Utility regulators Tuesday signed off again on a 2021 settlement that increased base electric rates for Florida Power & Light after the state Supreme Court required a more detailed justification of the agreement.
The Public Service Commission approved an order that dug deeper into a series of issues after the Supreme Court in September ruled that an earlier approval had not shown why the settlement “is in the public interest and results in rates that are fair, just and reasonable.”
The new order provided justification for issues ranging from how much profit FPL can earn to paying for solar-energy projects.
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“The evidence in this record demonstrates that FPL has delivered value to its customers at a relatively low cost,” the order said. “Residential rates remain well below the national average and below those charged by other Florida investor-owned-utilities.”
FPL reached the four-year settlement in 2021 with the state Office of Public Counsel, which represents consumers in utility issues, and other parties including the Florida Retail Federation, the Florida Industrial Power Users Group, and the Southern Alliance for Clean Energy. The commission then issued an order approving the settlement.
Base-rate issues are closely watched, as they involve billions of dollars, make up large portions of customers’ monthly bills, and help determine utilities’ profitability.
After approval by the commission, the FPL settlement led to a $692 million rate increase in January 2022 and another $560 million hike in 2023. The wide-ranging settlement also included such things as allowing increases in 2024 and 2025 to pay for solar-energy projects.
But the settlement drew challengesat the Supreme Court from the group Floridians Against Increased Rates and a coalition of three other organizations, Florida Rising, the Environmental Confederation of Southwest Florida, and the League of United Latin American Citizens of Florida. They have argued that the settlement was not in the public interest and that some parts of it violated state law.
The Supreme Court’s September ruling did not make conclusions about whether disputed parts of the settlement should be upheld. Instead, it focused on whether the commission offered justifications needed to evaluate the legality of the settlement.
“In this case, after hearing from 60 witnesses and receiving 635 exhibits into evidence, the commission produced an explanation of its public interest determination that spanned little more than a page,” the ruling said. “The order provides conclusory statements about the virtues of the settlement agreement, not the reasoned explanation required for our review.”
Public Service Commission member Art Graham on Tuesday suggested the Supreme Court ruling countered efforts by regulators to be more efficient.
“So basically what the Florida Supreme Court just said that we didn’t write enough?” Graham said. “Should we weigh the order next time to see if it weighs enough?“
But Commissioner Andrew Fay, an attorney, pointed to the need to carry out the Supreme ruling.
“The court has asked us to do this, and so I think it’s really important that we put it forward,” Fay said. “I recognize we can’t always be as efficient, but they serve as our primary (legal) jurisdiction for these issues, and we have a lot of respect for them. So we’ll send this order to them and see where it goes.”