FPL raises its rates on utilities

Race may be on for ‘lowest electric bill’ in the state

We don’t get to pick our electric utility — it depends where you live. In South Florida and more than half the state, Florida Power & Light Co. is the only provider, with the exception of some municipal utilities.

FPL prides itself on its electric rates, touting how they’re the lowest in Florida and among the lowest in the country.

But with recent changes affecting bills, the race may be on for the “lowest electric bill” in the state.

FPL’s typical 1,000-kilowatt residential bill increased on Friday to $100.73 from $100.42, as the utility’s four newest solar energy centers begin serving customers.

But Tampa Electric Co.’s current residential bill for the same electricity is only $99.53. That makes FPL actually No. 2.

Other monthly bills of major utilities in the state are a bit higher, as of February: Duke Energy,

$128.78; Gulf Power, $128.86; and Florida Public Utilities, $134.86.

A utility’s base rate is set by regulators, but customers’ bills move up and down with regulators’ decisions about what the utility can charge for fuel adjustments, storm surcharges, environmental costs, and improvements like a new solar plant.

On Feb. 1, FPL’s bill increased because four solar plants came online and the utility was allowed to charge customers for them.

And Tampa Electric’s narrow lead — more than a buck — won’t last long. Tampa Electric has applied for an increase because of a rise in natural gas prices. That would bring its average bill to

$103.58 in April, said spokeswoman Cherie Jacobs.

Bill comparisons exclude franchise fees

When FPL and Tampa Electric, both investorowned utilities, talk about how much their residential bills are, they tend to leave out the franchise fee. That fee averages about 6 percent, according to Florida Electric Municipal Association, a Tallahassee-based trade group for 33 municipal utilities.

The franchise fee, which is the cost of the utility’s use of public space, is usually a separate item on the utility bill, as are municipal taxes. Both are collected by the utility and passed onto the city.

FPL said it doesn’t include them in the typical residential rate they quote, because “these cannot only vary pretty widely by location, but [also] some municipalities charge only one or none of the additional charges,” said Sara Gatewood, spokeswoman for FPL. She notes that the collected fees go directly to the municipality.

In fact, none of the investor-owned utilities’ bill quotes include franchise fees or municipal taxes, which are part of the typical customer bill.

FPL bill with franchise fee, $106.77

FPL still usually wins the “lowest rate” contest when the franchise bill is included, says Amy Zubaly, president of the Florida Electric Municipal Association.

In December, for example, FPL’s typical residential bill including the average franchise fee was about

$101.91, according to the association.

So if the franchise fee is added to the new rate of

$100.73, then the new FPL

1,000-kilowatt bill actually rises to nearly $107.

Zubaly said while FPL’s bill does tend to be the lowest, sometimes a municipal utility dips below. In December, for example, utility customers in Wauchula, in Central Florida, were paying only $100.90.

Will customers benefit from utilities’ tax savings?

The race to the lowest electric bill is getting heated. Most utilities in the state are passing on their federal tax savings to consumers.

That is, all but the largest in the state, FPL.

Florida’s Office of Public Counsel and two business groups have asked the commission to review FPL’s rates in light of the corporate rate declining to

21 percent from 35 percent. J.R. Kelly, Florida’s Public Counsel, said ratepayers are paying taxes to FPL at a

35 percent tax rate when they have dropped to 21 percent under the Tax Cuts and Jobs Act of 2017.

“That money belongs to the ratepayers,” he said.

If FPL were to pass on those savings, customers’ bills would be even lower, advocates say.

“We find it highly unusual that FPL would not pass those savings on to customers,” said Stephen Smith, executive director of the Southern Alliance for Clean Energy in Nashville. “If you really care about customers, why aren’t you passing on these savings to customers?”

“This an example of where that monopoly is not favoring customers,” said Smith, who has been critical at how large FPL is getting, with recent acquisitions of Gulf Power and Vero Beach utility customers, warning of the power it gives one utility in the state.

FPL has said it passed on tax savings by restoring the storm reserve after 2017’s Hurricane Irma. As a result, customers haven’t had to pay the typical storm surcharge on their bills.

But other utilities have replenished their storm reserves while also returning tax savings to customers. The Public Counsel says FPL’s tax savings from just 2018 total $772 million, and those savings could go on for decades.

Deregulation on the horizon?

We don’t get to pick our energy source, and that’s something that has prompted Gainesvillebased Infinite Energy, a natural gas provider, to propose a state vote on a constitutional amendment in 2020. It would require the Florida Legislature to create a competitive market for energy.

Utilities still would own the power lines and wires, but consumers would have a choice of their electricity supplier, according to the petition. That would ultimately reduce costs, advocates contend.

FPL and other utilities, as well as two major business groups in the state, disagree.

Advocates have enough signatures for a review by the Florida Supreme Court, but would need some 800,000 more to get it on the ballot.

Smith said there’s still much study to be done on the effects of energy deregulation in Florida. “We have not made up our minds. It could be a good thing, or it could be done wrong,” he said.