TALLAHASSEE -- State utility regulators will decide Thursday whether the Florida Power & Light's 4 million customers -- or its shareholders -- will finance the company's expansion into oil and natural gas reserves.
The Florida Public Service Commission gave the company approval to get into the controversial fracking business in December and now must decide whether to approve guidelines proposed by FPL that would let the company spend up to $750 million a year more on gas exploration without regulatory approval.
In a rare pushback to the powerful utility, the commission staff recommended against having customers foot the bill for the untested venture.
Their argument: the success of FPL's natural gas exploration -- including gas fracking and "wildcatting" in untested territories -- is risky because it depends on the ability of the state's largest utility to do something no utility company has ever done at a time when natural gas prices are volatile.
"The distribution of benefits to FPL and its customers is not equitable," the staff concluded. While customers have to wait decades to see any drop in fuel costs resulting from the investment, there would be an immediate benefit to the company and its shareholders because it would "grow earnings" by expanding the rate base.
FPL counters the risk is worth the reward. "The guidelines we proposed are designed to enable us to take advantage of future opportunities to obtain more essential clean natural gas directly from the source, generating additional savings for our customers and helping protect them from the risk of fuel market volatility,'' said Mark Bubriski, FPL spokesman.