Public Shut Out of FPL Rate Increase Deal

George Cavros | August 29, 2014 | Energy Efficiency, Energy Policy, Utilities

The Florida Supreme Court ruled today that a deal struck between industrial users and the states biggest power company, FPL, and approved by the Florida Public Service Commission (PSC), could move forward. The deal was approved by the PSC in 2012 over the strenuous objection of the Office of Public Council (OPC) – the state office tasked with looking out for customers’ best interests. The Courts ruling today is the result of a legal challenge by OPC. The deal – approved by state regulators – requires residential customers to pay more of FPL’s rate increase while big business gets a break.

In its opinion, the Court held that it had historically given great deference to the PSC’s findings in its cases, and that state law did not prevent the PSC from approving a settlement agreement, even if the agreement was not supported by OPC.

According to the brief filed by OPC, the deal approved by the Commission allows FPL to collect more revenues from residential customers than what the company had requested in its original petition. It allows major rate increases in 2014 and 2016 and $209 million more in earning and bonuses for transactions that are already part of the FPL normal routine.

In its brief, OPC called the PSC decision a lopsided and unjust order “heavily skewed to favor FPL to the detriment of customers.” Residential customers will be on the hook for an additional $50 million annually, while industrial customers (less than 1% of FPL’s customer base) get a break. The Court’s ruling primarily dealt with the procedure by which the deal was approved, rather  than the substance of the settlement. While a PSC rate case considers many complex issues;  one wonders: why would the PSC would approve an FPL-backed deal that shifts a larger portion of the rate hike to  Florida’s families?

The major duties of the PSC related to electric utilities is to set customer rates, determine the need for power plants, and set conservation goals for the states power companies. PSC commissioners are appointed for 4-year terms by the governor from a list of names provided by the Florida Legislature. Two seats will be filled this year by Governor Scott.

FPL, the state’s largest monopoly utility, wields enormous influence in the State Capitol having spent $4.7 million on lobbyists in an 8 year period and contributed more than $800,000 to the campaign of Governor Rick Scott.

George Cavros
This blog was written by a former staff member of the Southern Alliance for Clean Energy.
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