TALLAHASSEE, Fla. — Buoyed by lower-than-expected natural gas costs, Florida Power & Light plans to slash May electric bills as customers grapple with the novel coronavirus.
Utilities are required to pass along savings to customers when power-plant fuel costs drop, but those savings typically show up on bills over a series of months. FPL’s plan, announced Monday, would lump together fuel savings this year into a one-time bill reduction in May.
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The plan needs approval from the Florida Public Service Commission, and a detailed proposal is expected to be filed with the regulatory panel this week.
“Traditionally, our regulators expect these types of savings to be spread out over the balance of the year,” FPL President and Chief Executive Officer Eric Silagy said in a prepared statement Monday. “However, challenging times call for exceptional measures. I believe this one-time bill decrease is the most effective way to infuse customers with much-needed money as we all navigate through this difficult and unsettling time together.”
FPL said residential customers who use 1,000 kilowatt hours of electricity a month would see their bills go from the current $96.04 a month to about $74 in May. Such bills would return to a more-normal $96.43 in June, which also would reflect a small charge that had previously been planned for solar-energy projects.
Utilities typically use 1,000-kilowattt hour residential bills as a benchmark, though electricity use varies widely. Also, FPL’s business customers would receive a one-time savings in May, though commercial rates are designed differently than residential rates.
The FPL plan is similar to a proposal that Tampa Electric Co. filed at the Public Service Commission last week. Tampa Electric, which has about 780,000 customers in Hillsborough County and nearby areas, pointed to a nearly $131 million “over-recovery” from customers expected this year because of low natural-gas costs.
The proposal would pass along chunks of fuel-cost savings to Tampa Electric customers from June through August and then smaller savings through the rest of the year. That would be done by giving customers credits on their bills from June through August for over-recovered amounts. The savings during the rest of the year would reflect the remaining projected lower fuel costs.
Tampa Electric has asked the Public Service Commission to consider the proposal during a May 5 meeting and said it could help provide bigger savings this summer as customers struggle with the effects of the coronavirus.
“Tampa Electric hopes to aid customers during this unique time in our history, given the pandemic, by returning the over-recovery amount more quickly than would typically be done,” the filing said.
Each year, utilities project their fuel costs, with those projected expenses then passed along to customers in the subsequent year. If fuel costs are far lower --- or far higher --- than expected, they can be adjusted mid-year on customers’ bills. Utilities are not supposed to make profits on fuel costs.
