FPL customers could foot Dorian bill
Utility could file for recovery of about $274 million in its expenses
Florida Power & Light Co. could file for recovery of about $274 million in its expenses for restoring power related to early September’s Hurricane Dorian, which threatened South Florida over Labor Day weekend.
How much of that customers could have to pay on their monthly electric bills was unclear Tuesday, as FPL didn’t respond to questions about the estimated surcharge.
“This seems like an extraordinary amount when the hurricane did not even hit Florida,” said J.R. Kelly, Florida’s Public Counsel, the state’s consumer watchdog who has challenged FPL on storm recovery expenses in the past. Kelly noted that FPL hasn’t yet filed the storm expenses with the Florida Public Service Commission for review.
Rebecca Kujawa, chief financial officer of FPL’s parent company NextEra Energy, noted on Tuesday’s
third-quarter earnings conference call that FPL is authorized to recover storm restoration costs on an interim basis from customers through a surcharge. She said FPL was still in the accounting process, but the current estimate was $274 million.
Kujawa noted that the Juno Beach-based electric utility can begin charging customers a storm surcharge 60 days after its regulatory filing. That provision was part of FPL’s 2016 rate settlement agreement.
Expenses initially claimed for a storm by a utility are later
compared with the actual receipts submitted to the Public Service Commission.
While Hurricane Dorian spared South Florida and much of FPL’s service territory, the utility had about 17,000 crews — including several thousand from out-of-state — staged throughout the state to be ready to restore power after Dorian.
In a recent interview, FPL’s president and CEO Eric Silagy has said there also was the extra cost of paying overtime to crews since preparation for the storm was over Labor Day weekend.
As Hurricane Dorian threatened South Florida and areas north, FPL warned that millions of customers could be without power, some for weeks. An estimated 4 million customers were in the forecast path of Dorian, FPL said.
“We missed a huge bullet [with Hurricane Dorian]. It would have been horrific,” said Silagy in an interview with the South Florida Sun Sentinel on Oct. 16. The high-force winds could snap concrete power poles and there could have been many deaths, he said.
In the end, about 160,000 out of FPL’s 5 million households and businesses in Florida lost power due to Dorian. Powerful wind gusts from feeder bands from the storm, as well as fallen trees, branches and debris took down some power lines along coastal areas.
FPL said it was able to remotely restore power to many customers in Florida before Hurricane Dorian veered north. After devastating parts of the Bahamas, Dorian turned away from Florida’s coast and headed north toward the Carolinas.
The last time FPL customers had a storm-related surcharge on their bills was for 2016’s Hurricane Matthew. The utility collected $322.45 million from customers, which amounted to $3.36 a month on the typical residential electric bill.
But the Office of Public Counsel, the consumer watchdog for the state’s utilities, challenged some expenses, which led to a nearly $28 million refund for customers.
Kelly said FPL could opt to recover storm expenses the same way it did after 2017’s Hurricane
Irma, which avoided a surcharge on customer bills but allowed the utility to keep tax savings.
In 2018, FPL used its windfall corporate tax savings due to the new tax law to cover $1.3 billion in claimed costs from Irma. The unusual move was challenged by the Office of Public Counsel and others that said the tax savings should be refunded to customers, but the Public Service Commission ruled that FPL could keep the $772 million in annual tax savings.
On its conference call Tuesday, parent company NextEra Energy also said FPL is earning its top allowed profit of 11.6 percent.