Reducing Florida Power & Light’s (FPL’s) rate request by one-third, the Florida Public Service Commission (PSC) on November 29 approved (Docket No. 160007-EI) an $811 million settlement agreement offered by the utility.
Other participants in the resolution included Florida’s Office of Public Counsel, South Florida Hospital and Healthcare Association, and the Florida Retail Federation.
The agreement did not come without some arm-bending. In a notice filed on November 18 with the commission, FPL had warned that, if the negotiated rate increase it submitted in October weren’t approved at the end of this month then the utility will move ahead anyway — as allowed by state law — and raise customers’ rates effective January.
In its memo, the Sunshine State’s largest utility stated, “Florida Power & Light … hereby gives notice of its intent to implement on January 1, 2017 – pursuant to the “file and suspend” provisions of Section 366.06(3), Florida Statutes, and subject to refund – the rates that it filed with its rate petition on March 15.”
What’s more the utility planned to charge the higher, $1.3 billion rate it first asked for in its March filing – not the scaled-back $811 million settlement figure .
FPL’s revenues now will increase $400 million in 2017, and the utility will phase in $411 million in additional revenues over the remaining three years of the settlement. For the typical residential customer—using 1,000 kilowatt-hours (kWh) per month—the bill will increase $9.48 over four years, as opposed to FPL’s initially projected $13.28 increase.
The settlement agreement also:
- Allows for 1,200 megawatts (MW) of solar generation over four years;
- Discontinues FPL’s natural gas hedging program, which could potentially save fuel costs and, in turn, lower customers’ bills; and
- Establishes FPL’s new rate of return range, between 9.6 percent and 11.6 percent (as opposed to its initial request, between 10.5 and 12.5 percent, with an incentive bonus).
After FPL filed its base rate increase petition with the PSC on March 15, the commission held nine hearings in FPL’s service territory and heard from thousands of consumers during the eight-month rate case process.
FPL currently provides electric service to more than 4.8 million retail customers in all or parts of 35 Florida counties.