JUNO BEACH, Fla., Aug. 10, 2021 /PRNewswire/ -- Florida Power & Light Company today announced a comprehensive, four-year rate settlement agreement developed jointly with the Florida Office of Public Counsel – the state's consumer advocate – as well as the Florida Retail Federation, the Florida Industrial Power Users Group and the Southern Alliance for Clean Energy, that would phase in new rates starting in 2022. The agreement would support continued long-term investments in infrastructure, clean energy and innovative technology – including the largest solar buildout in the United States – while keeping FPL's typical residential customer bills well below the national average through the end of 2025.
"This agreement is a big win for all 5.6 million FPL customers and our state, and it demonstrates what can be achieved through a collaborative process," said FPL President and CEO Eric Silagy. "In a rapidly growing state on the front lines of climate change, our customers deserve bold and decisive, long-term actions as we build a more resilient and sustainable energy future all of us can depend on, including future generations. This agreement paves the way for FPL to continue delivering America's best energy value – electricity that's not just clean and reliable, but also affordable."
The agreement would resolve FPL's current base rate proceeding and directly support FPL's groundbreaking "30-by-30" plan to install 30 million solar panels in Florida by 2030, which remains ahead of schedule and under budget. In doing so, the agreement would also unlock a second phase of the company's highly popular and sold-out SolarTogether program – more than doubling what's already the largest community solar program in the country across FPL's service area that now spans from Miami to Pensacola1. In all, the settlement agreement would support the development of 16 million solar panels across more than 50 new sites – enough to power approximately 1 million homes with clean, emissions-free energy from the sun.
In addition to solar energy, the settlement agreement would support FPL's green hydrogen pilot project in Okeechobee County, an innovative technology that could one day unlock 100% carbon-free electricity that's available 24 hours a day, as well as the FPL Manatee Energy Storage Center, the world's largest integrated solar-powered battery system that's projected to begin serving customers later this year. The agreement would also enable FPL to continue building a stronger, smarter and more storm-resilient energy grid in the face of Florida's frequently severe weather.
The proposed agreement reflects a nearly 40% reduction in FPL's proposed January 2022 base rate revenue increase, from $1.1 billion to $692 million, driven partly by a reduction in the company's originally proposed return on equity midpoint from 11.5% to 10.6%. Likewise, FPL's 2023 requested revenue increase would be reduced by nearly 10%, from $605 million to $560 million.
Other components of the proposed settlement agreement include:
Information for residential customers
FPL's typical residential customer bill is lower today than it was 15 years ago and well below the national average. The proposed settlement agreement would keep typical residential bills well below the national average and among the lowest in Florida through 2025. In fact, residential bills are projected to grow modestly from 2021-2025 at an average annual rate of 2.5%, which is less than half the rate of inflation over the last 12 months and well below recent price increases in gasoline, housing, used cars and airfare.
Combined with current projections for fuel and other costs over the full four years of the rate plan, the proposed settlement agreement would phase in increases on the typical 1,000-kWh residential customer bill as follows:
Based on the settlement agreement, FPL's standard 1,000-kWh typical monthly residential bill benchmark would be:
FPL Bills – 2006, 2021 & 2022-2025
"2006" reflects FPL's average bill during the year 2006. "2021" reflects FPL's average bill during the year 2021. "2022-2025" reflects the current projection for FPL's typical 1,000-kWh customer bill from 2022-2025, which includes projected base rate adjustments, as well as current projections for fuel and other clauses. All bill totals include the state's standard gross receipts tax, but do not include any local taxes or fees that vary by community. FPL bills do not include the company's Northwest Florida region. All rates are subject to change.
Most FPL customers power their homes for just a few dollars a day. The majority of FPL customer households consume less than the standard 1,000-kWh typical bill benchmark. In fact, more than 1 million FPL customers pay $50 or less per month for electricity.
Consistent with the four-year rate plan filed in March, the proposed settlement agreement would unify the rates and tariffs of FPL and Gulf Power. In recognition of the initial difference in the costs of serving the existing FPL and Gulf Power customers, the settlement agreement would implement a transition rider/credit mechanism to address those differences in a reasonable manner for all customers. The transition rider/credit would decline to zero over a five-year period, at which point rates would be fully aligned by Jan. 1, 2027. Under the proposed settlement agreement, a typical 1,000-kWh residential customer bill in Northwest Florida is projected to be lower at the end of 2025 than it is today.
FPL Northwest Florida Bills – 2006, 2019, 2021 & 2022-2025
"2006" reflects Gulf Power's average bill during the year 2006. "2019" reflects Gulf Power's average bill during the year 2019, which is when FPL's parent company, NextEra Energy, purchased Gulf Power. "2021" reflects Gulf Power's average bill during the year 2021. "2022-2025" reflects the current projection for the typical 1,000-kWh customer bill in Northwest Florida from 2022-2025, which includes projected base rate adjustments as well as current projections for fuel and other clauses. All bill totals include the state's standard gross receipts tax but do not include any local taxes or fees that vary by community. Bills also do not include surcharges for hurricanes. All rates are subject to change.
Information for business customers
FPL business customers' typical bills are lower today than they were 15 years ago and are well below the national average. As part of the proposed settlement agreement, base rate adjustments would vary widely depending on rate class and customer usage. Typical business customer bills are projected to grow at an average annual rate of about 1% to 3% from 2021-2025, depending on rate class. Even with the proposed increase, typical business customer bills will remain below the national average through 2025.
The estimates above are based on the company's proposed settlement agreement and subject to approval by the Florida Public Service Commission.
Florida Power & Light Company
Florida Power & Light Company is the largest energy company in the U.S. as measured by retail electricity produced and sold. The company serves more than 5.6 million customer accounts supporting more than 11 million residents across Florida with clean, reliable and affordable electricity. FPL operates one of the cleanest power generation fleets in the U.S. and in 2020 won the ReliabilityOne® National Reliability Excellence Award, presented by PA Consulting, for the fifth time in the last six years. The company was recognized in 2020 as one of the most trusted U.S. electric utilities by Escalent for the seventh consecutive year. FPL is a subsidiary of Juno Beach, Florida-based NextEra Energy, Inc. (NYSE: NEE), a clean energy company widely recognized for its efforts in sustainability, ethics and diversity, and has been ranked No. 1 in the electric and gas utilities industry in Fortune's 2021 list of "World's Most Admired Companies." NextEra Energy is also the parent company of NextEra Energy Resources, LLC, which, together with its affiliated entities, is the world's largest generator of renewable energy from the wind and sun and a world leader in battery storage. For more information about NextEra Energy companies, visit these websites: www.NextEraEnergy.com, www.FPL.com, www.NextEraEnergyResources.com.
Cautionary Statements and Risk Factors That May Affect Future Results
This news release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, but instead represent the current expectations of NextEra Energy, Inc. (NextEra Energy) and Florida Power & Light Company (FPL) regarding future operating results and other future events, many of which, by their nature, are inherently uncertain and outside of NextEra Energy's and FPL's control. In some cases, you can identify the forward-looking statements by words or phrases such as "will," "may result," "expect," "anticipate," "believe," "intend," "plan," "seek," "potential," "projection," "forecast," "predict," "goals," "target," "outlook," "should," "would" or similar words or expressions. You should not place undue reliance on these forward-looking statements, which are not a guarantee of future performance. The future results of NextEra Energy and FPL and their business and financial condition are subject to risks and uncertainties that could cause their actual results to differ materially from those expressed or implied in the forward-looking statements, or may require them to limit or eliminate certain operations. These risks and uncertainties include, but are not limited to, those discussed in this news release and the following: effects of extensive regulation of NextEra Energy's and FPL's business operations; inability of NextEra Energy and FPL to recover in a timely manner any significant amount of costs, a return on certain assets or a reasonable return on invested capital through base rates, cost recovery clauses, other regulatory mechanisms or otherwise; impact of political, regulatory and economic factors on regulatory decisions important to NextEra Energy and FPL; disallowance of cost recovery by FPL based on a finding of imprudent use of derivative instruments; effect of any reductions or modifications to, or elimination of, governmental incentives or policies that support utility scale renewable energy projects of NextEra Energy Resources, LLC and its affiliated entities (NextEra Energy Resources) or the imposition of additional tax laws, policies or assessments on renewable energy; impact of new or revised laws, regulations, interpretations or ballot or regulatory initiatives on NextEra Energy and FPL; capital expenditures, increased operating costs and various liabilities attributable to environmental laws, regulations and other standards applicable to NextEra Energy and FPL; effects on NextEra Energy and FPL of federal or state laws or regulations mandating new or additional limits on the production of greenhouse gas emissions; exposure of NextEra Energy and FPL to significant and increasing compliance costs and substantial monetary penalties and other sanctions as a result of extensive federal regulation of their operations and businesses; effect on NextEra Energy and FPL of changes in tax laws, guidance or policies as well as in judgments and estimates used to determine tax-related asset and liability amounts; impact on NextEra Energy and FPL of adverse results of litigation; effect on NextEra Energy and FPL of failure to proceed with projects under development or inability to complete the construction of (or capital improvements to) electric generation, transmission and distribution facilities, gas infrastructure facilities or other facilities on schedule or within budget; impact on development and operating activities of NextEra Energy and FPL resulting from risks related to project siting, financing, construction, permitting, governmental approvals and the negotiation of project development agreements; risks involved in the operation and maintenance of electric generation, transmission and distribution facilities, gas infrastructure facilities, retail gas distribution system in Florida and other facilities; effect on NextEra Energy and FPL of a lack of growth or slower growth in the number of customers or in customer usage; impact on NextEra Energy and FPL of severe weather and other weather conditions; threats of terrorism and catastrophic events that could result from terrorism, cyberattacks or other attempts to disrupt NextEra Energy's and FPL's business or the businesses of third parties; inability to obtain adequate insurance coverage for protection of NextEra Energy and FPL against significant losses and risk that insurance coverage does not provide protection against all significant losses; a prolonged period of low gas and oil prices could impact NextEra Energy Resources' gas infrastructure business and cause NextEra Energy Resources to delay or cancel certain gas infrastructure projects and could result in certain projects becoming impaired; risk to NextEra Energy Resources of increased operating costs resulting from unfavorable supply costs necessary to provide NextEra Energy Resources' full energy and capacity requirement services; inability or failure by NextEra Energy Resources to manage properly or hedge effectively the commodity risk within its portfolio; effect of reductions in the liquidity of energy markets on NextEra Energy's ability to manage operational risks; effectiveness of NextEra Energy's and FPL's risk management tools associated with their hedging and trading procedures to protect against significant losses, including the effect of unforeseen price variances from historical behavior; impact of unavailability or disruption of power transmission or commodity transportation facilities on sale and delivery of power or natural gas by NextEra Energy, including FPL; exposure of NextEra Energy and FPL to credit and performance risk from customers, hedging counterparties and vendors; failure of NextEra Energy or FPL counterparties to perform under derivative contracts or of requirement for NextEra Energy or FPL to post margin cash collateral under derivative contracts; failure or breach of NextEra Energy's or FPL's information technology systems; risks to NextEra Energy and FPL's retail businesses from compromise of sensitive customer data; losses from volatility in the market values of derivative instruments and limited liquidity in over-the-counter markets; impact of negative publicity; inability of FPL to maintain, negotiate or renegotiate acceptable franchise agreements with municipalities and counties in Florida; occurrence of work strikes or stoppages and increasing personnel costs; NextEra Energy's ability to successfully identify, complete and integrate acquisitions, including the effect of increased competition for acquisitions; environmental, health and financial risks associated with NextEra Energy Resources' and FPL's ownership and operation of nuclear generation facilities; liability of NextEra Energy and FPL for significant retrospective assessments and/or retrospective insurance premiums in the event of an incident at certain nuclear generation facilities; increased operating and capital expenditures and/or reduced revenues at nuclear generation facilities of NextEra Energy or FPL resulting from orders or new regulations of the Nuclear Regulatory Commission; inability to operate any of NextEra Energy Resources' or FPL's owned nuclear generation units through the end of their respective operating licenses; effect of disruptions, uncertainty or volatility in the credit and capital markets or actions by third parties in connection with project-specific or other financing arrangements on NextEra Energy's and FPL's ability to fund their liquidity and capital needs and meet their growth objectives; inability of NextEra Energy, FPL and NextEra Energy Capital Holdings, Inc. to maintain their current credit ratings; impairment of NextEra Energy's and FPL's liquidity from inability of credit providers to fund their credit commitments or to maintain their current credit ratings; poor market performance and other economic factors that could affect NextEra Energy's defined benefit pension plan's funded status; poor market performance and other risks to the asset values of NextEra Energy's and FPL's nuclear decommissioning funds; changes in market value and other risks to certain of NextEra Energy's investments; effect of inability of NextEra Energy subsidiaries to pay upstream dividends or repay funds to NextEra Energy or of NextEra Energy's performance under guarantees of subsidiary obligations on NextEra Energy's ability to meet its financial obligations and to pay dividends on its common stock; the fact that the amount and timing of dividends payable on NextEra Energy's common stock, as well as the dividend policy approved by NextEra Energy's board of directors from time to time, and changes to that policy, are within the sole discretion of NextEra Energy's board of directors and, if declared and paid, dividends may be in amounts that are less than might be expected by shareholders; NextEra Energy Partners, LP's inability to access sources of capital on commercially reasonable terms could have an effect on its ability to consummate future acquisitions and on the value of NextEra Energy's limited partner interest in NextEra Energy Operating Partners, LP; effects of disruptions, uncertainty or volatility in the credit and capital markets on the market price of NextEra Energy's common stock; and the ultimate severity and duration of public health crises, epidemics and pandemics, including the coronavirus pandemic, and its effects on NextEra Energy's or FPL's businesses. NextEra Energy and FPL discuss these and other risks and uncertainties in their annual report on Form 10-K for the year ended December 31, 2020 and other Securities and Exchange Commission (SEC) filings, and this news release should be read in conjunction with such SEC filings. The forward-looking statements made in this news release are made only as of the date of this news release and NextEra Energy and FPL undertake no obligation to update any forward-looking statements.
1 On Jan. 1, 2021, Gulf Power, which serves customers in Northwest Florida, legally combined with FPL. Gulf Power will continue as a separate operating division under the Gulf Power name through 2021.
SOURCE Florida Power & Light Company; NextEra Energy, Inc.