TALLAHASSEE — State regulators Tuesday approved allowing Florida Power & Light to collect an additional $810 million from customers in 2022 amid higher-than-expected costs for natural gas that plays a key role in fueling power plants.
The decision by the state Public Service Commission will add almost $7 a month to the bills of residential customers who use 1,000 kilowatt hours of electricity. The increases will start in January.
FPL and other utilities, which are heavily dependent on natural gas, have grappled in recent months with higher fuel costs. Utilities pass along such costs to consumers and are not supposed to earn profits on them.
Maria Moncada, an attorney for FPL, told the commission Tuesday that the utility has taken a "long-term view" to try to mitigate spikes in gas prices. That has included making power plants more efficient.
"Whenever we generate a megawatt hour of electricity, we do so using less fuel," Moncada said.
But representatives of the Southern Alliance for Clean Energy, Vote Solar, Florida Rising and the Environmental Confederation of Southwest Florida argued that FPL has not done enough to shield customers from such increases. They pointed to a need for ramped-up programs to help consumers use less electricity.
"Unfortunately, for years, FPL has done little to insulate customers from this kind of price shock," said George Cavros, an attorney for the Southern Alliance for Clean Energy.
FPL, Tampa Electric Co. and Duke Energy Florida all warned this fall that they might need to collect more from customers in 2022 because of higher-than-expected fuel costs. Tampa Electric filed a proposal last month to collect about $273 million more starting in February. The commission has not made a decision on that proposal.
What this means for Gulf Power customers
The utility industry uses 1,000-kilowatt hour residential bills as a benchmark for making rate comparisons. FPL customers outside of Northwest Florida who use 1,000 kilowatt hours had been expected to pay $113.85 a month in January. With Tuesday's decision, that number will increase to $120.67, according to the commission.
Customers in Northwest Florida, who are transitioning as part of a merger between FPL and Gulf Power, had been expected to pay $148.78 a month for 1,000 kilowatt hours in January. That number will go to $155.61, according to the commission.
Utilities each year file projected fuel costs that regulators then use to determine how much will be charged to customers in the subsequent year. FPL made such a filing Sept. 3, with regulators approving it in early November.
But before the approval, FPL — along with Duke and Tampa Electric — had warned that natural gas prices were higher than expected. The approval Tuesday is what is known as a "mid-course correction," a sort of add-on to what was approved last month.
FPL will recoup the additional costs over next year. To try to ease the blow to customers, Commissioner Andrew Fay asked Tuesday about the possibility of spreading out the costs over a longer period of time.
Moncada, however, pointed to volatility of fuel prices and said the utility decided it was better to recover the money over one year instead of, for example, two years.
"You never know when that problem (higher fuel prices) is going to get compounded," she said.
Commission Chairman Gary Clark also raised questions about forecasts in recent days that showed natural-gas costs becoming lower. But the commission approved a recommendation from its staff members to approve FPL's request.
This article originally appeared on Pensacola News Journal: FPL, Gulf Power bills will increase in January as fuel costs rise