BRADENTON -- It's not too often major state retailers, the Tea Party and government officials see eye to eye.
Yet all three gathered in opposition to a request by the state's largest power provider to raise rates for its 4.6 million metered customers.
Florida Power & Light Co. is hitting the homestretch on its campaign for a $690.4 million proposed base rate increase, which is slated to go before the Public Service Commission in August.
While public hearings have drawn mostly opposition, the utility giant has stood its ground with promises to continue providing the lowest power costs among the Sunshine State's 55 electric utilities.
FPL President Eric Silagy said the increases are needed to cover inflation, the addition of nearly 100,000 new customers and a $1 billion clean energy plant being developed in Cape Canaveral.
Critics fear the rate increase will have a ripple effect for residents and businesses at a time when Florida's economy remains fragile. The opposiition has been led by the Florida Retail Federation, tea party, utility customers advocacy groups, labor unions and GOP officials.
FPL's request comes on the heels of a 2009 rate settlement poised to sunset this December.
"Low bills and reliability are the two things our customers care about," Silagy said. "We know it, and they will tell you it. But that (2009 settlement) was a kick-the-can-down-the-road approach, and now we're down the road."
Silagy acknowledges that there's never a good time to raise rates, but he doesn't think the company's request is too much to ask either.
FPL wants to increase its base rates by 16 percent, which equates to $7.09 per month for the average customer based on 1,000 kilowatt hours of use.
But because the portion of billing tied to fuel costs has fallen significantly, the company estimates the rate increase only will result in a monthly net increase
of $1.41 for residential customers.
FPL's typical residential monthly bill as of March was $94.62, the lowest in Florida and $31.08 below the state average.
In fact, while food costs have grown by 20 percent, health care by 24 percent and gas by 41 percent since 2006, FPL's bill has declined 13 percent, Silagy said.
He attributes that largely to FPL's efforts of reducing oil usage, which also slims the company's operating budget. He said the capital investments dependant on the current rate request will further bolster that trend, with the Cape Canaveral plant alone estimated to save $1 billion in fuel over its 30-year life.
"It's like taking that 1960s Cadillac sitting in the garage and replacing it with a hybrid," Silagy said. "We made a conscious decision as a company to wean ourselves off of oil."
The aspect of the rate proposal that irks opponents most is tied to FPL's return on equity. The REO, which is basically a cap on investor profits, was set at 11 percent in the 2009 rate settlement.
FPL now is seeking 11.25 percent, with a 0.25 percent contingency on retaining the lowest rates in Florida, which could push it up to 11.5.
Silagy says the extra earnings are essential to attract more investors for future capital projects, citing the risk involved in utility operations.
Critics don't buy it.
Led by the charge of Tea Party activists, blue collar workers, elected officials and business associations, a slew of FPL customers are lobbying to have the proposal stopped dead in its tracks.
"They're asking for a higher profit margin, and we just don't think they need it," said John Fleming, spokesman for the Florida Retail Federation. "They haven't adequately justified it."
At the first public hearing in Sarasota in May, nearly 50 people expressed concerns to utility regulators.
Although bottoming natural gas prices have soften the blow some, they argue that won't always be the case, leaving rate payers with the potential for much larger markups in the next year or two.
The PSC is scheduled to begin officially reviewing the case Aug. 20, with a final vote slated for November. The five-member board can reject or approve all of FPL's $690.4 million request, or grant only portions.
Since FPL's last rate settlement in 2009, four new PSC commissioners have been appointed, who are believed to be more utility friendly.
Four more public hearings have been scheduled in South Florida before a decision on the rate case will be made.
"We without a doubt will be challenging FPL's request," said J.R. Kelly, Florida public counsel and top advocate for utility customers. "It's unreasonable. It's ridiculous."
Josh Salman, Herald business writer, can be reached at 941-745-7095. Follow him on Twitter @JoshSalman