Florida Power & Light Co. crews work on lines.
Published on December 30, 2024 at 10:43 am
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Pointing to issues such as growth and a need to continue expanding its system, FPL on Monday said it will propose a four-year plan to raise base electric rates.
Florida Power & Light Co. will seek increases of about $1.55 billion that would take effect in 2026 and $930 million that would take effect in 2027, according to a letter filed with the Florida Public Service Commission. It also will seek additional money in 2028 and 2029 to pay for solar-energy and battery projects, though the filing did not detail specific amounts.
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In the letter, FPL said, for example, that it has “experienced significant growth in our customer base” during the past four years and expects such growth to continue.
“While this growth will ultimately have a positive impact by spreading existing fixed costs over a larger customer base, it also means that FPL must invest significant capital to meet the needs of these additional customers by building transmission and distribution infrastructure, including poles, wires, transformers, substations and other components,” the letter, addressed to Public Service Commission Chairman Mike La Rosa, said. “The costs of meeting these obligations have substantially increased due to the impact of inflation.”
The letter is the first formal step in a months-long process at the Public Service Commission. FPL said it will file a detailed proposal on Feb. 28; its current base-rate plan, which took effect in 2022, will expire at the end of 2025.
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Base rates make up a major part of customers’ monthly bills, and the regulatory commission will consider voluminous amounts of information and hold hearings while considering the FPL proposal. The state Office of Public Counsel, which represents consumers, and groups that represent businesses and consumers also are expected to take part in the case.
The commission on Dec. 19 gave final approval to a plan that will lead to a $184.9 million base-rate increase in 2025 for Tampa Electric Co., followed by increases of $86.6 million in 2026 and $9.1 million in 2027. In August, the commission approved a settlement that will increase Duke Energy Florida’s base rates by $203 million in 2025 and $59 million in 2026.
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FPL is by far the largest utility in the state, with Monday’s letter saying it has about 6 million customer accounts.
The utility has more than 180,000 customers in portions of Baker, Clay, Nassau, Putnam and St. Johns counties.
When factoring in other expenses such as power-plant fuel, FPL said the proposal would lead to customer bills increasing at an average annual rate of about 2.5% from January 2025 through 2029.
In a prepared statement Monday, FPL President and CEO Armando Pimentel said the utility has a “proven track record of delivering value for our customers.”
“While we know there is never a good time to request a rate increase, we need to continue to make smart investments in the grid and in new generation resources so we can continue to deliver reliable electricity, enhance resiliency and diversify our generation mix to power our fast-growing state,” Pimentel said. “That is our never-ending commitment to our customers and that’s what this balanced plan does.”
The rate case will include myriad issues, but one of the most closely watched will be FPL’s requested return on equity — a key measure of profitability. The commission typically approves a range of allowable return on equity and a “midpoint” in the range.
FPL said in the letter it will seek a midpoint of 11.9% As a comparison, the commission this month approved a 10.5% midpoint for Tampa Electric.
FPL also made clear in the letter that it wants to continue expanding the use of solar energy. Florida utilities have increasingly turned to solar in recent years.
“Utility-scale solar and battery projects are currently the lowest-cost form of new power generation, providing not only clean and reliable energy to customers, but also mitigation of fuel price volatility and savings in the form of reduced fuel costs,” the letter said. “Deploying solar projects with cost-effective battery storage provides additional customer benefits by extending the hours when FPL can deliver low-cost energy to customers, even when the sun is not shining.
