FP&L seeks fuel charge reduction
South Florida Business Journal - by Paul Brinkmann
Lower fuel charges could mean the average Florida Power & Light residential customer would see a slightly lower bill in 2009, but a hike in rates in 2010 could be on the way.
FP&L on Monday filed proposals with the Florida Public Service Commission that would reduce the amount of the pass-through fuel charge, resulting in a drop of $1.57 in the bill of an average customer who uses 1,000 kilowatts a month.
The rate drop would take effect Jan. 6 if approved in a Dec. 2 PSC vote.
The typical 1,000 kilowatt-hour residential customer bill is currently $111.12 a month. F&PL is proposing to reduce that to $109.55 through a lower 2009 fuel charge, reflecting a recent reduction in prices in fuel markets.
FP&L president and CEO Armando Olivera said the process of setting the 2010 rate is just beginning. He said volatile fuel prices this year made things difficult to predict. Natural gas makes up 50 percent of the company’s power generation.
“Frankly, we were seeing huge volatility,” Olivera said. “Now, we see natural gas down, but there we days when that wasn’t evident.”
The power company prides itself on offering one of the lowest rates in Florida, well below the national average.
At the same time, the Juno Beach-based company said it will ask the PSC for a 6 percent to 9 percent increase in its base rate to cover the cost of doing business, which includes capital improvements.The rate customers are paying took effect in 2006 and expires at the end of next year. If fuel prices stay low, FPL said that its base rates would increase a typical residential customer's bill to between $115 and $118.
The current rate proposals do not reflect new investment in solar energy, Olivera said. The company is adding three new solar plants, but the cost of those was already approved by the PSC in July.
The three plants are expected to cost $688 million.
Shares of parent company FPL Group (NYSE: FPL) closed down $1.67 to $45.63. The 52-week high was $73.75 on Jan. 7. The 52-week low was $33.81 on Oct. 10.
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Web Editor Susan R. Miller contributed to this story.
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