FPL bills to go down slightly; Matthew costs unresolved

TALLAHASSEE, Fla. – Florida Power & Light customers will see a pair of slight reductions in their monthly bills this summer due to the federal tax overhaul signed last year.

However, regulators put off a decision until August about a one-time refund that customers would receive, in part, because of an “over-recovery” of storm-restoration costs after Hurricane Matthew in 2016.

The Florida Public Service Commission on Tuesday gave intervening groups until June 28 to file briefs on the $27.7 million refund proposal.

“We should have a recommendation in front of us by the agenda conference on Aug. 7,” commission Chairman Art Graham said at the end of a four-hour hearing on the refund.

Earlier Tuesday, the commission approved customer-bill reductions tied to FPL’s benefits from the Tax Cuts and Jobs Act, the federal tax overhaul signed in December by President Donald Trump.

The act lowered the federal income tax rate for corporations from 35 percent to 21 percent.

Under the plans approved by the Public Service Commission, FPL residential customers who use 1,000 kilowatt hours of electricity a month will see their bills go down 59 cents in July because of the company’s tax savings.

An FPL customer with a 1,000-kilowatt-hour bill currently pays $99.87 a month.

The new federal income tax rate is being calculated into recent FPL transactions involving power plants in Jacksonville and Martin County, along with part of customer bills that pay for environmental costs.

In September, residential customers who use 1,000 kilowatt hours a month will see their bills adjusted down another 2 cents because of a pipeline-related issue.

The Public Service Commission approved the reductions before reviewing a proposed agreement that would lead to a one-time credit of $3.18 on a 1,000-kilowatt-hour residential bill. The proposed agreement is related to Hurricane Matthew costs.

FPL had anticipated offering the refund in July if regulators had approved the deal on Tuesday.

The agreement was reached last month between FPL and the state Office of Public Counsel, which represents consumers in utility issues.

Patricia Christensen of the Office of Public Counsel called the settlement a “fair compromise.”

However, the approval didn’t include a number of groups that frequently intervene in Public Service Commission cases, including the Florida Industrial Power Users Group, which includes large electricity users.

Jon Moyle, an attorney who represents the group known as FIPUG, argued that more information is needed regarding FPL’s costs associated with pre-storm hardening efforts, along with mobilization, demobilization and crew-standby costs.

Also, Robert Scheffel Wright, an attorney representing the Florida Retail Federation, said the group could not support the settlement as it had not been included in the negotiations.

FPL serves about 4.9 million customers from the Florida Keys to near Jacksonville.

The refund is tied to $316.5 million that the company charged customers following the powerful October 2016 storm that ran northward along the East Coast without making landfall in Florida.

Utilities are typically allowed to recoup costs of restoring power and rebuilding systems after hurricanes and to replenish storm reserves. But they also have to return to the Public Service Commission to justify the amounts recovered from customers.

The storm impacted 34 of the 35 counties served by FPL. The company contends that within two days of the storm skirting the coast, 99 percent of the 1.2 million customers that lost power had their electricity restored.

“In the aftermath of a hurricane, FPL’s mission is to safely restore critical infrastructure and the greatest number of customers in the least amount of time,” FPL Senior Counsel Kenneth Rubin said. “This is not a least-cost proposition. It requires experience, judgment, preparation and quick decision-making to determine a prudent and reasonable path to safely get the job done.”

The utility estimates it replaced more than 250 miles of wire, more than 900 transformers and more than 400 poles due to Matthew, in addition to having to clear large amounts of vegetation.

To recover the costs, FPL added extra charges to customers’ bills for a year. For a residential customer who uses 1,000 kilowatt hours a month, the charge was $3.35 a month. The storm charge expired in March.

The company collected $322.45 million through the charge, with about $6 million listed in the proposed agreement as “over-recovery” of costs.

The remainder of the refund, $21.7 million, is due to an accounting adjustment on the restoration costs. The one-time refund would include interest.