TALLAHASSEE — State regulators should allow Florida Power & Light to raise its base rates $357 million over the next two years, about $1 billion less than the company says it needs to operate in the future without layoffs, the staff of the Public Service Commission recommended Wednesday.
In a 518-page report, the staff of the regulatory agency rejected the company's argument that it needs the heavy influx of cash to pay for operations and avoid layoffs. The staff also recommended to commissioners the option of allowing for another $310 million base rate increase in 2011, when the company is scheduled to start up two new generation plants that are expected to reduce customer fuel bills, potentially offsetting some of the increase.
The staff proposal will be one of several factors the PSC takes into consideration when it votes on the rate case, scheduled for Jan. 13. It will be a crucial test for the revamped PSC, a five-member board with two new members appointed by Gov. Charlie Crist in an effort to give the panel a "fresh face."
In the past five months, the PSC has been buffeted by allegations that its staff and commissioners have become too close to the utilities they regulate. Crist, who opposes any increase in utility base rates, appointed the new members in October, saying it was time to "clean house."
While the staff recommendation is just one element in the decision, it traditionally has carried a lot of weight.
FPL has argued that it deserves the full rate increase because it operates efficiently and has the lowest electric rates in the state. The company says it needs the additional revenue to finance $16 billion in improvements over the next five years.
The PSC will weigh the staff proposal and decide on Jan. 13 how much in new revenue to collect from FPL's 4.5 million customers. A second step will come on Jan. 29, when the PSC will set the rates and decide how to divide the burden between FPL's residential and commercial customers.
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