Florida power company spent $2.78 billion on upgrades, but customers doubt they got their money's worth

Marcia Heroux Pounds, Sun Sentinel on

Published in Business News

WEST PALM BEACH, Fla. –– The hurricane season is over, but Florida power customers, consumer advocates and state legislators are still simmering over the effectiveness of the company's electric grid upgrades, and whether the utility can do more to prevent storm-driven power outages.

In September, Hurricane Irma was the first test of a 10-year upgrade of Florida Power & Light Co.'s grid. FPL called its nearly $3 billion in upgrades a success. Yet, Irma knocked out power for 90 percent of its customers.

"How did we do? Cut to the chase. Did we get our money's worth?" said state Sen. Aaron Bean, who chairs the state Senate Committee on Communications, Energy, and Public Utilities, during an Oct. 10 presentation by Florida's Public Service Commission, which regulates FPL and other utilities.

Jon Moyle, a lawyer who represents big power users in the Florida Industrial Power Users Group, said Bean asks a fair question. "I don't think anyone knows," he said.

J.R. Kelly, Florida's public counsel, who represents consumers, said no judgment can be made about the grid's reliability "until you get down to the core -- what failed and why did it fail and how did it fail?"

That judgment initially falls to the PSC. But the commission, which came down hard on FPL after rotted poles were found after Hurricane Wilma in 2005, has done little to follow up.

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One reason is that the commission signed off on a 2016 settlement with FPL on its base rate request, as it has in two previous rate cases. No review of FPL's grid spending takes place unless the utility requests a rate increase. Because settlements were reached, there was no evidence or testimony submitted about the $2.78 billion FPL says it spent on upgrades.

"Expenses are only reviewed when the company files for a rate case, then all expenses are audited," said Cindy Muir, spokeswoman for the PSC. As a result of the 2016 settlement, "specific hardening expenses were not identified."

FPL also has not been asked to justify storm recovery charges to customers. That's because the 2016 settlement gave FPL the power to add up to a $4 a month surcharge to customer bills without giving the commission evidence to justify it.

Without the information, consumer and business advocates can't question FPL's recovery of certain costs.


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