Summary
This 8-K filing by NextEra Energy Inc. (NEE) details a significant development for its subsidiary, Florida Power & Light Company (FPL). FPL and key intervenors have filed a joint motion with the Florida Public Service Commission (FPSC) to approve a stipulation and settlement agreement regarding FPL's base rate proceedings. This agreement, if approved, would establish new retail base rates and charges from January 2017 through December 2020, impacting FPL's revenue streams. The proposed settlement outlines specific increases in annualized retail base revenues totaling approximately $811 million over the initial two years, with additional revenue tied to the commercial operation of the Okeechobee Clean Energy Center and the expansion of solar generation. The agreement also sets the allowed regulatory return on common equity (ROE) at 10.55%, with provisions for rate adjustments if FPL's earned ROE falls outside a specified range. Furthermore, it addresses the recovery of storm restoration costs and the amortization of depreciation reserves, providing a framework for operational and financial stability for FPL during the agreement's term.
Key Highlights
- 1FPL and key intervenors have agreed to a settlement resolving FPL's base rate proceeding for the period of January 2017 through December 2020.
- 2The settlement includes phased-in increases in annualized retail base revenues: $400 million in 2017, $211 million in 2018, and $200 million upon the Okeechobee Clean Energy Center reaching commercial operation (mid-2019).
- 3FPL can seek base rate increases for up to 300 MW annually of new solar generation from 2017-2020, provided it's cost-effective with an installed cost cap of $1,750 per kilowatt.
- 4The allowed regulatory return on common equity (ROE) is set at 10.55%, with a band of 9.60% to 11.60%, allowing for rate adjustments if earned ROE falls outside this range.
- 5The agreement allows for the amortization of up to $1.0 billion of depreciation reserve surplus (plus any remaining from the 2012 agreement) over the term, subject to maintaining earned ROE within the 9.60% to 11.60% range.
- 6Future storm restoration costs will be recoverable on an interim basis, capped to produce a surcharge of no more than $4 per 1,000 kWh for residential customers in the first 12 months, with provisions for additional recovery and surcharges if costs exceed certain thresholds.