FPL Proposes Plan to Refund Customers Nearly $400 Million in Federal Corporate Tax Savings
Florida Power & Light Company today announced a plan to refund its approximately 5.8 million customers nearly $400 million in savings resulting from the new federal tax law. The savings are the result of a federal production tax credit (PTC) for the development of solar energy centers, which FPL continues to build across Florida as part of the nation’s largest solar expansion that today includes 50 operational sites.
FPL solar energy centers that began serving customers in 2022 are retroactively eligible for the PTCs. To quickly provide these savings to customers, FPL is planning a one-time, $25 million refund in the month of January 2023. Also starting next year and through 2025, the company plans to phase in nearly $360 million in additional federal tax savings for future planned solar projects.
“We recognize that all Floridians are continuing to deal with the challenges of record-high inflation and increased costs of everyday goods and services,” said FPL Chairman and CEO Eric Silagy. “As we continue working to operate even more efficiently to drive costs out of our business, federal tax savings will begin to provide some relief to customers next year as high natural gas prices continue to put upward pressure on bills.”
FPL’s 2022-2025 rate agreement, which was unanimously approved last year by state regulators and signed by the state’s consumer advocate and other organizations, includes a provision that accounts for changes to federal tax law. This mechanism will facilitate the quick implementation of bill adjustments over the remainder of FPL’s rate agreement.
Despite widespread support for the comprehensive rate agreement, which ensures FPL customers pay by far the lowest rates among utilities serving more than 75% of Floridians, some groups earlier this year appealed the Florida Public Service Commission’s final order to the Florida Supreme Court.
“Ironically, these self-proclaimed advocacy groups are now effectively asking Florida’s highest court to tear up the very rate agreement that will soon quickly enable customers to begin saving hundreds of millions of dollars on their electric bills over the next three years, including a multi-million-dollar lump sum refund to start the new year,” Silagy said.
As a result of federal tax savings, FPL projects its typical 1,000-kWh residential customer bill to be $126.65 in January 2023, by far the lowest among Florida’s investor-owned utilities, which serve more than 75% of the state. The company projects its typical 1,000-kWh residential customer bill in Northwest Florida, which includes a temporary hurricane surcharge for past Northwest Florida storms, to be $156.85. All bills would increase slightly in February in the absence of the one-time refund due to an approved base rate adjustment and higher expected fuel costs in 2023, but still reflect lower base rates as a result of federal tax savings.
FPL’s 2023 bill projections do not include higher-than-projected fuel costs in 2022, which the company has paid but are not yet reflected in bills. FPL does not profit from the fuel it purchases to generate electricity at power plants; it passes those costs directly to customers. The company continues to monitor the still highly volatile fuel market to get a more accurate assessment of actual costs for 2022, with the goal of easing the impact for customers. FPL expects to file a mid-course fuel correction by the end of this year or early next year, which will result in an additional adjustment to rates in 2023.
Driving down costs while supporting customers
While natural gas prices have increased sharply and the fuel market remains volatile, FPL continues to improve the fuel efficiency of its power plants and invest in low-cost renewable energy that is reducing the fuel portion of customer bills. Since 2001, the modernization of FPL’s power plant fleet has saved customers more than $12 billion in fuel the company did not need to buy, which equates to approximately $4.50 per month, or $55 per year, on the typical 1,000-kWh FPL residential customer bill. In fact, FPL’s 50 solar energy centers helped customers avoid more than $200 million in fuel costs in just the first seven months of 2022 alone – which equates to roughly $3 per month on the typical 1,000-kWh FPL residential customer bill.
FPL is committed to reducing and eventually eliminating the fuel portion of customer bills, but it will take time. As natural gas costs are increasingly expensive, unstable and hard to predict, the company is working to reduce and, by no later than 2045, eliminate natural gas from regular operations – and the fuel portion of customer bills along with it.
FPL has long been committed to helping customers find new ways to reduce their energy use, which is the best way to save on electric bills. For energy savings tips that can lower residential bills by around $30 a month during the hottest months of the year, visit FPL.com/WaysToSave. Customers struggling to pay their bill can call FPL’s dedicated customer service team who can work with them to identify payment arrangements and available assistance at the local, state and federal level.