JUNO BEACH, Fla. – The Florida Public Service Commission (PSC) today approved a settlement agreement reached by Florida Power & Light Company, the Florida Office of Public Counsel, Florida Attorney General and other intervenors in the company’s rate proceeding. The agreement will effectively freeze base rates paid by customers until the end of 2012.
FPL President and CEO Armando J. Olivera said: “We think this agreement is in the best interest of all of the parties involved, especially our customers. We appreciate the willingness of those who represent Florida’s electric consumers to work with us on an agreement that will help provide financial stability for customers and the company alike, and we appreciate the support for the agreement by the Commission and its staff.”
The settlement agreement resolves all outstanding issues related to FPL’s recent rate proceeding. The key elements of the agreement are as follows:
- Base rates will be effectively frozen until the end of 2012.
- Cost recovery for a new combined-cycle natural gas unit at FPL’s West County Energy Center will be limited to the projected fuel savings for customers during the term of the agreement.
- Costs for storm damage would be recoverable beginning 60 days from the filing of a petition but capped at $4 for every 1,000 kilowatt hours of usage during the first 12 months. If storm restoration costs exceed $800 million, the company may request cost recovery above the cap, and any additional costs would be recoverable in subsequent years.
- If the company’s return on equity (ROE) falls below 9 percent, the company may seek rate relief. If the ROE rises above 11 percent, the intervenors may seek a rate reduction. Earnings will be calculated using an actual, non-weather-adjusted basis.
- The company can vary the amount of surplus depreciation that it uses in any year up to a calendar-year cap of $267 million, increased in the following year by the amount of any unused portion from prior years, and a cap of $776 million over the course of the agreement, provided that in any year of the agreement the company must use enough to maintain a 9 percent ROE but may use no more than is necessary to earn 11 percent.
- All motions for reconsideration, including FPL’s, will be withdrawn, and the company has agreed not to appeal the PSC's previous rate case decision. The Commission’s decision will become final 30 days from the date the Commission issues its order approving the settlement agreement if the decision is not appealed.
Typical monthly bills for FPL residential customers are 24 percent below the national average and the lowest out of Florida’s 55 electric utilities. As a result, FPL customers save $405 annually on the typical bill as compared with other Floridians. At the same time, the company’s reliability is in the top quartile nationwide, and FPL's generation fleet is far cleaner than the national average, producing power with 35 percent fewer carbon dioxide emissions, 55 percent fewer nitrogen oxide emissions and 75 percent fewer sulfur dioxide emissions.
Florida Power & Light Company
Florida Power & Light Company is the largest electric utility in Florida and one of the largest rate-regulated utilities in the United States. FPL serves 4.5 million customer accounts in Florida and is a leading employer in the state with approximately 10,000 employees. The company consistently outperforms national averages for service reliability while customer bills are below the national average. A clean energy leader, FPL has one of the lowest emissions profiles and one of the leading energy efficiency programs among utilities nationwide. FPL is a subsidiary of Juno Beach, Fla.-based NextEra Energy, Inc. (NYSE: NEE). For more information, visit www.FPL.com.