On March 12, 2021 FPL formally requested that the Florida Public Service Commission (PSC) approve a series of rate increases. These rate increases – if granted – would result in $6.2 billion in increased customer bills over the first four years, more than $1 billion in the first year alone, making it the largest electric rate hike in Florida history. Because FPL operates as a government-protected and government-regulated monopoly, the rates it charges to customers are set by the PSC, and must be “fair, just and reasonable.”
As described in its notice to the PSC in January, the $6.2 billion that FPL would extract from its customers includes $1.1 billion a year in increased rates in 2022 and each of the three subsequent years, plus additional nine-figure increases in 2023, 2024, and 2025.
FPL is already highly profitable and benefits financially from the fact that it is the only regulated electric utility in Florida that did not pass the savings from recent corporate tax reductions – an estimated $772.3 million per year – on to its customers. The reference point used by electric regulators across the country in setting electric rates is the electric company’s Return on Equity (ROE). Based on an analysis of electric utility ROE across the country by Regulatory Research Associates, a group within S&P Global Market Intelligence, FPL’s request would provide an effectively guaranteed ROE to FPL that is more than 20% higher than the average ROE approved by state regulatory commissions in 2020 for government-regulated monopoly electric utilities in the U.S.
Even in a robust economy, FPL’s request would be excessive. While our economy is trying to recover from Covid-19, it is unconscionable.