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FPL 2021 Rate Case: Campaign Report

In March of 2021, Florida Power & Light filed a proposal to the Florida Public Service Commission (PSC) to increase electricity base rates by approximately 20% over the following four years. In late October, the PSC approved a settlement agreement which allows FPL to raise rates by a record-breaking $4.868 billion, adding up to the largest rate increase in Florida’s history. Now, the average household utility bill is set to increase by over $215 each year by 2025.

Throughout the entire rate case, our coalition worked to protect households' right to affordable energy services while making the proceedings more accessible for community members to engage in. What follows is a summary of our actions, from organizing residents to speak at PSC hearings and sign action letters, to hosting street demonstrations and press conferences, and conducting community-wide education campaigns. We also highlight lessons learned and provide context for why energy affordability and utility accountability are crucial targets for our movements to achieve climate justice and deeper democracy.

Most electric utility companies in the United States are regulated monopolies. This means they are legally protected from competition, have a captive customer base, and earn guaranteed profits. Meanwhile, a group of commissioners (public officials who are nominated by the state legislature) monitors the companies’ activities, sets and enforces regulations for their services.

Florida Power & Light Company (FPL) is the largest monopoly corporation in the state. Throughout 2020, while many of our neighbors struggled to keep up with monthly bills, the company banked over $2.65 billion in net earnings, and FPL President and CEO Eric Silagy received an $8.8 million compensation package

This is a $1.1 million jump from his compensation in 2019 and over 150 times as much as the median household income earned by Floridans in recent years. Our households, known to FPL as residential customers, are the greatest source of this revenue. Since 2016, residential customers have consistently accounted for 55 percent of FPL earnings.

Low-wealth communities and communities of color are often most impacted by high energy costs, known as energy burden, and energy insecurity. When people have inconsistent access to reliable and affordable power, they are forced to make tradeoffs between other expenses—like medications, childcare, or food. Energy insecurity often becomes a part of a cascade of disadvantages including financial hardship, inadequate housing, poor nutrition, and unmet health-related needs.

No business or policy decision should leave our neighbors or loved ones in the dark during times of collective hardship. Accessible and affordable energy services are essential to maintain our communities’ security and well-being. With this firm belief, energy justice advocates throughout the state worked to establish and extend moratoriums on electricity shut-offs starting in March of 2020.

Unfortunately, FPL resumed disconnections in October of 2020. Over the course of three short months, FPL shut off power over 250,000 times for customers who were behind on their monthly bills (combined data: Oct, Nov, Dec).

There is no industry standard or government mandate that requires utilities to release public information about disconnections. The data is reported inconsistently, and advocates often have to piece together datasets that only include a fraction of the people impacted by high energy burden.

 
Photo caption: In August, demonstrators from community groups gather outside FPL building in Miami where they have planted 250 flags to represent the 250,000 disconnections initiated by FPL after the moratorium on electricity shut-offs expired in the final months of 2020.

The households and small businesses facing energy insecurity and higher risk for disconnection are most often bearing the burdens of historic and ongoing environmental injustices. Partnerships between advocates and community based-organizations reveal that structural problems are fundamentally baked into the energy system.

A focus on utility accountability reveals that FPL is not the only bad actor. For example, utilities across the country recently wielded their political power to secure beneficial tax-code changes in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Nine utilities received tax bailouts totaling $1.25 billion. It would have cost just 8.5% of that amount to prevent every shutoff reported by these companies. 

This economic stimulus bill was supposed to support those struggling amidst the economic fallout of the COVID-19 pandemic. With the money utilities spent on executive pay and dividends, many could have bailed out their customers more than 500 times. But, none of those utility dollars were used to relieve households’ or small businesses’ debts.

When a utility company would like to change the cost of electricity, it is required to “ask” regulators for their approval over a series of regulatory proceedings called a rate caseUtilities have continuously increased their rates over the past decades, revealing that the regulatory compact is deeply flawed. Abuse of monopoly power and corporate capture of regulators’ interests have forced households across the country to grapple with high and increasing energy-related expenses.

In March of 2021, FPL filed a proposal to the Florida Public Service Commission (PSC) to increase electricity base rates by approximately 20% over the next four years. FPL has to prove that the new rates are reasonable and necessary to maintain reliable energy services. The months-long case can be extremely inaccessible to follow, let alone engage in. 

Catalyst Miami joined forces with Florida Rising, Earthjustice, Central Florida Jobs with Justice, Miami Climate Alliance, Sierra Club, 350.org South Florida, Florida Conservation Voters, and other energy justice advocates. We organized meetings to build strategy and met with partners to educate one another. The coalition set out to create meaningful opportunities for the public to collectively build power for utility accountability. We broke down the technical energy policy terms, misleading statements coming from FPL, and any procedural barriers in the case itself.

The more that utilities build large fossil-fuel infrastructure projects like gas plants, the harder it is to make effective cost-based arguments for clean energy. These companies have a vested interest in building out more pipelines and gas plants because their profits are tied to these capital investments. The prospects of distributed renewable energy offer more independence, political and economic power to our communities (their customers).

FPL defended proposals to invest in new fossil fuel infrastructure by citing growing demand for electricity and overemphasizing the funds allocated for outright unjust clean energy programs. In the public eye, FPL consistently brushed off responsibility for systemic energy injustices and put the burden of change on individual ratepayers being harmed as this rate case progressed.

Our communities know we cannot afford to continue investing in uneconomic and unsustainable energy infrastructure, and there is no shadow of a doubt that FPL has an overabundance of generating capacity to reliably meet their customers’ needs. Hundreds of Floridians who engaged with the coalition believe that it is unreasonable for our hard-earned dollars to be funneled into unnecessary investments that only contribute to FPL’s guaranteed returns.

 

 

 

 

 

 

 

 

 

 

 

 

Throughout the rate case, FPL repeatedly stated that they are proud to “keep typical residential customer bills well below the national average through the end of 2025.” This misleading statement is based on the unrealistic and false assumption that the average customer for every utility uses an average 1,000 kWh per month. This assumption is inappropriate for FPL to use because their performance is far below average when compared to other large investor-owned utilities. In short, the average FPL customer pays for more than 1,000 kWh per month.

In August of 2021, after significant pushback and discussions with other parties involved in this regulatory battle, FPL filed for a settlement that slightly lowered their original rate increase proposal. The terms were crafted in closed door negotiations, which excluded the community-based organizations intervening in the public interest. FPL and the signatories deliberately ignored state rules and ensured that no party representing residential customer interests was invited, much less present, at the negotiating table.

"Since residential customers were denied a seat at the table, they wound up on the menu."
Earthjustice representing Florida Rising, League of United Latin American Citizens, and Environmental Confederation of Southwest Florida

Catalyst Miami continued to work in close partnership with Florida Rising, Earthjustice, Miami Climate Alliance, Florida Conservation Voters, and other energy justice advocates to demystify the key decision emerging in this case. Simply stated, the PSC could side with corporate interests or acknowledge the needs of residents and small businesses across the state.

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In late October of 2021, the PSC approved the settlement agreement. So, FPL is allowed to increase rates by a record-breaking $4.868 billion—the largest rate increase in Florida’s history. The average household utility bill is set to increase by over $215 each year by 2025.

Campaign donations, donations to local nonprofits in exchange for political support, and dark money spending by utilities are not uncommon. Regulators and legislators tend to feel a stronger cultural, financial, and personal tie to the people they are supposed to regulate than they do to the ones they are supposed to protect. There is significant on- and off-the-record influence leveraged to fuel harmful rate cases and nearly unfettered investment in capital improvements at the cost of residents and small businesses across the country.

The PSC was created to ensure that reliable utility services are provided at fair prices by enforcing and setting regulations for utility companies. Commissioners are expected to approve proposals that are lawful and in the public interest, but this agreement egregiously fails both of those tests. It’s no surprise that FPL secured all that the company’s elite desired by shuffling the pawns on their chess board. The company is making the most of their connections to the state legislature and regulators, while acting to keep the public from paying attention.

The terms of this settlement agreement mount a disproportionate share of the rate hike on the backs of residential customers. Households are poised to be charged well over their fair share and actively subsidize the rates paid by FPL’s commercial and industrial customers by several hundred million dollars. This unfair structure, justified in the name of clean energy, should be a resounding alarm for municipalities, community-based organizations, and impacted small businesses and residents navigating extreme heat, poor quality infrastructure, barriers to democratic participation, and health inequities. Any energy transition which ostensibly deploys renewable energy at the expense of people’s basic needs is not the transition needed by all Florida residents.

Many utilities try to have it both ways. They work against clean energy to fuel the flames of climate denial and disinformation, while positioning themselves as the only ones who can implement clean energy infrastructure at scale. Some utilities are phasing in small amounts of renewables, but they are doing it in a way that maintains monopoly power and control.

Among other capital projects, some of the funds extracted from FPL ratepayers are supposed to go towards expanding structurally unfair clean energy programs. FPL brands one of their controversial programs as utility-scale community solar, but there is little to no community involvement or benefit for energy consumers. This is not true community solar.

Instead, Solar Together allows for FPL to essentially double-bill customers for solar energy. It also portions out a higher share of the solar capacity for commercial and industrial customers, keeping residential customers from accessing a share that is fair in proportion to what we will be paying. This is a prime example of how the settlement agreement will drive a “massive transfer of wealth from the residential class to participating commercial/industrial customers.” 

The cost of these unfairly structured clean energy investments looks like a couple hundred million dollars on paper, but it’s likely to balloon out over their lifetime. FPL expects to make over $2 billion in profit from the solar investments alone.

If FPL were sincere in its intentions to “deliver America’s best energy value,” we would see the company taking responsibility for their harmful programs and practices. The evolution and outcome of this rate case prove that FPL is not interested in taking part in such change.

We need new opportunities for distributed ownership and access to the holistic benefits of a renewable energy system. We need accessible and supportive assistance programs that provide long-term relief for ever-increasing utility cost burden and debt in times of crisis. We need infrastructure and governance principles that support the health and well-being of workers and communities, not only an accumulation of wealth for the corporate elite, commercial and industrial classes. This will require people and communities to embrace their agency and challenge dominant players in the energy system as it exists.

Many utilities use similar tactics to fight against community-driven change. They’ve built political, social, and public relations machines that they deftly deploy against community organizers to maintain the status quo.” Community organizers and advocates can learn from one another to build power and achieve their goals: 

  • Popular education is key to building grassroots power at any time. Design visuals that lay out the basics, combat misinformation, expose inequities, and help the community articulate demands.
  • Embrace storytelling to show the real implications of utility decisions. Amplify the needs of those most impacted, weave intersecting crises together, and uplift a vision for energy democracy.
  • Expose the money trail between utilities and public officials. Show people how they are being excluded from crucial decision-making spaces to prove that exploitation by utilities is a long-term and systems-level problem.
  • Elections are a prime opportunity to fight the bad and build the good. Push back on political donations by utilities, make climate and energy accountability a campaign focus, and rally support for candidates that prioritize utility justice for the community.

Utilities are a massive, often overlooked contributor to the climate crisis.
In 2020, for example, gas- and coal-burning power plants were responsible for 32% of greenhouse gas emissions in the United States. The largest utility companies operate their own fossil fuel infrastructure to supply these dirty power plants. Meanwhile, their profits-over-people business practices only heap harm onto the communities navigating disproportionate climate and energy-related hardships. Utilities actively champion false solutions to the climate crisis which maintain monopoly power, high customer costs, and environmental injustices. Advocates should prioritize their irresponsibility and the need for accountability to address the root causes of energy burden, climate change, and related harms.

Mutual respect, transparency, learning exchange, and adaptive collaboration are important for utility accountability coalitions to work effectively.
Utilities and regulators use highly technical vocabulary and inaccessible procedures to keep people from understanding details that matter. They diminish and deny the value of community members’ stories, which are actually the most powerful evidence and inspiration. Coalitions should prioritize all types of learned and lived expertise to build a deep bench of experts working together on utility accountability.