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

Rhea-AI Summary

Florida Power & Light Company (FPL), a subsidiary of NextEra Energy (NYSE: NEE), announced plans to file a new rate request for 2026-2029 after its current base rate agreement ends in 2025. The proposal estimates a 2.5% average annual increase in typical residential customer bills from January 2025 through 2029. Despite the increase, FPL bills would remain below the national average.

The plan aims to support infrastructure investments, with FPL's distribution service reliability being 59% better than the national average. The company has added 275,000 customer accounts since 2021 and expects 330,000 more through 2029. FPL's smart-grid technology helped avoid 1.8 million customer outages in 2023 and 1.4 million outages during storms in the last three hurricane seasons.

Positive

• Distribution service reliability 59% better than national average
• Smart-grid technology prevented 1.8 million customer outages in 2023
• Non-fuel operations and maintenance costs per customer 26% lower than a decade ago
• Solar investments saved customers over $890 million in fuel costs
• Strong customer growth with 275,000 new accounts since 2021

Negative

• Proposed 2.5% average annual rate increase for 2026-2029
• Significant cost inflation: transformers up 101%, utility poles 49%, wires/cables 20%, labor 11% since 2021

Insights

Utility Rate Analyst

This rate case filing by FPL represents a significant regulatory development with material implications for NextEra Energy's (NEE) financial outlook. The proposed 2.5% average annual rate increase through 2029 aims to support $2.9 billion in annual operational cost savings versus industry peers. The timing is strategic, coming amid a 101% surge in transformer costs and 49% increase in utility pole expenses since 2021.

The rate plan's focus on grid modernization and generation diversification is important given FPL's projected addition of 330,000 customer accounts through 2029. The company's operational efficiency metrics are compelling - distribution reliability 59% better than national average and O&M costs per customer 26% lower than a decade ago. These metrics strengthen FPL's position in negotiations with regulators.

Energy Infrastructure Specialist

The strategic importance of this rate case extends beyond simple cost recovery. FPL's emphasis on grid resilience and generation diversification through solar and battery storage positions NEE favorably in Florida's rapidly evolving energy landscape. The smart grid investments have already demonstrated tangible benefits, preventing 1.8 million customer outages in 2023 and 1.4 million storm-related outages over three hurricane seasons.

The company's fuel cost mitigation strategy through solar expansion, which has already saved $890 million in fuel costs, provides a compelling narrative for regulators. This approach, combined with FPL's position as America's largest electric utility serving 6 million accounts, creates significant economies of scale that benefit both shareholders and ratepayers.

JUNO BEACH, Fla., Dec. 30, 2024 /PRNewswire/ -- Florida Power & Light Company today notified the Florida Public Service Commission (PSC) that it plans to file a formal request to set new rates once its current base rate agreement concludes at the end of 2025.

The plan, covering 2026 through 2029, would enable FPL to continue to diversify the company's electricity generation mix, protecting customers from fuel price volatility, and continue to deliver some of the country's most reliable electricity to its 6 million customers, all while keeping bills as low as possible.

Bill adjustments: FPL estimates that its proposal, along with projections for fuel and other costs, would increase a typical residential customer bill by an average annual rate of approximately 2.5% from January 2025 through 2029. Importantly, even with the proposed rate adjustment, FPL bills would remain well below the national average and below many other Florida electric utilities. Customers will be able to calculate potential adjustments to their bill after FPL files its formal plan.

What's next: The customary process for setting new base rates takes about a year. FPL will submit a detailed four-year rate plan as early as February to the PSC, beginning an extensive public review process that includes numerous opportunities for input from customers prior to a decision by state regulators.

How we got here: FPL's current four-year rate plan concludes at the end of 2025. It was agreed to by the state's consumer advocate and numerous environmental, business and customer groups and was unanimously approved by the PSC in 2021.

A word from FPL President and CEO Armando Pimentel: "FPL has a proven track record of delivering value for our customers – including diverse energy sources, high reliability and low bills. While we know there is never a good time to request a rate increase, we need to continue to make smart investments in the grid and in new generation resources so we can continue to deliver reliable electricity, enhance resiliency and diversify our generation mix to power our fast-growing state. That is our never-ending commitment to our customers and that's what this balanced plan does."

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 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 1.8 million customer outages in 2023 alone. Smart-grid technology helped avoid 1.4 million outages during storms in the last three hurricane seasons.
  
  
• Diversifying the ways FPL generates electricity: FPL's plan continues 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 billions of dollars in fuel costs and investing in solar has saved customers more than $890 million in fuel FPL did not have to purchase. FPL's non-fuel operations and maintenance costs per customer are nearly 26% lower than they were a decade ago, are the lowest among peer utilities and save 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 customer accounts since 2021 and expects to add about 330,000 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.

High reliability, best-in-class resiliency and low bills: No other utility in the U.S. provides a better combination of reliability, resiliency and low bills than FPL. The proposed four-year rate plan will help FPL continue providing excellent service for customers every single day.

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 nearly 11%, wires and cables 20%, utility poles 49% and transformers 101%.

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 6 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 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), 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.

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SOURCE Florida Power & Light Company

FAQ

What is FPL's proposed rate increase for NEE customers from 2026 to 2029?

FPL proposes an average annual rate increase of approximately 2.5% for typical residential customers from January 2025 through 2029.

How many customer accounts has FPL added since 2021?

FPL has added approximately 275,000 customer accounts since 2021 and projects adding another 330,000 through the end of 2029.

How much have FPL's solar investments saved customers in fuel costs?

FPL's investments in solar energy have saved customers more than $890 million in fuel costs that the company did not have to purchase.

What is FPL's distribution service reliability compared to the national average?

FPL's distribution service reliability is 59% better than the national average and ranks as the best among major utilities in Florida.

How many customer outages did FPL's smart-grid technology prevent in 2023?

FPL's smart-grid technology helped avoid 1.8 million customer outages in 2023.