Florida Power & Light proposes plan to recover hurricane, increased fuel price costs

After two hurricanes and increases to natural gas prices in 2022, Florida Power & Light Company announced Monday that it had filed a proposal with the Florida Public Service Commission (PSC) to adjust customer rates to recover those unexpected costs.

The plan, which the PSC must approve, would balance unrecovered fuel and storm costs while adjusting for a decline in fuel costs for 2023.

The plan would increase rates for its typical 1,000-kWh peninsular Florida customers’ bill by approximately 10 percent. The rate increase would still keep residential bills below the national average, FPL said. For residential customers in Northwest Florida, rates would increase roughly 8 percent. But increases would be below rates previously approved to take effect in February.

“FPL has a proven track record of keeping bills below the national average. When events beyond our control – like hurricanes and significant changes in fuel prices – force a change to customer bills, we try to do so in a thoughtful way that minimizes the impact on our customers while balancing the risk of invoices piling up,” FPL Chairman and CEO Eric Silagy said. ”

PSC requires that utilities like FPL restore power and pay upfront for any repairs after a hurricane strikes. Utilities then recover the cost of that restoration as a surcharge on customer bills if approved by PSC. In this case, FPL is seeking to recover $1.3 billion for restoration costs because of Hurricanes Ian and Nicole. According to the plan, customers would pay a temporary storm surcharge for 12 months starting in April, thus eliminating the risk of storm costs piling up year over year.

FPL said its investments into the energy grid since the 2004-2005 hurricane seasons have helped speed restoration times and reduce restoration costs. The company’s continued investments in storm hardening led to a rapid response to Hurricane Ian, FPL said. In 2017, FPL calculated that restoration efforts would have taken four additional days and cost nearly $500 million more if those investments had not been made.

PSC asked FPL to calculate what the impact would be of spreading the hurricane recovery costs across all FPL customers’ bills. The utility said it would reduce the monthly storm charge on a typical 1,000-kWh bill by nearly $10.

The utility is also seeking permission to recover about $2.1 billion in unexpected natural gas costs. Its proposal would spread those unrecovered costs over a 21-month period beginning in April 2023. To partially offset those costs, the utility said it plans to decrease its projected fuel factor by about $1 billion during the final nine months of the year.