AARP at the hearing of the Florida Public Service Commission concerning rate increases from FPL.

Florida Power & Light Company (FPL) filed a petition with the Florida Public Service Commission (PSC) for a rate increase on March 17, 2012. The petition requests a general base revenue increase of approximately $525 million, effective January 2013, plus a base step adjustment of another $170 million, effective when FPL’s Cape Canaveral plant becomes operational in June 2013.

Por Tiberio Fario.

Florida’s local AARP Chapter invited its members and the general public to attend the hearings concerning the rise of the electricity rates, which will affect all paying customers: private individuals and families, small and large business as well as government offices and facilities.

The hearings, offer the best opportunity to listen to what FPL is proposing, in order to get approval from the Public Service Commission (PSC) to increase these rates. Everyone that is concerned about the rising cost of living that we have experienced in South Florida was encouraged to attend.

The Florida Public Service Commission is responsible for the economic regulation of the private electric and gas companies all over the state, ensuring that adequate service is provided so that fair, non discriminatory and reasonable tariffs are established and charged to the general public.  The commission is made up of five members designated by the Governor and confirmed by the State Senate.

The commission can respond to questions related to the regulation of public utilities through its Service, Safety and Consumer department based in Tallahassee.  This department is managed by specialized personnel who provide information about companies that are regulated by the PSC.  Their number is 1-8003423552, their e-mail is: contact@psc.state.fl.us, and the PSC web page is www.floridapsc.com.

The hearings took place at the Miami Dade County Auditorium on August 7^th, 2012, located at 2901 West Flagler Street, Miami, FL 33135, and began punctually at 9:00 AM with a not too large showing of public. Nevertheless, the meeting was quite vocal as representatives of different types of customers, individuals, several small business associations, and attorneys representing others, were able to express their views and sentiments.

A separate hearing was to take place at Florida Memorial University located at 15800 NW 42^nd Avenue, in Miami Gardens on the same day, at 4:00 PM.

FPL presented its plans and expansion programs, including a new gas powered plant to be installed in the Cape Canaveral area, which is scheduled to go in service in the spring of 2013. This “Clean Energy Center” will be located in Cape Canaveral, and when it goes on-line (in service), it will have cost approximately $1 billion dollars. However when they estimate the savings in fuel, that is also calculated to be in the order of another billion dollars, they can anticipate that the plant will pay for itself, with substantial earnings for the company during the 30 years of its estimated operating life.

On the other hand, the impact of accelerated depreciation, ordered by the PSC in 2010, which was a temporary measure to avoid increases in rates, since then, will be finalized in 2013.

The company expects to have approximately 100,000 new clients, for which they will have to incur in other type of investments for new infrastructure, like posts and cables, which we all know are basic and necessary in order to provide an adequate service to all.

The presentations were very technical and professional using sophisticated financial and mathematical estimations and formulae to calculate and justify their proposal.  The majority of consumers found these calculations complex and confusing, to say the least.

As a final argument, the company states that they have made very large investments which are considerably higher than their net earnings, and they plan to make additional investments of approximately 15 billion dollars before 2014.

FPL says that the electricity bill for single family homes will only be increased by a few dollars per month, ($7.09 per month, which comes to be about 23 cents per day),
in the basic portion of the rate, which would adjust their annual revenue to about 690 million dollars, “so that they can continue maintaining the successful operation for the benefit of their clients”.

Additionally, the company mixes the petition for the rise in tariff rates with the projected cost reductions of using natural gas, which is the feed stock for the new plant.   The comparison between these two factors is really not related, since the fuel costs are directly billed to the consumer.

At this time, with the present situation that we have been living in south Florida for the past years, it really does not seem reasonable for Florida consumers to be asked for a tariff increase in their electricity bills, since this raise will also affect all other services that the consuming public uses, who will also have to partake an additional impact specially senior citizens that have a steady or declining income.

When FPL asks for this additional price increase, it is planning to pay its shareholders an 11.25% profit, and not content with that, they are also asking for an additional ¼ % bonus, or incentive “if they keep on doing a good job”, which is what they are paid to do anyway.

In these difficult times this proposal will undoubtedly affect consumers of all ages, specifically senior citizens who are either retired, or have been forced out of a job, in addition to customers affected by the rising unemployment rate that is rampant in South Florida.