The Florida Public Service Commission (PSC) today approved a base rate increase of $350 million and a 10.5 percent Return on Equity (ROE) for Florida Power & Light Company (FPL). As FPL moves forward with construction of three new power plants, today’s decision provides rate certainty through 2016 for the customers and the utility and concludes the company’s rate case petition.
In FPL’s original request, filed on March 19, the company requested an 11.5 percent ROE and a $516.5 million base rate increase. A Settlement Agreement, filed on August 15, requested a $378 million increase and a 10.7 percent ROE. Today, FPL filed a new agreement, and Commissioners lowered the increase by $40 million over the life of the agreement by retaining the company’s current $5 late fee. An additional $18 million annual rate decrease was also awarded as part of the new agreement.
“Our decision today reflects agreement on all issues heard throughout this lengthy process and is in the public interest,” said PSC Chairman Ronald A. Brisé. “Ensuring rate stability and reliability for FPL’s customers–including industrial customers–will help create jobs and grow Florida’s economy.”
FPL, the Florida Power Industrial Users Group, the South Florida Hospital and Healthcare Association, and the Federal Executive Agencies signed the original Settlement Agreement and worked on a new agreement today that addressed the Commissioners concerns, including ROE, customer late fees, the overall revenue requirement, and incentive mechanism (also called asset optimization mechanism).
Commissioner Lisa Edgar, who seconded the motion to approve the new agreement, said, “We gave all parties time to participate and this resolution is in the public interest, based on the record of evidence. It provides rate predictability for customers now and in the future and benefits the local economy and businesses looking to expand.”
“As Commissioners from very different backgrounds, we massaged a document and came up with a good agreement that benefits the customers and the company,” said Commissioner Art Graham. “The new agreement will help spark economic development in the state and maintain FPL’s good customer service.”
Commissioner Eduardo Balbis, who made the motion to accept the new agreement, said, “All of the issues raised by Commissioners have been addressed, and, for me personally, the signatories heard my concerns and came up with additional concessions for the benefit of FPL’s residential ratepayers.”
“This new agreement achieves our goal of fair, just, and reasonable rates,” said Commissioner Julie Brown. “I thank the Public Counsel for their persistence that helped move the process along and provided additional hearings that benefitted all customers.”
FPL filed its petition for a base rate increase on March 19, beginning months of Commission analyses and customer input. The PSC held nine customer hearings in FPL’s service territory, where PSC Commissioners heard from hundreds of customers about the utility’s proposed rate increase and its quality of service. Technical hearings were held in August and November, where evidence and testimony was presented from witnesses for FPL and intervenors in the case.
Customer rates for January 2013 will be available after FPL files its adjusted tariffs.
For additional information, visit www.floridapsc.com.
Follow the PSC on Twitter, @floridapsc.