FPL to seek rate increases, citing customer-driven system demands, inflation

The Sunshine State’s leading electricity provider will seek new rate increases next year it says are necessary to expand its systems, accommodate a surging customer base and adjust for inflation.

Florida Power & Light (FPL) told the state’s Public Service Commission (PSC) it will formally request new base rates on Feb. 28, triggering what has customarily been a one-year process that will decide the company’s rates from 2026 through 2029.

A letter that FPL President and CEO Armando Pimentel sent to PSC Chair Mike La Rossa said FPL plans to ask for increases of about $1.55 billion in 2026 and $930 million in 2027. The company will also seek unspecified hikes in 2028 and 2029, Pimentel said, to “recover the cost of building and operating additional cost-effective solar and battery projects.”

FPL estimated customers will see an average increase to their bills of about 2.5% from 2025 to 2029, an uptick “well below the national average and below many other Florida electric utilities,” the company said.

The company’s current four-year rate plan, which the PSC unanimously approved in 2021, ends Dec. 31, 2025.

“While we know there is never a good time to request a rate increase, we need to continue to make smart investments in the grid and in new generation resources so we can continue to deliver reliable electricity, enhanced resiliency and diversify our generation mix to power our fast-growing state,” Pimentel said in a statement.

“That is our never-ending commitment to our customers and that’s what this balanced plan does.”

FPL said in a Monday news release that the rate increases will help pay for further investments in infrastructure and technologies that made its systems 59% more reliable than the national average and among the best in the state. That includes smart-grid tech the company credits for hastening 1.8 million post-storm power restorations in 2023 and preventing 1.4 million outages in the past three hurricane seasons.

The company said it will also continue its investment in “low-cost solar and battery storage technology” to complement its power plant fleet, which includes natural gas and nuclear power. To date, FPL said its solar investments have saved customers more than $890 million that would have otherwise been spent on nonrenewable energy.

Since 2021, FPL said it has added roughly 275,000 new accounts. It expects 330,000 more through the end of 2029, a demand that “will require significant new generating capacity and distribution infrastructure to meet demand in one of America’s fastest-growing states.”

“The last four years were unlike any in our recent history. Over this period, we experienced meaningful and unanticipated increases in inflation and interest rates, which rose by 21% and over 180%, respectively,” Pimentel said in the letter. “This, combined with significant migration to Florida, presented new challenges for FPL to navigate.”

FPL is easily Florida’s largest power utility, with more than double the combined customers of its in-state competitors, municipal utilities and cooperatives.

PSC records show the company had over 5.95 million customer accounts in mid-October, compared to 2 million for Duke Energy, 832,182 for Tampa Electric, 30,164 for FPU and about 2.94 million accounts dependent on cooperative and municipal providers.

FPL could encounter pushback on its request, particularly as it relates to the company’s intended profit from the increases.

The PSC permits a range of return on equity (ROE), a measure of business profitability, for power companies in the state that includes a set “midpoint.” When the panel approved FPL’s current plan in 2021, it set the midpoint at 10.6%.

The panel OK’d midpoints of 10.5% for Tampa Electric this month and 10.3% for Duke Energy in August. Duke initially sought a midpoint of 11.15%.

FPL’s desired midpoint is even higher at 11.9%, which according to Pimentel “reflects appreciably higher interest rate and other capital market factors expected during the term of the proposed four-year rate plan.”