Florida’s biggest utility company is proposing a nearly $10 billion rate hike for electricity over the next four years, which environmental advocates say would represent the largest utility hike in U.S. history.
Florida Power & Light Company (FPL), a subsidiary of Florida-based energy company NextEra Energy, outlined the changes in a petition filed in February with the Florida Public Service Commission, which regulates the state’s electric industry. According to the document, the rate hike would include two base rate increases in 2026 and 2027, and additional hikes in 2028 and 2029 to cover the installation of solar generation and battery storage facilities.
The proposed hike would exceed the total sum of hikes state utility regulators signed off on in 2023, which was $9.7 billion, according to the U.S. Energy and Information Administration.
The Public Service Commission has held several in-person customer service hearings on the proposed utility rate increase, in addition to two virtual hearings, in order to give customers a chance to voice their concerns. FPL will have an opportunity to defend its proposal when it goes before the commission at a two-week hearing slated to begin on Aug. 11. The regulatory body will then decide on whether or not to approve the proposed rate hike.
FPL contends that the increases are necessary to ensure the reliability of the grid, diversify their energy sources and reduce fuel costs.
“Our four-year rate proposal would enable FPL to continue to deliver some of America’s most reliable electricity while keeping customer bills well below the national average,” an FPL spokesperson said in an email to CBS MoneyWatch. “While we know that no one welcomes rate increases, this request is essential to ensure that we can continue to deliver the reliable, low-cost electricity our customers depend on.
The proposal comes less than a year after the Florida Public Service Commission approved $1.2 billion in rate hikes to pay for “storm restoration costs,” a move environmental advocates say has jacked up monthly bills for Floridians. The last time the state’s public service commission approved a base rate hike for FPL was in 2021, when it green lit a nearly $5 billion increase for the years 2022 to 2025.
Backlash from environmental groups
Environmental groups say the rate hike, if passed, could cause Floridians significant financial strain, exacerbate the state’s affordability crisis, and funnel more money than necessary to FPL stakeholders.
“This isn’t about reliability or infrastructure,” Brooke Ward, senior Florida organizer for Food & Water Watch, a U.S. nonprofit focused on sustainable food, clean water and a livable climate, said during a virtual press conference hosted by environmental groups on Tuesday. “It’s about boosting profits.”
If passed, the proposal could push up Floridians bills by over $360 by the end of 2027, Food & Water Watch estimates.
“These rate increases fall heaviest on the region’s most vulnerable households, especially the elderly and disabled,” Mark Wolfe, executive director of the National Energy Assistance Directors Association, said in an email to CBS MoneyWatch. “If it can ask for an additional $10 billion, it should include provisions to help low-income families afford the resulting higher cost of electricity.”
FPL says in its proposal that the typical residential customer bill is “estimated to increase at a compound annual growth rate of 2.5%” and that it would “remain approximately 25% below the projected national average.” According to estimates FPL shared with CBS MoneyWatch, with the rate hike, customer bills would increase by $10 to $20 by 2029.
At the virtual meeting on Tuesday, Ward claimed the FPL is using “funny math” to make it seem like FPL is raising rates at a lower level than they are. In addition to base rates, the utility has multiple mechanisms to collect additional funds from rate payers which “rapidly hike up those bills,” she alleged.
Advocates such as the Florida Office of Public Counsel, the agency representing Florida residents in legal proceedings before the Public Service Commission, claim a disproportionate amount of the money from the rate hikes would be funneled to shareholders. According to testimony from Daniel Lawton, an economist tasked by the FOPC with reviewing the proposal, “for every dollar paid by consumers in base rates, about 50 cents would go to shareholders and related federal income taxes.”
Lawton called the shareholder profit request a “substantial overreach” and said it would result in “excessive rates and harms all Florida customers.”
In her rebuttal testimony for the company, FPL Senior Director Financial Forecasting Ina Laney said Lawton’s analysis was “fundamentally flawed and misleading,” and that it “fails to recognize the significant customer benefits derived from FPL’s financial strategy.”
Added Laney, “FPL consistently achieves industry-leading performance in service reliability and cost management.”
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