Florida's electric company plans to raise rates in 2025: What does it mean for consumers?

Starting in January 2025, customers of Florida Power & Light (FPL) are likely to face increases in their monthly bills, as the utility company has requested approval to raise nearly $1.2 billion to cover the costs of restoring power following the passage of four hurricanes through the region.

According to a document submitted to the Florida Public Service Commission, FPL is seeking to recover approximately $1.179 billion over a 12-month period starting in January, due to the impact of Hurricane Idalia, a Category 3 storm that struck Florida in August 2023.

Also, Debby, a Category 1 hurricane, made landfall in August, followed by Helene, a Category 4 hurricane, and Milton, a Category 3 hurricane, which struck the state less than two weeks apart in September and October, all this year.

"The four hurricanes caused over 3 million combined power outages for FPL customers due to damaging winds, storm surges, and, in Milton's case, dozens of unusually powerful and long-track tornadoes," the cited document states.

A report from the Miami Herald indicates that the Public Service Commission would need to approve this recovery of funds for FPL, which is not unusual, as in the past, other utility companies have regularly received such approvals.

The plan proposed by FPL would add approximately $12.02 per month to the bill of a typical residential customer consuming 1,000 kWh. This surcharge is set to last for 12 months, allowing FPL to recover around $1.2 billion in restoration costs and replenish its storm reserve, which was depleted by Hurricane Idalia and exhausted following Hurricane Debby.

According to FPL, the bills will remain competitive nationwide. This recharge allows for the immediate coverage of restoration costs, minimizing the possibility of additional charges accumulating if new storms hit in 2025.

"We are aware that customers bear the costs of restoration, which is why we continue to invest in smart grid technology and storm protection. This prevents many outages, speeds up restoration, and reduces restoration costs, while helping customers recover faster, from when children return to school to when Florida's economy gets back on track," said Armando Pimentel, the president and CEO of FPL, in a statement last Tuesday, emphasizing that his company has worked "tirelessly to quickly restore power to our customers after each of these hurricanes."

The company claims that its investment in smart grid technology and infrastructure improvements has prevented nearly 900,000 power outages and significantly reduced restoration times after each hurricane.

During the presentation before the Public Utilities Commission, FPL estimated the costs to be approximately $811.1 million for Hurricane Milton, $157.8 million for Helene, and $113.5 million for Debby. These expenses would be partially offset by a storm reserve of about $75.4 million that the utility company had available prior to Debby.

Furthermore, the company aims to raise $150 million to replenish this storm reserve, in addition to covering the associated interest costs.