Policy
Florida Supreme Court orders justification for FPL electric rate settlement
Base-rate issues are closely watched, as they involve billions of dollars, make up large portions of customers’ monthly bills and help determine how much profit that utilities can earn.
The Supreme Court, in Tallahassee. Photo by Mark Wallheiser/Getty Images
The Florida Supreme Court on Thursday said state regulators did not adequately justify approval of a settlement that increased base electric rates for Florida Power & Light and ordered a new explanation.
Justices, in a 4-2 opinion, sent a battle about the settlement back to the Florida Public Service Commission, saying regulators in a 2021 decision did not meet a legal requirement of showing why the agreement “is in the public interest and results in rates that are fair, just and reasonable.”
“The commission must therefore give us something to work with: a decision that is reasoned and articulated enough to allow us to assess on what basis it has concluded that the settlement agreement is in the public interest and results in rates that are fair, just and reasonable,” Justice John Couriel wrote in the majority opinion joined by Chief Justice Carlos Muniz and Justices Jorge Labarga and Jamie Grosshans.
But Justices Charles Canady and Renatha Francis wrote dissenting opinions and said nothing in state law allows the Supreme Court to send the issue back to the commission for a new explanation.
“There is no statutory or constitutional support for us to assume this role of project manager for the commission,” Francis wrote.
The ruling came in challenges to the settlement by the group Floridians Against Increased Rates and a coalition of three other organizations, Florida Rising, the Environmental Confederation of Southwest Florida and the League of United Latin American Citizens of Florida. They have argued that the settlement was not in the public interest and that some parts of it violated state law.
FPL reached the four-year settlement in 2021 with the state Office of Public Counsel, which represents consumers in utility issues, and other parties including the Florida Retail Federation, the Florida Industrial Power Users Group and the Southern Alliance for Clean Energy.
Base-rate issues are closely watched, as they involve billions of dollars, make up large portions of customers’ monthly bills and help determine how much profit that utilities can earn.
After approval by the commission, the FPL settlement led to a $692 million rate increase in January 2022 and another $560 million hike that took effect this year. The wide-ranging settlement also included such things as allowing increases in 2024 and 2025 to pay for solar-energy projects.
The Supreme Court decision did not make conclusions about whether disputed parts of the settlement should be upheld. Instead, it focused on whether the commission offered justifications needed to evaluate the legality of the settlement.
“In this case, after hearing from 60 witnesses and receiving 635 exhibits into evidence, the commission produced an explanation of its public interest determination that spanned little more than a page,” Couriel wrote. “The order provides conclusory statements about the virtues of the settlement agreement, not the reasoned explanation required for our review.”
Couriel added that the commission and FPL “assure us that the commission’s decision was warranted considering the evidence in the record. But it is not enough to point to the pile of paper memorializing these proceedings and say, ‘It’s in there.’ Instead, the commission must do the job with which the Legislature has tasked it by showing, in its final order, how the paper in that pile supports its decision.”
But in her dissent, Francis pointed to evidence in the record that justified the commission’s handling of the issue.
“Although the portion of the order discussing the public interest is terse, the nearly 70,000 pages of record evidence establishes that the commission thoroughly considered considerable information in coming to its decision that the factors justified the settlement order,” she wrote.
FPL issued a statement that said it is "important to understand that today’s decision by the Supreme Court is procedural in nature and directs the Florida Public Service Commission to make its final order more robust."
"FPL customers are already benefiting from this agreement, which enables the company to continue making sustained, customer-focused investments in infrastructure, clean energy and innovative technology while keeping bills as low as possible,” the statement said.
Justice Meredith Sasso, who joined the court in May, after oral arguments in the case, did not take part in Thursday’s decision.
The Supreme Court sending such a case back to the commission is relatively unusual. But it made a similar move last year in a challenge to a Duke Energy Florida solar-energy program. The commission subsequently approved a revised order supporting the Duke program.
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