Florida Power & Light on Tuesday sought approval to collect an additional $810 million from customers in 2022 as high natural-gas prices continue to drive up costs for electric utilities.
The request, filed at the state Public Service Commission, would push up FPL customer bills that were already slated to increase next year. Costs for natural gas and other power-plant fuel are generally passed through to customers.
FPL, Duke Energy Florida and Tampa Electric Co. have all warned in recent weeks that they might have to revamp fuel costs for customers because of higher-than-expected natural gas prices.
In Tuesday’s filing, FPL, which recently received approval for base-rate increases, said it has tried to limit fuel costs by taking steps such as expanding the use of solar energy and upgrading power plants to make them operate more efficiently.
“FPL plans to continue to improve these efforts in the coming years by, among other things, installing significantly more solar and more efficient combined cycle generation in the coming years,” the filing said. “In the absence of FPL’s foresight and long-term strategic initiatives, natural gas price increases such as those described herein would have a far greater impact on customer bills.”
The utility asked the Public Service Commission to approve the request during a Dec. 7 meeting, which would allow the increases to take effect in January. For residential customers who use 1,000 kilowatt hours of electricity a month --- a common industry benchmark --- the request would translate to paying $6.82 or $6.83 a month more than what had been expected in January, according to the filing.
Natural gas plays a critical role in Florida’s utility system, as it was used to produce about two-thirds of the electricity generated in 2019, according to a Public Service Commission report.
Utilities each year file projected fuel costs that regulators then use to determine how much will be charged to customers in the subsequent year. FPL made such a filing Sept. 3, with regulators approving it last week.
But before the approval, FPL --- along with Duke and Tampa Electric --- had already warned that natural gas prices were higher than expected. The filing Tuesday is what is known as a “mid-course correction,” a sort of add-on to what was approved last week.
The $810 million sought by FPL represents gas costs above projections for the final months of this year and for 2022. For example, the utility had initially projected that natural gas in 2022 would cost an average of $5.03 per million British thermal units, a price measurement used for natural gas. It now projects an average cost of $5.81, according to the filing.
A report posted online by the U.S. Energy Information Administration pointed to continuing volatility in natural-gas prices.
“We forecast that U.S. inventory draws will be similar to the five-year average this winter, and we expect that factor, along with rising U.S. natural gas exports and relatively flat production through March, will keep U.S. natural gas prices near recent levels before downward price pressures emerge,” the report said. “Because of uncertainty around seasonal demand, we expect natural gas prices to remain volatile over the coming months with winter temperatures to be a key driver of demand and prices.”
Duke and Tampa Electric have not requested to collect additional money from customers next year for fuel costs. But both said in October filings that they were analyzing the issue and would report back to the Public Service Commission in the coming weeks.
