Florida Power & Light Co. connected three new 74.5 megawatt solar plants to the grid Dec. 31, and said Friday it plans to complete four more solar plants of the same size this year.
Each of the newly-completed plants costs roughly $130 million to build and produces enough power to supply 15,000 homes, FPL spokeswoman Alys Daly said.
The plants that came online in December — the FPL Citrus Solar Energy Center, DeSoto County; the Manatee Solar energy Center, Manatee County, and the FPL Babcock Ranch Solar Energy Center, Charlotte County, bring FPL’s solar generating capacity to more than 335 megawatts, enough to power 60,000 homes.
The plants that collectively contain approximately 1 million solar panels were built on time, under budget and cost-effectively, meaning there will be no net cost to customers after savings from fuel and other generation-related expenses.
“FPL has been leading the smart- cost-conscious expansion of solar in Florida since we built our first solar power plant back in 2009,” FPL President and CEO Eric Silagy said.
“By investing strategically in affordable clean energy, we continue to improve the efficiency of our system, reduce fuel consumption, lower emissions and keep costs down for our customers over the long term,” Silagy added.
The solar energy centers slated to be build this year will be in Alachua, Putnam and DeSoto counties, with the fourth location not determined yet, Daly said.
Daly said the local communities welcome the energy centers that are silent, operate autonomously and without lights, produce no emissions and require no water. Each has a different footprint to minimize impact on wetlands.
Because the plants generate under 75 megawatts, they are exempt from the Florida Power Plant Siting Act, and the Florida Public Service Commission’s approval is not needed.
In November the PSC approved an $811 million rate hike for FPL which began this month.
Under the terms of a settlement agreement, FPL can undertake the construction of 300 megawatts of solar photovoltaic generation each year as long as it is cost-effective. FPL can charge customers for the solar installations.
Daly said she didn’t have an estimate for the cost of the four planned plants. The PSC must approve the costs and that company has to show there will be no net cost to customes after savings from fuel and other generation-related expenses.
The cost of the plants completed in 2016 are included in customers’ base rates.
The biggest chunk of Florida Power & Light Co.’s $811 million rate increase started in January, as the typical customer’s bill rose by $7.21 a month. Now another $3.36 a month increase is expected to show up beginning in March.
That’s because FPL, headquartered in Juno Beach, is seeking to raise its customers bills to recoup $318.5 million for power restoration and replenishing its storm reserve fund following Hurricane Matthew. The storm grazed Florida’s east coast in October, with gusts exceeding 100 miles an hour in some spots.
The company said in filings with the Florida Public Service Commission that under a 2012 settlement agreement that expired Dec. 31, it has the right to collect money from customers for hurricane-related costs, including the storm reserve.
If granted, the increase will result in a typical customer bill jumping to $102.77 from $91.56 in December. Those amounts do not include franchise fees or local taxes, which vary. It’s likely the PSC will take up the issue in February.
Under the 2012 agreement, storm charges cannot exceed $4 per 1,000 kilowatt-hours of usage a month. The Matthew-related fees for FPL’s 4.8 million customer accounts will continue through February 2018.
“Obviously, Hurricane Matthew was a large and powerful storm that affected major portions of our service area and severely damaged the electric grid in some areas, particularly northern and central Florida. It knocked out power to about 1.2 million customers,” FPL spokesman Dave McDermitt said Wednesday.
“Our prompt response, which included approximately 14,600 restoration workers, really was the most effective in FPL history and helped us restore service to 99 percent of our customers within two days following the storm,” McDermitt said.
“We had to replace 250 miles of power lines, 900 transformers and 400 utility poles,” McDermitt said.
AARP and other intervenors fought against FPL’s proposed rate increase of $1.3 billion that the company had sought last year. Ultimately, FPL reached a settlement agreement between FPL and three groups representing customers. That base rate hike includes $400 million this year, $211 million in 2018 and $200 million in 2019.
AARP opposed that settlement, and has expressed concerns about the impact of the bigger bills on fixed-income seniors.
Wednesday, Jack McRay, AARP Florida Advocacy Manager, said, “AARP Florida is concerned about the impact that this new rate increase would have on Florida residential ratepayers. Given the new makeup of the Florida Legislature, we are exploring our options for addressing utilities regulation in 2017.”
Storm reserve funds were used to pay for damage from Hurricane Hermine in September, and by the time Matthew hit in early October, the fund was down to $93 million. FPL is allowed to bring it back to $117 million.
FPL has been collecting a storm charge since 2007 to pay for the costs of previous major storms, particularly those in 2004 and 2005, McDermitt said. The last bond payment to finance those repairs is scheduled for August 2019.
Since 2009, FPL has not been permitted to collect money from customers in advance for future storm costs.
“This allowed base rates to be somewhat lower, but customers will now pay for Hurricane Matthew recovery costs,” McDermitt said.
In the last decade, FPL has spent roughly $2 billion on storm hardening costs, including strengthening 600 main power lines, placing 450 main power lines underground and clearing vegetation from more than 135,000 miles of power lines. In addition, 1.4 million poles have been inspected and upgraded or replaced as needed.
Storm-hardened feeder lines performed more than 30 percent better during Matthew than those that weren’t, McDermitt said. Smart grid technology helped avoid more than 118,000 service interruptions. No hardened distribution feeder pole or transmission structure failed.
Florida’s last major storms until Hermine and Matthew were 11 years ago, but restoration costs were fairly comparable, McDermitt said.
FPL spent more than $906 million on restoration following the 2005 hurricanes, with $721 million due to Hurricane Wilma in October 2005. That storm left 98 percent of FPL customers without power.
While Florida was spared the worst of Matthew, the damage to FPL’s 35-county territory was substantial.
“The most striking difference was the recovery time,” McDermitt said. We had work crews that started in South Florida and then hopscotched up the coast. It hugged the coast the whole way up.”
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.
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.