Summary
This 8-K filing from NextEra Energy Inc. (NEE) on August 15, 2012, reports a significant development for its subsidiary, Florida Power & Light Company (FPL). FPL, along with key intervenors, has filed a joint motion with the Florida Public Service Commission (FPSC) proposing a settlement agreement to resolve FPL's base rate proceeding. This proposed agreement, if approved, would set new retail base rates and charges, expected to increase annual retail base revenues by $378 million starting in January 2013, and would remain effective through December 2016. The settlement outlines a regulatory return on common equity (ROE) of 10.70% with a band, and includes provisions for recovering modernization project costs and future storm restoration expenses. The parties are requesting swift FPSC approval, with a decision due by August 31, 2012, to ensure the new rates can be implemented by January 1, 2013, as planned.
Key Highlights
- 1FPL and key intervenors have jointly proposed a settlement to resolve the ongoing base rate proceeding.
- 2The proposed agreement would result in an annualized increase of $378 million in FPL's retail base revenues, effective January 2013.
- 3The settlement sets FPL's allowed regulatory return on equity (ROE) at 10.70%, with a range of 9.70% to 11.70%.
- 4Costs associated with FPL's three modernization projects (Cape Canaveral, Riviera, Port Everglades) will be incorporated into retail base rates as they become operational.
- 5Provisions are included for the amortization of up to $400 million in surplus depreciation and fossil dismantlement reserves, subject to ROE limitations.
- 6Future storm restoration costs will be recoverable on an interim basis, capped at a surcharge of $4 per 1,000 kwh for residential customers in the first year, with adjustments for costs exceeding $800 million annually.
- 7The settlement requires approval from the Florida Public Service Commission (FPSC), with parties requesting a decision by August 31, 2012.