FPL executives make weak case for rate increase
Palm Beach Post Letters to the Editor
Monday, August 31, 2009
Provide renewable energy systems
Florida Power & Light Vice President Tim Fitzpatrick states in his Aug. 20 letter, "Our base rate is 17 percent lower than it was nearly a quarter-century ago" ("FPL: Post misrepresented request's impact on businesses"). However, Florida's electric base-rate is above the national average.
Moreover, Mr. Fitzpatrick states that, "FPL's requested Return on Equity of 12.5 percent is necessary to help attract investment to support $16 billion in capital expenditures over the next five years." To the contrary, FPL stock gets the highest rating from Standard & Poor's, and FPL's credit rating is top-notch. FPL is trying to enrich its stockholders at the expense of its customers.
The Florida Public Service Commission should order FPL to lower its base rate for power and should further order FPL to provide its customers with lease-to-own solar energy systems tied to FPL's grid. The cost of these renewable energy systems are rebated by the state at $4 per installed watt, and the federal government rebates an additional 30 percent.
Once the solar system is installed, FPL is required to install a net-meter that moves forward to pay FPL and backward for FPL to pay back the customer for energy generated. If a properly sized solar system is installed, the customer's bill will go down to zero and FPL will have to pay the customer for excess power generated to FPL's grid. No need for $16 billion in capital expenditures by FPL over the next five years.
It's time for the Florida Public Service Commission to act in the best interests of Florida residents and require such utilities to provide lease-to-own renewable energy systems.
Editor's note: Thomas Saporito is executive director of Renewable Electric Systems.com.
Generate revenue by issuing bonds
In response to Florida Power & Light CEO Armando Olivera's Aug. 26 defense of the company's rate request: Enough is enough. ("FPL: Rate increase will save customers money in the long run.")
Mr. Olivera accuses The Post of not being logical, but he continues to say that FPL customers will see an offset of the rate increase through a decrease in fuel costs, which is a variable charge. He also uses the logic that FPL has the lowest rates in the state. His logic comes from the thinking after Florida was hit with hurricanes, and FPL wanted compensation because the power was out, so use went down. It also comes from asking for voluntary donations to increase the "green" generation of power. As everyone knows, these voluntary funds were misused.
FPL is a regulated monopoly. FPL also has the highest volume of customers in the state. Every company has fixed costs and variable costs. Costs are not exponential based on the increase of users. In other words, by adding 10 percent more customers, costs do not increase by 10 percent. Since FPL has the largest customer base, the company has locked in volume while spreading the costs. Other Florida power companies have a much smaller base, therefore less absorption of costs. In Florida, FPL should have the lowest rates.
There are other means to generate revenue. Why is FPL not considering issuing bonds? For FPL to increase rates to invite investors is just a ploy to drive the stock price up. I believe that Mr. Olivera needs to look within before raising rates in a state that has high unemployment and where senior citizens will be getting no increase in Social Security for two years. Floridians are being nickled and dimed to death. I guess Mr. Olivera just doesn't care.