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Storms, fuel costs could boost FPL bills

An FPL technician works on a power pole in Miami.
David Adame/David Adame for FPL
Florida Power & Light Company
Smart grid media event of the Automated Lateral Switch (ALS) installation in Miami, Fla., Oct. 21, 2015.

Florida Power & Light is asking the state Public Service Commission to approve collecting more than a billion dollars from customers to recoup costs related to Hurricane Ian and Hurricane Nicole, and high natural gas costs.

Florida Power & Light customers could face increased electric bills in April after the utility got hit in 2022 by hurricanes and higher-than-expected natural gas costs.

FPL said Monday it will ask the state Public Service Commission to approve collecting $1.3 billion from customers to recoup costs related to Hurricane Ian and Hurricane Nicole. It also will seek to collect about $2.1 billion because of high natural gas prices in 2022 — though that would be partially offset by reducing the amount FPL expects to collect for 2023 gas costs by $1 billion.

“FPL has a proven track record of keeping bills below the national average. When events beyond our control — like hurricanes and significant changes in fuel prices — force a change to customer bills, we try to do so in a thoughtful way that minimizes the impact on our customers while balancing the risk of invoices piling up,” FPL Chairman and CEO Eric Silagy said in a prepared statement.

The proposals would come on top of increased bills that took effect this month for many customers and additional hikes that will take effect in February. FPL said last year it expected to seek more increases after the hurricane and fuel costs became clearer.

In addressing rates, utilities point to a benchmark of residential customers who use 1,000 kilowatt hours of electricity a month.

Because of a merger with the former Gulf Power, FPL has two sets of rates. FPL residential customers in areas traditionally served by the utility saw their 1,000-kilowatt hour bills increase from $120.67 to $125.39 in January.

Such bills will go up again to $129.59 in February, according to information released last month by the Public Service Commission. Under the new proposals, they would go to $142.88 in April, FPL said Monday..

Former Gulf Power customers in Northwest Florida who use 1,000 kilowatt hours of electricity saw their bills go down a penny in January to $155.60. But the bills are slated to go up to $159.79 in February and to $173.09 in April.

FPL would collect the hurricane-related costs over 12 months and the 2022 fuel costs over 21 months. It would apply the offset for 2023 fuel costs over nine months.

Customers’ bills are made up of a combination of expenses, such as base rates, fuel costs and environmental costs. Utilities also are typically allowed to pass along costs related to preparing for hurricanes and restoring power after storms — though disputes sometimes arise about whether costs are storm-related.

Ian made landfall Sept. 28 as a Category 4 hurricane in Lee and Charlotte counties before crossing the state. FPL provides electricity in some of the areas hardest hit by the storm, including parts of Lee, Charlotte, Sarasota and DeSoto counties. It also, for example, serves much of Volusia County, which sustained damage after Ian went through Central Florida.

The Category 1 Hurricane Nicole, which made landfall Nov. 10 near Vero Beach, battered areas on the East Coast where FPL provides electricity.

FPL said Monday that it also will ask the Public Service Commission to spread costs to all customers from past hurricanes that hit Northwest Florida. That would help ease the amounts paid by former Gulf Power customers.

Utilities have grappled for the past year with high costs of natural gas, which plays a major role in fueling power plants. The Public Service Commission meets each fall to consider fuel costs that will be passed on to customers in the ensuing year, but utilities also are able to seek to recoup additional costs if the projections are too low.

The state Office of Public Counsel, which represents consumers in utility cases, and two business groups criticized FPL and other utilities in the fall for not seeking approval at that point for the higher-than-expected fuel costs in 2022.

They argued that delays in recouping the money could lead to additional interest costs and create uncertainty for residents and businesses. But FPL and other utilities said they wanted to return to the PSC in January with better numbers because of volatility in the gas market.

Duke Energy Florida, for example, said in December that it expected to ask the commission in January for approval to recover about $1.1 billion in fuel costs from 2022. Proposals for FPL, Duke and Tampa Electric Co. had not been posted on the commission website Monday morning.

Jim Saunders is the Executive Editor of The News Service Of Florida.