Florida Power & Light Co. should return to ratepayers as much as $736.8 million in its savings under the Tax Cuts and Jobs Act of 2017, the federal tax reduction OK’d by the Republican Congress, according to a petition filed with the Public Service Commission.
“FPL’s retail customers are entitled to refunds and to rate reductions implemented as quickly as possible to reflect this dramatic reduction in FPL’s costs,” Public Counsel J.R. Kelly wrote in the document delivered Wednesday to the PSC.
Kelly filed the petition on behalf of his office, which represents ratepayers before the commission, and the Florida Retail Federation. Both organizations were party to a 2016 settlement agreement that set FPL’s rates for the subsequent four years.
The commission asserted authority on Feb. 6 to order utility rate reductions reflecting companies’ savings under the tax bill. FPL estimates its savings at $684.8 million per year. The higher amount reflects Kelly’s office’s estimate.
The windfall would boost the utility’s return on equity to 13 percent — above the maximum 11.6 percent allowed by the PSC, Kelly wrote. That would justify taking a fresh look at FPL’s base charges to customers, he said.
Contrary to the 2016 settlement and the principle that utility rates must be “fair, just, and reasonable, FPL is improperly attempting to retain all of the tax savings for the benefit of its shareholder, NextEra Energy Inc., rather than flowing back these dramatic windfall cost savings to its customers,” the petition says.
Kelly has already reached agreements with the other investor-owned utilities to steer tax cuts to ratepayers, mostly by using them to offset costs of hurricane repairs. Gulf Power Co., which suffered no storm damage, will pass its tax cut along to its customers, he said.