Florida regulators to review utilities' case for storm-damage surcharge fees

The Florida Public Service Commission rejected arguments by consumer advocates recently that Progress Energy Florida Inc. and Florida Power & Light Co. should be blocked from recovering money the utilities spent beyond their storm reserve funds.

St. Petersburg-based Progress Energy Florida filed a petition Nov. 2, asking the commission to allow it to recover $251.9 million from its 1.5 million customers. Florida Power & Light of Juno Beach filed its petition Nov. 4, seeking $356 million from its 4.1 million customers.

Progress Energy Florida serves all or part of 34 counties, including Pinellas, Pasco and Polk counties. Florida Power & Light serves customers in east, south and southwest Florida, including Manatee and Sarasota counties.

On Nov. 17, the Office of Public Counsel, which represents Florida consumers before the commission, and the Florida Industrial Power Users Group, which represents large power users, asked commissioners to dismiss the utilities' petitions.

Commissioners declined to block the utilities from making a case to recover storm costs.

"This motion shouldn't be here," said commission Chairman Braulio Baez during debate about dismissing Progress Energy Florida's request. "We shouldn't be short-circuiting a discussion that we agree should take place."

The PSC is scheduled to hear testimony about Progress Energy Florida's storm cost recovery proposal in March. Florida Power & Light is scheduled to appear in April.

The Office of Public Counsel and the users group argued that Progress Energy Florida was trying to circumvent an agreement not to seek an increase in its base rate before Dec. 31. The base rate includes the company's cost of doing business, excluding fuel, conservation and environmental costs.

Bonnie Davis, representing Progress Energy Florida, said the consumer advocates were "dead wrong" to tie the company's recovery request to the agreement.

She said the storm reserve fund was not designed for "losses from catastrophic storms." A 1993 PSC order establishing the storm reserve allows Progress Energy Florida to seek recovery of additional expenses if storm expenses exceed the fund, which was $45.4 million before the storms hit last summer.

"The company went forward and expended money... to restore service," Davis said. "That is a fairly unusual... risk that the company took."

After declining to throw out Florida Power & Light's petition, commissioners also considered a request to impose an interim rate increase sought by FPL before the utility's hearing in April.