Florida Power & Light Co. has announced that customers will not pay a surcharge for Hurricane Irma restoration as previously expected. Instead, FPL plans to apply federal tax savings toward the $1.3 billion cost of Hurricane Irma restoration, which will save each of FPL's 4.9 million customers an average of approximately $250.
In addition, FPL may be able to use future federal tax savings to continue operating under the current base rate agreement beyond the initial term, which covers through 2020, for up to two additional years.
"The timing of federal tax reform, coming on the heels of the most expensive hurricane in Florida history, created an unusual and unprecedented opportunity. We believe the plan we've outlined is the fastest way to begin passing tax savings along to our customers and the most appropriate approach to keeping rates low and stable for years to come," said Eric Silagy, president and CEO of FPL.
Hurricane Irma was one of the largest, most powerful storms to ever hit Florida, and FPL's response was unprecedented both in scale and the speed of power restoration. The company had previously announced its intention to begin recovering the $1.3 billion restoration cost by implementing a surcharge on customer bills through 2020.
The ability to leverage the federal tax savings in this way is afforded by FPL's current base rate agreement, which was negotiated with the Office of Public Counsel and other customer groups and approved unanimously by the Florida Public Service Commission in 2016. The agreement set parameters for base rates and storm surcharges from 2017 through at least 2020.
"Our current rate agreement provides the ability to use federal tax savings to entirely offset Hurricane Irma restoration costs, which delivers an immediate benefit to customers, and also the potential opportunity to avoid a general base rate increase for up to an additional two years," Silagy said.
Keeping customer bills low
While the prices of almost all products and services have risen in recent years, FPL's typical 1,000-kWh residential customer bill has remained very low. In fact, FPL's typical bill is lower today than it was more than 10 years ago.
Already among the lowest in the nation, FPL's typical 1,000-kWh customer bill will drop to nearly 30 percent below the latest national average with a decrease of $3.35 a month that will take effect March 1 with the completion of the recovery of costs for Hurricane Matthew.