State utility regulators brought some monetary relief to Florida Power & Light Co. customers Wednesday, agreeing to cut their power bills by more than $5 a month.
The decrease, which FPL requested because of a drop in prices for natural gas and heavy oil, will reduce an average monthly bill of 1,000 kilowatt hours to $103.51 as of Jan. 1. That’s a drop of $5.10.
Included in the reduction is a lowered storm surcharge, which the Florida Public Service Commission also approved Wednesday. FPL’s 4.4 million household and business customers have been paying an average of $1.65 a month since September 2005 to pay for hurricane costs from the 2004 season. FPL asked the PSC Friday for permission to lower the surcharge to $1.10.
“FPL is pleased to be able to reduce our customers’ electric bills starting in January 2007,” FPL spokesman Jim Davison said. “This rate reduction is for all of our customers.”
FPL had expected to reduce the storm surcharge at this point by taking advantage of a state law that allows utilities to sell bonds to pay for storm costs. The utility is preparing to sell $1.1 billion in bonds to pay for the storms of 2004 and 2005 and build a reserve for future ones. Doing so would place the $1.10 surcharge on customer bills, and they would pay that amount for the next 12 years.
But the utility is still at the negotiating table with some PSC staffers and Saber Partners LLC, the New York-based financial advisers the PSC hired to draft the financial orders. It’s unclear when the sticking points will be settled, so FPL decided to lower the storm surcharge starting in January anyway.
The decrease in FPL bills is the first in nearly two years for consumers, who have been hit by back-to-back increases from storm costs and soaring fuel prices. Bills at the beginning of this year went up an average 19 percent because of a spike in natural gas and oil prices.
“It’s been very scary,” said Virginia Jefferson, whose bill went from $125 to nearly $190 during the summer months. Jefferson, 51, of Riviera Beach, considers her bill to be “ridiculously high,” to the point that even an average $5 reduction didn’t faze her.
“I was hoping you’d say $50,” she said. FPL told the PSC it needed $6.01 billion to pay for projected fuel costs for next year. Such costs, which now make up more than half of consumers’ bills, are passed directly onto the customer; the utility does not profit from them.
Also, the PSC allowed FPL to collect $6.1 million from consumers to pay for five days’ worth of fuel it needed when one of the reactors at its Turkey Point nuclear plant in Miami-Dade County had to be shut down because of a tiny hole that officials say was drilled deliberately.
The state’s Office of Public Counsel and other consumer advocates argued that FPL should wait until the FBI completes its investigation into who drilled the hole and then go before the PSC to prove that the $6.1 million was prudent.
Public Counsel Harold McLean criticized the PSC’s decision on the $6.1 million. “It’s profoundly disappointing and, I think, contrary to law,” said McLean, whose office either will ask the PSC to reconsider its decision or appeal it to the courts. “It causes the ratepayers to be the insurer of the utilities.” Consumer advocates have chided the PSC, arguing that the five-member body rubber stamps utility requests. The commission has three new members Gov. Jeb Bush appointed, and McLean praised the panel during the 2006 legislative session for what he saw as a more aggressive pro-consumer approach. But Wednesday, he took it back. “I apparently was in error,” he said. “It seems to me that consumers of Florida, insofar as the PSC is concerned, are stuck with business as usual.”
SOURCE: Palm Beach Post