This increase reflects new base rates, which are currently pending PSC review, consistent with Florida law that permits rates to be implemented subject to refund when additional time is required to conclude a proceeding.
The schedule for the PSC's final action on FPL's rate filing was extended so the Commission could first conduct the hearing and vote on FPL's settlement agreement. In conjunction with the base rate increase, FPL is also implementing other rate adjustments, including a substantial reduction in the customer fuel charge. The result will be a net increase for a typical residential customer of no more than $1.
50 per month beginning in January.
In August, FPL reached a settlement agreement with the Florida Industrial Power Users Group, South Florida Hospital & Healthcare Association and Federal Executive Agencies. These groups represent large business and governmental customers that employ tens of thousands of Floridians. If the PSC approves the proposed agreement in December 2012, FPL will implement the rates outlined in that proposal, which would eliminate the net increase on a typical residential customer bill, holding residential bills flat in January.
Because new rates will be effective in January 2013, FPL will initiate notice to customers in December 2012. If the PSC does not approve the settlement agreement in December, and ultimately approves a base rate that is lower than the amount implemented in January 2013, customers would be refunded the difference, with interest.
In an informational filing made with the PSC, FPL noted that the company's ability to offset expenses through the use of non-cash surplus depreciation is very limited in 2013 and will soon expire. This would cause a significant, rapid deterioration in the company's finances if new rates were not to be implemented in January.
"We appreciate the PSC's diligent review of the proposed settlement, which we believe reflects a thoughtful and fair compromise with major customer groups that is in the public interest and will benefit all FPL customers and the state of Florida. If approved, the settlement agreement would support our ability to continue to provide our customers with exceptional reliability, award-winning customer service and the lowest electric bills in the state for at least four more years," said FPL President Eric Silagy.
The company's rate request, as originally filed March 19, 2012, addressed only rate requirements arising in 2013. The proposed settlement agreement would help secure low, stable bills for all FPL customers through 2016.
The PSC completed its in-depth evidentiary hearing in the case in November 2012, and is scheduled to vote on the proposed settlement agreement in December 2012. Following the vote, FPL will publish the specific rates that will take effect in January 2013.
Florida Power & Light Company is the largest electric utility in Florida and one of the largest rate-regulated utilities in the United States.