July 19, 2005
PSC takes final action on FPL’s storm cost recovery request; Surcharge reduced to less than six cents/day per household

JUNO BEACH, Fla. – The Florida Public Service Commission today approved $442 million of Florida Power & Light Company’s request for a temporary storm surcharge on customer bills to pay the cost of service restoration from three back-to-back major hurricanes last year.

“We have to seek recovery of storm costs to ensure that we are ready to respond the next time we are hit by a hurricane,” said Armando Olivera, FPL president. “We recognize that some customers are still struggling to recover from last year’s hurricane season, and yet, we also know that there would be a greater burden if we weren’t prepared for future storms.”

The PSC also approved its staff's recommendation to capitalize approximately $70 million of FPL’s storm expenses and deferred action on an accounting adjustment of $21.7 million.

FPL customers have been paying a storm surcharge of $2.09 per month on a 1,000 kilowatt-hour residential bill since February. Today’s action by the PSC reduces the surcharge to an estimated $1.68 per month effective September 16. The surcharge amounts to less than six cents a day per household for only the costs of the actual hurricane restoration. FPL requested that the surcharge continue for up to 36 months.

During the 2004 hurricane season, FPL incurred nearly $1 billion in storm restoration costs, of which $354 million was covered by an existing storm reserve and another $110 million by insurance on the company’s power plants. That left a deficit in the storm reserve of $533 million.

Since the mid-1990s, Florida utilities have been unable to purchase storm insurance on their electrical transmission and distribution system – the poles, wires and substations portion of the business. In addition, the utilities are not eligible for Federal Emergency Management Agency (FEMA) or other federal money. So the PSC established a well-defined process to address storm costs and that process has served electric utility customers well – providing a fair and fiscally responsible solution. That process includes a storm reserve fund, along with the ability for FPL to seek recovery when storm costs exceed the reserve.

Florida Power & Light Company is the principal subsidiary of FPL Group, Inc. (NYSE: FPL), nationally known as a high quality, efficient and customer-driven organization focused on energy-related products and services. With annual revenues of more than $10 billion and a growing presence in 26 states, FPL Group is widely recognized as one of the country's premier power companies. Florida Power & Light Company serves 4.3 million customer accounts in Florida. FPL Energy, LLC, FPL Group's wholesale electricity generating subsidiary, is a leader in producing electricity from clean and renewable fuels. Additional information is available on the Internet at www.FPL.com, www.FPLGroup.com and www.FPLEnergy.com.