Tallahassee, Florida -- The Florida Public Service Commission has approved a revised rate hike agreement for Florida Power and Light's 4.6 million customers.
The commission spent much of Thursday dissecting and modifying a proposed settlement agreement that will last until 2016.
FPL started the day asking for a $378 million hike in base rates starting in January.
But the commission lopped off $28 million from that amount by lowering FPL's return on equity from 10.7 percent to 10.5 percent, and reducing the company's proposed late fee from $6 to $5.
So the revised agreement grants FPL a $350 million rate hike Jan. 1 with allowances for more increases when the utility completes its work on three power plants over the next four years.
Preliminary figures indicate residential bills will go down slightly in January and then increase about $1 in June.
FPL's Alys Daly says the agreement is good for customers.
"It'll enable us to keep bills low, reliability high and customer service among the best in the nation. We have been investing significantly in modernizing our power plants and that is saving our customers billions of dollars on fuel. In fact, our bills today are 13 percent lower than they were in 2006."
Future rate hikes will take effect when work is completed on three power plants: Cape Canaveral, Riviera Beach and Port Everglades.
Daly says those base rate increases will be offset by lower fuel costs at the more efficient plants.
"Those plants are going to save customers billions of dollars in fuel and customers don't begin paying for them until those plants go online and they start saving on the fuel portion of their bill."
The Florida Office of Public Counsel, which represents consumers before the PSC, opposed the FPL agreement from the start. Public Counsel J.R. Kelly argued it was not in the public's interest.
He said it was unusual for the PSC to approve a deal without the support, or a neutral stance, from the Office of Public Counsel.
"There have been some settlements that have been approved by the Public Service Commission, which we've taken no position. But never in the history, as I understand the PSC, has one been approved when we've opposed it."
Commissioners disagreed with Kelly, saying the changes made on Thursday were good for customers and the company, in part, because they provide certainty on rates for years to come.