AARP joins fight to overturn PSC-approved settlement in FPL rate case

Tallahassee, Fla. – AARP has filed a “friend of the court” brief in a state Supreme Court case challenging a decision by the state Public Service Commission (PSC) approving a contested settlement giving Florida Power & Light (FPL) a $354-million rate increase -- far greater than it even asked for in its petition.

In the filing, AARP asked the court to require the PSC to ensure that the rates are fair, just, and reasonable, as the law requires.  AARP’s brief argued that the shockingly high rate increase must be explained because the evidence in the case indicated the rates should have decreased, not increased. 

FPL sought an increase by filing a public notice describing the details of the increase it requested.  The state Office of Public Counsel, the state’s official consumer representative at the PSC, intervened in the case and submitted evidence showing that the rates are already too high based on current economic conditions.  Just before the hearing in the case, FPL and several commercial and industrial ratepayers submitted a proposed settlement that awards a rate increase worth hundreds of millions more than FPL even asked for.  It also shifts more of the burden for paying the rates onto residential ratepayers. 

The Office of Public Counsel objected, but the PSC approved the settlement anyway. The Office of Public Counsel urged the PSC to evaluate the evidence before it and decide only those matters included in the public notice.  Public Counsel J.R. Kelly argued that the PSC is required to start a separate ratemaking proceeding to address the many new matters included in the settlement. 

Kelly also warned that it is unfair to shift a greater burden for the rates onto the residential ratepayers, especially since the increase is offset by a decrease for the commercial and industrial ratepayers.  These large power users initially agreed with the Public Counsel that the rates should be decreased overall. But they agreed to the significant rate increase following secret settlement negotiations that granted them significant benefits at the expense of residential rate payers.

AARP Florida Advocacy Manager Jack McRay said AARP is alarmed by both the huge rate increase and that PSC violated its own rules and the law when it approved the settlement.  AARP filed the brief to ensure that the PSC follows rules put in place to protect against unfair utility rates now and into the future.  Senior Attorney Julie Nepveu noted that the PSC performed an about-face in awarding cost recovery without asking any questions and eliminated important oversight that has saved ratepayers hundreds of millions of dollars.   “Unless ratepayers can trust that the FPSC will follow its own rules and carry out its obligation to set fair, just, and reasonable rates, they will be forced to intervene in many more rate cases in order to preserve their interests,”  AARP said in its brief.  “If they do not intervene, they risk that the FPSC, as it did here, will approve outrageous settlements entered into during secret negotiations that increase rates based on  matters that are required to be, but were not the subject of public notice.”