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Electric utilities

Florida Power & Light Company Seeks Fuel Cost Adjustment to Pass on Increased Fuel Expenses to Customers

Strategic Insights

— 1 min read

The Florida Public Service Commission has approved a fuel cost adjustment for Florida Power & Light Company, which will increase the average residential electricity bill by 19% to $108.61. The adjustment will take effect on January 1, 2006, and will reflect the company's extraordinary expenses for fuel used to generate electricity during a period of skyrocketing global energy costs.

Key Takeaways:

  • The fuel cost adjustment will increase the average residential electricity bill by 19% to $108.61, with commercial and industrial customer bills increasing by 30% to 41%.
  • FPL's total fuel costs to be recovered in 2006 will exceed $6.5 billion dollars.
  • FPL makes no profit on fuel used to generate electricity and passes on the costs directly to customers.
  • FPL has taken several actions to mitigate the impact of fuel price volatility on customer bills, including fuel hedging and increasing the efficiency of its power plant fleet.
  • FPL has reduced its base rates by 15% or approximately $4 billion since 1999, and has committed to further reducing fuel costs.
  • The company has implemented various energy-saving programs to help customers manage energy use and reduce their bills.

Statistics:

  • Average residential electricity bill: $108.61 (up from $91.62)
  • Increase in fuel costs for FPL: $16.99 or 19% per 1,000 kilowatt-hour monthly bill
  • Total fuel costs to be recovered in 2006: over $6.5 billion dollars
  • FPL's fuel mix in 2006: 21% nuclear, 6% coal, 18% purchased power, 18% oil, and 37% natural gas
  • Savings to customers from FPL's hedging activities: over half a billion dollars by the end of 2005
  • Increase in fuel hedging savings to customers in 2006: expected to be significantly greater
  • Reduction in FPL's base rates since 1999: 15% or approximately $4 billion
  • Revenue of FPL Group: over $10 billion annually
  • Number of customer accounts served by FPL: 4.3 million

Sources:

  • Florida Public Service Commission
  • Florida Power & Light Company
  • FPL Group, Inc.
  • FPL Energy, LLC

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