FPL outlines plan to pay for significant restoration efforts after four hurricanes slam Florida in 14 months

Rhea-AI Summary

Florida Power & Light Company (FPL) has requested approval from the Florida Public Service Commission for a temporary surcharge on customer bills in 2025 to recover $1.2 billion in restoration costs from four hurricanes that hit Florida in 14 months. The surcharge would add $12.02 monthly to typical 1,000-kWh residential customer bills from January through December 2025. The request covers costs from Hurricanes Debby, Helene, and Milton in 2024, plus $150 million to replenish storm reserves depleted by Hurricane Idalia in 2023. The storms caused over 3 million combined outages, though FPL's grid investments prevented nearly 900,000 additional outages. Despite the surcharge, FPL bills will remain below the national average, with typical residential bills increasing to $133.99 for FPL customers and $143.45 for FPL Northwest customers.

Positive

• Smart grid technology prevented 900,000 outages, demonstrating effectiveness of infrastructure investments
• Rapid restoration times achieved: 1-5 days for complete power restoration across all hurricanes
• Bills will remain below national average even after surcharge implementation

Negative

• $1.2 billion in hurricane restoration costs to be passed to customers
• $12.02 monthly surcharge added to typical customer bills throughout 2025
• Storm reserve fund completely depleted, requiring $150 million replenishment

Insights

Utility Financial Analyst

The proposed $1.2 billion storm recovery surcharge represents a significant financial event for NextEra Energy's FPL subsidiary. The $12.02 monthly increase for typical customers, while substantial, is strategically structured as a 12-month surcharge to minimize long-term rate impacts and avoid potential overlapping charges from future storms.

The company's smart grid investments have demonstrated strong ROI by preventing 900,000 outages, which significantly reduced restoration costs. Despite the rate increase, FPL's projected 2025 rates remaining below national averages suggest minimal risk to customer retention or regulatory pushback.

The $150 million storm reserve replenishment is prudent financial planning, though the frequency of recent storms indicates this may need to be increased in future years. The rapid restoration times (1-5 days) showcase operational efficiency that typically supports favorable regulatory treatment of cost recovery requests.

Climate Risk Analyst

The unprecedented frequency of four hurricanes in 14 months, including two major storms (Categories 3-4), signals escalating climate-related operational risks for utilities in Florida. This pattern suggests potentially higher future storm hardening capital requirements and more frequent cost recovery proceedings.

The effectiveness of FPL's grid resilience investments in preventing 900,000 outages demonstrates the value of climate adaptation strategies. However, the rapid depletion of storm reserves after Hurricane Idalia indicates current reserve levels may be insufficient for the evolving risk landscape.

The clustering of storms Helene and Milton within two weeks highlights the growing challenge of managing compressed disaster recovery timelines, which could strain resources and impact restoration costs in future events.

JUNO BEACH, Fla., Oct. 29, 2024 /PRNewswire/ -- Florida Power & Light Company today asked the Florida Public Service Commission (PSC) to approve a temporary surcharge on customer bills in 2025 to recover restoration costs after four hurricanes battered Florida in less than 14 months.

FPL's plan: The petition filed with the PSC seeks to recover restoration expenses for Hurricanes Debby, Helene and Milton, which ripped through Florida this year. It also seeks $150 million to replenish the company's storm reserve, which was primarily depleted by Hurricane Idalia last year and then wiped out after Hurricane Debby in August. If approved by the PSC, the temporary surcharge would reimburse FPL about $1.2 billion and would likely add $12.02 a month to a typical 1,000-kWh residential customer bill from January through December next year.

How we got here: Category 3 Idalia struck Florida in August 2023. This year, Category 1 Debby hit Florida in August, then Category 4 Helene and Category 3 Milton pounded the state less than two weeks apart in September and October. The four hurricanes caused more than 3 million combined outages to FPL customers with damaging winds, storm surge and – in the case of Milton – dozens of unusually powerful, long-track tornadoes.

Rapid response: For each hurricane, FPL assembled and strategically pre-positioned thousands of restoration workers from around the U.S. The crews worked around the clock to quickly restore all impacted customers. Importantly, FPL's sustained investments to build a stronger, smarter and more resilient energy grid avoided nearly 900,000 outages and enabled faster restorations.

By the numbers: 

• More than 3 million outages 
• More than 52,000 men and women in restoration workforce 
• Nearly 900,000 outages avoided through smart grid technology 
• Timeline to essentially complete restoration 
  • Idalia (2023) (Category 3): 1 day 
  • Debby (2024) (Category 1): 1 day 
  • Helene (2024) (Category 4): 3 days 
  • Milton (2024) (Category 3): 5 days 

A word from FPL President and CEO Armando Pimentel: "FPL worked relentlessly to quickly restore power to our customers in the aftermath of each of these hurricanes. We're mindful that customers pay these restoration costs, which is why we continue to invest in storm hardening and smart grid technology. This avoids many outages, speeds restoration and reduces restoration costs while helping customers bounce back faster, from getting kids back to school to getting Florida's economy back up and running."

Estimated 2025 bills: Even with the temporary surcharge, FPL bills in 2025 will remain well below the national average.

Typical 1,000-kWh residential customer bill
FPL		FPL Northwest
Current	Jan. 2025  (proposed)	Current	Jan. 2025  (proposed)
$121.19	$133.99	$135.38	$143.45
Note: Jan. 2025 bill includes proposed storm surcharge and other annual adjustments to cost-recovery clauses

Why a 12-month surcharge? Electric bills in Florida do not include the cost of responding to hurricanes and tropical storms. Instead, a temporary surcharge is applied after storms. Adding this temporary surcharge to bills for 12 months, rather than spreading it out over a longer period, reduces the chance of overlapping surcharges if additional storms hit Florida in 2025.

Editor's Note: Download visuals of FPL's hurricane restoration

Florida Power and 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 approximately 5.9 million accounts, or more than 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 nine 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), a clean energy company widely recognized for its efforts in sustainability, corporate responsibility, ethics and compliance, and diversity. 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.

View original content to download multimedia:https://www.prnewswire.com/news-releases/fpl-outlines-plan-to-pay-for-significant-restoration-efforts-after-four-hurricanes-slam-florida-in-14-months-302290024.html

SOURCE Florida Power & Light Company

FAQ

How much will FPL's hurricane restoration surcharge cost customers in 2025?

FPL customers will see a $12.02 monthly increase on typical 1,000-kWh residential bills from January through December 2025.

How many customer outages did FPL experience from the four hurricanes?

The four hurricanes caused more than 3 million combined outages to FPL customers, though smart grid technology prevented nearly 900,000 additional outages.

What will be FPL's typical residential bill after the 2025 surcharge?

After the surcharge, typical 1,000-kWh residential bills will be $133.99 for FPL customers and $143.45 for FPL Northwest customers.

How much is FPL requesting to recover in total storm restoration costs?

FPL is requesting to recover approximately $1.2 billion in storm restoration costs, including $150 million to replenish its storm reserve fund.