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Public Service Commission


05/16/2006 Contact: 850-413-6482

Commission Approves Securitization for FP&L Hurricane Losses, Sets Amount at $1.13 Billion

TALLAHASSEE — A 12-year bond issue – the first approved under a law passed in 2005 – will be used to reimburse Florida Power & Light for hurricane losses incurred in 2004 and 2005.

The five member Florida Public Service Commission set the company’s recovery at $1.13 billion, compared with the $1.7 billion sought by the utility.  The Commission staff’s preliminary estimates indicate a monthly surcharge to pay off the bonds will be approximately $1.05 for 1000kwh of residential use.

Commission Chairman Lisa Edgar said, “Securitization will minimize the rate impact on FP&L’s customers while allowing FP&L to be reimbursed for restoration costs directly related to the storms.”

The company sought recovery of $213 million for losses outstanding from the 2004 hurricane season, $826 million for losses incurred during the 2005 hurricane season, and a storm reserve of $650 million.  The Commission reduced the requested amounts to $198 million for the 2004 storm season, $735 million for 2005, and a reserve of $200 million.