Florida Power & Light Co. customers will pay about $1 more on their monthly electric bills starting March 1 under new base rates approved by state regulators Friday. But the overall monthly bills will decline because of lower fuel costs and storm surcharges.
The Public Service Commission approved what amounts to a 1 percent increase for residential customers using 1,000 kilowatt-hours of energy a month to pay for a $75 million base rate hike it approved earlier this month. The increase is 6 percent of the $1.27 billion FPL had requested.
Base rates make up about half of customers' bill and are listed on the bill as the electric charge and gross receipts taxes.
Most business customers will see their monthly base rates increase from 0.5 percent to 1.2 percent in March, said FPL spokesman Mark Bubriski. But business customers' overall bills should decrease slightly on average because of an adjustment in the utility's storm fee.
Monthly bills for typical FPL residential customers are lower than those of other major Florida utilities.
In March, FPL's storm charge on typical customers' bills will decrease by about $2, after dropping $15 this month because of declining fuel cost projections and the completion of more efficient power plants.
Customers also received a one-time refund of about $44 this month because of lower fuel costs in 2009.
The rate increase decision prompted FPL officials to announce that they would suspend building several major projects approved by the commission, including two for which the commission approved $45 million in costs as part of the rate increase.
"[The] decision will simply reinforce investor perceptions that the regulatory climate in Florida continues to deteriorate and is increasingly hostile to investment," said FPL Group Chairman Lew Hay. "Absent confidence in fair regulatory treatment, we believe providers of capital will be more reluctant to invest."
BMO Capital Markets Analyst Michael Worms said last week that he disagrees: "I don't think it will have a material impact on their abilty to finance whatever they want to finance."
Analysts asked about the issue during an earnings call this week in which FPL Group — the parent company of FPL — said that its profit dipped slightly in 2009 to $1.62 billion from $1.64 billion the year before.
Catapult Capital management analyst Edward Heyn asked whether FPL's response was "much ado about nothing."
"There's little impact to your financial profitability," Heyn said.
FPL Group Chief Financial Officer Armando Pimentel said the company has reduced its estimates for expected earnings. "I don't know that it's much ado about nothing," he said. "When we say we're disappointed in the outcome, we are."
Julie Patel can be reached at jpatel@SunSentinel.com or 954-356-4667.Copyright © 2014, The Baltimore Sun