Thursday, June 5, 2008

FPL may zap customers with 16% rate hike

The high costs of fuel will hammer consumers yet again starting in August -- when Florida Power & Light plans to raise electric bills by 16 percent to make up for its soaring fuel costs.

If approved by regulators, the utility said the average homeowner who uses 1,000 kilowatt-hours a month will see his or her monthly bill go from $102.63 to $118.91. Many homeowners with central air conditioning use considerably more than that.

The energy surcharge is allowed by law and is generally considered a quick pass-through by regulators, who are likely to approve the request quickly.

The utility said they have been hit by the same trends as drivers being slammed by higher prices at the pump. The price of natural gas, used to generate half of FPL's electricity, has increased 32 percent, from $8.17 per million BTU in July 2007 to $10.75 per million BTU in May 2008.

Fuel oil, which accounts for eight percent of FPL's power, has gone from $57.81 per barrel in July of 2007 to $89.02 per barrel in May 2008, a 54 percent increase, the utility said.

FPL said it needs $746 million to recover its additional costs through the end of 2008. ''We recognize that higher electric bills will be a burden on our customers,'' said FPL President Armando J. Olivera. ``We never like having to increase the price customers pay for electricity, and it's especially painful during difficult economic times. However, the increase in fuel prices that we have been experiencing is extraordinary. This is not unique to FPL; utilities across the country are experiencing the same issue.''

The Public Service Commission is expected to consider FPL's request at its July 1 meeting. If approved, the increase will be seen in bills from August through December. The company will make another request for 2009.

Source: Miami Herald


Here is what FPL says about all of this: What’s the Fuel Charge?

The fuel charge, or fuel adjustment, reflects the actual cost of the fuel we use to generate your electricity. The charge is a mix of the different fuels used by all of our power plants, including natural gas, oil, nuclear, and coal. The cost of fuel used to make electricity has always been part of your bill, but to help keep you informed, it is now itemized on your bill.

It is important to note that FPL customers pay only actual fuel costs that the company incurs. When fuel prices go up, the additional costs are passed through to customers, and when fuel prices go down, the savings are also passed through to customers. There is no profit of any kind for FPL on fuel.


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