March 14, 2001
FPL, Office of Public Counsel agree on 7-percent base-rate reduction;
customers to save approximately $1 billion through 2005
JUNO BEACH, Fla. -- Florida Power & Light Company
today announced jointly with Jack Shreve, Florida's Public Counsel,
and other parties,
an agreement to permanently reduce base rates $250 million a year.
This represents a 7-percent base-rate reduction and will benefit
all FPL customers by approximately $1 billion over the four-year
term of the agreement. In addition, as part of the agreement, FPL
will decrease its fuel charge by an additional $200 million during
2002.
A residential bill will drop from the current $81.63 for 1,000 kilowatt-hours
a month, to $76.22 beginning April 15, including base-rate and fuel-clause
reductions. In addition, customers will receive in their June bills
an expected $84 million refund from revenue sharing under the current
agreement. Combining base-rate and fuel-clause reductions, along
with the revenue refund, customers will see their bills decline by
more than $450 million this year.
The agreement is patterned after the revenue-sharing agreement currently
in place that has saved customers approximately $1.3 billion since
1999. Like the current agreement, it features a special rebate to
customers if FPL's annual revenues increase above certain threshold
levels. The new agreement still must be approved by the Florida Public
Service Commission. The parties have asked the Commission to approve
the agreement at a meeting on March 22.
"We're pleased to announce this rate reduction agreement that
would end this expensive, time-consuming rate review proceeding," said
FPL President Paul Evanson. "Our agreement continues progressive,
incentive-based regulation for the State of Florida. Through the
leadership and dedicated efforts of Jack Shreve and the Office of
Public Counsel, we were able to reach an agreement that is a win-win
for customers and shareholders: major rate reductions for our customers
and incentives for FPL to improve operational efficiencies while
still maintaining high levels of reliable service. This resulted
after extensive review of our costs to provide electric service," Mr.
Evanson said.
Other parties in the rate review who have joined in the agreement
are the Florida Industrial Power Users Group, Florida Retail Federation,
Lee County, Publix Super Markets, Inc., Thomas P. and Genevieve Twomey
and Dynegy Midstream Services, LP. South Florida Hospital & Healthcare
Association has not signed the agreement at this time.
Since 1985, when FPL had its last rate increase, the utility has
added more than $10 billion in facilities and one million new customers.
It has announced plans to invest an additional $2.7 billion to significantly
increase its power generating capability during the next two years
to ensure FPL can meet the energy needs of customers in the most
reliable and cost-effective manner.
In its commitment to first class service, FPL has improved its system
reliability, which continues to be well above the national average.
Since 1997, FPL decreased the average amount of time customers were
without power by nearly 50 percent and improved its restoration time
by 30 percent. The number of interruptions per customer in a year
has improved 27 percent in four years.
Florida Power & Light Company is the principal subsidiary of
FPL Group, Inc. (NYSE: FPL), nationally known as a high quality,
efficient and customer-driven organization focused on energy-related
products and services. With annual revenues of more than $8 billion
and a growing presence in more than a dozen states, FPL Group is
widely recognized as one of the country's premier power companies.
Florida Power & Light Company serves approximately 3.9 million
customer accounts in Florida. FPL Energy, Inc., FPL Group's energy-generating
subsidiary, is a leader in producing electricity from clean and renewable
fuels. Additional information is available on the Internet at www.fpl.com,
www.fplgroup.com and www.fplenergy.com.
Highlights of the proposed agreement:
• Base-rate reduction amount: Approximately $1 billion through
2005 ($250 million annually)
• Fuel clause reduction: $200 million
• Residential rates: For a standard 1,000 kWh comparison, residential
monthly rates will decline from $81.63 to $76.22 as a result of base
rate and fuel adjustment reductions.
• Effective date: The new rates will be reflected in customers'
bills beginning April 15, 2002, through Dec. 31, 2005.
• Revenue sharing: Like the current agreement, customers will
receive refunds if revenues exceed certain threshold levels.
NOTE: FPL Group will host a conference call with security analysts
regarding the proposed rate agreement at 9 a.m. today. Interested
parties may listen to the conference call on FPL Group's Internet
site, www.fplgroup.com, by following the link provided.
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