AARP has filed a “friend of the court” brief with the Florida Supreme Court objecting to Florida Power & Light Co.’s rate increase and what it calls the failure of state regulators to protect residential consumers.
The base rate increased 8 percent in January for the customer who uses 1,000 kilowatt hours.
On April 17, Florida Public Counsel J.R. Kelly filed an appeal with the court saying the Public Service Commission misinterpreted state statutes when it approved a settlement of FPL’s rate case that bypassed his office. The Office of Public Counsel represents ratepayers in utility cases.
In the filing, AARP said that it objects to approval of a contested settlement agreement that provides Juno Beach-based FPL a rate increase far greater than it asked for in its petition. It asks the court to set aside the Public Service Commission’s order approving the settlement and remand it to the PSC to “make the required findings based on substantial evidence on the record as a whole.”
AARP Florida Advocacy Manager Jack McRay said today that AARP is alarmed by both the size of the rate increase and that the PSC violated its own rules and Florida law when it approved the non-unanimous settlement.
Senior AARP Attorney Julie Nepveu said that the PSC performed “an about-face in awarding cost recovery without asking any questions and eliminated important oversight that has saved ratepayers hundreds of millions of dollars.”
FPL spokesman Mark Bubriski said, “The agreement, which was unanimously approved by the PSC after extensive hearings, benefits all of our customers – including seniors, families and small businesses – by enabling us to continue delivering excellent reliability, industry-leading clean power and award-winning customer service.”
Bubriski said the FPL customer who uses 1,000 kilowatt hours a month pays about $95 compared to the average of $123.75 that customers of other utilities in Florida pay. Neither average includes local taxes or franchise fees that are also included on many utility bills.
The PSC granted Juno Beach-based FPL a $350 million base rate increase that took effect in January. The PSC order extends through 2016 and includes $620 million in initial costs of new power plants in Cape Canaveral, Riviera Beach and Hollywood.
The PSC approved a modified version of a $378 million settlement FPL negotiated with the Florida Industrial Power Users Group, the South Florida Hospital and Healthcare Association and the Federal Executive Agencies.
AARP wants the court to require the PSC to ensure that the rates are fair, just, and reasonable, as the law requires. AARP’s brief argued that the “shockingly high rate increase” must be explained because the evidence in the case indicated the rates should have decreased, not increased.
The Office of Public Council intervened in the case and submitted evidence it said shows that the rates are already too high based on current economic conditions. Just before the hearing in the case, FPL and several commercial and industrial ratepayers submitted a proposed settlement. It also shifts more of the burden for paying the rates onto residential ratepayers, ARRP said.
“Unless ratepayers can trust that the FPSC will follow its own rules and carry out its obligation to set fair, just, and reasonable rates, they will be forced to intervene in many more rate cases in order to preserve their interests,” AARP said in its brief. “If they do not intervene, they risk that the FPSC, as it did here, will approve outrageous settlements entered into during secret negotiations that increase rates based on matters that are required to be, but were not the subject of public notice.”
AARP, which represents the interests of people age 50 and over, has close to 2.8 million members in Florida.