.55 percent, which is lower than the 11.5 percent FPL had requested.
The staff was also going to recommend FPL be permitted to increase rates by $450 million in 2017 and $206 million in 2018, or about $45 million more than what’s in the settlement.