Power Struggle: FP&L's Proposed Rate Hike Tests Regulators, Households

TOPSHOT - First responders in the water outside an apartment complex that was flooded from and ... More overflowing creek due to Hurricane Milton on October 10, 2024 in Clearwater, Florida. At least four people were confirmed killed as a result of two tornadoes triggered by Hurricane Milton on the east coast of the US state of Florida, local authorities said Thursday. (Photo by Bryan R. SMITH / AFP) (Photo by BRYAN R. SMITH/AFP via Getty Images)
When Florida Power & Light requested a nearly $9 billion rate increase over four years, it landed with a thud—threatening to add even more financial strain to already burdened Florida households, many of whom have seen bills rise by 20% in the last five years. However, the utility's PR machine has kicked into high gear to explain its position: it must fund grid modernization, clean energy expansion, and infrastructure upgrades.
There's no question FP&L must modernize its grid and expand its clean energy portfolio. But affordability matters. Regulators must find a middle ground—approving some rate increases while capping excessive profits, mandating transparency, and requiring support for vulnerable customers.
'There's no reason we should have the highest return on equity in the nation. It's a tax increase on Floridians because you don't have a choice but to pay your electric bill. We should not have some of the highest electricity bills in the nation,' because consumers run their air conditioners much of the year, says Bradley Marshall, senior attorney with Earthjustice, in a virtual conversation.
In February, FP&L—the wholly owned subsidiary of NextEra Energy—asked the Florida Public Service Commission to grant it a $8.961 billion rate hike from January 1, 2026, to December 31, 2029. A household using the average 1,200 kilowatt-hours per month would see its monthly bill rise, initially, by $10 in 2026—a number that would continue growing through 2029.
Zane Smith, senior director for the AARP in Florida, told me that escalating energy bills force seniors into a cruel dilemma: choosing between running their air conditioners and filling prescriptions or buying groceries. Many are on a fixed income, unable to pay higher energy bills—something that could lead to heat-related illnesses or even death.
Part of the problem is that the utility seeks an 11.9% return on equity, notably higher than the national industry average of 9.6%. The company argues that this ensures financial stability and attracts investors. However, Florida residents have already seen their electric bills rise by 20% over the last five years. Indeed, some analysts argue that FP&L's rate request is more about improving shareholder value than servicing the state's electricity customers.
'This massive rate increase is not because of investments in renewable energy, but because of FP&L's continued need to increase the return on equity for their shareholders,' says Brooke Ward, senior Florida organizer for Food and Water Watch, in a chat. 'It's also because hundreds of millions of dollars are invested in fossil fuels. When we look at our moderate-income families in urban areas, a quarter of those currently have an energy burden of 12% or more, which means they are in energy poverty.'
Emergency response workers await deployment orders after Hurricane Milton in St. Petersburg, ... More Florida, US, on Friday, Oct. 11, 2024. Hurricane Milton's devastating path across Florida has left at least 10 dead, millions without power, and destroyed homes and crops, as authorities warn it could take days to assess the full extent of the damages. Photographer: Tristan Wheelock/Bloomberg
That's why the Florida Public Service Commission is in the eye of the storm. The commission, though, has a track record of greenlighting steep rate hikes, raising concerns about the public's interest. Consider: the Florida Supreme Court previously questioned the commission's approval of a $4.8 billion rate increase in 2021, suggesting that regulatory oversight might be lacking.
Specifically, Florida Supreme Court Justice Carlos Muñiz lambasted the public service commission, saying it lacked transparency and didn't adequately justify why it granted the last hike—after the commission's staff advised against it. 'The PSC is a black box,' he told the Florida press. 'It's supposed to be the opposite of a black box.'
'The Florida Public Service Commission is really captive to the utilities,' which are significant participants in the state's political arena, making huge donations to elected officials and sponsoring charitable events, adds Susan Glickman, vice president of policy with the Clio Institute, in a talk with me.
Utilities must prioritize investing in critical projects that benefit the public. FP&L must deliver reliable, affordable electricity—even as it faces mounting challenges from climate extremes and population growth. That's where grid modernization comes in: a smart grid can reroute power during congestion and prevent outages before they happen.
To that end, the utility claims its distribution reliability is 59% better than the national average. It also stated that its investments in technology enabled it to prevent 2.7 million customer outages in 2024, when Hurricanes Debby, Helene, and Milton struck. This track record has been achieved as it has added 275,000 customers since 2021 and is set to add 335,000 more through 2029.
According to the U.S. Energy Information Administration, natural gas accounts for 73% of the utility generation mix, nuclear for 11%, and solar for 14%.
'First, customers don't open up an ROE; they open up an electricity bill, which is expected to remain well below the national average even with the proposed increase. Ultimately, ROE is about our ability to obtain capital to continue making smart investments on behalf of customers,'Andrew Sutton, spokesperson for FP&L, told me.
'Planning for the future and investing in the grid now actually reduces cost over time for everyone,' FP&L's CEO Armando Pimentel, added, on FP&Ls site.
FP&L's rate request is a tricky balancing act—at the intersection of grid modernization, shareholder returns, and customers' bills. It is known for being reliable, but it still heavily depends on fossil fuels.
The utility's nearly $9 billion rate hike request is, therefore, a tough sell—especially with such a high return on equity. While investment and upgrades are necessary, the company shoots for the moon. Regulators should pare back the return, require cost transparency, and ensure low-income protection. The overarching goal is to support a resilient grid without overburdening Floridians.

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