Florida Power & Light (FPL) on March 9 filed updated fuel cost projections for 2015 with the Florida Public Service Commission (PSC), requesting to reduce customer rates beginning May 1, thanks primarily to projected savings on natural gas costs.
“We’re thrilled to be able to reduce rates while we continue to deliver clean power and outstanding service for our customers,” said Eric Silagy, president and CEO of FPL. “The investments we’ve made in converting our old, oil-fired power plants to modern energy-efficient centers that run on clean natural gas continue to deliver benefits. U.S.-produced natural gas is critical to reducing emissions and keeping our customers free from the past’s reliance on foreign oil, and the projected decrease in cost is an excellent added benefit for our customers.”
On track to continue to be the lowest in Florida for a sixth year in a row, FPL’s typical 1,000-kWh residential customer bill with the rate reduction will be more than 10% lower than it was in 2006, nearly a decade ago.
Investments in high-efficiency natural gas generation since 2001 have enabled FPL to cut its use of foreign oil by more than 99% – from more than 40 million barrels of oil in 2001 to less than 1 million barrels annually today. The company has been strategically phasing out older, less-efficient fossil fuel plants and replacing them with new, high-efficiency natural gas energy centers that use approximately one-third less fuel per megawatt-hour.
Since 2001, the effectiveness of these investments has saved FPL customers more than $7.5 billion on fuel and prevented more than 85 million tons of carbon emissions.
FPL based its original 2015 projected cost on a forward curve as of July 2014. For the mid-course calculations filed on March 9, FPL used a forward curve as of Feb. 2. Since the time of the original projections, natural gas prices for 2015 have declined substantially. For example, FPL originally projected the average 2015 cost of natural gas to be $5.13 per MMBtu (September 2014 filing) whereas FPL’s current estimate is $4.60 per MMBtu, a decrease of 10.5%. The company now projects that its current 2015 fuel cost recovery factors will produce an over-recovery of approximately $208 million by the end of the year.
For 2015, FPL projects its generation mix will be approximately 73% natural gas. Therefore, a decrease in the projected cost of natural gas for FPL can significantly decrease its fuel factors.
Florida Power & Light is the third-largest electric utility in the United States, serving more than 4.7 million customer accounts across nearly half of the state of Florida. FPL’s typical 1,000-kWh residential customer bill is approximately 25% lower than the national average and, in 2014, was the lowest in Florida among reporting utilities for the fifth year in a row. FPL is a subsidiary of Juno Beach, Fla.-based NextEra Energy (NYSE: NEE).