The Florida Supreme Court ordered last week that the Florida Public Service Commission must justify its approval of Florida Power and Light’s $4.868 billion rate increase settlement. In a 4-2 decision, the state’s court instructed the utility regulator to “do the job with which the Legislature has tasked it” and explain why the increase in customer bills paired with charging customers for a higher rate of profit as agreed to in the settlement was “fair, just, and reasonable” for Floridians. The Supreme Court order does not halt the rate increase, which went into effect in 2022 and resulted in increases to customer bills. However, the order marks a challenge to the “constructive regulatory environment” that Florida Power and Light (FPL) has cultivated and enjoyed over the last several years in Florida.
Text from the Florida Supreme Court opinion
The Florida Public Service Commission (PSC,) which advocates, academics, and reporters have referred to as a “rubber stamp” and “lapdog” of the investor-owned utilities, has a history of approving whatever the corporations are asking for with little to no debate. Gov. Ron DeSantis has appointed or reappointed all five members of the PSC. Over the years, the commissioners have established a track record of voting in support of FPL with little weight in their decisions given to opposing viewpoints.
During FPL’s recent rate case, one expert witness tweeted his experience of traveling to Tallahassee to present evidence and testimony against the rate case settlement. The PSC did not ask him a single question. Thousands of FPL customers spoke out against the rate increase, before and after the settlement was approved, at virtual public hearings and by submitting written comments to the PSC.
Despite that, FPL secured the support of some stakeholders to its rate increase settlement, most significantly the state’s Office of People’s Counsel (OPC,) the state’s consumer advocate. At the time of the settlement, the OPC was under the charge of Richard Gentry, a former utility lobbyist that the Florida Legislature appointed to the role just months prior to the settlement, replacing longtime utility critic J.R. Kelly. Gentry abruptly resigned from the OPC at the end of 2022.
Several advocacy groups who formally intervened in the rate case docket pushed for and secured an additional Memorandum of Understanding (MOU) after the initial settlement was reached. The MOU outlines additional utility disconnection protections for extreme weather instances, includes commitments to ongoing stakeholder engagement and pilot programs, and represents a compromise to these organizations’ opposition to the rate increase settlement.
Floridians have dealt with historic heat waves this year, increasing the impact of the higher FPL rates and resulting in some of the highest monthly bills residents have ever seen. Social media posts from around the state show people asking for help paying their FPL bill, expressing shock and anger that the amount is so high, and fear and uncertainty if their families will be able to stay cool as heat indexes remained high overnight. FPL’s high fuel charges have further increased bills, due to the rising cost of methane gas, also referred to as “natural gas.” Nearly 70 percent of FPL’s fuel comes from gas, and when the cost of gas spikes, customers are left vulnerable to those fluctuations.
The PSC serves as the regulatory body tasked with protecting the public and has the authority to deny or modify fuel costs. However, despite asking some questions about the fuel costs, the PSC unanimously approved increasing fuel charges on top of the already approved rate increase.
Last week’s Supreme Court Order is not the first time the PSC has effectively been asked to show its work and further explain its reasoning behind approving FPL’s requests. In 2022, a group of Florida Legislators asked the PSC for an additional audit of FPL to ensure that FPL was not charging customers for political spending which has come under scrutiny after consultants with whom FPL worked engaged in multiple election scandals leading to criminal charges and ongoing investigations, including a federal investigation of NextEra, FPL’s parent company. The PSC dismissed the request, declining to provide any information or data to the lawmakers.
