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PSC considering Fla. Power & Light rate proposal

Associated Press Modified: November 19, 2012 at 5:15 pm •  Published: November 19, 2012

"This agreement will provide them with four years of competitive and predicable rates," said FPL general counsel Wade Litchfield.

Jon Moyle, a lawyer for the Florida Industrial Power Users Group, said the deal would be good for businesses by offering rate certainty and keeping their power bills from increasing.

The Florida Retail Federation, Village of Pinecrest and a pair of individual consumers sided with the public counsel, who also argues the deal would give FPL investors a windfall. The settlement calls for a 10.7 percent rate of return, higher than any other electric utility in the state.

"The evidence of record in this docket shows that FPL with no base rate increase at all will be able to provide safe and reliability service in the 2013 test year while recovering all of its reasonable and prudent costs," said retail federation lawyer Robert Scheffel Wright. He added that FPL still would earn more than $1 billion in net operating income and receive a healthy return on equity without an increase.

FPL originally asked to raise base rates by $690.4 million per year effective in 2013. The proposed settlement would raise base rates by only $378 million next year but provides for additional increases as new power plants come on line in June 2013 and in 2014 and 2016.

The monthly base rate for a residential customer using 1,000 kilowatt hours would go up $4.10 in January and $1.74 in June, for a total of $5.84 if the settlement is approved. It then would increase by about $2 in 2014 and another $2 in 2016. Due to reductions in fuel and other costs, the total bill, though, would increase only 94 cents as of June to $95.56.

Under FPL's original proposal the base rate for the same customer would increase by $5.23 in January and $1.86 in June, for a $7.09 total in 2013. The net increase, though, would be $2.54 as of June due to the other rate adjustments for an overall bill of $97.16. FPL would have to file new cases if it wanted additional base rate increases after 2013.