Florida Power & Light on Friday asked the Public Service Commission to allow it to raise rates on 4.8 million Florida customers by 23.7 percent by 2019, a $1.3 billion increase that is also designed to reward its shareholders with substantially higher profits.
FPL argues that while it has delivered stable and low-cost power to customers since its last rate case in 2009, it must charge customers more to offset the increase in expenses and accommodate the growth in population.
“We are committed to delivering our customers exceptional value for their money and will continue to make smart investments that will further improve service for customers and help keep costs down,'' said Eric Silagy, FPL president and CEO, in a press release. Download 2016 Rate Proceeding - News Release (TYL) - FINAL
If approved, the increase will lock in base rates for four years and the typical residential customer bill of 1,000 kilowatt hours would increase by about $13 a month — with $8.50 imposed in 2017, another $2.50 in 2018 and $2 more in 2019. The current base rate imbedded within a customer’s overall bill is $54.86 per 1,000 kwh. Other charges are added to every bill, and the current total for 1,000 kwh is $93.38.
The request comes on the heels of the company spending more than $3.4 million in campaign funds to stave off competition from the solar industry by mounting a campaign to keep a constitutional amendment off the November ballot that would have opened the door to a competitive solar market in Florida.
The PSC has the final say over the rate request but the current panel of governor-appointed commissioners has consistently-sided with FPL on its controversial requests. The company is the third largest utility in the nation and one of the most active campaign contributors in the state.
Despite that record, J.R. Kelly, the lawyer who represents ratepayers in utility cases, said Friday he will "fight the good fight" and argue that FPL's rate hike should be rejected. FPL is earning profits at the top end of the rate allowed under the current agreement with the state, and Kelly said, the company can afford to make the investments it needs to continue to operate an efficient and reliable system without a rate increase..
"I know why they want the money. They want to continue to earn all they can for their shareholders and earn at the top of their range,'' Kelly said. "If they are earning like that, they don't need that $1 billion."
Under state law, the utility is allowed to earn a return on equity of between 9.5 percent and 11.5 percent without having to justify its profits before regulators. Kelly said for every 100 basis points, or each percentage point of ROE, FPL earns about $165 million in profit.