WEST PALM BEACH, Fla. - FPL president Eric Silagy testified at FPL's rate hike hearing on Tuesday that the utilty's settlement agreement in 2010 provided it with the ability to recover costs for its West County Energy Center and maintain an 11 percent return on equity.
He said FPL is asking regulators, now that the rate agreement is expiring at year-end, to allow for recovery of its new Cape Canaveral clean energy plant. He said it was a $1 billion investment but because it will use 33 percent less fuel, the plant will effectively pay for itself.
Consumer and business advocates questioneed Silagy about the utilty's request rate of return and what he sees as FPL's obligation to provide customers with the lowest rates.
FPL is asking for up to an 11.5 percent return on equity, based on its performance, which translates into $240 million if the utilty receives what it requested, Silagy said.
"Is it FPL's duty to provide safe, reliable service at the least cost?" Florida Retail Federation lawyer Robert Scheffel Wright asked FPL president Eric Silagy at Florida Power & Light Co.'s rate hike hearing Tuesday morning.
Wright pointed out that former FPL president Armando Olivera had said in previous rate cases that it was FPL's duty to provide electric service at the lowest possible cost. He said two other Florida utility presidents also agreed it was their duty to provide the lowest possible cost in previous rate cases.
"How can you disagree with that?" Wright asked.
Silagy said that's not how he interprets FPL's mission. "I wouldn't want to be sacrificing safety or worse reliability or customer service...It's a function of trying to balance between those," he said. "I don't look at just the least cost."
The hearing continues at 1 p.m and can be watched by clicking on the camera icon at http://www.psc.state.fl.us.