Public Energized For, Against Proposed Energy Rate Increase

Testimony on FPL’s request to raise rates seemed like a Goldilocks fairy tale where some felt the rates increase were too cold, others too hot and some just right.

And some point it wasn’t hard to imagine a representative from The Rent Is Too Damn High Party to appear, too, during the Public Service Commission hearing on Florida Power and Light’s rate increase request Thursday at Sarasota’s

University Park resident David Rosen said despite all the arguments “none of us wants actually to pay higher electric rates” and hopes he gets what he pays for, but FPL needs enough profit so the system won’t degrade and cause folks to pay more for faulty equipment.

The Public Service Commission will rule whether to increase, partially increase, maintain or decrease FPL’s rates in August. If fully approved, rates could increase 16 percent for homes.

Mara Routh of Sarasota said she is thankful for FPL for restoring power in 45 minutes in a house filled with 40 10-year-olds for a birthday party with an overflowing chocolate fountain and swimming.

“Forty children that I did not want in my home, wet, covered in chocolate,” she said. “Within an hour the transformer was fixed and the party was rescued. Everyday when we flip on the light we should be so grateful that we have such a wonderful, responsible nurturing company like Florida Power and Light.”

Schef Wright, an attorney who represents the Florida Retail Federation, asked for no increase because it will be hard on both business and residential customers.

He said the commission’s duty is for FPL to “get just enough money” to provide safe, reliable energy service.

FPL would get $690 million from its customers in addition to the $10.4 billion it already collects, Wright said, and would lessen the buying power for shoppers to spend on food and other needs.

“We don’t think FPL has demonstrated any reason why to get any additional money,” Wright said.

Then there’s Florida Sen. Mike Bennett (R) of West Bradenton who said he didn’t want to “beat up on FPL” and championed the company and the commission, which he chaired a nomination committee to place some members on the board.

Still, “a rate increase while we face high unemployment is unacceptable,” Bennett said. “A rate increase when so many are getting by on so little is unacceptable. A rate increase that improves the rate of return on investment at the expense of so many is unacceptable.”

Businesses should also have the right to have solar power panels on their buildings and sell the power to tenants, he added.

Bob Mattingly, vice president of operations and director of maintenance at the Sarasota-Manatee Airport Authority said a rate increase would have a negative impact to retain and attract airline service with its $15 million budget, and asks to maintain rates.

Kerry Kirschner, executive director of the pro-business Argus Foundation, which FPL has a membership with, said there should be a reasonable rate of return for investors, but danced around a definitive position on a rate increase.

“If we lose our current level of service from Florida Power and Light, we will not know what that means until we actually lose it,” Kirschner said.

FPL and Public Counsel

Here’s more of what FPL wants: 

• Increase its residential base rate by 16 percent in 2013 to boost its maximum profit margin to 12.5 percent after taxes. The increase would help pay for a new power plant at Cape Canaveral that will open. That’s an increase of about 46.98 per 1,000 Kwh per month. 

• Increase business base rate to about 3 percent for most non-demand customers 

That would amount to about $1.41 more a month (or a nickel a day) on your household power bill if FPL can experience a reduced price in fuel.

“Our investment in Smart Meters are also providing our customers better information about their usage while our investment in our smart grid and hardened infrastructure has helped make our service more reliable and more efficient,” FPL President Eric Silagy testified. “In fact, because of our investments and focus in keeping operating costs down, FPL is more efficient than 90 percent of all utilities nationwide, which translates into lower bills for you, everyday.” 

Silagy also said he expects the power company to use less electricity this year compared to last year. 

What the Florida Office of Public Counsel challenges is that FPL’s return on equity capital of 11.5 percent is “excessive and unreasonable.”

Public Counsel J.R. Kelly calls FPL “a good company” and a “good corporate citizen” but that profit margin is too much.

Public Counsel also plans to challenge:

• Salaries and benefits FPL requests,

• Reasonableness of affiliate charges and transactions

• FPL’s accounting of customers, revenues and expenses

• Company’s expenses related to plant upgrades and modifications

• Proposal for fees for future storm cost recovery

• FPL’s argument that fuel costs decrease could still cause a minor increase