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State stabilizes FPL rates after Hurricane Irma review

“With closer monitoring, future restoration costs will be reduced.” 

The state’s Public Service Commissioners on Tuesday kept rates stable for Florida Power & Light (FPL) customers, approving an agreement recognizing $1.375 billion in Hurricane Irma restoration costs.

“To help keep future restoration costs in check, the PSC also approved the use of new technology to track utility storm expenses,” a press release said.

The agreement — between FPL; the Office of Public Counsel (OPC), representing consumers; and the Florida Industrial Power Users Group — establishes new guidelines to better monitor outside contractors’ costs and expenses.

Tracking storm restoration expenses is often difficult due to the large number of contractors needed to quickly restore power after major storms. This year, FPL will start using a smartphone app to record the time and expenses of all crews and will expand the app’s uses in 2020.

“This agreement benefits the public interest. FPL customer bills will not increase to cover Hurricane Irma costs,” commission chair Art Graham said in a statement.

“Customers will also benefit from FPL’s new storm cost tracking app.  With closer monitoring, future restoration costs will be reduced.”

Commissioner Donald Polman added, “The storm that we’re dealing with, Irma, was a tremendous impact to your customers, throughout your service area,” said Commissioner Donald Polmann. “I think everybody should recognize that this has come to a pretty quick closure with the settlement agreement. I do absolutely see this to be in the public interest that we move forward expeditiously.”

In May 2019, the PSC determined that FPL’s savings from the federal Tax Cuts and Jobs Act of 2017 (TCJA) were within the terms of FPL’s last rate case settlement.

The PSC approval allowed TCJA savings to replenish a utility account tapped to pay for Hurricane Irma recovery costs and avoid a potential surcharge on customer bills.

OPC and other parties had questioned FPL’s $1.375 billion in restoration costs for  Hurricane Irma. Today’s agreement approval avoids a PSC hearing scheduled to further review FPL’s storm expenses and resolves all issues in the case.

The agreement includes $50 million in adjustments to accounting for expenses.

Hurricane Irma hit Florida on September 10, 2017, causing more than 4.4 million FPL customers to lose power. Workers from 30 states and Canada helped FPL restore electricity.

The utility, saying it accomplished what the customers expected, reported that 50 percent of its 4.4 million customers that lost power from Hurricane Irma were back online within one day. Within 10 days of the storm, 99 percent of the customers were restored.

FPL spokesman Mark Bubriski said the agreement confirms the company “handled that storm properly.”

“Hurricane Irma may seem like ancient history to some folks, but really it was less than two years ago,” he said. “The regulatory process takes some time to review everything that goes into it.”

As an example of the steps to better track expenses, FPL is starting to employ a smart-phone app for recording time and expenses of crews, which will expand the app’s uses in 2020.

“We have been working on some new technologies to help us better manage, track, and increase transparency around the costs of restoring power after a hurricane,” Bubriski said.

Part of the complexity of tracking expenses is that utilities bring in large numbers of crews from other states to help restore power after major storms.

The utility used workers from 30 states and Canada to restore electricity after Irma, deploying 28,000 workers across its coverage area.

State Public Counsel J.R. Kelly said high costs are expected as utility crews come in as customers demand quick restoration of power. However, he said “we don’t want open checkbooks to these people, pay them exorbitant amounts of money.”

FPL serves nearly 5 million customer accounts in Florida.

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The News Service of Florida contributed to this post.

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