AARP filed an amicus brief that asks Florida’s top court to overturn a decision by the state regulator — as well as the state law underpinning that decision — on the grounds that both fail to safeguard consumers against unwarranted utility cost increases.
The Florida legislature broadened the authority of the state’s regulatory agency to allow increased utility costs in order to “promote utility investment in nuclear power plants.” The law permits a utility to seek cost recovery through increased utility rates before a power plant becomes operational, and before it can provide any benefit to the consumers.
In Florida, the state’s Public Services Commission (PSC) is authorized to set utility rates and determine what costs can be charged to the ratepayers. The PSC approved an electricity rate increase to fund development of nuclear power plants, but did not require the utility companies to demonstrate an actual intent to build any of the plants.
A coalition of consumers challenged both the PSC’s actions and the underlying law, arguing that the new policy fails to protect consumers — an explicit task of the PSC — and saddles consumers with billions of dollars of costs for power plants that might never be built in their lifetimes.
AARP Foundation Litigation attorneys filed AARP’s friend of the court brief, pointing out that the PSC’s blanket approval departed from standard practice requiring tangible proof of intent to build the plants, and noting the high incidence of cancellations or indefinite delay in nuclear power plant construction. The brief pointed out that the PSC’s decision forces consumers to sign a blank check for projects and shifted the risk of bad business decision-making from utility companies to consumers. The brief also took issue with the law enabling this decision by the PSC, noting that it failed to guide the PSC on how to protect ratepayers when costs for nuclear power plants are collected before the plants become operational, as in traditional rate-making practice. Without the legislative guidance, the statute authorizing the PSC to approve rates to collect costs before the plants become operational is unconstitutional under the Florida Constitution, which requires a separation of powers between the legislature and the PSC.
AARP’s brief detailed the choices that low- and fixed-income people face when presented with high utility bills, including reducing their consumption of utilities to life-threatening levels, or choosing to forego other necessities (food, medicine, etc.) in order to pay high utility bills. Finally, the brief argued that older consumers should not bear the cost of power plants that will only benefit future consumers, and argued that the current structure set up a system of intergenerational inequality that must be avoided when setting utility rates.
What’s at Stake
High utility costs threaten all people who live on low or fixed incomes and particularly affect older people because many older people have higher sensitivity to heat or cold or suffer from health conditions (such as diabetes, lung disease and heart disease) that render them particularly sensitive to heat. AARP Florida strenuously fought the law that allowed this utility rate increase and is working with AARP Foundation Litigation attorneys to challenge this rate increase in court.
Southern Alliance for Clean Energy v. Florida Public Service Commission is before the Supreme Court of Florida, the state’s highest court.