Florida regulators on Oct. 26 unanimously approved NextEra Energy Inc. subsidiary Florida Power & Light Co.'s settlement agreement expected to phase in new rates beginning in 2022 and support an expansion of solar generation.
The stipulation agreement is expected to shape rates through 2025 and will keep typical Florida Power & Light, or FPL, residential customer bills below the national average through the end of 2025. The settlement will also support the "largest solar build-out" in the U.S., the company said.
The settlement agreement reduces FPL's original revenue increase request, submitted to regulators in March (Docket 20210015-EI), from $1.1 billion to $692 million in 2022 and from $605 million to $560 million in 2023, regulators said Oct. 26 during the hearing. The company's proposed return on equity midpoint was reduced from 11.5% to 10.6%.
The regulators' decision also unifies the rates of FPL and NextEra's other Florida utility, Gulf Power Co., through a transition rider/credit that will phase out at the end of 2026.
"There are a lot of things in it that I like, there are some things in it that I don't like," Florida Public Service Commission Chairman Gary Clark said during the Oct. 26 hearing. "The fact that it establishes ... a predictability of the rates going forward for the next five years is certainly a plus."
Clark expressed some concern about residential ratepayers "subsidizing" the company's SolarTogether community solar program and its electric vehicle program.
"But at the same time, I see where we are going in this state," Clark added. "I see where the demand is moving to, and I certainly understand the need for that."
FPL, which serves more than 5.6 million customer accounts in Florida, said Oct. 26 that the impact on the average residential customer's bill would be modest, with an average annual increase of 2.8% over the 2021-2025 period.
The settlement agreement supports FPL's "30-by-30" plan to install 30 million solar panels in Florida by 2030, which "remains ahead of schedule and under budget," the company said Oct. 26. The PSC said the agreement includes installation of 3,576 MW of solar by 2025. The agreement would also support a second phase of the SolarTogether program.
Also, the settlement agreement supports the company's green hydrogen pilot project in Okeechobee County, Fla., as well as the 409-MW/900-MWh FPL Manatee Solar Energy Center (Parrish Facility) in Parrish, Fla. In June, FPL announced that it installed the first battery components at the site, which the company touts as the "largest solar-powered battery storage facility in the world."
The settlement also includes supporting the closure of Unit 4 at the coal-fired Scherer plant in Monroe County, Ga. FPL owns a roughly 76% interest in the unit. Also, the settlement promotes an expansion of electric vehicle infrastructure in the company's service area, with required annual reports on information gained through the process.
"Florida is a rapidly growing state on the front lines of climate change and our customers deserve bold, decisive, long-term actions as we continue building a more resilient and sustainable energy future all of us can depend on," FPL President and CEO Eric Silagy said in a statement Oct. 26.