Florida Power & Light Company today announced jointly with Jack Shreve, Florida's Public Counsel, and other parties, an agreement to permanently reduce base rates $250 million a year. This represents a 7-percent base-rate reduction and will benefit all FPL customers by approximately $1 billion over the four-year term of the agreement. In addition, as part of the agreement, FPL will decrease its fuel charge by an additional $200 million during 2002.
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A residential bill will drop from the current $81.63 for 1,000 kilowatt-hours a month, to $76.22 beginning April 15, including base-rate and fuel-clause reductions. In addition, customers will receive in their June bills an expected $84 million refund from revenue sharing under the current agreement. Combining base-rate and fuel-clause reductions, along with the revenue refund, customers will see their bills decline by more than $450 million this year.
The agreement is patterned after the revenue-sharing agreement currently in place that has saved customers approximately $1.3 billion since 1999. Like the current agreement, it features a special rebate to customers if FPL's annual revenues increase above certain threshold levels. The new agreement still must be approved by the Florida Public Service Commission. The parties have asked the Commission to approve the agreement at a meeting on March 22.
"We're pleased to announce this rate reduction agreement that would end this expensive, time-consuming rate review proceeding," said FPL President Paul Evanson. "Our agreement continues progressive, incentive-based regulation for the State of Florida. Through the leadership and dedicated efforts of Jack Shreve and the Office of Public Counsel, we were able to reach an agreement that is a win-win for customers and shareholders: major rate reductions for our customers and incentives for FPL to improve operational efficiencies while still maintaining high levels of reliable service. This resulted after extensive review of our costs to provide electric service," Mr. Evanson said.
Other parties in the rate review who have joined in the agreement are the Florida Industrial Power Users Group, Florida Retail Federation, Lee County, Publix Super Markets, Inc., Thomas P. and Genevieve Twomey and Dynegy Midstream Services, LP. South Florida Hospital & Healthcare Association has not signed the agreement at this time.
Since 1985, when FPL had its last rate increase, the utility has added more than $10 billion in facilities and one million new customers. It has announced plans to invest an additional $2.7 billion to significantly increase its power generating capability during the next two years to ensure FPL can meet the energy needs of customers in the most reliable and cost-effective manner.
In its commitment to first class service, FPL has improved its system reliability, which continues to be well above the national average. Since 1997, FPL decreased the average amount of time customers were without power by nearly 50 percent and improved its restoration time by 30 percent. The number of interruptions per customer in a year has improved 27 percent in four years.
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 $8 billion and a growing presence in more than a dozen states, FPL Group is widely recognized as one of the country's premier power companies. Florida Power & Light Company serves approximately 3.9 million customer accounts in Florida. FPL Energy, Inc., FPL Group's energy-generating subsidiary, is a leader in producing electricity from clean and renewable fuels. Additional information is available on the Internet at www.fpl.com, www.fplgroup.com and www.fplenergy.com.
HIGHLIGHTS OF THE PROPOSED AGREEMENT:
* Base-rate reduction amount: Approximately $1 billion through 2005
($250 million annually)
* Fuel clause reduction: $200 million
* Residential rates: For a standard 1,000 kwh comparison, residential
monthly rates will decline from $81.63 to $76.22 as a result of base
rate and fuel adjustment reductions.
* Effective date: The new rates will be reflected in customers' bills
beginning April 15, 2002, through Dec. 31, 2005.
* Revenue sharing: Like the current agreement, customers will receive
refunds if revenues exceed certain threshold levels.
NOTE: FPL Group will host a conference call with security analysts regarding the proposed rate agreement at 9 a.m. today. Interested parties may listen to the conference call on FPL Group's Internet site, http://www.fplgroup.com/, by following the link provided.
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SOURCE: Florida Power & Light Company