Electricity Rates to Go Up. Oh, no? Oh, Yes!

I'm going to run the risk of being accused of something.  I'm afraid it won't be the first time, and perhaps it won't be the last.  I think some perceive me as being anti-populist, and whenever I take one of those seemingly anti-populist positions, someone thinks I'm up to something that is not good.  Once, I was indirectly accused of taking a bribe.

We have recently had an advance communication that FPL has requested a rate increase through the State's Public Service Commission.  The Commission has to approve proposed rate changes from utilities, of which FPL is likely the biggest example in Florida.  The request is for three staggered increases over four years, to begin in 2017.  "Typical residential customer[s]" will, if the rate requests are approved by the PSC, pay $8.56 more per month in 2017, a further $2.64 per month in 2018, and an additional $2.08 per month in 2019, so that the total increase by 2020 will be about $13.28 per month, more than rates are now.  The "total typical residential 1000 kWh" bill is expected to be $101.18 in January, 2017, $104.45 in January, 2018, and $107.29 in January, 2019.  FPL adds, in its request, that "even with the proposed increases, FPL's typical residential bill through 2020 is estimated to increase roughly in line with inflation, to remain well below the national average, and to be lower than it was 10 years ago, in 2016 (i.e. $108.61)."

FPL claims that the reason for the requested increases, other than, presumably, keeping up with inflation, is "to continue its successful long-term strategy to improve value and service to customers."  The proposal also includes FPL's claim to have a "long-term strategy of sustained investment in modern, fuel-efficient technologies" and a "commitment to manage operating costs efficiently," resulting in the company's being "positioned...to rank consistently among the very best companies in the electric utility industry," with "electric service that is cleaner and more reliable than ever before."  The utility adds that it has "one of the cleanest generation emissions rates of all large U.S. utilities."

Does the application go on and on, and on?  Yes, of course it does.  And it's filled with similar self-promotion.

As a frame of personal reference, let me reveal that my typical January bills are in the $40s and $50s, and my summer rates in the neighborhood of about $110.  So my anticipated increase, assuming it's calculated by percent, will be about half that estimated in the application.  You can judge your own estimated planned increases yourselves.  My winter usage is in the low 300s kWh per month.  I imagine my summer usage is about double that.

I looked up electricity rates in this country (http://www.npr.org/sections/money/2011/10/27/141766341/the-price-of-electricity-in-your-state), and I'm not sure FPL is strictly accurate in its claim of having rates that are "well below the national average."  It might depend on how you calculate the national average.  The cheapest electricity in the country is in Idaho, which reportedly gets much of its electricity from hydroelectric dams, which require no fuel, and which are paid for over a long period of time.  Idahoans pay 8 cents per kWh.  Florida is number 33 on the list I saw, with a cost of 11.7 cents per kWh.  Michigan and Pennsylvania were 13 and 13.2 cents per kWh, respectively, and California is number 43, with a kWh cost of 15.2 cents.  Most of the highest charges were clustered in the 18 cent per kWh neighborhood (NY at 18.1 cents per kWh), with Hawai'i being the off-the-chart highest charge of 33.2 cents per kWh.  But all the states in the northeast were more expensive, electricity-wise, than is Florida, California was higher, and large states like Illinois, Texas, and Ohio were even with us or just a couple of tenths of a cent per kWh less than we pay.  So population-wise, we might be among the cheaper.  It might be that more Americans pay more than we do per kWh for electricity than pay less.  I'm guessing FPL is doing a bit more bragging than they should, but we're certainly not being gouged.

It seems likely enough that we will pay more for electricity than we did in the recent past.  Not a lot more, but more.  But what are we getting for it?

"Cost of inflation?"  I guess that's fair.  Cost of failed projects?  Maybe.  New construction, repairs, and development?  I can't imagine why not.

I wrote before about a scheme some private companies have to increase the amount of renewable energy (from wind) in the system.  All electricity, no matter what its source, goes into the same grid.  The offer was if private customers, like you and me, want to fund the erection of more wind turbines, we can agree to pay a small extra fee, which will be collected by our supplier (FPL), and which will be passed along to the developers of the new windmills and turbines.  I didn't choose to do that, but I'm thinking that FPL might want to invest like that.  In the long run, it's cheaper and easier for them to have windmills and solar panels than to keep burning stuff to make electricity.  So nobody told me this, and FPL don't assert a specific commitment to it, but I'm thinking, and hoping, that that's where some of the money will go.

I think we're doing pretty well, energy cost-wise.  Lots of people move to south Florida, and very few show any interest in minimizing their electricity usage.  So we have to live with paying for what we need.  According to FPL, we're still doing better than we were 10 years ago, in terms of writing a check to them every month.  So I don't see where there's much basis for complaint.  Do you see this differently?