Published: Friday, Nov. 20, 2009

Updated: Friday, Nov. 20, 2009

FPL: Editorial distorts facts

The Bradenton Herald’s recent editorial (Is FPL Playing Fair with Customers?) distorted key facts in a careless attempt to falsely portray Florida Power & Light Company’s service and responsibility to its customers. The newspaper should have asked itself, “Is the Bradenton Herald Playing Fair with its Readers?” Unfortunately, the facts aren’t on the paper’s side.

The editorial based its attack on the claim that FPL proposed a “shameless idea” to roll back customer fuel charges over 12 months instead of giving customers a one-time credit in January 2010 for fuel savings in 2009. If the newspaper had checked its facts, readers would have learned that this “shameless idea” didn’t come from FPL and certainly isn’t shameless. There’s a very good reason why the Florida Public Service Commission (PSC) has managed fuel charge overages and deficits for all investor-owned utilities this way for more than twenty years.

By law, Florida’s electric utilities, including FPL, do not make a profit on the fuel used to generate electricity. Each year, utilities must file with the PSC their forecasted fuel costs for the following year and their actual fuel costs for the current year. Every November, the PSC holds hearings to review this data and authorize utilities’ customer fuel charges for the upcoming year. Normally, the current year’s overages or deficits – including any applicable interest – are spread across the upcoming 12 months unless they exceed 10 percent of the original projection before the end of the year. The reason for this is simple: stability for customers.

While utility fuel costs can swing up or down by millions of dollars in any given time period, the PSC’s annual fuel charge “true-up” process reduces the month-to-month volatility in customer bills that was commonplace before the PSC adopted this approach. This gradual, balanced approach has allowed customers to better estimate how much their electric bill will be from month to month, particularly in times when fuel prices have risen.

This year, in consideration of the uniquely difficult economy and the favorable difference in FPL’s 2009 projected and actual fuel costs, the PSC deviated from its traditional policy of implementing the true-up. Instead of reducing customer fuel charges over 12 months, the Commission voted for FPL to rebate the 2009 savings as a one-time credit in January to help stimulate the economy. Contrary to the Herald’s claims, FPL didn’t “balk” at this decision. Actually, we’re delighted to help our customers, especially during these economic times.

The Herald carried its baseless attack with more false assumptions, asking insidiously, “Two other major Florida utility companies refunded those fuel costs already this year. Why didn’t FPL?” Again, if the newspaper had researched the issue, it could have learned that those two utilities’ fuel charges had exceeded the PSC’s traditional 10 percent threshold so they had to file mid-year fuel charge corrections. Their customers didn’t get a refund or a credit. They got lower fuel charges for the remaining months of 2009.