FPL proposes to raise rates while critics question utility's profits

TALLAHASSEE — Florida Power & Light on Friday filed a proposal that would lead to higher electric bills for customers over the next four years, with the utility pointing to issues such as growth and a need to build more solar-energy facilities.

The base-rate proposal, filed at the Florida Public Service Commission, would lead to increases of $1.545 billion in 2026 and $927 million in 2027. Also, FPL would pass along costs to customers in 2028 and 2029 for solar-energy and battery-storage projects.

“Continued growth and the need for additional generation are among the principal drivers of FPL’s increased revenue requirements,” the proposal said. “FPL projects to add 335,000 more customers through the end of 2029. To meet this new growth and maintain operational reliability, FPL must invest in generation, transmission, and distribution. Each of FPL’s new customers deserves the same outstanding reliability and low bills that existing customers have long experienced.”

FPL in December submitted a letter to the Public Service Commission that outlined its plans to seek base-rate increases. But the proposal filed Friday was more detailed and will launch a months-long rate case that will end with a decision by the regulatory commission. FPL is operating under a four-year rate plan that will expire at the end of 2025.

Base rates make up a major part of customers’ monthly bills, along with costs such as power-plant fuel, and the commission will consider voluminous amounts of information and hold hearings in the coming months. The state Office of Public Counsel, which represents consumers, and business and consumer groups have already given notice that they will intervene in the FPL case.

In a petition to intervene filed Tuesday, for example, the Southern Alliance for Clean Energy said costs “will be borne by FPL customers through their power bills, including FPL customers that are SACE (Southern Alliance for Clean Energy) members.”

“This proceeding will provide SACE and other parties, and the commission, the opportunity to test the prudency of investments made by FPL, and expenses, prior to costs being passed on to FPL customers, including FPL customers who are also SACE members,” the petition said.

In addressing monthly bills, utilities typically cite a benchmark of residential customers who use 1,000 kilowatt hours of electricity a month. FPL in recent years also has had different bill amounts for customers in its traditional service area and Northwest Florida customers who were previously served by Gulf Power Co.

FPL customers in the traditional service area who use 1,000 kilowatt hours a month currently pay $134.14. Under the proposal, that is estimated to go to $142.37 in 2026; $148.29 in 2027; $149.93 in 2028; and $151.99 in 2029, according to the utility.

FPL customers in Northwest Florida who use 1,000 kilowatt hours a month currently pay $143.60. That would go to $147.10 in 2026; $148.29 in 2027; $149.93 in 2028; and $151.99 in 2029.

The proposal includes projects to upgrade power plants and to add numerous solar-energy facilities. For instance, the utility could build 1,490 megawatts of solar projects in 2028 and 1,788 megawatts of solar projects in 2029, along with battery-storage facilities, according to the proposal.

An issue that will likely draw heavy attention during the case will be FPL’s requested return on equity — a key measure of profitability. The commission typically approves a range of allowable return on equity and a “midpoint” in the range.

FPL proposed a midpoint of 11.9 percent, in part citing a need to attract investor money. As a comparison, the commission in December approved a 10.5 percent midpoint in a Tampa Electric Co. rate case.

“Maintaining a strong financial position under all market conditions, good and bad, is critical for an essential service provider with an obligation to serve,” the FPL proposal said. “FPL’s liquidity and appropriate capital structure has supported FPL’s ability to keep the lights on and access capital under terms that benefit customers. The success is attributable, in part, to keeping borrowing costs relatively low and providing competitive returns that encourage investors to continue to provide the capital needed to maintain and enhance FPL’s level of service.”

But a collection of groups quickly issued a news release Friday criticizing FPL’s proposed return on equity and the broader rate request.

“Monopoly utilities should not be making excessive profits at the expense of families and businesses struggling to make ends meet,” said Yoca Arditi-Rocha, executive director of The CLEO Institute, a nonprofit group that works on climate issues.