How large are the proposed base rate increases and when would they take effect?

The settlement would increase annualized retail base revenues by $945 million beginning January 1, 2026, and by an additional $705 million beginning January 1, 2027, if approved by the FPSC.

What return on equity would FPL be authorized to earn under the settlement?

FPL's authorized regulatory ROE would be 10.95%, within a range of 9.95% to 11.95%, on a 59.6% equity ratio. Earned ROE below 9.95% would allow FPL to seek rate relief, and earned ROE above 11.95% would allow any party with standing to seek a rate review.

What is the rate stabilization mechanism and how could it affect earnings?

The RSM is a non-cash accounting mechanism funded by up to $1.155 billion of deferred tax liabilities, the RSAM carryover balance, and ITCs from 2025 battery storage. FPL may amortize it to keep earned ROE within the authorized range, but it must amortize enough to avoid falling below the bottom of the range and cannot amortize amounts that push earnings above the top of the range.

What growth opportunities does the settlement create beyond the base rate increases?

The SoBRA mechanism would allow FPL to seek base rate recovery for solar projects entering service in 2027 through 2029 (planned at roughly 1,192 MW, 1,490 MW, and 1,788 MW) and battery storage in 2028 and 2029 (600 MW each), subject to need and cost-reasonableness tests. A large load tariff for customers with 50 MW or more of new load and at least an 85% load factor is also included.

What happens if the FPSC does not approve the settlement as filed?

The settlement becomes effective only if the FPSC approves it in its entirety without modification, unless the parties unanimously agree in writing to changes. The FPSC's decision may also consider FPL's original as-filed base rate request, so the outcome could differ from the settlement terms.

NEXTERA ENERGY INC 8-K SEC Disclosure

01—Abstract

Summary

Summary of the 8-K filed August 20, 2025. Cited figures are marked; the original filing is the authoritative source.

On August 20, 2025, Florida Power & Light (FPL), a subsidiary of NextEra Energy (NEE), and ten of the thirteen intervenor groups in its base rate case jointly asked the Florida Public Service Commission (FPSC) to approve a 2025 stipulation and settlement.

If approved, it would resolve FPL's pending rate proceeding and set base rates for a four-year minimum term from January 1, 2026 through December 31, 2029. The settlement calls for annualized retail base revenue increases of $945 million^a effective January 1, 2026 and an additional $705 million effective January 1, 2027. FPL's authorized regulatory ROE would be 10.95% within a 9.95%-11.95% range, on a 59.6% equity ratio.

The original February 2025 request was larger, at $1,545 million^b for 2026 and $927 million for 2027, so the settlement represents a meaningful reduction in the headline increases. For investors, the settlement provides rate visibility and regulatory stability over the term. Earnings protection comes from a rate stabilization mechanism (RSM) funded by up to $1.155 billion of deferred tax liabilities, the RSAM carryover, and 2025 battery ITCs.

The RSM lets FPL manage earnings within the authorized band, and the solar and battery base rate adjustment (SoBRA) mechanism provides incremental rate recovery for planned solar and battery projects in 2027 through 2029, subject to need and economic tests. Growth-related items include a large load tariff for customers with 50 MW or more of new load and a 70% take-or-pay minimum. Other provisions include storm cost recovery capped at a $5^c per 1,000 kWh residential surcharge in the first year, a mechanism for adjusting rates after federal or state corporate tax changes, and a commitment not to financially hedge natural gas during the term.

The settlement is not yet effective. It requires FPSC approval without modification, unless the parties unanimously agree to a change, and the parties asked for a ruling in time for January 1, 2026 implementation.

The FPSC may also consider FPL's as-filed case. Investors should watch the commission's decision, the treatment of the RSM and asset optimization gains, and the outcome of future SoBRA proceedings.

02—Key points

Key Highlights

Proposed settlement with ten of 13 intervenor groups would resolve FPL's base rate case for a minimum term of January 1, 2026 through December 31, 2029.
Base revenue increases of $945 million effective January 1, 2026 and $705 million effective January 1, 2027, below FPL's original request of $1,545 million and $927 million for 2026 and 2027 respectively.
Authorized regulatory ROE of 10.95% (range 9.95%-11.95%) on a 59.6% equity ratio, consistent with prior FPL base rate cases.
Rate stabilization mechanism funded by up to $1.155 billion of deferred tax liabilities, RSAM carryover, and 2025 battery ITCs to manage earnings within the authorized ROE band.
SoBRA mechanism allows base rate recovery for solar projects (2027-2029) and battery storage (2028-2029), subject to resource or economic need demonstrations.
Settlement requires FPSC approval, and the parties requested a decision in time for new rates on January 1, 2026; the outcome remains uncertain until the commission rules.

03—Questions

Frequently Asked Questions

How large are the proposed base rate increases and when would they take effect?
The settlement would increase annualized retail base revenues by $945 million beginning January 1, 2026, and by an additional $705 million beginning January 1, 2027, if approved by the FPSC.
What return on equity would FPL be authorized to earn under the settlement?
FPL's authorized regulatory ROE would be 10.95%, within a range of 9.95% to 11.95%, on a 59.6% equity ratio. Earned ROE below 9.95% would allow FPL to seek rate relief, and earned ROE above 11.95% would allow any party with standing to seek a rate review.
What is the rate stabilization mechanism and how could it affect earnings?
The RSM is a non-cash accounting mechanism funded by up to $1.155 billion of deferred tax liabilities, the RSAM carryover balance, and ITCs from 2025 battery storage. FPL may amortize it to keep earned ROE within the authorized range, but it must amortize enough to avoid falling below the bottom of the range and cannot amortize amounts that push earnings above the top of the range.
What growth opportunities does the settlement create beyond the base rate increases?
The SoBRA mechanism would allow FPL to seek base rate recovery for solar projects entering service in 2027 through 2029 (planned at roughly 1,192 MW, 1,490 MW, and 1,788 MW) and battery storage in 2028 and 2029 (600 MW each), subject to need and cost-reasonableness tests. A large load tariff for customers with 50 MW or more of new load and at least an 85% load factor is also included.
What happens if the FPSC does not approve the settlement as filed?
The settlement becomes effective only if the FPSC approves it in its entirety without modification, unless the parties unanimously agree in writing to changes. The FPSC's decision may also consider FPL's original as-filed base rate request, so the outcome could differ from the settlement terms.

04—Continue

← View all 8-K filings