FPL Customers to Receive $28 Million Refund in August, Rates Also Expected to Decrease Slightly in September
By Space Coast Daily // July 16, 2018
FPL approved a joint agreement to resolve all issues from Hurricane Matthew
BREVARD COUNTY, FLORIDA – The Florida Public Service Commission unanimously approved a joint agreement between Florida Power & Light Company and the state’s consumer advocate to resolve all outstanding issues in the review of restoration costs for Hurricane Matthew, which impacted nearly the entire eastern coastline of Florida in 2016.
The agreement between FPL and the Office of Public Counsel confirms the prudence and reasonableness of the company’s restoration costs while adjusting the accounting treatment for a portion of the costs in order to reduce the near-term impact to customers. As a result, FPL will refund approximately $28 million plus interest, which will translate into a credit of about $3 per 1,000 kWh for residential customers.
“This sensible resolution puts a little more money back in our customers’ pockets,” said Eric Silagy, president and CEO of FPL.
“Importantly, it speaks to the fact that we never lose sight of our responsibility to operate efficiently while executing an aggressive and rapid response to a major hurricane to safely restore power to all customers as quickly as possible.”
FPL restored service to nearly 99 percent of the 1.2 million customers affected by Hurricane Matthew within two days of the storm exiting the state.
FPL filed documentation with the Florida Public Service Commission support approximately $316.5 million in recoverable costs due to Hurricane Matthew. Based on the initial approved rates, FPL collected from customers approximately $322.4 million between March 1, 2017, and Feb. 28, 2018, through a temporary surcharge.
As is customary during hurricane cost recovery, the $6 million difference was set to flow back to customers through a routine true-up adjustment. In addition, FPL agreed to adjust the accounting treatment of $21.7 million of its restoration costs so customers would receive a total refund of $27.7 million, plus interest.
Keeping bills among the lowest in the state and nation
In January, FPL announced that customers would not pay a surcharge for Hurricane Irma restoration due to federal tax savings. Hurricane Irma was one of the largest, most powerful storms to ever hit Florida, and FPL’s response was unprecedented both in scale and the speed of power restoration.
However, the timing of federal tax savings enabled the company to cover Irma’s $1.3 billion restoration bill. The ability to leverage the federal tax savings in this way was afforded by FPL’s current base rate agreement, which was negotiated with the Office of Public Counsel and other customer groups and approved unanimously by the PSC in 2016. The agreement set parameters for base rates and storm surcharges from 2017 through at least 2020.
Federal tax savings paved the way for even more FPL customer savings in July, allowing for a net reduction in customer rates of approximately 50 cents on a typical 1,000-kWh residential bill. In September, FPL expects to reduce rates again by 26 cents for a 1,000-kWh residential customer bill.
This decrease is the result of a routine decrease in the storm charge and savings from the transfer of the Martin-Riviera Lateral Pipeline to Florida Southeast Connection, LLC.
While the prices of almost all products and services have risen in recent years, FPL’s typical 1,000-kWh residential customer bill has remained very low. In fact, FPL’s typical bill is lower today than it was more than 10 years ago. Also, FPL’s typical bill is approximately 30 percent lower than the national average.
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