JUNO BEACH, Fla., April 27, 2012 /PRNewswire/ -- Florida Power & Light Company today updated projections for its 2013 typical 1,000-kWh residential customer bill based on revised estimated fuel prices, costs for ongoing construction of upgrades at nuclear facilities, and adjusted data related to its requested base rate increase.
In March, FPL filed a request for an increase of approximately $7 per month or 23 cents a day on the base rate portion of a typical 1,000-kWh residential customer bill in 2013 to pay for increased costs of doing business and for a new, high-efficiency natural gas power plant near Cape Canaveral, Fla. Offset in part by adjustments to fuel and other charges, the actual 2013 net increase on a typical customer's total bill was projected in March to be $2.48 a month or about 8 cents a day.
However, the updated figures filed today reduce the projected net increase on a typical customer bill to $1.41 a month or about 5 cents a day in 2013.
FPL's typical 1,000-kWh residential customer bill, currently $94.62, is the lowest of the state's 55 electric companies and well below the national average. In 2013, with a projected total typical bill of $96.03, FPL would continue to be the lowest in Florida and well below the national average, based on publicly available rate data.
This projected net bill increase of $1.41, or about 1.5 percent on the total bill, is down from the $2.48 a month increase previously forecast. This decrease is primarily because of lower natural gas prices in conjunction with FPL's ongoing initiative to construct and convert power plants to more fuel-efficient, natural gas facilities. It also accounts for a reduction in the nuclear cost recovery charge, an anticipated increase in capital costs related to its nuclear upgrade projects, and other bill adjustments compared with the current total bill.
Compared with 2006, FPL's typical bill today is 13 percent less and, based on the latest projection, would still be more than 11.5 percent less in 2013. In addition, customer base rates have been effectively frozen since 2010.
"We understand that there is never a good time for an increase, but our investments in natural gas and other innovative technologies along with our continuous focus on operating efficiently have kept our typical residential customer bills the lowest in Florida and our reliability among the best nationally. We believe this disciplined, clean-energy approach will help keep service strong and bills low for years to come," said FPL President Eric Silagy.
FPL's Typical Customer Bill
Jan. 2012 (Current)
Increase of $7.09/month
or about 23 cents/day
Decrease of $7.71/month
Nuclear Upgrades Base Rate
included in base
Increase of $2.24/month
Nuclear Cost Recovery Clause
Decrease of $0.52/month
Increase of $0.31/month
Net increase beginning
*Figures for 2013 are projections as of April 27, 2012. **Other charges include the company's latest estimates for non-nuclear
Items Included in Updated 2013 Bill Projection
As part of the ongoing base rate proceeding, FPL made an informational filing today with the Florida Public Service Commission (PSC) regarding revised calculations that are intended to correct an allocation error identified in the company's March 19, 2012, filing. The correction does not change the overall revenue requirements request of $690.4 million but does adjust the allocation of the request among the various rate classes. For the residential customer class, the 1,000-kWh base rate increase would change from $6.97 a month, as previously filed, to $7.09 a month; and for most commercial and industrial customer classes, the correction would result in a slight decrease.
In addition to the adjusted base rate increase, FPL's updated 2013 typical 1,000-kWh residential customer bill estimate also includes revised estimates for projected fuel costs; cost recovery to support nuclear investments; and adjustments related to the projected in-service costs of uprate investments at FPL's St. Lucie and Turkey Point nuclear power plants.
FPL has invested heavily in clean, efficient natural gas power plants in recent years. This strategy combined with lower natural gas prices is driving significant savings for customers. Based on the most recent cost projections for natural gas and other fuels, FPL now expects to be able to reduce its 1,000-kWh residential customer fuel charge by nearly $8 a month in 2013. Compared with FPL's current fuel charge, this would be a decrease of more than 20 percent and would be the company's lowest fuel charge in more than a decade.
FPL's formal forecast of 2013 fuel costs will be filed with the PSC later this year along with other components of a customer's bill such as environmental compliance and energy conservation costs.
Today, as part of the PSC's annual review process, FPL filed testimony and data that provides a detailed update of the company's nuclear investments in support of its 2013 request for certain statutorily allowed costs to be recovered through the nuclear cost recovery clause.
FPL is requesting nuclear cost recovery of approximately $151 million in 2013, down from $196 million in 2012. If approved by the PSC, this reduction would translate into a $0.52 decrease per month in the nuclear cost recovery charge for a typical 1,000-kWh residential customer – from $2.20 today to $1.68 in 2013.
Nuclear cost recovery supports FPL's ability to conduct two ongoing nuclear investments: the uprate project to upgrade and expand the capacity of the company's nuclear units at St. Lucie and Turkey Point and the continued effort to seek state and federal licensing that would create the opportunity to build two new nuclear units at FPL's existing Turkey Point site in the future.
Approximately $130 million of FPL's 2013 nuclear cost recovery request – nearly 90 percent of the total $151 million – is for the uprate project, which is already delivering tangible benefits for FPL customers. On track to be fully completed in early 2013, FPL now expects the nuclear uprate project to deliver a total of 490 megawatts of new, cost-effective, zero-emissions power-generating capacity. This is higher than the previous estimate of 450 megawatts of new capacity.
FPL's updated projection for the total cost of the uprate investment is approximately $2.95 billion to $3.15 billion, which is an increase from the previous nonbinding cost estimate of $2.32 billion to $2.48 billion. The higher cost is primarily driven by additional labor and engineering necessary to support Nuclear Regulatory Commission requirements and design evolution as well as construction and implementation logistics. Despite the increase, completion of the uprate project is still solidly cost-effective for customers. Based on the latest projected price of fuel and other factors, the investment is projected to save customers an estimated $3.8 billion on fossil fuel such as coal, natural gas and foreign oil over its operating lifetime.
As upgraded equipment begins to be used to generate electricity for customers, those costs begin to be recovered through the base rate with PSC approval and fossil fuel savings flow through the fuel charge. Of the 490 megawatts expected to be added, 31 megawatts have entered service to date; and in 2012, approximately $0.25 of a typical residential customer's base rate is due to completed components of the project. The fossil fuel cost savings from these new nuclear megawatts reduce the customer fuel charge.
In 2012, an estimated 336 new megawatts will be added to the 31 uprate megawatts already serving customers as FPL completes the upgrades of three of its four nuclear reactors. The fourth and final reactor upgrade will be completed in early 2013 and will provide the final 123 megawatts of the project. As these additional megawatts begin benefiting customers, they will increase base rate revenue requirements and reduce fossil fuel costs. The company's current estimate of the impact of the new megawatts is included in the overall net bill estimate announced today; however, these figures will not be finalized until late in 2012 when they are expected to be submitted for PSC approval.
The remaining approximately $20 million of the total $151 million nuclear cost recovery request for 2013 is to pay for expenses associated with ongoing work in pursuit of the necessary state and federal licenses that would create the opportunity to build two new nuclear units at the existing Turkey Point site.
For more information, FPL customers can visit www.FPL.com/answers, which features frequently asked questions, details about FPL's base rate request and an online bill calculator that shows residential customers how much their 2013 bills would be based on their actual kilowatt-hour usage and the company's latest projections.
Florida Power & Light Company
Florida Power & Light Company is the largest rate-regulated electric utility in Florida and serves the third largest number of customers of any electric utility in the United States. FPL serves approximately 4.6 million customer accounts and is a leading Florida employer with approximately 10,000 employees as of year-end 2011. During the five-year period ended December 31, 2011, the company delivered the best service reliability among Florida investor-owned utilities, while its typical residential customer bills, based on data available in December 2011, are about 25 percent below the national average. A clean energy leader, FPL has one of the lowest emissions profiles and one of the leading energy efficiency programs among utilities nationwide. FPL is a subsidiary of Juno Beach, Fla.-based NextEra Energy, Inc. (NYSE: NEE). For more information, visit www.FPL.com.
Cautionary Statements And Risk Factors That May Affect Future Results
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical facts, but instead represent the current expectations of NextEra Energy, Inc. (NextEra Energy) and Florida Power & Light Company (FPL) regarding future operating results and other future events, many of which, by their nature, are inherently uncertain and outside of NextEra Energy's and FPL's control. Forward-looking statements in this press release include, among others, statements concerning the effects of FPL's rate request. In some cases, you can identify the forward-looking statements by words or phrases such as "will," "will likely result," "expect," "anticipate," "believe," "intend," "plan," "seek," "aim," "potential," "projection," "forecast," "predict," "goals," "target," "outlook," "should," "would" or similar words or expressions. You should not place undue reliance on these forward-looking statements, which are not a guarantee of future performance. The future results of NextEra Energy and FPL are subject to risks and uncertainties that could cause their actual results to differ materially from those expressed or implied in the forward-looking statements. These risks and uncertainties include, but are not limited to, the following: effects of extensive regulation of NextEra Energy's and FPL's business operations; inability of NextEra Energy and FPL to recover in a timely manner any significant amount of costs, a return on certain assets or an appropriate return on capital through base rates, cost recovery clauses, other regulatory mechanisms or otherwise; impact of political, regulatory and economic factors on regulatory decisions important to NextEra Energy and FPL; risks of disallowance of cost recovery by FPL based on a finding of imprudent use of derivative instruments; effect of reduction or elimination of existing government support policies on demand for generation from renewable energy projects of NextEra Energy Resources, LLC (NEER); impact of new or revised laws, regulations or interpretations or other regulatory initiatives on NextEra Energy and FPL; effect on NextEra Energy and FPL of potential regulatory action to broaden the scope of regulation of OTC financial derivatives and to apply such regulation to NextEra Energy and FPL; capital expenditures, increased cost of operations and exposure to liabilities attributable to environmental laws and regulations applicable to NextEra Energy and FPL; effects on NextEra Energy and FPL of federal or state laws or regulations mandating new or additional limits on the production of greenhouse gas emissions; exposure of NextEra Energy and FPL to significant and increasing compliance costs and substantial monetary penalties and other sanctions as a result of extensive federal regulation of their operations; effect on NextEra Energy and FPL of changes in tax laws and in judgments and estimates used to determine tax-related asset and liability amounts; impact on NextEra Energy and FPL of adverse results of litigation; effect on NextEra Energy and FPL of failure to proceed with projects under development or inability to complete the construction of (or capital improvements to) electric generation, transmission and distribution facilities, gas infrastructure facilities or other facilities on schedule or within budget; impact on development and operating activities of NextEra Energy and FPL resulting from risks related to project siting, financing, construction, permitting, governmental approvals and the negotiation of project development agreements; risks involved in the operation and maintenance of electric generation, transmission and distribution facilities, gas infrastructure facilities and other facilities; effect on NextEra Energy and FPL of a lack of growth or slower growth in the number of customers or in customer usage; impact on NextEra Energy and FPL of severe weather and other weather conditions; risks associated with threats of terrorism and catastrophic events that could result from terrorism, cyber attacks or other attempts to disrupt NextEra Energy's and FPL's business or the businesses of third parties; risk of lack of availability of adequate insurance coverage for protection of NextEra Energy and FPL against significant losses; risk to NEER of increased operating costs resulting from unfavorable supply costs necessary to provide NEER's full energy and capacity requirement services; inability or failure by NEER to hedge effectively its assets or positions against changes in commodity prices, volumes, interest rates, counterparty credit risk or other risk measures; potential volatility of NextEra Energy's results of operations caused by sales of power on the spot market or on a short-term contractual basis; effect of reductions in the liquidity of energy markets on NextEra Energy's ability to manage operational risks; effectiveness of NextEra Energy's and FPL's hedging and trading procedures and associated risk management tools to protect against significant losses; impact of unavailability or disruption of power transmission or commodity transportation facilities on sale and delivery of power or natural gas by FPL and NEER; exposure of NextEra Energy and FPL to credit and performance risk from customers, hedging counterparties and vendors; risks to NextEra Energy and FPL of failure of counterparties to perform under derivative contracts or of requirement for NextEra Energy and FPL to post margin cash collateral under derivative contracts; failure or breach of NextEra Energy's and FPL's information technology systems; risks to NextEra Energy and FPL's retail businesses of compromise of sensitive customer data; risks to NextEra Energy and FPL of volatility in the market values of derivative instruments and limited liquidity in OTC markets; impact of negative publicity; inability of NextEra Energy and FPL to maintain, negotiate or renegotiate acceptable franchise agreements with municipalities and counties in Florida; increasing costs of health care plans; lack of a qualified workforce or the loss or retirement of key employees; occurrence of work strikes or stoppages and increasing personnel costs; NextEra Energy's ability to successfully identify, complete and integrate acquisitions; environmental, health and financial risks associated with NextEra Energy's and FPL's nuclear generation facilities; liability of NextEra Energy and FPL for significant retrospective assessments and/or retrospective insurance premiums in the event of an incident at certain nuclear generation facilities; increased operating and capital expenditures at nuclear generation facilities of NextEra Energy or FPL resulting from orders or new regulations of the Nuclear Regulatory Commission; inability to operate any of NEER's or FPL's nuclear generation units through the end of their respective operating licenses; liability of NextEra Energy and FPL for increased nuclear licensing or compliance costs resulting from hazards posed to their nuclear generation facilities; risks associated with outages of NextEra Energy's and FPL's nuclear units; effect of disruptions, uncertainty or volatility in the credit and capital markets on NextEra Energy's and FPL's ability to fund their liquidity and capital needs and meet their growth objectives; inability of NextEra Energy, FPL and NextEra Energy Capital Holdings, Inc. to maintain their current credit ratings; risk of impairment of NextEra Energy's and FPL's liquidity from inability of creditors to fund their credit commitments or to maintain their current credit ratings; poor market performance and other economic factors that could affect NextEra Energy's and FPL's defined benefit pension plan's funded status; poor market performance and other risks to the asset values of NextEra Energy's and FPL's nuclear decommissioning funds; changes in market value and other risks to certain of NextEra Energy's investments; effect of inability of NextEra Energy subsidiaries to upstream dividends or repay funds to NextEra Energy or of NextEra Energy's performance under guarantees of subsidiary obligations on NextEra Energy's ability to meet its financial obligations and to pay dividends on its common stock; and effect of disruptions, uncertainty or volatility in the credit and capital markets of the market price of NextEra Energy's common stock. NextEra Energy and FPL discuss these and other risks and uncertainties in their annual report on Form 10-K for the year ended December 31, 2011 and other SEC filings, and this press release should be read in conjunction with such SEC filings made through the date of this press release. The forward-looking statements made in this press release are made only as of the date of this press release and NextEra Energy and FPL undertake no obligation to update any forward-looking statements.
SOURCE Florida Power & Light Company
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