March 22, 2002

PSC approves FPL's rate reduction agreement; lower rates to go into effect beginning April 15

JUNO BEACH, Fla. - Florida Power & Light Company today said the Florida Public Service Commission has unanimously approved a 7-percent base-rate reduction that will save customers approximately $1 billion through 2005.

"Thanks to today's prompt action by the Commission, our customers will receive the benefit of this reduction beginning with meter readings taken on April 15," said Paul Evanson, FPL president. "I particularly want to express my appreciation to the Commission for encouraging this type of incentive-based regulation. In doing so, they have set Florida apart from most other states in the nation as a leader in fostering a progressive regulatory environment. From the beginning when this rate review was initiated, Chairman Lila Jaber and the Commission have emphasized their support for negotiated agreements among interested parties. We're pleased we have been able to achieve just that."

In addition to reducing base rates by $250 million a year, the agreement provides for revenue sharing between the utility and customers when base revenues exceed certain levels. Also, under the agreement, FPL will reduce its fuel charge by another $200 million for the balance of 2002. The agreement approved today is similar in structure to one negotiated in 1999 between FPL and the Office of Public Counsel and approved by the Commission. Combined, the 1999 and 2002 agreements provide an annual permanent rate reduction of $600 million, or more than $2.2 billion in potential savings to customers through 2005, including reduced rates and revenue-sharing refunds to date.

The base-rate reduction resulted from an agreement among FPL, Florida's Public Counsel Jack Shreve and other parties following more than nine months of extensive review of FPL's financial data. During the review, FPL submitted 750 pages of testimony from 13 expert witnesses, provided more than 1,300 pages of detailed financial data, responded to more than 4,100 specific questions about the data from the Office of Public Counsel, the PSC staff and attorneys for other parties and made approximately 100,000 pages of documents available for their review.

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.

Since 1985, when FPL had its last rate increase, the utility has added more than $13 billion in facilities and 1.3 million new customers. It has announced plans to invest more than $2.8 billion in facility expansion through 2003 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 AGREEMENT:

• Rate reduction amount: Approximately $1 billion through 2005 ($250 million annually).
• 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 with meter readings taken April 15, 2002, and will run through Dec. 31, 2005.
• Revenue sharing: Like the current agreement, customers will receive a refund if base revenues exceed certain threshold levels.