FPL Points to $240 Million in Hurricane Dorian Costs

Posted By: Garnie Holmes Industry,

FPLBy Jim Saunders

As powerful Hurricane Dorian threatened to crash into the state’s East Coast last September, Florida Power & Light brought in crews and took other steps to prepare for potentially massive electricity outages.

But Florida caught a big break: Dorian veered north, never making direct landfall in the state.

Now, 10 months later, FPL is asking state regulators to sign off on about $240 million of costs the utility says it piled up in preparing for Dorian and restoring power in some areas. The utility made a filing this week that is an initial step in asking the Florida Public Service Commission to determine that the costs were justified.

The filing said Dorian, which devastated the Bahamas, could have caused major damage if it had hit South Florida, which includes the most heavily populated counties served by the utility.

Manuel Miranda, senior vice president of power delivery for FPL, said in written testimony that the utility “reasonably anticipated the consequences of a massive and potentially devastating storm and began to commit to resources to be available to support the anticipated restoration work.”

“FPL followed its well developed, systematic and well tested plan to respond to such a weather event, which includes obtaining and pre-staging resources in advance of the storm,” Miranda said in the written testimony. “There was significant uncertainty in the ultimate path and timing of forecasted impact to FPL’s service territory. Even as some of the models subsequently began to project that the storm would turn north and remain offshore, a slight deviation to the west of the modeled track … could have been catastrophic for much of Florida’s east coast. During this period, FPL remained prepared for any potential outcome.”

But state Public Counsel J.R. Kelly said his office, which represents consumers at the Public Service Commission, will closely scrutinize FPL’s reported costs. He said the “bottom line is, Dorian really didn’t do anything” to cause major damage in Florida.

“This is a U-turn,” Kelly said. “The storm made a U-turn.”

FPL is seeking a determination from the commission that its actions related to Dorian were “prudent” and that the costs were reasonable. By far, the largest chunk of costs, $183.5 million, involved contractors who could help restore power and provide other services, such as trimming trees, Miranda’s testimony said.

Another $28.8 million involved what are described as “logistics” costs, such as expenses related to staging sites, lodging and meals. Also, the utility said 184,000 customers lost power because of Dorian, as tropical-storm force winds hit parts of the state.
In the past, utilities often have received approval from the Public Service Commission to add surcharges to customers’ bills to cover hurricane-related costs.

FPL is not asking the commission to allow it to recoup the Dorian costs through such a surcharge. Instead, it has moved forward with a financing mechanism that involves using what is known as a “depreciation reserve surplus” to cover the storm costs --- a strategy that the Public Service Commission has supported.

The utility says that using the reserve surplus avoids the need for a surcharge and provides the company flexibility in offsetting costs. Kelly, however, argued that while customers won’t see extra charges on their bills, they are “paying every penny of Dorian.”

Article reposted with permission from The News Service of Florida.