TALLAHASSEE — When Florida’s largest electric utility goes to state regulators today to ask for permission to dramatically raise rates, it will have recent history, powerful supporters and financial clout on its side.
Florida Power & Light, whose electric grid serves 4.5 million households in the state, wants the Public Service Commission to approve a 30 percent increase, saying it needs the money to prepare for future growth.
Missing from the discussion will be a previously powerful consumer voice, the AARP, which says it can’t afford to hire a lawyer this time to speak on behalf of the utility’s customers.
FPL’s timing is awkward: The state economy is in tatters, unemployment stands at 10.7 percent and consumer pocketbooks are stretched thin. On top of that, just last week FPL flouted the commission’s unanimous decision to force the company to disclose how much its top executives make. The utility said it will challenge the ruling in court.
“We are in the middle of the worst recession in decades, and people are losing their jobs and their homes,” said state Chief Financial Officer Alex Sink, who opposes the FPL rate increase. “We shouldn’t be making matters worse.”
Attorney General Bill McCollum agrees. He has lent his lawyers to help the Office of Public Counsel, which represents consumers, oppose the request.
But FPL says it is taking consumers into account, and that planning ahead will help them in the long run by providing for future electricity, attracting investors at lower costs and making its system more efficient and less reliant on fossil fuels. The company says it needs to construct and operate two nuclear power plants to meet future demand, as well as upgrade its existing power plants to make them cleaner and more efficient.
“FPL is seeking a base rate increase at this time to support this investment — and to retain investor confidence despite the most uncertain and volatile capital markets that this country has experienced since the Great Depression,” FPL President Armando Olivera said when he filed the rate request in March.
But opponents argue FPL is making enough money to reach those goals now. They point to the $1.2 billion the company has accumulated from depreciation and argues that instead of raising rates, FPL should reduce them.
The panel of five commissioners on the PSC will sort out their claims and analyze every facet of FPL’s business — from its request to spend thousands of dollars to maintain the atrium at its Juno Beach headquarters to the $2.5 million spent in three months this year for a corporate jet and helicopter. A similar case will be played out again in late September, when Progress Energy Florida offers similar arguments for its request for a 31 percent rate hike.
Working in FPL’s favor are its strong political connections, its long record of campaign contributions and a recent decision by the PSC that favored another state utility in a similar case.
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