Summary
NextEra Energy Inc.'s subsidiary, Florida Power & Light Company (FPL), has filed a petition with the Florida Public Service Commission (FPSC) seeking significant increases in base annual revenue. These increases are structured to be implemented in stages: $866 million effective January 2017, $262 million effective January 2018, and an additional $209 million when a proposed natural gas-fired power plant in Okeechobee County becomes operational, expected in mid-2019. This filing is critical as FPL's current rate agreement expires at the end of 2016, aligning with the requested 2017 rate effective date. A key commitment from FPL is that if these revenue adjustments are approved, they will not seek further general base rate increases before the end of 2020. The proposed increases are based on a requested regulatory return on common equity (ROE) of 11.50%, which includes a performance adder. Investors should note that the FPSC is expected to issue a final decision in the fourth quarter of 2016, following hearings in the third quarter. The outcome of this rate case will have a material impact on FPL's future revenue and profitability.
Key Highlights
- 1FPL filed a petition for significant base annual revenue increases with the Florida Public Service Commission (FPSC).
- 2Requested revenue increases total $866 million for January 2017, $262 million for January 2018, and $209 million for mid-2019 (upon Okeechobee plant operationalization).
- 3FPL commits to no further general base rate increases before the end of 2020 if the proposed adjustments are approved.
- 4The requested increases are predicated on a regulatory Return on Common Equity (ROE) of 11.50%, including a performance adder.
- 5The current FPL rate agreement expires at the end of December 2016, making this rate case timely for new rates effective January 2017.
- 6Hearings are anticipated in Q3 2016, with a final FPSC decision expected in Q4 2016.
- 7The filing includes testimony, exhibits, and supporting schedules for the proposed rate adjustments.