Since January, thousands of residential Florida Power & Light customers submitted signed petitions and comments and made phone calls to regulators asking them to not allow FPL to raise its rates.
Despite that, the five-member Florida Public Service Commission unanimously approved a settlement deal Tuesday that allows FPL to increase its base rates by $811 million through 2020.
Now some are calling for reform of Florida’s utility regulation system, while others assert that the Office of Public Counsel, which represents all ratepayers, should not have been a party to the settlement.
The PSC approved a settlement agreement announced Oct. 6 by FPL, the Florida Retail Federation, the South Florida Hospital and Healthcare Association and the OPC.
Not including franchise fees and local taxes, which vary from city to city and can be substantial, the bill for a customer who uses 1,000 kilowatt hours a month will jump from $91.56 to $102.97 in 2020.
Following the vote, AARP Florida’s state director Jeff Johnson, said consumers are not being heard, and residential ratepayers need an independent public counsel dedicated to their interests.
AARP’s Advocacy Manager Jack McRay said the group with 2.8 million members in Florida is “exploring all options” as to what the next step should be.
FPL spokeswoman Alys Daly said Wednesday that FPL’s typical residential customer bill is $40 lower than the national average.
“Our typical business and residential bills are expected to remain lower than they were in 2006 for at least the next four years. AARP members who are served by FPL are paying less for their electricity than the majority of AARP members who live in other parts of the country and at the same time, our customers have cleaner and more reliable service,” Daly said.
“We invest more than 3.5 billion a year – far more than our earnings – in infrastructure to deliver our customers with top-ranked reliability and bills that are among the lowest in the nation,” Daly said.
State Sen. Jose Javier Rodriguez, D-Miami, said the rate increase serves “as further evidence of the need for reform in Florida away from a monopoly system overly controlled by a small handful of giant utilities.”
Florida Public Counsel J.R. Kelly said as for any calls for reform, “That is a decision for the Legislature. Our office has always strived to provide the best legal representation for all ratepayers of the regulated utilities (electric, water, wastewater and gas), and we will continue to do so.”
Kelly has said the settlement was fair and far less than FPL’s original $1.3 billion request. In addition, among other positives such as more solar power plants, FPL is now required to begin terminating hedging activities for natural gas prices, a practice which has cost all Florida ratepayers more than $6 billion over the last 14 years.
AARP’s Associate Director for Advocacy Zayne Smith said the 6,700 petition signatures and 769 individual comments submitted to the Florida Public Service Commission were the biggest ever response from AARP members in any Florida rate case.
The Sierra Club also encouraged consumers to submit comments throughout the process that began in January and Monday it submitted 5,768 comments in bulk. Many of them explained the hardship posed by any rate increase and argued that there isn’t a need for more gas-burning power plants.
The other six parties who participated in the rate case, including AARP and the Sierra Club, did not sign on to the agreement.
Nathan Skop, a former PSC commissioner who represented Alexandria and Daniel Larson of Loxahatchee in the rate case, said Wednesday that by agreeing to the settlement, the Office of Public Counsel compromised its position to “advocate on behalf of Florida ratepayers.”
“The Larsons believe that the Office of Public Counsel should not have been a signatory to this terrible settlement which completely contradicts what OPC argued at hearing,” Skop said.
OPC originally said FPL’s rates should be reduced by more than $800 million, but later revised that and said the reduction should be more than $300 million.
“Had OPC not agreed to the settlement and remained neutral, it would have sent a clear message that the settlement was not in the public interest and forced the Commission to approve the settlement or decide the FPL rate case. OPC agreeing to the settlement gave the Commission the pretext to approve the settlement and issue gushing praise on what a great deal it is. Clearly this is not the case. A comparison to the 2010 settlement clearly illustrates how bad a deal the current settlement really is,” Skop said.
In 2010, FPL received a $75.5 million increase after regulators slashed its $1.2 billion request.
In 2013, a $350 million, or 8 percent base rate increase, took effect after FPL reached a settlement with large power users in late 2012, and the PSC also granted FPL another $620 million rate increase for new power plants. OPC was left out of the 2012 settlement, the first time that ever occurred. OPC said the settlement was invalid without its signature. Kelly took the issue to the Florida Supreme Court, but ultimately lost.