Florida Utilities Seek to Overcharge Consumers by $250 Million

ORLANDO, Fla., June 28, 2001 — In a filing with federal energy regulators, Florida Power & Light and Tampa Electric proposed a new pricing plan for electric transmission service. A critic of the plan said yesterday it is not in the best interests of consumers because it is estimated to cost electric customers $250 million more than they are paying now.

Florida’s investor-owned utilities are creating an independent organization to own and operate their high-voltage electric lines. The utilities plan to transfer ownership of their transmission grid to this new company called GridFlorida. In a pricing proposal submitted to federal regulators June 1, Florida Power & Light and Tampa Electric outlined the proposed cost basis for transmission service under the new arrangements.

An analysis of their proposal was performed by Florida Municipal Power Agency, a nonprofit power producer for community-owned electric utilities. FMPA supplies power to city-owned power companies across Florida and is a large purchaser of electric transmission service.

FMPA filed a protest June 27 opposing the new pricing plan. FMPA’s General Manager and CEO, Roger Fontes, said, “FPL and Tampa Electric have proposed a slick regulatory trick. They are seeking to selectively lock in rates for those costs that decrease over time, such as depreciating facilities, while automatically increasing rates for those costs that go up over time, such as adding new facilities.”

“Under this plan, it is guaranteed that GridFlorida’s rates will be higher than current rates, even before you add millions in start-up costs and new administration costs for GridFlorida,” Fontes said. “This plan will cost Florida consumers about $250 million over 10 years.”

“FMPA supports the concept of an independent organization owning and operating the high-voltage electric lines in a way that is fair for all. Unfortunately, this pricing proposal is not structured in the best interests of consumers. This plan has one goal: to enrich the stockholders of investor-owned utilities,” Fontes said.

In a recent but separate action, the Florida Public Service Commission opened an investigation to determine if the formation of GridFlorida will raise or lower electric bills for consumers.

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