Florida PSC cuts fuel cost recovery for Duke, NextEra utilities

The Florida Public Service Commission (PSC) has reduced the 2016 fuel and capacity cost recovery factors, lowering customer bills in April for utility subsidiaries of NextEra Energy (NYSE:NEE) and Duke Energy (NYSE:DUK).

The action was taken March 1 concerning Florida Power & Light (FPL) and Duke Energy Florida (DEF) recovery.

FPL requested PSC approval to reduce customer rates to reflect lower projected natural gas prices and to coincide with the in-service date of its new Port Everglades Next Generation Clean Energy Center next month.

The 1,200-MW Port Everglades project in Broward County is scheduled to enter commercial operation around April 1.

The approved adjustments save customers $1.65 a month on a 1,000-kilowatt hour (kWh) residential bill compared to current rates.

DEF’s fuel cost reduction is also primarily due to lower projected natural gas prices.  Residential bills will decrease by $5.83 per month, from current rates, beginning in April for a 1,000 kWh monthly electric bill. 

As for Duke Energy Florida, it’s prepared to break ground on a 1,640-MW, combined-cycle, gas-fired in Citrus County. The project will be located alongside Duke’s Crystal River generation complex, which includes coal power as well as the now-retired Crystal River 3 nuclear plant.

The fuel and capacity cost component of customers’ bills is set for each calendar year, but mid-course corrections are used when a utility’s costs increase or decrease significantly in the interim.  Under Commission rules, a utility must notify the PSC when it expects an under- or over-recovery greater than 10 percent, although lesser mid-course corrections are allowed.

FPL’s and DEF’s current fuel factors were set by the PSC during the November 2015 cost recovery clause hearing.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.