State regulators have directed Florida Power & Light Co. to give utility customers a one-time refund of about $44 on their household electric bills in January for lower-than-expected fuel costs in 2009.
The refund, which will be higher for homes and businesses that use more than 1,000 kilowatt-hours per month, will appear in the form of a credit on customers’ bills.
At its annual surcharge hearing in Tallahassee, the Public Service Commission unanimously voted Monday to speed up returning to FPL customers $365 million. Commissioners also approved the utility’s request for $4.8 billion in fuel fees, environmental costs and other expenses next year.
Officials from FPL, which also wants a $1.27 billion annual base rate increase, had proposed providing the refund in small amounts over a full year to keep customers’ bills consistent.
But John McWhirter, who represents businesses with the Florida Industrial Power Users Group, said consumers would appreciate “a one-time stimulus package to meet the Christmas bills.”
Critics have questioned why FPL didn’t refund some of the fuel costs this year as did two other major Florida utilities in light of lower fuel costs. Commissioner Nathan Skop, who proposed accelerating the refund Monday, noted that FPL has been using the argument that lower fuel costs will more than offset its proposed base rate hike.
“Some of the arguments made in 1/8the base rate request3/8 could not be made with the same marketing pitch, if you will,” without the refund that is owed to customers, Skop said.
FPL attorney John Butler said lower fuel costs will drive customers’ bills down significantly, even if the proposed base rate hike is approved. Unless fuel costs fluctuate by more than 10 percent, the utility doesn’t ask to alter customers’ fuel fees before the annual hearing, he said.
Butler said he doesn’t think consumer groups “would be in favor to do the same thing if the tables were turned” and fuel costs had increased.
“We think that symmetry in this process is extremely important,” he said.
But Assistant Attorney General Cecilia Bradley argued the one-time refund is warranted. “If there was true symmetry, we wouldn’t be here today. I don’t know any of our consumers who made a billion dollar profit last year,” Bradley said.
FPL Group – the utility’s parent company – earned a profit of $1.64 billion last year, including $789 million in profit from the utility.
The PSC action was the first major commission decision for new commissioner David Klement, a former journalist appointed by Gov. Charlie Crist to replace Commissioner Katrina McMurrian. McMurrian resigned last month amid allegations in recent months that the commission is too close to the utilities it regulates.
The $4.8 billion in FPL surcharges comprises about half of an FPL customer’s bill and amounts to about $44.85 a month for a typical household for the first 1,000 kilowatt-hours of power used. That compares with $7.2 billion in surcharges this year – about $64 per month for a typical household – according to FPL.
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