Florida Power & Light, the nation’s largest electric utility, submitted a proposal asking the Florida Public Service Commission to approve a significant increase in base customer rates for the next four-year period. Consumer advocates have criticized this move that could potentially cost Florida businesses and residents billions of dollar.
The Proposed Rate Increase and Its Significance
FPL is the country’s largest electric provider. Its decisions affect approximately 12,000,000 people. The proposed rate increase, which includes increases in customer base rates affects FPL’s customers directly, but it also has implications for the wider utility industry. It could set a precedent nationwide for rate adjustment.
It is no coincidence that this request comes at the same time as a sustained period of high inflation. Data from the Federal Reserve Bank of St. Louis shows that, according to the data, the cost of electricity has been rising significantly in the U.S., going from 13.6 cents per kilowatt (kWh), in January of 2021, to 17.9 cents by January of 2025.
FPL Proposal to Adjust Customer Base Rates: Key details
FPL has officially submitted a request to the FPSC for establishing new base rates in the future. The current agreement expires this year. Base rates make up a substantial portion of utility bills for both commercial and residential customers. This proposal is aimed at increasing base customer rates. These are a major cost factor for homes and business.
FPL defends proposed rate hikes as necessary investments in “electric service infrastructure”, citing unanticipated cost increases of components and labour required for installation infrastructure. These costs exceeded the projections that were made in the 2021 settlement rate case.
FPL filed a request for a $1.545-billion increase to the base rate in 2026. Then, an additional $927-million increase is requested in 2027. The utility also seeks to make additional adjustments for the years 2028-2029 through the “Solar and Battery Base rate Adjustment (SoBRA) mechanism”, which is designed to cover costs related with the development of solar power and battery storage.
Some critics argue that the increase in rates will burden customers with an unjustified financial burden. Reports by The Tampa Bay Times According to reports, the new proposed rates would result in “a $9 billion increase of base rates for customers over a period of four years”, causing increased concerns regarding affordability.
Increases for business customers are more evident. Base rates for demand of 50kW could rise by almost 13 percent, or $182. The base rate for larger businesses using 2,000kWh could increase by $9,000 (or roughly 15%).
Sample monthly estimates of 2028 and 2020 were not included in the filings.
Responses to and perspectives on the request for a rate increase
Zayne S. Smith, Senior Director of Advocacy at AARP Florida He shared his concerns Tampa Bay TimesFPL stated, “Rather that finding a balanced solution between customer needs and its own business, FPL prioritized profit margins”. The decision could put households under undue strain, especially those already struggling with the rising cost of living.
FPL’s President and Chief Executive Officer, Armando Piementel The proposal was defended in a 28th February press release. “At FPL our focus is on customers. Every day.” Our balanced plan submitted to PSC will allow FPL to continue making smart investments into the grid, and new generation sources to benefit customers and power our rapidly growing state. FPL is the only utility that offers a combination of low rates, reliability and resilience in the U.S.
Bradley Marshall is a senior attorney at Earthjustice. The potential impact was highlighted: “This could be the biggest rate increase in United States’ history and that is why we are fighting against it.”
Mary Gutierrez, director and scientist for Earth Ethics, Inc. Florida Power & Light, a utility company, has increased rates, causing additional financial hardships for consumers across the state. In a period when families already face financial difficulties due to the rise in cost of living and rising utility costs, this will make it even more difficult for them.
Perspective and Regulatory review of the adjustment to customer base rates
FPSC has been tasked now with a thorough review of FPL’s request. The commission has the right to accept the proposal as it is, modify the plan, or refuse the whole thing. If the rates are approved, they will come into force in 2026. This would affect energy prices for Floridians as well as businesses. The Florida Public Service Commission’s decision will play a crucial role in balancing investment and affordable access to energy.