FPL’s rate hikes will be challenged

The following Editorial was published in The Daily Sun on Jan. 6, 2021.

OUR POSITION: It appears Florida Power & Light will have to defend its rate hikes to the Florida Supreme Court.

A projected rate increase this month for FPL customers might be in trouble if a citizens group is successful appealing the price hikes to the Florida Supreme Court.

And, the hearing before the state’s highest court is possible because the Public Service Commission, in a rare instance where it bucked FPL wishes, basically approved the lawsuit.

Floridians Against Increased Rates (FAIR) formed in March of 2021 to fight against FPL’s rate hike requests. The utility fought to kill the lawsuit arguing FAIR was a “shell” organization and questioned its membership and finances, according to a News Service of Florida story by Jim Saunders. But the Public Service Commission decided FAIR has standing in the case and stood aside to allow the suit to go forward.

Adding credence to the suit, two other groups filed a second appeal over FPL rates just this week. Florida Rising, the Environmental Confederation of Southwest Florida and the League of United Latin American Citizens of Florida filed a notice that they are appealing the rates that were approved by the PSC.

As we said in an editorial last month, the PSC had unanimously supported a four-year rate settlement with the utility that calls for a $692 million increase in base rates this month and another increase of $560 million in 2023. Additional increases are planned in 2024 and 2025 to pay for solar projects.

Under that plan, consumers were already in line to see an average monthly bill to increase by 18% through 2025 with the biggest jump in costs planned for 2022. FPL estimated that would increase the average cost of consumption from about $102 a month to about $114 a month, rounding off numbers.

FPL went back to the PSC just months later and requested another rate increase because it said the cost of natural gas was soaring. The PSC said “okay” and announced customers’ FPL bill will go up another $6.82 or so a month for average consumption. It is called a fuel-cost adjustment.

FPL defended the request to pay for gas price increases even though the cost of natural gas has been going down for weeks.

“While FPL continues to make investments to improve the fuel efficiency of its power plants and invest in solar generation, natural gas prices have increased sharply in 2021 due to increased global demand and supply restrictions, and increased fuel costs now account for more than half of the expected total bill increase in 2022,” Jack Eble, company spokesman, said in an email to The Daily Sun. “And, even with the adjustment to the fuel charge, FPL bills will continue to be well below the national average next year.”

The citizens advocacy group is arguing FPL will make billions of dollars from the rate hikes it does not need.

“Perhaps the worst aspect of the settlement agreement is that most, if not all, of these increases are not necessary for FPL to fulfill its obligation to provide safe and reliable service at the lowest possible cost,” the group said in a court brief, according to the News Service of Florida story. “FPL can and should provide service in 2022 with rates no greater than its current rates.”

FPL argues otherwise saying the agreement the PSC approved will provide customers with “stability” in respect to their monthly bill and allow the utility to remain financially strong with the ability to make investments that will be important to keeping rates predictable in the future.

FPL does a great job taking care of its customers, especially during hurricanes and emergencies. But we’re pleased the PSC took the side of FAIR and allowed the suit to go forward. While the Supreme Court’s decision might be predictable, it will be interesting to hear the two sides go at it in public.