FPL customers spared Hurricane Dorian surcharge
Florida Power & Light Co. said Thursday that it would not seek recovery from utility regulators of what it says was $270 million in costs to recover from Labor Day weekend’s Hurricane Dorian, a storm that hit the Bahamas but spared most of Florida.
FPL’s more than 5 million customers could have had a storm surcharge on their monthly electric bills, the Juno Beachbased utility said. But FPL said it won’t be seeking the charge, which it said saves customers an average of about $54 over 12 months.
CEO Eric Silagy credited the utility’s investments in “clean energy” and technology for lowering costs to run FPL’s electric grid in not having to seek recovery of restoring power after the hurricane, a slow-moving storm that formed in the ocean on Aug. 24, and became a Category 5 hurricane.
In an interview earlier this year, Silagy said the storm would have been “horrific,” snapping concrete polls and causing deaths had it hit Florida.
The state’s largest utility was allowed in May by regulators to keep about $772 million in annual federal tax savings. Other utilities in Florida, including Tampa Electric Co. and Duke Energy, passed on their tax savings to customers.
The commission took the unusual step of going against its own staff recommendation, which had said FPL should deduct hurricane recovery costs — at that time an estimated $1.3 billion from 2017’s Hurricane Irma — but pass the remaining savings to customers.
Other utilities in Florida, including Tampa Electric Co. and Duke Energy, passed on their tax savings to customers who had been paying taxes at a higher rate through their bills.
Commissioners cited the 2016 rate settlement that was struck with FPL, which happened before the federal tax cut. They agreed that FPL’s rates are “just and reasonable,” and didn’t need to be reviewed.
Following the decision, Florida Public Counsel J.R. Kelly called the decision “a big win for FPL and a big loss for ratepayers.” He said the commission “failed to keep ratepayers’ interest at heart.”
The tax savings resulted from the tax reform law of 2017, which lowered corporate income tax rates from 35 percent to 21 percent. The tax changes were signed into law just three months after Irma.
As previously announced, FPL said its typical residential customer monthly bill will decrease beginning in January by about $4, to $96.04 from the current $99.90, due to lower operating costs.
FPL has typically sought storm cost recovery from regulators: customers paid surcharges through their bills for 2016’s Hurricane Matthew. But then the utility agreed in 2018 to refund its nearly $28 million of it after the Public Counsel claimed “over-recovery.”