By Shelby Green on September 15, 2025
Nearly 12 million Floridians face higher electricity bills as state regulators weigh competing proposals in Florida Power and Light’s bid for what is likely the largest rate hike in United States history. One proposal, led by Florida Power and Light (FPL), would lead to a $7 billion rate increase compared to another proposal, led by the state’s consumer advocate, which would limit the rate increase to $5 billion.
FPL filed its historic $9.819 billion request to increase rates in February 2025, including a request to raise the company’s return on equity (ROE) to 11.9 percent, several points higher than the industry standard of 9.68 percent. About one third of the proposed first-year rate increase would go strictly to profits, due to an increased ROE, according to the Office of Public Counsel (OPC), which represents the public in utility rate cases and other matters.
This is likely the largest rate hike request in American history, and it will be handled by the Florida Public Service Commission (PSC), a regulatory board of five Governor-appointed officials responsible for setting utility rates and deciding how much customers pay for electricity through a legal proceeding known as a rate case. FPL’s proposed ROE, if approved, would be the highest for any regulated electric utility in Florida. FPL reported $4.543 billion in profit last year, and its CEO, Armando Pimentel, was compensated $11.351 million, nearly 20% more than the average compensation of the 54 utility CEOs analyzed by the Energy and Policy Institute (EPI). An increase to a utility’s ROE allows the company to charge customers more money on their bills for the benefit of shareholders. Approximately half of every dollar FPL collects could go directly towards profit, according to the OPC.
Customers are still paying for the $150 “storm recovery fee” the PSC allowed FPL to charge for additional hurricane recovery costs earlier this year. The proposed 23 percent rate increase would mark at least the third rate hike since 2021, when the PSC approved a 20 percent increase – $5 billion – which at the time was the largest in its history. Collectively, Florida residents could soon be paying $600 more annually for electricity than they were just five years ago.
AARP scrutinized FPL for its request to increase its profits that will hit “older residents living on fixed incomes […] the hardest.” In a message urging the Commission to reject FPL’s proposal, a Bradenton senior detailed how she is forced to take money from her grocery budget in order to keep the lights on. Higher rates could force seniors on fixed incomes to choose between essentials like groceries or gas, says AARP, a senior-focused organization that hand-delivered nearly 34,000 petitions urging the Commission to reject FPL’s rate increase.
Drastic differences in two competing proposals to conclude Florida Power and Light’s rate case
Days before the PSC was set to hear arguments on FPL’s rate case, FPL abruptly filed a settlement agreement attempting to close the original rate case and move forward with hearings and testimony only on its settlement agreement before the PSC. In the settlement agreement, FPL trimmed its rate increase to $6.903 billion and agreed to a 10.95 percent ROE, still the highest among its peer utilities and topping the 10.5 percent the PSC gave to Tampa Electric Company (TECO) last year. TECO’s rate increase is currently on appeal before the Florida Supreme Court.
FPL claimed it worked with a “diverse” group to develop new rates with a “meaningful representation of [all] customer interests.” However, the OPC condemned FPL’s new proposal as “disproportionately favorable” to corporate interests and countered with its own settlement, backed by Floridians Against Rate Increases (FAIR) and a coalition of organizations — including Florida Rising, the League of United Latin American Citizens of Florida, and the Environmental Confederation of Southwest Florida (FEL). Under FPL’s proposed settlement agreement, small businesses served by FPL would be forced to pay 10% more than current rates for their service. Nearly every group that signed onto FPL’s proposal represents corporate interests, a tiny minority of FPL’s total customer base, according to a joint motion filed by the OPC, FAIR, and FEL.
The OPC says the groups supporting its proposal represent the interests of a commanding 98% of FPL’s customer base. The OPC’s proposal would cut the base bill (excluding surcharges, taxes, and fees) by nearly half for the average residential customer compared to FPL’s initial plan, freeze rates for two years, and keep the minimum bill at $25. FPL’s ROE would still be highest in Florida, at 10.6 percent, and permit the monopoly utility to collect $5.241 billion over the next four years.
FPL opposed the OPC’s alternate settlement, claiming it is invalid because it lacked the utility’s support. The OPC argued that “no Court has ruled that the public interest standard requires the utility to be a party to a non-unanimous rate case settlement agreement.” However, the PSC dismissed the OPC’s settlement agreement, adopting FPL’s position that the petitioning utility is an “indispensable party” to any settlement.
The OPC can still submit the terms of its alternative settlement as a proposed stipulation within its testimony, due September 17, for the PSC’s consideration.
Florida Power and Light proposes to shift significant costs onto everyday Floridians
FPL’s settlement with Walmart, Wawa, and several other large entities* hands nearly $1 billion in subsidies to industrial giants, according to the OPC, at the expense of Florida’s families and small businesses. Small businesses could face a rate increase of over $75 million next year, three times what FPL proposed in its original plan, while also bearing additional costs created by data centers.
Initially, FPL planned to close the tariff currently used for data centers, GSLD-3, and create a new one for data centers, requiring data center developers to pay over 65 percent higher rates. Under FPL’s proposed settlement, FPL will not close the GSLD-3 tariff to data centers as originally proposed. Instead, data centers with a load smaller than 50 MW would be allowed to remain on the GSLD-3 tariff. Such a move would enable smaller data centers to save over 50 percent off their base bills compared to FPL’s initial filing, according to a preliminary analysis by the Energy and Policy Institute.
Data Centers developers could save over 50 percent off their base bills by settling with Florida Power and Light
In addition, data centers secured a new minimum “take-or-pay” requirement, 70 percent instead of the 90 percent originally proposed. “Take or pay” provisions protect consumers by requiring a large electric customer (like a data center) to pay for the infrastructure required to serve them, even if they end up not using all of the infrastructure as originally planned. In the absence of a strong “take-or-pay” provision, residential and small commercial customers could be responsible for paying for infrastructure they do not need.
The Florida Public Service Commission will decide before the end of 2025 to either accept the settlement from FPL or the OPC, reject them both, or put forth a new plan.
*Groups party to FPL’s settlement: Florida Industrial Power Users Group (FIPUG), Florida Retail Federation (FRF), Florida Energy for Innovation Association (FEIA), Walmart, EVgo Services, Americans for Affordable Clean Energy, Circle K, RaceTrac, Wawa, Electrify America, Federal Executive Agencies, Armstrong World Industries, and Southern Alliance for Clean Energy (SACE).
