Florida is home to four regulated, monopoly utility companies: Duke Energy, Tampa Electric, Southern Company’s Gulf Power, and NextEra Energy’s Florida Power and Light (FPL), which is the largest of the four. In the first quarter of 2016, FPL reported a net income of $393 million compared to $359 million for the prior-year quarter. The utility’s service territory covers the east coast of Florida and parts of the west coast south of Tampa Bay. The company serves more than 9.5 million customers through 4.8 million customers accounts and has a generating capacity of over 25,000 megawatts.
Florida Power and Light’s energy portfolio is dominated by fossil fuels, specifically natural gas. The utility operates 70 fossil fuel units that make up 21,766 megawatts of the utility’s 25,254-megawatt generating capacity. In 2016, FPL had 110 megawatts of solar (0.1%) in its portfolio. By the end of 2025, FPL plans to have only 1% of solar.
Data from Florida Power and Light’s Ten Year Power Plant Site Plan submitted to the Public Service Commission in April 2016
In August 2015, the Tampa Bay Times reported that the four Florida utility companies lost $6.1 billion in natural gas hedging, which is when a utility agrees to buy a volume of fuel in the future at a fixed price. Since 2002, the Florida Office of Public Counsel says losses for each utility are: $1.4 billion for Duke Energy Florida, $390 million for Tampa Electric, $4.1 billion for Florida Power and Light and $171 million for Gulf Power. (Duke disputes the numbers and said its losses are $1.1 billion.) The counsel’s office tally translates to $815 on average for every electric customer in Florida.
Months later, in April 2016, the utilities agreed to limit their natural gas hedging by 25%. However, the utilities and the state public service commission (PSC) agree that the practice of hedging still benefits customers by reducing wide swings in customer bills.
In December 2014, the PSC allowed FPL to invest $191 million in a joint fracking venture with PetroQuest Energy, Inc. in Oklahoma and bill customers for the investment. The measure was opposed by the state’s largest energy users, lawyers who represent the public in rate cases, and environmental groups.
FPL has had one lobbyist registered in Florida for every two legislators each legislative session between 2007-2013, and has been one of the largest donors to state-level campaigns in recent election cycles. FPL’s spending on legislative lobbying from 2007-2013: $4,713,000, with FPL employing 190 lobbyists.
The Wall Street Journal reported in November 2016 that NextEra is having difficulty overcoming its image problem as it is trying to buy Oncor, which is the biggest utility in Texas. The article explores how NextEra failed to win approval to buy Hawaiian Electric Industries earlier in 2016, and also discusses how FPL complained to state legislators in Florida after they received a $75 million rate increase in 2009 and not the $1.3 billion it wanted. Within months, four utility commissioners were rejected for reappointment or not confirmed by the state senate.
Texas Commissioner Ken Anderson said NextEra/FPL is “not known for playing well with other people. They have a reputation among regulators and others as ‘my way or the highway.’ That’s not going to work in Texas.”
State Senator Miguel Diaz de la Portilla received $410,855 in income from Becker & Poliakoff,P.A. during the 2012 calendar year, and one of the firm’s clients includes FPL. Sen. Diaz de la Portilla called South Miami Mayor Philip Stoddard and lobbied him in 2012 to support FPL’s base-rate increase.
In 2012, Integrity Florida found 11 members of the Florida legislature on the payroll of lobbying firms. Other sitting state legislators also listed FPL as a client.
$1.3 Billion Rate Increase
In 2016, FPL submitted a request for $1.3 billion in base-rate hikes. FPL wants regulators to approve rates that would generate an additional $826 million in 2017, $270 million in 2018, and $209 million in 2019. A customer would see base-rates increase from $57 to $70, and the total bill would increase from $91 to $107. Additionally, FPL’s rate case expenses, estimated at $4.2 million, will be paid by its customers.
Weakening Energy Efficiency Standards and Ending Solar Rebates
At the end of 2014, the PSC voted 3-2 in favor of FPL and the other utility companies’ proposals to gut Florida’s energy-efficiency goals by more than 90 percent, and to terminate solar rebate programs by the end of 2015.