customer bill that increases roughly in line with inflation through 2020 while remaining among the lowest in the state and below the current national average. In fact, FPL expects that, even with the requested increase, its typical residential and commercial/industrial customer bills through 2020 will be even lower than they were in 2006. The four-year period of certainty also will allow FPL management and employees to focus on continuing to improve the Company’s service delivery and realizing further operational efficiencies, rather than devoting significant resources to more frequent base rate cases. 2017 Test Year The main drivers of need for an increase in 2017 are: FPL’s 1. Capital investment initiatives that support storm $829 million hardening, increased reliability, and system growth, which provide long-term economic benefits to customers, and ensure regulatory compliance 2. Impact of 2016 depreciation study $187 million FPL’s 3. Discontinuation of the reserve amortization as $175 million of January 1, 2017 4. Inflation and customer growth $145 million 5. Change in the weighted average cost of capital $36 million 6. Revenue growth that partially offsets the ($217 million) growth in base revenue requirements 7. Productivity gains that partially offset the ($175 million) growth in base revenue requirements 8. Growth in wholesale business, which ($126 million) FPL’s reduces the amount of revenues needed from retail customers 9. Other $12 million FPL plans to undertake capital projects representative of its philosophy of continuous improvement. As an example, the Company plans to invest in three universal solar projects totaling 224 MW (nameplate) of zero-emissions generation that will advance clean energy goals, while producing FPL’s significant fuel savings to help keep customer bills low. The Company also will invest in innovative technology that will be implemented on existing smart FPL’s grid to prevent outages and reduce restoration time, thereby improving reliability and increasing customer satisfaction. More of these smart investments are discussed in prepared testimony. FPL’s
customer bill that increases roughly in line with inflation through 2020 while remaining among the lowest in the state and below the current national average. In fact, FPL expects that, even with the requested increase, its typical residential and commercial/industrial customer bills through 2020 will be even lower than they were in 2006. The four-year period of certainty also will allow FPL management and employees to focus on continuing to improve the Company’s service delivery and realizing further operational efficiencies, rather than devoting significant resources to more frequent base rate cases. 2017 Test Year The main drivers of FPL’s need for an increase in 2017 are: 1. Capital investment initiatives that support storm hardening, increased reliability, and system growth, which provide long-term economic benefits to customers, and ensure regulatory compliance $829 million 2. Impact of FPL’s 2016 depreciation study $187 million 3. Discontinuation of the reserve amortization as of January 1, 2017 $175 million 4. Inflation and customer growth $145 million 5. Change in the weighted average cost of capital $36 million 6. Revenue growth that partially offsets the growth in base revenue requirements ($217 million) 7. Productivity gains that partially offset the growth in base revenue requirements ($175 million) 8. Growth in FPL’s wholesale business, which reduces the amount of revenues needed from retail customers ($126 million) 9. Other $12 million FPL plans to undertake capital projects representative of its philosophy of continuous improvement. As an example, the Company plans to invest in three universal solar projects totaling 224 MW (nameplate) of zero-emissions generation that will advance FPL’s clean energy goals, while producing significant fuel savings to help keep customer bills low. The Company also will invest in innovative technology that will be implemented on FPL’s existing smart grid to prevent outages and reduce restoration time, thereby improving reliability and increasing customer satisfaction. More of these smart investments are discussed in FPL’s prepared testimony.
06885-2016_16-0341.ord.docx