Miami Herald: Consumer advocate, FPL make last argument in rate-hike battle
Nov 19, 2009
Miami Herald–November 18, 2009
BY MARY ELLEN KLAS
Herald/Times Tallahassee Bureau
TALLAHASSEE — Customers of Florida Power & Light deserve a rate decrease, not an increase, because the company’s request for a $1.3 billion annual hike is “a conglomeration of extreme positions and excessive demands,” Florida’s consumer advocate argued in a final brief filed Monday with state regulators.
The Office of Public Counsel, which represents customers in the rate case before the Public Service Commission, spared few adjectives to criticize FPL in its 86-page brief. FPL countered with its own brief filed Monday, summarizing its case in a 168-page document.
The public counsel called FPL’s $1.3 billion rate request “inequitable and self-serving in the extreme,” and said the request to raise rates $1 billion next year and $300 million in 2011 were “outsized demands” that “mask an overearning situation.”
The consumer advocate argued that because the company has over-collected $2 billion from its depreciation expenses, lowered its debt risk with a high equity ratio, and thereby demanded more money from customers, regulators should reject the rate increase and instead return $1 billion a year by lowering rates.
FPL, however, said that during six weeks of hearings before state regulators it had proved that it provided customers superior service, saved customers $3 billion through fuel efficiencies, kept rates low in the face of massive growth, and now deserves the rate increase to pay for growing utility demands.
“Up-front capital investments pay off in the form of lower costs and more reliable service over time,” the company argues.
FPL projects that because of lower fuel bills, the average customer will pay $6 less per month in 2010 than they did this year, and that’s after the one-time refund to all 4.5 million customers ordered by the commission in January.
State regulators are expected to review the final arguments and decide on Jan. 12 whether to accept or reject the rate increase or, as expected, modify it. Customers are expected to see the change on their bills beginning in March.