Rick McAllister, head of the Florida Retail Federation which was one of the opponents to Florida Power & Light's rate increase request, called the "doom and gloom" predictions emanating from the company and its vendors that it will cut projects and impose potential layoffs as "not justified." FPL lost its bid to have rates rise $1.3 billion.
“Over the past week, FPL leaders have forecast project cutbacks and layoffs in an effort to stir public support for a higher profit margin,'' McAllister said in a statement. "While they have the power to make these threats real, there is nothing in the PSC decision that justifies these cutbacks.''
Here's the rest of McAllister's statement:
“FPL’s rate filing didn’t ask for any funding for the Canaveral and Riviera Beach Clean Energy Centers – yet those are two of the projects they now threaten to put on hold.
“Florida’s Public Service Commission heard months of testimony before determining that FPL could continue to provide its customers with safe, adequate and reliable service without significantly increasing its base rates.
“The witnesses of the Public Counsel and other consumer parties in FPL's rate case established that FPL can, in fact, run its system and access capital markets to obtain all needed capital to continue its construction program, with no rate increase at all.
“The critical issue in the FPL case, as in any utility rate case, is whether FPL actually needs additional revenues from its customers in order to provide safe and reliable service, which includes the ability to access capital markets.
“I doubt that there are many investments in the U.S. or the world where you are virtually guaranteed a 10 percent return on your investment with minimal risk. FPL might face some incrementally higher borrowing costs, but their gloom-and-doom claims have no basis in reality.
“FPL's evidence in the rate case doesn't come close to proving the need for additional revenues to move forward with their current projects.
“Florida’s regulatory system allows utilities to recover capital costs for solar and nuclear generation through funding mechanisms completely outside of the base rate. FPL is overstating the impact of the PSC decision to make a political point.
Beyond the base – funding mechanisms for utility cost recovery
„ Cost recovery for 100% of FPL’s Turkey Point nuclear project costs is in place under the Nuclear Cost Recovery statute (Section 366.93, Florida Statutes.) The PSC noted in its decision that this cost recovery is completely outside the rate case. FPL will earn an ROE on its nuclear investment of 11.75% up to the time that the projects come on line.
„ FPL’s Environmental Cost Recovery Clause assures full cost recovery for FPL’s solar projects
„ FPL’s two new gas-fired projects should not be impacted by the rate decision. FPL was not asking for any funding for the Canaveral Clean Energy Center or the Riviera Beach Clean Energy Center in its rate request filing. As Commissioners and Staff made clear, it is customary for utilities to fund/finance construction of new conventional units until they come on line. At that point FPL can seek a rate increase if it needs one to run its system and earn a reasonable rate of return.
„ The Commissioners and Staff also note that the PSC has never disallowed full recovery of any utility’s reasonable and prudent investment and operating costs for any power plant