FPL’s fuel, purchase power and other clauses approved for ’05

JUNO BEACH, Fla., Nov. 10, 2004 (BUSINESS WIRE) — Florida Power & Light Company said the Florida Public Service Commission has approved fuel and other clause adjustments that together will increase a typical 1,000 kilowatt-hour residential customer bill by $3.49 — or four percent — beginning Jan. 1, 2005, to $89.92. FPL does not make a profit on fuel as the cost is a pass-along reflected in customer bills.

An agreement between FPL and the Office of Public Counsel — and approved by the PSC – involving an alternate method of recovering approximately $38 million in Nuclear Regulatory Commission-mandated incremental security enhancements at the company’s two nuclear power plants has reduced the total amount of the clause adjustments by 43 cents from what FPL had projected in its original filing in September.

For small commercial customers, such as bank branch offices, small retail stores, etc., the bill will increase about 4.2 percent, while for large industrial customers, such as FPL’s largest manufacturing and mining customers, the increase will approximate 6.6 percent. The percentage of increase is higher for these customers since fuel makes up a larger portion of the customer’s overall bill.

Fuel and purchase power clauses combined will make up approximately 53 percent of a typical 1,000 kilowatt-hour residential bill. Other clauses included in the non-base rate portion of a customer bill are energy conservation and environmental cost recovery, which make up approximately two percent. FPL’s base rates, on the other hand, which include the costs of producing and delivering electricity to our customers, account for only 45 percent.

Since 1999, FPL has been able to reduce its base rates for electricity by 15 percent. By reducing these non-fuel costs, the company has helped to offset somewhat the doubling of fuel costs appearing on the customers’ bills over that same period.

The market prices of oil and gas prices actually have almost tripled since 1999, but because FPL uses a diversity of fuel sources — including nuclear and purchased power from coal-fired generators — it has been able to hold down costs for its customers. FPL has taken a number of additional steps to mitigate the impact of fuel price volatility, such as minimizing the use of higher-priced natural gas by “fuel-switching” at power plants capable of burning both oil and natural gas; selling excess generation on the market and returning profits to customers through the fuel clause, and utilizing fuel hedging to provide some insurance against spikes in fuel prices in the future.

FPL expects its total fuel costs for 2005 to top $4 billion, up from $3.7 billion in 2004, a $339 million differential attributable to continuing increases in oil and natural gas prices.

About FP&L [ www.FPLEnergy.com and www.FPL.com ]

Florida Power & Light Company is the principal subsidiary of FPL Group, Inc., nationally known as a high quality, efficient and customer-driven organization focused on energy-related products and services. With annual revenues of more than $9 billion and a growing presence in 26 states, FPL Group is widely recognized as one of the country’s premier power companies. Florida Power & Light Company serves more than 4.2 million customer accounts in Florida. FPL Energy, LLC, FPL Group’s wholesale electricity generating subsidiary, is a leader in producing electricity from clean and renewable fuels.

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  • The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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