JUNO BEACH, Fla., Jan. 11, 2021 /PRNewswire/ -- Florida Power
& Light Company (FPL) today notified the Florida Public Service
Commission (PSC) that it expects to file a formal request in the
coming months for new base rates. The company intends to propose a
four-year rate plan that would begin in January 2022, once its current base rate
settlement agreement concludes at the end of this year. FPL
previously extended operations under the rate agreement by freezing
base rates for an additional year through 2021.
FPL now serves 5.6 million customer accounts from Miami to Pensacola across more than half of
Florida(1), a rapidly growing state on the front lines
of climate change and strong, frequent severe weather. Recognizing
this, FPL's plan will enable the company to continue building a
more resilient and sustainable energy future for everyone –
including future generations – while keeping typical customer bills
lower than the national average through at least 2025.
"Delivering clean, reliable and affordable energy to customers
is a duty each of us at FPL takes extremely seriously, particularly
during these difficult and challenging times," said Eric Silagy, president and CEO of FPL.
"Providing an essential service to today's customers comes with the
fundamental responsibility to constantly look over the horizon to
ensure we're ready to serve them tomorrow as well. Of course, we're
mindful there's never a good time to request a rate increase, but
we remain steadfastly committed to providing customers unparalleled
value for their money while building an energy future they can
depend on. To do that, we're asking for regulatory approval to
continue our disciplined, long-term investment strategy in
infrastructure, clean energy and other innovative technology that
are the foundation of our communities. Over the past 15 years,
we've repeatedly demonstrated that this innovative and long-term
approach provides customers with lower bills and higher reliability
today, and positions Florida for even greater success
tomorrow."
In 2006, FPL's bill was slightly above the national average but
has decreased roughly 10% over the last 15 years while the national
average has increased approximately 30% during roughly the same
period. FPL's typical 1,000-kWh residential customer bill is lower
today than it was 15 years ago and 30% lower than the national
average.
As FPL's bill has decreased over time, the service it provides
customers has consistently and demonstrably improved. FPL's
investments to build a stronger, smarter energy grid has resulted
in best-in-state reliability every year since 2006, as well as
repeated national recognition. In 2020, FPL received the
ReliabilityOne® National Reliability Excellence Award,
presented by PA Consulting, for the fifth time in the last six
years. Since becoming sister companies with FPL in 2019, Gulf Power
has delivered operational and financial benefits for customers,
including the company's best-ever service reliability in
2019. Gulf Power delivered even better reliability in 2020 and
earned the 2020 ReliabilityOne® Award for Outstanding
Reliability Performance in the Southeast suburban/rural service
area. FPL is one of the nation's cleanest electric utilities, with
a modern, state-of-the art fleet of ultra-efficient clean energy
centers and a rapidly growing portfolio of solar power plants as
part of the company's "30-by-30" plan to install 30 million solar
panels by 2030.
"Even as the price of many goods and services increases year
after year – often with little to no warning – the price of
electricity from FPL has come down over the last 15 years while
service has become significantly cleaner and more reliable. This
does not and cannot happen by accident. Instead, it's the direct
result of smart, long-term investments that reduce costs and
improve efficiencies. In the coming months, we look forward to
demonstrating how our 2022-2025 base rate proposal will help us
continue delivering the clean, reliable and affordable energy
customers expect and deserve in the years ahead," said Silagy.
Aligned with previous multi-year proposals, FPL is designing its
new rate plan in a way that keeps costs down for customers over the
long term while supporting continued investments to further enhance
its infrastructure and improve the efficiency of its system.
Overview of request
FPL, which has not requested a
general rate increase since 2016 and extended its current rate
agreement by freezing base rates for an additional year, is
finalizing its base rate adjustment proposal that would cover the
next four years (2022-2025) and provide continued, longer-term cost
certainty for customers.
FPL expects the proposal to include:
- In 2022, an adjustment to base annual revenue requirements of
approximately $1.1 billion.
- In 2023, a subsequent year adjustment to base annual revenue
requirements of approximately $615
million.
- In 2024 and 2025, a request for a Solar Base Rate Adjustment
(SoBRA) mechanism to recover up to 900 megawatts (MW) of
cost-effective solar projects in each year. If the full amount of
new solar capacity allowed under the SoBRA proposal was
constructed, FPL's preliminary estimate is that it would result in
general base rate adjustments of approximately $140 million in 2024 and $140 million in 2025, which would be partially
offset by a reduction in fuel costs on the clause portion of
customer bills.
The total of these rate increase requests over the four-year
period from 2022 through 2025 would result in an estimated average
increase in total revenue of less than 3.7% per year. FPL projects
typical customer bills will remain well below the national average
even with the proposed increase. In fact, adjusted for inflation,
FPL's typical bill in January 2022
would be nearly 22% less than it was in 2006. In nominal terms,
FPL's projected bill in January 2022
is projected to be just 3.5% higher than it was in 2006.Through the
consolidation of FPL and Gulf Power, the typical residential
customer bill in Northwest Florida
is projected to be lower than today's bill by the end of the
proposed four-year rate plan.
The phased-in rate adjustments are necessary to help pay for the
more than $29 billion FPL is
investing during the four-year period from 2019 through 2022 to
benefit customers, including improving electric service
reliability, reducing emissions and improving generation fuel
efficiency, strengthening its electric system to make it more
resilient in severe weather and preparing for customer growth. In
addition, FPL will continue to make significant investments
throughout the base rate proposal timeframe to further improve
service for its customers.
Most FPL customers power their homes for just a few dollars a
day. FPL's residential customer monthly usage median is 950 kWh,
which means most FPL customer households consume less than the
standard, 1,000-kWh typical bill benchmark, which is currently
about $99. The typical 1,000-kWh Gulf
Power residential customer bill is approximately $140.
Until FPL files its formal request, which is expected to occur
in March, all rate, bill and revenue figures are estimates.
Customers can visit FPL.com/answers or
GulfPower.com/answers to learn more about the request. Once
the formal request has been filed, the website will enable
customers to calculate the estimated impact to their bills in 2022
based on their current electricity usage.
Delivering service efficiently
FPL ranks best-in-class
among all major U.S. utilities based on its operating and
maintenance (O&M) costs per kWh of retail sales. Compared with
the average utility's O&M costs, FPL's innovative and
relentless day-to-day focus on driving costs out of the business
saves customers nearly $2.6 billion
annually, which equates to savings of about $24 a month on a typical residential customer's
$99 bill. Never satisfied, FPL
continues to find new ways to work more efficiently to save
customers money. For example, FPL's 2022 non-fuel O&M, which
will be reflected in the company's upcoming filing, is projected to
be lower than FPL's 2018 best-in-class level.
As an example, FPL's Project Accelerate, an annual program
designed to find new ways to improve efficiency, lower costs and
save money, is expected to produce more than $1.5 billion in savings for customers over the
company's four-year rate plan, which is an annual savings run rate
of approximately $390 million that
will be reflected in the proposed rate plan. Another significant
cost-saving measure that FPL has taken during the current rate plan
is its merger and consolidation with Gulf Power. FPL estimates the
consolidation is resulting in approximately $82 million per
year in O&M savings for the combined company. FPL also projects
system benefits of approximately $1.5
billion over the next 30 years as a result of power
generation upgrades already underway, a new transmission line
physically connecting both companies and the ability to dispatch
from, and plan for, a common fleet of power generation resources.
In total, customer savings from combining the two companies is
projected to be $2.8 billion.
The company is committed to operating efficiently in order to
deliver reliable service while keeping increases low, even while
the costs of other essential products and services have risen
dramatically. For example, groceries, medical care, health
insurance and housing increased 25%-75% from 2006 to 2020.
Meanwhile, FPL's typical customer bill is 10% lower today than it
was in 2006.
While FPL's focus on efficiency and productivity has lessened
the impact, the costs of many materials and products the company
must purchase in order to provide clean, reliable and affordable
power have increased. These increased expenses, combined with the
projected addition of approximately one-half million new customers
during the seven-year period beginning in 2018, are driving higher
operating costs.
Investing in Florida to keep
the state strong, competitive and successful
As
Florida's largest private investor, FPL is proposing a four-year
rate plan that will support continued investments in long-term
infrastructure and advanced technology that will help keep customer
bills low and reliability high over the long term. For the period
2019 through 2022, FPL will have invested more than $29 billion to benefit customers, with additional
significant investments expected in 2023 and beyond to meet the
growing needs of Florida's economy and continue delivering
outstanding value for customers.
These investments support the continued building of a stronger,
smarter and more resilient energy grid. Consistently the top
priority for customers, the expectation and need for reliable,
around-the-clock electric service has only been amplified amid the
coronavirus (COVID-19) pandemic as more customers work and attend
school remotely. Beyond customer expectations, hundreds of new
federal regulatory requirements implemented since 2017, including
new cyber security standards, have required FPL to continue
investing in its infrastructure.
While FPL has been awarded the most reliable electric utility in
the U.S. for five of the last six years, climate change and
Florida's strong, frequent severe weather requires the company to
continue investing in the energy grid. Additional investments in
building a stronger, smarter electric system are crucial as FPL
continues to further improve the reliability of its service for
customers, including fewer outages and faster restoration. Also,
FPL continues to invest in smart grid technology that enables the
company to continually monitor and assess the health of its system,
predict potential issues before they disrupt service to customers
and restore power faster following outages.
The proposal will also include FPL's continued investments in
cleaner, more efficient power generation. FPL's ultra-efficient
fleet of state-of-the-art power plants has one of the cleanest
emissions profiles among comparable utilities nationwide, and the
company continues to rapidly expand solar energy. From 2019 through
2022, FPL will have added more than 2,700 MW of power generation,
the costs for which are not included in current customer rates.
Although these investments are supported by base rates, they are
expected to generate substantial savings for customers over the
long term by reducing fuel and other costs, resulting in
substantial net customer savings over the lives of the
investments.
FPL's track record of making smart power generation improvements
is strong. For example, since 2001, FPL's investments in
high-efficiency natural gas energy centers have saved customers
nearly $11 billion in fuel costs and
prevented more than 145 million tons of carbon dioxide emissions,
equivalent to negating the emissions output of every registered
vehicle in Florida for nearly the
next four years.
FPL's annual capital investments in Florida far exceed its annual earnings, making
the company's financial strength, particularly its allowed return
on equity (ROE), critical to financing these important improvements
on behalf of customers. As part of its base rate request, FPL
expects to propose that its allowed ROE midpoint be set at 11.50%,
which includes a 0.5% performance incentive in recognition of FPL's
superior performance, relative to other utilities in Florida and the nation. FPL's financial
strength – in all financial climates – directly benefits customers,
enabling the company to borrow money at lower interest rates and
attract investors needed to support the types of smart, long-term
investments that improve service and keep bills low over time.
FPL's best-in-class or top-decile performance across numerous key
metrics translate into a customer value that's among the best in
the nation. FPL's proposed ROE midpoint will better reflect this
and encourage continued strong performance.
As it has from the moment COVID-19 became widespread in
March 2020, FPL remains committed to
supporting customers experiencing hardship due to the pandemic and
the resulting economic uncertainty. To date, FPL has provided
customers approximately $75 million
in relief through various programs and initiatives. As Florida
recovers, the company will continue to assist customers who need it
most. However, the pandemic is also a stark reminder of the
importance of reliable electricity and the need for continued
smart, long-term investments in infrastructure, clean energy and
innovative technology that will enable FPL to serve customers now
and for decades to come.
FPL plans to formally file its petition and testimony with the
PSC in March to enable a thorough review and a decision to be
reached before the end of 2021.
Florida Power & Light
Company
Florida Power &
Light Company is the largest energy company in the U.S. as
measured by retail electricity produced and sold. The company
serves more than 5.6 million customer accounts supporting more than
11 million residents across Florida with clean, reliable and
affordable electricity. FPL operates one of the cleanest power
generation fleets in the U.S and in 2020 won the
ReliabilityOne® National Reliability Excellence Award,
presented by PA Consulting, for the fifth time in the last six
years. The company was recognized in 2020 as one of the most
trusted U.S. electric utilities by Escalent for the seventh
consecutive year. FPL is a subsidiary of Juno Beach, Florida-based NextEra Energy, Inc.
(NYSE: NEE), a clean energy company widely recognized for its
efforts in sustainability, ethics and diversity, and has been
ranked No. 1 in the electric and gas utilities industry in
Fortune's 2020 list of "World's Most Admired Companies." NextEra
Energy is also the parent company of NextEra Energy Resources, LLC,
which, together with its affiliated entities, is the world's
largest generator of renewable energy from the wind and sun and a
world leader in battery storage. For more information about NextEra
Energy companies, visit these websites: www.NextEraEnergy.com,
www.FPL.com, www.GulfPower.com, www.NextEraEnergyResources.com.
1) On Jan. 1, 2021, Gulf
Power, which serves customers in Northwest Florida, legally combined with FPL.
Gulf Power will continue as a separate operating division under the
Gulf Power name through 2021.
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SOURCE Florida Power & Light
Company