FPL rate hearings move forward after state regulators agree

State regulators are going forward with hearings on FPL's proposed rate increase, despite last week's agreement between the utility and big power users.

FPL wanted the Public Service Commission to curtail the hearings on its original rate request of $690 million, arguing that it had reached a settlement that would result in lower rates for consumers.

But commissioners decided the deal is off the table – at least until Thursday. Meanwhile, the commission is accepting public comments on the agreement between FPL and big power users through Wednesday.

In March, FPL asked for a rate increase of about $7 on the typical residential monthly bill for 1,000 kilowatts. Large power users, along with the Florida Retail Federation, Florida's Public Counsel Office and groups such as the AARP opposed the rate hike.

Last week, FPL and the big users agreed to a base-rate revenue request of $378 million, or about a $6 increase on a typical monthly bill. The utility agreed to a lower return on equity of 10.7 percent, compared to up to 11.5 percent in its original request.

But the state's top consumer advocate and the retail group still oppose the increase, saying the utility should be approved for a return on equity of less than 10 percent.

"Evidence will show that FPL doesn't need additional revenue in order to do its job," said Robert Scheffel Wright, lawyer for the Florida Retail Federation.

Public Counsel J.R. Kelly last week called the settlement a "bad deal" for consumers because it rolls in capital costs for two new energy-efficient plants at Port Everglades in Fort Lauderdale and in Riviera Beach. He said the deal generates nearly $1 billion for FPL.

In his opening statements Monday, FPL's lawyer John Reed touted the utility's record, saying FPL out-performs its peers by providing the lowest residential bill in the state and controlling fuel costs through new energy-efficient plants. He said if FPL had been a "mediocre" performing utility, rates would have been $1.6 billion higher in 2010.

John Moyle, lawyer representing the Florida Industrial Public Users Group, said under FPL's requested rate increase, big power users' rates would go up 24 percent. Big power users should get more credit for allowing FPL to interrupt their power to provide electricity to residents in emergencies, he said.

"Don't kick the credit can down the road," Moyle asked regulators.

The hearings continue at 9:30 a.m. Tuesday and can be watched on psc.state.fl.us.



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