AARP objects to proposed FPL rate case deal, calls it harmful to customers

FPL has 15,000 restoration workers ready to roll.

AARP has formally objected to a proposed settlement of FPL’s rate case.

AARP has strongly objected to the proposed rate case settlement between Florida Power & Light Co. and three intervenors, saying the $811 million base rate increase will be harmful to FPL’s residential customers.

John Coffman, an attorney representing AARP, said in a document filed late Thursday with the Florida Public Service Commission, that the deal is contrary to the evidence filed in the case and should be rejected. The evidentiary record in the case heard for nine days ending Sept. 1 supports a reduction of more than $300 million in FPL’s rate revenue for 2017, he added.

Coffman called the proposed rate of return on equity — or profits —  11.6 percent that FPL could earn under the deal “outrageous.”

“Forcing consumers to pay such excessive profit levels would place the Florida Commission far out of the mainstream, as compared to other public utility commission decisions throughout the United States,” Coffman stated.

In January FPL filed a petition with the PSC seeking a $1.3 billion increase in customers’ base rates. If approved, that would have resulted in a monthly bill increase of $13.28 by 2020 for the customer who uses 1,000 kilowatt hours.

If the PSC approves the settlement it is set to consider Oct. 27, the typical customer would see a bill increase of $9.48 a month by 2020, with the first $5 increase  kicking in next year.

AARP, with 2.8 million members in Florida, has fought FPL’s quest for a rate increase from the beginning, and launched a campaign resulting in more than 760 consumers submitting comments to the PSC.

On Oct. 6 the Office of Public Counsel, which represents all ratepayers, the South Florida Hospital and Healthcare Association and the Florida Retail Federation signed the deal. Under it FPL would charge customers $400 million more in 2017, $211 million more in 2018 and $200 million more in 2019.

Public Counsel J.R. Kelly said earlier this week the agreement is fair to everyone and will save customers an estimated $2 billion. He had no further comment Friday.

FPL  spokesman Mark Bubriski said earlier this week the company is pleased to have reached a fair, long-term agreement that will help it to continue to deliver superior value for customers.

AARP also said the deal would lock in “improper additional piecemeal rate increase in unknown amounts for new solar generation,” and would permit FPL to collect additional amounts over current rates by maintaining and expanding storm costs and other surcharges over the next four years.

It appears that the settlement would grant significant rate relief to larger customer groups at the expense of residential customers, Coffman stated.

AARP and five other intervenors who not sign the agreement were not notified prior to its Oct. 6 filing. Attorneys for FPL and the other three signatories stated in a filing that they  could not reach the other parties because Hurricane Matthew was on its way.

Nathan Skop, a former PSC commissioner who represents Alexandria and Daniel Larson of Loxahatchee in the case, said Florida Administrative Code rules require any statement that parties could not be contacted to be backed up with details about the dates and methods of the attempted contact.

The Larsons have also filed a formal objection to the settlement agreement.

AARP has requested  the hearing set for Oct. 27 be delayed for two more weeks because there  isn’t enough time  to address the “significantly anti-consumer” provisions proposed in the non-unanimous agreement.

Skop has also asked the PSC to delay any decision on FPL’s storm hardening plan and wooden pole inspection, which was included in the rate case. First, it should hold a workshop to assess how FPL’s system held up during Hurricane Matthew in light of the outages that occurred.

Other intervenors including the Sierra Club, the Federal Executive Agencies, the Florida Industrial Power Users Group and Wal-Mart have not taken a public stance for or against the agreement.

 

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