Reducing Florida Power & Light Company’s (FPL) rate request by a third, the Florida Public Service Commission (PSC) today approved an $811 million settlement agreement offered by FPL, Florida’s Office of Public Counsel (OPC), who represents FPL customers, South Florida Hospital and Healthcare Association, and the Florida Retail Federation.
“During PSC service hearings last summer, we heard from hundreds of FPL customers about the company’s proposed $1.3 billion increase. In approving this much-reduced settlement, we have protected customers from an excessive rate increase,” said PSC Chairman Julie Brown. “Fully supported by OPC and other advocacy groups, it ensures customers stable rates for four years and helps FPL provide reliable service, while continuing to invest in clean energy.”
FPL’s revenues 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 per month—the base rate charge will increase $9.48 over four years, as opposed to FPL’s initially projected $13.28 increase.
The settlement agreement also includes the following terms:
Allows for 1,200 megawatts 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.
Establishes FPL’s new rate of return range, between 9.6 and 11.6 percent, as opposed to its initial request, between 10.5 and 12.5 percent with an incentive bonus.
FPL filed its base rate increase petition with the PSC on March 15, 2016. The PSC held nine service hearings in FPL’s service territory and heard from thousands of consumers during the 8-month rate case process. Commissioners also held a technical hearing on August 22, 2016–August 26, 2016 and August 29, 2016 - September 1, 2016 in Tallahassee, and a hearing on the settlement on October 27, 2016.
FPL currently provides electric service to more than 4.8 million retail customers in all or parts of 35 Florida counties.
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