(The Center Square) — The Florida Public Service Commission approved a rate hike this week for a natural gas provider and gave one of the state’s largest utilities more time to provide data on a storm-related rate increase request.
The commission exercises regulatory authority over monitoring the safety, reliability and service of utilities that provide electricity, natural gas service, telephone, water, and wastewater.
Florida Power & Light requested a temporary increase in electricity rates for customers to incrementally recover the cost of storm damage caused by Hurricanes Ian and Nicole in 2022, and their petition was approved in March 2023.
FPL was required to provide documentation to the commission supporting its cost review and true-up of the total actual storm restoration costs by Sept. 30.
Due to the enormity of ongoing repairs and the large amount of invoices and financial records related to these costs — projected to be over $1.3 billion after impacting over 2.58 million customers — FPL argued that it needed more time to prepare the documentation.
A waiver was granted by the commission on Tuesday, allowing the utility to submit the requested documentation no later than Dec. 31.
Also on the agenda was a petition from Florida City Gas, a subsidiary of FPL. Initially filed May 31, 2022, the petition sought approval to increase rates and associated depreciation rates based on a projected test year ending Dec. 31.
According to the company’s website, FCG serves 116,000 residential, commercial and industrial customers in Florida’s Miami-Dade, Broward, Brevard, Palm Beach, Hendry, Martin, St. Lucie and Indian River counties.
According to a commission memo, the requested plan consisted of increasing rates to allow the company to generate a total base increase of $29 million based on 2023 projections, a 10.75% return on equity, and an equity ratio of 59.6% from investor sources.
The gas company also wants to implement a reserve account called a reserve surplus amortization mechanism (which is an accounting tool that would allow the company to pay off capital costs over time), have its adjusted depreciation rates approved, have the continuation and expansion of the SAFE pipeline improvement program, and the implementation of an advanced metering infrastructure pilot program.
On June 9, the commission issued a final order, granting parts of the petition and denying others. Reserve account and reserve account-adjusted depreciation rates were approved, which was a significant issue of contention in this case. This caused the Office of Public Counsel to file a reconsideration motion to the commission.
During the hearing on Tuesday, the Office of Public Counsel was granted five minutes of oral argument and stated that the biggest issue was the lack of rationale behind approving the reserve account and reserve account-adjusted depreciation rate parameters. They argued that the rate stability promised through approving the reserve account could not be delivered because parts of FCG’s petition were not approved.
The commission denied OPC’s recommendation to have the case’s final order reconsidered.
This article First appeared in the center square