41 RESOLUTION NO. ___ _
2
3 A Resolution of the City of South Miami, Florida, opposing
4 the proposed base rate increase by Florida Power and
5 Light; authorizing the mayor to file this resolution with the
6 Florida Public Service Commission; providing for
7 distribution by the City Clerk.
8
9 WHEREAS, Florida Power and Light ("FPL") provides electricity within the City
1 0 of South Miami ("City"), and the City and its residents have no alternative but to purchase
11 services from FPL; and the City government purchases electricity from FPL to power City
12 Hall and numerous municipal buildings in order to provide services to residents; and
l3
14 WHEREAS, the residents and businesses of the City must also purchase electric
15 service from FPL; and
16
17 WHEREAS, the City, its residents and businesses continue to face a depressed
18 economy with limited resources wherein jobs are being lost, incomes and revenues are
19 static or declining, and home mortgages are being foreclosed, requiring the City, its
20 residents and businesses to live within their means and budget accordingly; and
21
22 WHEREAS in March 2012, FPL proposed a 16% base rate hike in order to ensure
23 up to a 11.5% return on equity for its shareholders; and
24
25 WHEREAS, FPL benefits from more pass-through cost recovery mechanisms
26 than any other regulated utility in the United States of America, including the Storm Cost
27 Recovery Surcharge, the Fuel Cost Recovery Clause pass-through, the Environmental
28 Cost Recovery Clause pass-through, the Capacity Cost Recovery Clause pass-through, the
29 Conservation Cost Recovery Clause pass-through, and the Nuclear Cost Recovery Clause
30 pass-through, which pass-through mechanisms increase FPL's current cash flow without
31 the scrutiny employed in a traditional rate case; and
32
33 WHEREAS, currently, approximately 52% of the rates paid by FPL customers are
34 paid pursuant to these cost recovery mechanisms instead of through base rates; and
35
36 WHEREAS, in 2009 the Florida Public Service Commission ("PSC") awarded
3 7 FPL only 7% of its requested base rate relief, yet FPL continued in 2010 and 2011 to
38 report substantial earnings growth, including an increase of 14% in 2010 and 13% in
39 2011; and
40
41 WHEREAS, October 4, 2010, the PSC Staff recommended that the PSC order
42 FPL to hold $400 million for possible refund to customers and that the PSC investigate
43 over earning by the company, however the customers never received a refund; and
44
45 WHEREAS, the proposed rate increases will adversely affect the residents of the
46 City and further strain limited resources.
47
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NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY
COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA, THAT:
Section 1. The foregoing "WHEREAS" clauses are hereby ratified as true and
correct and are incorporated herein by this reference.
Section 2. The City hereby objects to and opposes the Public Service
Commission ("PSC") approving FPL's request for a base rate increase.
Section 3. The Mayor, or an alternate member of the City Commission if the
Mayor is unavailable, is authorized on behalf of the City to file this Resolution with the
PSC and present this Resolution opposing the rate increase at any public meeting,
conference or hearing, including those scheduled for the purpose of discussing or
considering any matters under consideration in PSC docket number 120015-EI
Section 4. The City Clerk is hereby directed to distribute a copy of this
resolution via mail to the PSC Clerk, Attention: Docket 120015-EI, 2540 Shumard Oak
Blvd., Tallahassee, FL 32399-0850, and via electronic mail to the PSC at
contact@psc.state.fl.us
Section 5. If any section, subsection, sentence, clause, phrase, or portion of
this Resolution, or application hereof, is for any reason held invalid or unconstitutional by
any Court, such portion or application shall be deemed a separate, distinct, and
independent provision, and such holding shall not affect the validity of the remaining
portions or application hereof.
Section 6.
repealed.
All Resolutions made in conflict with this Resolution are hereby
Section 7. This Resolution shall be effective immediately upon its adoption.
Passed and adopted this __ day of ______ , 2012.
ATTEST:
CITY CLERK
READ AND APPROVED AS TO FORM,
LANGUAGE, LEGALITY AND
SUFFICIENCY:
CITY ATTORNEY
Page 2 of2
APPROVED:
Mayor
COMMISSION VOTE:
Mayor Stoddard:
Vice Mayor Liebman:
Commissioner Newman:
Commissioner Harris:
Commissioner Welsh:
Dr. Hector Mirabile
Manager, City of South Miami
6130 Sunset Drive
South Miami, Florida 33143
Dear Dr. Mirabile:
I am writing to make you aware that today we filed the required petition, testimony and
data supporting our request for a January 2013 change in base rates.
With the proposed base rate increase and the latest estimates for fuel and other
components of electric service, FPL's typical 1 ,ODD-kWh residential bill is projected to
increase by about $2.48 a month, or about 8 cents per day compared with today's bill.
This includes the proposed base rate increase of $6.97 a month, or about 23 cents a
day, offset in part by an estimated $4.49 a month net decrease in other components of
a typical 1 ,ODD-kWh residential customer bill in 2013.
Most small businesses, which comprise more than 80 percent of all commercial
customers in FPL's territory, would see little change in their bills in 2013. In fact, many
would actually see a net decrease on their bills based on currently projected reductions
in the fuel charge and other bill components, more than offsetting the base rate
increase.
The increase would not take effect until 2013, and we expect that, even with the
change, our customer bills will still be the lowest in the state and well below the national
average.
In fact, from 2006 to 2012, FPL's 1,OOO-kVv'h residential customer bill has decreased 13
percent. FPL's business customer bills have decreased, on average, 14 percent during
the same time period.
Also today we launched a new, online calculator at www.FPL.com/answers so that
residential customers can see the impact on their bills of the company's requested rate
adjustment. Business customers also will find updated information on this site.
Key elements underlying the company's request include:
• The need to address the impact of the accelerated amortization of non-cash surplus
depreciation, which was part of a 2010 base rate case settlement and which was a
temporary solution to avoid a base rate increase
• Cost recovery for the new Cape Canaveral Next Generation Clean Energy Center,
which will use 33 percent less fuel per megawatt-hour of power generated
• The impact of inflation on the cost of many materials and products needed to provide
affordable, reliable power
Florida Power & Light Company
4200 West Flagler Street, Miami, FL 33134
Dr. Hector Mirabile
March 19, 2012
Page 2 of2
• The anticipated addition of nearly 100,000 new customers between the end of 2010
and the end of 2013
• A proposed adjustment to an 11.25 percent midpoint return on equity, which is within
the range of currently allowed ROEs for other investor-owned utilities in the state.
We know there is never a good time for a rate increase, and we are particularly mindful
that the economy remains uncertain. We've worked hard to minimize the required
increase, and we're committed to working equally hard to make sure our customers
continue to have the lowest electric bills in the state, reliability that is among the best in
the country, and top-notch customer service. Clean, low-cost, high-quality electric
service is a competitive advantage for our customers and our state. I have enclosed the
news release issued today for your review.
Please click here httQ:llwww.TQI.com/customer/efficiEmcy:/common/pdf/newsrelease2.Qdf
to read the news release we issued today on this subject.
You have my commitment that we will continue to communicate with you throughout the
rate-making process. Our website, www.FPL.com/answers also will provide you with
updated information. Finally, you are welcome to contact me directly if you have
questions or concerns.
Thank you,
~,: ... ~ .. .t!I,.;--
Ramon Ferrer
Area Manager
FPL
4200 West Flagler Street
Miami, Florida 33134
305-442-5454
I=PL.
Florida Power & Light Co.
Media Line: 305-552-3888
March 19,2012
FOR IMMEDIATE RELEASE
Florida Power & Light Company files request for base rate increase
• Total bill impact for 1,OOO-kWh residential customer expected to be about 8 cents a day
• Company launches online tool so residential customers can calculate their personal bill impact
• Oespite increase, typical FPL customer bill expected to remain lowest in state and lower than
the national average
JUNO BEACH, Fla. -Florida Power & Light Company today filed its formal request for a base rate
increase with the Florida Public Service Commission (PSC). The requested increase would not take
effect until Jan. 1, 2013.
Today's filing was consistent with the company's notice to the PSC in January that an adjustment
would be necessary because the company's existing rate agreement, which effectively froze base
rates for three years, expires at the end of 2012.
FPL expects that, even with the change, its customer bills will still be the lowest in the state and well
below the national average.
The company is requesting a base rate increase of $6.97 a month, or about 23 cents a day, on the
base portion of a typical 1 ,OOO-kWh residential customer bill offset in part by an estimated $4.49 a
month net decrease in other components of a typical bill, including lower fuel usage, lower fuel
prices and other adjustments.
As a result, the typical residential customer bill would increase about $2.48 a month, or about 8
cents a day -a 2.6 percent increase.
The adjustment is needed to pay for increases in the cost of doing business and to begin paying for
a new, high-efficiency natural gas power plant after it enters service in June 2013, The plant will use
considerably less fuel to generate electricity, which in turn helps to keep customer bills low over the
long term and reduces the impact of the base rate request.
"We've worked hard to minimize the required increase, and we're committed to working equally
hard to make sure our customers continue to have the lowest electric bills in the state, excellent
reliability and top-notch customer service. In today's competitive economy, clean, low-cost, high-
quality electric service is an advantage for our customers and our state," FPL President Eric Silagy
said.
The majority of FPL residential customers use less than 1,000 kilowatt-hours of electricity a month,
although usage varies from household to household.
To enable residential customers to see the specific impact on their bills based on their individual
use of electricity, FPL launched a new, online calculator at www.FPL.com/answers. Residential
efficiency programs among utilities nationwide. FPL is a subsidiary of Juno Beach, Fla.-based
NextEra Energy, Inc. (NYSE: NEE). For more information, visit www.FPL.com.
###
Cautionary Statements And Risk Factors That May Affect Future Results
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of
historical facts, but instead represent the current expectations of NextEra Energy, Inc. (NextEra Energy) and
Florida Power & Light Company (FPL) regarding future operating results and other future events, many of
which, by their nature, are inherently uncertain and outside of NextEra Energy's and FPL's control. Forward-
looking statements in this press release include, among others, statements concerning the effects of FPL's
rate request. In some cases, you can identify the forward-looking statements by words or phrases such as
"will," "will likely result," "expect," "anticipate," "believe," "intend," "plan," "seek," "aim," "potential," "projection,"
"forecast," "predict," "goals," "target," "outlook," "should," "would" or similar words or expressions. You should
not place undue reliance on these forward-looking statements, which are not a guarantee of future
performance. The future results of NextEra Energy and FPL are subject to risks and uncertainties that could
cause their actual results to differ materially from those expressed or implied in the forward-looking
statements. These risks and uncertainties include, but are not limited to, the following: effects of extensive
regulation of NextEra Energy's and FPL's business operations; inability of NextEra Energy and FPL to
recover in a timely manner any significant amount of costs, a return on certain assets or an appropriate return
on capital through base rates, cost recovery clauses, other regulatory mechanisms or otherwise; impact of
political, regulatory and economic factors on regulatory decisions important to NextEra Energy and FPL; risks
of disallowance of cost recovery by FPL based on a finding of imprudent use of derivative instruments; effect
of reduction or elimination of existing government support policies on demand for generation from renewable
energy projects of NextEra Energy Resources, LLC (NEER); impact of new or revised laws, regulations or
interpretations or other regulatory initiatives on NextEra Energy and FPL; effect on NextEra Energy and FPL
of potential regulatory action to broaden the scope of regulation of aTC financial derivatives and to apply
such regulation to NextEra Energy and FPL; capital expenditures, increased cost of operations and exposure
to liabilities attributable to environmental laws and regulations applicable to NextEra Energy and FPL; effects
on NextEra Energy and FPL of federal or state laws or regulations mandating new or additional limits on the
production of greenhouse gas emissions; exposure of NextEra Energy and FPL to significant and increasing
compliance costs and substantial monetary penalties and other sanctions as a result of extensive federal
regulation of their operations; effect on NextEra Energy and FPL of changes in tax laws and in judgments and
estimates used to determine tax-related asset and liability amounts; impact on NextEra Energy and FPL of
adverse results of litigation; effect on NextEra Energy and FPL of failure to proceed with projects under
development or inability to complete the construction of (or capital improvements to) electric generation,
transmission and distribution facilities, gas infrastructure facilities or other facilities on schedule or within
budget; impact on development and operating activities of NextEra Energy and FPL resulting from risks
related to project siting, financing, construction, permitting, governmental approvals and the negotiation of
project development agreements; risks involved in the operation and maintenance of electric generation,
transmission and distribution facilities, gas infrastructure facilities and other facilities; effect on NextEra
Energy and FPL of a lack of growth or slower growth in the number of customers or in customer usage;
impact on NextEra Energy and FPL of severe weather and other weather conditions; risks associated with
threats of terrorism and catastrophic events that could result from terrorism, cyber attacks or other attempts to
disrupt NextEra Energy's and FPL's business or the businesses of third parties; risk of lack of availability of
adequate insurance coverage for protection of NextEra Energy and FPL against significant losses; risk to
NEER of increased operating costs resulting from unfavorable supply costs necessary to provide NEER's full
energy and capacity requirement services; inability or failure by NEER to hedge effectively its assets or
positions against changes in commodity prices, volumes, interest rates, counterparty credit risk or other risk
measures; potential volatility of NextEra Energy's results of operations caused by sales of power on the spot
market or on a short-term contractual basis; effect of reductions in the liquidity of energy markets on NextEra
Energy's ability to manage operational risks; effectiveness of NextEra Energy's and FPL's hedging and
trading procedures and associated risk management tools to protect against significant losses; impact of
unavailability or disruption of power transmission or commodity transportation facilities on sale and delivery of
power or natural gas by FPL and NEER; exposure of NextEra Energy and FPL to credit and performance risk
from customers, hedging counterparties and vendors; risks to NextEra Energy and FPL of failure of
Explaining your residential electric bill
Below are explanations of the items related to your monthly electric bill. The Florida Public
Service Commission (PSG) regulates each non-tax item.
Customer charge': A fixed monthly amount to cover
the cost of providing service to your location. This charge
includes the cost of the meter, billing and providing customer
service. It is applicable whether or not electricity is used.
Fuel charge': The cost for fuel required to provide each
kilowatt-hour (kWh) of electricity. FPL makes no profit on
fuel costs, which are adjusted at least once a year.
Non-fuel charge':
» Base energy charge: The costs other than fuel to
produce and deliver electricity, including the cost of
operating power plants, and maintaining the grid.
» Energy Conservation Cost Recovery Charge
(ECCR): Cost of programs designed to reduce electric
demand and consumption through efficiency measures.
» Capacity Payment Recovery Clause (CPRC):
Cost for purchasing electricity from non-FPL owned
resources as well as certain nuclear-related expenses.
» Environmental Cost Recovery Clause (ECRC): Cost
to meet environmental laws and regulations.
Storm charge': Used to repay the bonds and taxes issued
during the 2004 and 2005 hurricane restoration efforts and
Customer Charge'
to partially replenish the storm damage reserve fund for
future storms.
Gross receipts tax': A tax of about 2.56 percent on a
customer's electric bill that is paid to the State of Florida.
Other taxes and fees: Vary by area, with amounts not
established by FPL. FPL collects these fees and taxes for
distribution to the appropriate entities and does not profit
from them.
» Franchise fee': FPL competes with municipalities and
county governments for the right to serve customers. If
a local government chooses, it can enter into a contract
with FPL that enables the government to charge
residents a contractual amount, the franchise fee, in
exchange for its agreement to not form an electric utility
for the term of the franchise.
» Utility/municipal tax': A tax imposed by a municipality
or county government on the sale of electricity.
Base rate: Consists of the customer charge and base
energy charge and is not a separate item on the bill.
c·--------·-r-·--·--.,.·---·----------Base Rate
Typical 1 ,000~kWh
Residential Bill
in 2012:
$5.90 ---;
$94.62
(excludes municipal tax and franchise fee)
Expected to remain the
lowest bill in the state**
* Items listed on the bill
Stonn Charge'
$1.08
** Based on currently available comparisons of the state's 55 utilities
Non-fuel Charge'
Base Energy Charge
$37.36
ECCR
$2.87
CPRC
$9.69
ECRC
-"'------$1.92
21938
Rate Adjustment Recovery Mechanisms Authorized For Utilities In FPl Proxy Grup
---'------~i ---I-Alilant i --I 'I Du~e !lntegryS I MDU I I E~!~y 1 PG&E I Portland T:gress j SCANA i Sempra I l vect:-: i
! Allete I Energy 1\ consolidated! Dominion , Energy ! Energy ! Resources i Nstar I Corp, I Corp_ 1 Electric I Energy i Corp. I Energy i Southern! Corp. I,' Wisconsin! Xcel Energy,
FPL Authorized Rate Adjustment; and i and , Edison and I Resources! and I and i Group and! and ,and and and and, and i and i Co. and! and ! Energy and I Inc. and ~~echa~Lf~te(s)! State(s)' S!3'~!a~~~s) I State(s) i ~~tate(s) I State(s) I, State(s}! State(s} I, State(s) I Stat~s)! St~ State(s) \ State(s) 'I State(s) ! State(s}
Generalizati,on Base Rate, ! I I I L' I I I I 1FT [ i '\
l=l=A::::,dj:::_u=st::::m::::e=nt=(::::GB=R=A:::::} ------L===1---\--.-i ___ t_! --' -1 -':+--\ . -! I ; i -l:
'Securitization of Storm Recovery I I i I, I r I iii I -'1 l ~ r
Costs , ----1 ' I ,~--;---1--+=+= ---i t-,--,==+=_---L =---r I' -=--:c:
I! ! iii: 'i I i
Customer-Funded Storm Reserve!, ___ , , ___ ,--I -----i 1 ! X I ! : I X X ----l
Nuclear Cost Recovery Clause!: II 'I ,'! I I I
(projected costs, true-up, and! .-! , I (
cash (AFUDC) I! ---j I ~ I ! --t---I --i -----'-:J I ------r-=-f=' ==F=f=====t====+===1 Conservation Clause (projected :' i' I \ I i, I
costs andtrue-up_} ____ ~! I X .-X X ~ I X I X ! ..J,..-X !
CapacitYClause (projected costs",! -f ! '--, 1 i, 4
and true-up) I I _____ I _ ! " ---+-~ ,
~nvironmental Clause {projected i ! -t---l -~-I i \
costs and true-ueL X -.l ! X : X X I L X X X X·
x
x
Fuel Clause (projected costs and, I i I I! -T----t-I
true-up) __ .~ __ , X X X X _ Lx X . _---=-_Lx ±=X __ I xd--c_X _( X X X I X i X X! X
'/ --,-II Regulatory Interim'Rate Relief i ' __ i 1
Within 60 Days ----j-
PERCENT OF OPERATING COSTS i -------, ---'--']
RECOVERED FROM COST' I
ADJUSTMENT MECHANISMS I I I
[B1 [C] -=--____ '1 __ i! ~ ----t--I
[fAJ As requested in Staff Inte'rrogatory No. 2.07 Issued JulY, 9, 2009 (contained'in Staff Composite Exhibit 35·9).
rBJ As requsted in Public Counsel's Interrogatory No. 2.59 issue;d April S, 2009 (contained in Staff Composite Exhibit No, 35·17). .
·CJ ;:PL return on_e:~uitv witness "did not conduct a study to identify the oercent of operating costs that are covered by SPeCific cost adiustment mechanisms for FPl or the utilities_In this pro_xv~~~~" FPl Resp9nse to PUQ!iC Coun~slrtterrogatoFY No. 259 (contair\ed 'm S:-'-C,ff"'C=-o-m-o-o,"",,-. =-e''''hl'''bl--' N"'c-,-3S--1"'7--),'-----