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Tuesday, February 7, 2017

Florida Power & Light customers will pay cost of Hurricane Matthew

Posted By on Tue, Feb 7, 2017 at 2:14 PM

Whether they took the brunt of Hurricane Matthew or experienced a rainy breeze, Florida Power & Light customers will spend the next year paying for the utility's response to the early October storm.

The state Public Service Commission on Tuesday approved —- with little comment —- a $318.5 million request by FPL to cover the costs of restoring power after the storm pummeled parts of the East Coast. Part of the money also will help the company replenish its storm reserve fund, which stood at $93.1 million before Matthew.

The charge will add $3.36 to the monthly bills of typical residential customers who use 1,000 kilowatt hours of electricity a month. The charge will be in place for 12 months.

The Public Service Commission agreed to let FPL work with the state Office of Public Counsel to schedule hearings in about a year to determine if the recovery charge has generated enough or more money than needed by the company. If it is more than needed, customers could receive refunds. The Office of Public Counsel represents consumers in utility cases.

FPL attorney John Butler said the company expects to have final numbers on the cost of the recovery effort by the middle of this year.

FPL is "still incurring some costs and we're still collecting final information on invoicing for costs that were incurred," Butler told the commission.

With the addition of the storm recovery charge, the typical 1,000-kilowatt hour bill will stand at $102.37 a month starting in March.

The storm charge follows the commission approval in late 2016 of a four-year $811 million base-rate increase that pushed up the typical residential customer's 1,000-kilowatt hour monthly bill by $6.93 in January. The base-rate hike will require additional increases in January 2018 and June 2019.

"We understand that no one ever wants to pay higher rates, but fortunately, FPL's 1,000-kWh customer bill —- even with the temporary hurricane recovery surcharge —- will continue to be lower than it was in 2006 and approximately 25 percent lower than the national average," company spokesman David McDermitt said in a prepared statement Tuesday.

Matthew, a powerful storm that pounded the East Coast on Oct. 6 and Oct. 7, knocked out power to approximately 1.2 million FPL customers. While FPL service was lost as far south as Miami-Dade County, counties to the north such as St. Johns, Flagler, Volusia and Brevard experienced the brunt of Matthew, which did not make landfall in Florida.

The company estimated that 14,600 company employees and contractors replaced over 250 miles of wire, more than 900 transformers, and over 400 poles, with 99 percent of customers back on line within two days.

FPL based its request to recoup the costs on part of a 2012 settlement agreement in a base-rate case. It said the settlement allows it to collect restoration costs above the amount in a storm reserve and to replenish the reserve.

In filings with the commission, FPL estimated restoration costs at $316.8 million and said it is entitled to recover $293.8 million of that amount from customers after adjustments related, at least in part, to an accounting methodology. The storm reserve partially offset that total, leaving $200.7 million to be recovered.

FPL also contended it was entitled to collect $117.1 million to replenish the storm reserve.

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