FPL files details of new rate plan designed to power growing state with unmatched combination of high reliability and low bills

Rhea-AI Summary

Florida Power & Light Company (FPL) has submitted a four-year rate plan request to the Florida Public Service Commission for 2026-2029. The proposal aims to maintain reliable electricity delivery while managing costs for customers in the growing state.

Key highlights include:

• FPL's distribution service reliability is 59% better than the national average
• Smart-grid devices helped avoid 2.7 million customer outages in 2024
• The company has added 275,000 customers since 2021 and expects 335,000 more through 2029
• The typical 1,000-kWh residential bill in January 2026 would be 20% lower than 2006 when adjusted for inflation
• Business customer bills would increase 1% to 5% annually from 2025-2029

The company cites significant cost increases since 2021: labor up 16%, wires/cables 30%, utility poles 49%, and transformers 101%. The proposal is now subject to PSC review and public hearings.

Positive

• Distribution service reliability 59% better than national average
• Smart grid prevented 2.7M customer outages in 2024
• $16B in customer fuel cost savings from plant modernization
• Lowest non-fuel operations costs among peer utilities, saving $2.9B annually
• Strong customer growth with 275,000 new customers since 2021

Negative

• Rate increases for business customers (1-5% annually 2025-2029)
• Significant infrastructure cost inflation (transformers +101%, poles +49%)
• Large capital investment needed for 335,000 new customers through 2029

Insights

Utility Regulation Expert

NextEra Energy's Florida Power & Light subsidiary has filed a pivotal four-year rate plan (2026-2029) with the Florida Public Service Commission that will significantly shape the company's revenue profile once the current rate structure expires. The filing represents a material regulatory development with direct implications for NextEra's earnings trajectory.

The proposal's focus on customer growth is particularly noteworthy. With 275,000 customers added since 2021 and 335,000 more expected by 2029, FPL faces substantial capital requirements to build generation and distribution infrastructure in one of America's fastest-growing utility markets. This customer expansion provides a solid organic growth foundation that's relatively rare among major utilities.

For revenue impact, FPL indicates small and medium business customers would see annual increases of 1-5% through 2029. Though specific revenue projections aren't provided, these increases would help offset the substantial inflationary pressures facing the utility sector, with FPL noting dramatic input cost increases including transformers up 101% and utility poles up 49% since its last rate filing.

The generation diversification strategy highlighted in the filing aligns with NextEra's broader corporate approach of balancing conventional generation with renewables. The $16 billion in fuel cost savings from fleet modernization demonstrates how capital investments can create operational efficiencies that benefit both customers and shareholders.

Florida's regulatory environment has historically been constructive, though the magnitude of the request amid inflationary pressures may invite scrutiny. The extensive review process creates a critical regulatory milestone that will influence NextEra's investment thesis through the remainder of the decade.

Financial Analyst

This rate case filing represents a significant financial catalyst for NextEra Energy, as FPL contributes the majority of NEE's consolidated earnings. The four-year structure provides extended revenue visibility that's uncommon among utilities, creating a more predictable earnings trajectory through 2029 if approved.

The customer growth metrics are particularly compelling from a financial perspective. Adding 610,000 customers between 2021-2029 provides a robust platform for capital deployment and rate base growth. In the utility business model, expanded rate base translates directly to earnings growth when returns are preserved.

What's financially material here is FPL's acknowledgment of substantial inflation in its cost structure. The 101% increase in transformer costs and 49% increase in utility pole costs since 2021 represent significant input pressures. This rate filing is strategically timed to ensure these rising costs can be recovered, protecting NextEra's margins and returns on invested capital.

The generation diversification strategy merits investor attention, particularly the emphasis on solar and battery investments. These assets typically receive favorable regulatory treatment while offering multiple financial benefits: reducing fuel volatility exposure, qualifying for tax incentives, and enabling longer-term operating cost advantages. The $1.1 billion in solar-related fuel savings demonstrates the tangible economic benefits of this approach.

From a capital allocation perspective, this filing is critical because it establishes the financial framework for NextEra to deploy billions in capital expenditures at regulated returns. The filing essentially seeks regulatory authorization for the investment returns that will drive shareholder value through 2029. Investors should closely monitor the regulatory process, as any modifications to allowed returns or disallowances of proposed investments would directly impact NextEra's financial outlook.

JUNO BEACH, Fla., Feb. 28, 2025 /PRNewswire/ -- Florida Power & Light Company today submitted a comprehensive four-year request to the Florida Public Service Commission (PSC) to set new rates once its current base rate agreement concludes at the end of this year. 

The proposal, covering 2026 through 2029, would enable FPL to continue to deliver some of the nation's most reliable electricity, provide excellent customer service, diversify its generation resources to reduce fuel costs, and keep bills as low as possible.  

A word from FPL President and CEO Armando Pimentel: "At FPL, we're focused on our customers every single day. The balanced plan we submitted to the PSC would enable FPL to continue to make smart investments in the grid and in new generation resources to benefit our customers and to power our fast-growing state. No other utility in the U.S. provides a better combination of reliability, resiliency and low bills than FPL."

Bill adjustments: Residential customers can calculate how the proposal would affect their individual bills by using the calculator feature at FPL.com/answers. Overall, FPL projects that, even with the proposed rate adjustment, residential customer bills would remain well below the national average and below many other Florida utilities. When adjusted for inflation, the typical 1,000-kWh residential customer bill in January 2026 under FPL's proposal would be about 20% lower than it was 20 years earlier, in 2006. 

Estimated FPL bills under rate proposal (for 1,000-kWh residential customer)
Region	Current	2026	2027	2028	2029
Peninsular Florida	$134.14	$142.37	$148.29	$149.93	$151.99
Northwest Florida	$143.60	$147.10
Estimates include base rates proposed to the Florida Public Service Commission (PSC), as well as projections for fuel and other costs, which are approved annually by the PSC. Beginning in 2027, FPL customers in peninsular and Northwest Florida will pay the same rates.

Typical small- and medium-size business customer bills would increase at an average annual rate of 1% to 5% from 2025 through 2029 under the proposal. Commercial and industrial customers can reach out to their FPL account managers for more information. 

Key priorities: Among the ways FPL's proposed rate plan would benefit customers: 

• Delivering reliable service: FPL's plan supports continued investments in the critical infrastructure and technologies that have helped make FPL's distribution service reliability 59% better than the national average and the best among major utilities in Florida. FPL's technology investments have benefitted customers, with smart-grid devices helping speed restoration and avoid 2.7 million customer outages in 2024 alone. This includes more than 800,000 avoided outages during Hurricanes Debby, Helene and Milton last year. 

• Diversifying the ways FPL generates electricity: To continue to meet customer growth and increasing demand, FPL will make investments in low-cost solar and battery storage technology to complement its existing power plant fleet, which includes one of the nation's largest natural gas fleets and safe, reliable nuclear power. Continuing to diversify the power generation fleet helps protect FPL customers from fuel price volatility. 

• Keeping bills as low as possible: FPL continuously leverages the latest technology and relentlessly drives down costs to improve efficiency. Modernizing FPL's power plant fleet has saved customers more than $16 billion in fuel costs, including $1.1 billion through investments in low-cost solar energy centers. FPL's non-fuel operations and maintenance costs per customer are the lowest among peer utilities, saving customers about $2.9 billion per year compared to an average-performing utility – or more than $24 per month on a typical 1,000-kWh residential customer bill. 

New infrastructure for growth: FPL has added about 275,000 customers since 2021 and expects to add about 335,000 more through the end of 2029, which will require significant new generating capacity and distribution infrastructure to meet demand in one of America's fastest-growing states. 

Context: FPL works hard to diversify its supply chain and control costs for customers. Still, FPL is not immune to inflation. For example, since FPL last filed to adjust base rates in 2021, the cost of labor has increased by nearly 16%, wires and cables 30%, utility poles 49% and transformers 101% on average.  

What's next: Today's filing begins an extensive public review process. The PSC will set hearings and provide other opportunities for input from customers prior to a decision by state regulators. 

About Florida Power & Light Company  
As America's largest electric utility, Florida Power & Light Company serves more customers and sells more power than any other utility, providing clean, affordable, reliable electricity to more than 6 million accounts, or approximately 12 million people. FPL operates one of the most fuel efficient and cleanest power generation fleets in the U.S and in 2022 won the ReliabilityOne® National Reliability Award for the seventh time in the last ten years. The company was also recognized by Escalent in 2022 as one of the most trusted U.S. electric utilities for the ninth consecutive year. FPL is a subsidiary of Juno Beach, Florida-based NextEra Energy, Inc. (NYSE: NEE). NextEra Energy is also the parent company of NextEra Energy Resources, LLC, which, together with its affiliated entities, is the world's largest generator of renewable energy from the wind and sun and a world leader in battery storage. For more information about NextEra Energy companies, visit these websites: www.NextEraEnergy.com, www.FPL.com, 
www.NextEraEnergyResources.com.

 

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SOURCE Florida Power & Light Company

FAQ

How much will FPL's new rate plan increase business customer bills from 2025 to 2029?

Under the proposal, typical small and medium-size business customer bills would increase at an average annual rate of 1% to 5% from 2025 through 2029.

What cost savings has FPL's power plant fleet modernization achieved for customers?

FPL's power plant fleet modernization has saved customers over $16 billion in fuel costs, including $1.1 billion through investments in low-cost solar energy centers.

How many customer outages did FPL's smart-grid devices prevent in 2024?

FPL's smart-grid devices helped avoid 2.7 million customer outages in 2024, including over 800,000 during Hurricanes Debby, Helene and Milton.

How many new customers does FPL expect to add through 2029?

FPL expects to add approximately 335,000 new customers through the end of 2029, following the addition of 275,000 customers since 2021.

How much have FPL's infrastructure costs increased since their last rate adjustment in 2021?

Since 2021, FPL's costs have increased significantly: labor by 16%, wires and cables by 30%, utility poles by 49%, and transformers by 101%.