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Citizens of the State of Fla. v. Fla. Pub. Serv. Comm'n

Florida Supreme Court Considers Utility Rate Setting

    

AARP’s brief asks Florida’s top court to overturn a settlement in a rate paying case because it fails to safeguard consumers.

Background

The Florida Public Utility Commission is required to set rates that are fair, just and reasonable based on information presented to it in a public, adversarial hearing process. When a utility petitions for a rate increase, the commission requires the utility to publish a public notice to inform people what increases will be considered and how the rates will be divided among commercial, residential, consumer and other classes of ratepayers. After interested parties have a chance to join the case, the commission holds hearings where evidence about the rates is presented. In Florida, the Office of the Public Counsel is a taxpayer funded advocate with a duty to ensure that the interests of the consumers are protected when utility rates are set. Sometimes all the interested parties participating in the rate setting case agree to a settlement, which the commission considers and approves to set the new rates.

In this case, the Florida Public Service Commission started a hearing process when Florida Power and Light sought a rate increase. Numerous parties including the Office of Public Counsel and the commercial and retail ratepayers opposed the rate increase, and argued that a rate decrease was actually required. Just before the hearing was held, the commercial and retail rate payers joined with Florida Power and Light to announce a settlement increasing rates that are millions of dollars higher, and includes more categories of costs than were sought or disclosed in the public notice of the rate petition also shifting a greater share of the costs onto the residential ratepayers. The Office of Public Counsel objected, but the Florida Public Service Commission approved the settlement anyway.

The Office of Public Counsel challenged the approval of the settlement claiming FPSC cannot approve a non-unanimous settlement unless it makes the required findings to show the rates are fair, just and reasonable, which it did not do. It further argued that the settlement cannot be fair just and reasonable without the Office of Public Counsel concurrence.

AARP Foundation Litigation attorneys filed AARP’s friend-of-the-court brief in the appeal which argued that whenever there is a non-unanimous settlement the commission is required to make findings on the merits to ensure the rates. The brief also argues that the settlement includes cost recovery, rate increases, and shifts the burden for paying the rates even though those issues were not disclosed in the public notice. Failing to provide public notice of the potential breadth of the rate increase deprived potentially interested parties of an opportunity to participate in the decision.

AARP’s brief points out that the decision is important for this case because of the excessive rate increase. Utility costs typically comprise a significant share of an older person’s budget, and they will be harmed if forced to pay unnecessarily high rates. In addition, this case established a precedent for how rates will be set in the future. Protecting the policy and procedures in rate setting cases and preventing utilities from recovering costs that are not prudently expended is essential to protect older consumers.

What’s at Stake

High utility costs threaten all people who live on low or fixed incomes, but 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 make them particularly sensitive to temperature. When faced with unaffordably high utility rates, the situation is dire: they must cut back on the other basic necessities of life, such as food or medicine, or go without adequate heating or cooling.

Case Status

Citizens of the State of Fla. v. Fla. Pub. Serv. Comm’n is before the Supreme Court of Florida.

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About
Foundation Litigation

AARP Foundation Litigation (AFL) is an advocate in courts nationwide for the rights of people 50 and older, addressing diverse legal issues that affect their daily lives and assuring that they have a voice in the judicial system. Learn more about our litigation teams.