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Are Your Florida Utilities Bills About to Go Up?

Three years after a largely unsuccessful attempt to raise base power rates by $1 billion-plus for 4.5 million Florida electric-power customers, Florida Power & Light is back, asking for another rate increase.

See also: Snapshot of 2009 Utility Expenditures by Older Consumers

This time, the big power company is seeking a smaller increase in base power rates – an estimated $695 million per year out of ratepayers’ pockets, or a 15-percent increase in base rates. This is the part of your bill that the power company charges to provide basic power. It does not include fuel charges, extra fees for power plant construction or maintenance or taxes.

FPL has said that the rate increase would amount to about $6.80 monthly if you use 1,000 kilowatts of power per month. (Many homeowners use more power.)

FPL also announced that lower fuel costs would mean most homeowners would not pay that much per month. However, since fuel costs are included in a different portion of your power bill, the fuel costs would go down regardless of whether the base rate increase is granted or not.
“This proposed rate increase will come at a time when many Floridians 50+ are still struggling in a down economy,” said AARP Florida State Director Jeff Johnson.

Johnson noted that FPL’s request would mean the company would earn an estimated 11.25 percent rate of return on its investment. The company currently is earning about 10 percent.

“AARP’s 2.7 million members consider themselves very lucky these days to get a 2 percent rate on a two-year certificate of deposit,” Johnson added. “I’m no accountant, but a 10-percent return seems pretty healthy to me.”

Johnson said AARP Florida would carefully review financial information submitted in the rate case before taking a formal position on the FPL request.

In 2009 and 2010, AARP Florida fought hard to stop a much larger FPL rate increase. In that case, FPL asked the Public Service Commission to approve a request to increase base power rates by $1 billion in 2010 and another $287 million in 2011.

Instead, the PSC approved a $75.5 million rate increase, helping to save Florida consumers more than $1 billion a year. Following that vote, the state Senate rejected the nominations of two PSC commissioners submitted by then-Gov. Charlie Crist and forced two more commissioners to resign. The new rate request is the first FPL base-rate increase to go before a Public Service Commission with four new commissioners appointed by Gov. Rick Scott.

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