After an initial rate reduction early on in May, Florida Power & Light is proposing another rate decrease, this time a $256 million cut to take effect in July.
"This is more positive news for our customers," said Armando Pimentel, president and CEO of FPL. "We know that every dollar counts for our customers, and we are pleased to propose another rate reduction. At the same time, we continue to encourage our customers to use FPL's tips and free tools to help save energy and money."
FPL serves portions of Baker, Clay, Nassau, Putnam and St. johns counties in Northeast Florida.
The FPL proposal, made Friday to the Florida Public Service Commission, calls for reducing the fuel portion of customer bills by $256 million starting in July, reflecting continued downward revisions in projected natural gas costs for 2023 after last year's high levels.
If approved, FPL bills would remain below the national average and the typical 1,000-kWh residential customer bill in Northwest Florida would be lower in July than it was last year. Business customer bills would decrease by 2% to 5%, depending on rate class.
In addressing rates, utilities rely on a benchmark of residential customers who use 1,000 kilowatt hours of electricity a month. Because of a merger with the former Gulf Power in Northwest Florida, FPL has two sets of rates.
The PSC approves a fuel charge on customer bills based on FPL's projection of how much it will spend on fuel for its generating plants. FPL does not earn a profit on fuel and works hard to operate its power plants as fuel-efficiently as possible.
Since FPL projected its 2023 fuel expenditures last year, natural gas prices have declined. FPL has already made downward adjustments, which took effect in April and May, totaling nearly $1.4 billion in its 2023 fuel charges. If the July decrease is approved, it would be the third reduction in the fuel portion of FPL bills in 2023.
In April, the state Public Service Commission approved a plan to provide a break to Florida Power & Light customers because of lower-than-expected natural gas prices.
That plan, which the commission unanimously supported without discussion, reduced customers’ monthly bills this month — and partially offset increases that took effect in April.
Utilities generally are allowed to pass along projected fuel costs to customers. After soaring natural-gas costs last year, FPL filed a petition March 1 that said natural-gas prices are expected to be lower this year than previously projected. As a result, FPL proposed reducing amounts collected from customers by $379 million during the rest of 2023.
FPL also says the lower gas prices will save about $115 million in early 2024.
Rates for FPL and other utilities increased in April because of a combination of factors, including hurricane-related expenses and last year’s high natural-gas prices. Florida utilities rely heavily on natural gas to fuel power plants.
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