Solar, Wind Power

Renewables Investment Under Threat in FPL Rate Row

Citing a negative decision on its rate proposal by the Florida Public Service Commission (PSC) as further evidence of a “deteriorating regulatory and business environment”, Florida Power & Light Company has said it will immediately suspend activities on projects representing approximately $10 billion of investment over the next five years in the state’s energy infrastructure.

Among the projects FPL said it will immediately suspend activities on area number of new nuclear developments, but in a statement the company also said that “numerous discretionary infrastructure projects targeting improvements in efficiency and reliability within FPL’s power generation, transmission and distribution units” are under threat, potentially threatening its renewables investment programme.

FPL says it will also assess the cost structure of its ongoing operations and review other capital investments for appropriate reductions, saying it expects to make further decisions on these matters no later than the end of the second quarter.

The projects would have created an estimated 20,000 direct and indirect construction and related jobs over the next five years, FPL claims.

Commenting on the Florida PSC decision to turn down FPL’s rate application, FPL Group chairman and CEO Lew Hay said: “Investments have to be made in the expectation of fair regulatory treatment. By the time we ask for rate recovery, the money – in this case billions of dollars – already has been spent and sunk. Absent confidence in fair regulatory treatment, we believe providers of capital will be more reluctant to invest.” He added: “However, the PSC has spoken. Likewise, so have our investors, who have unfortunately seen what we believe is more than $1 billion of value in their FPL Group stock destroyed over the course of the rate proceeding. As a result, we believe that they do not want us to continue investing capital in Florida unless and until the regulatory and business environment improves.”

FPL Group claims to be the largest supplier in the US for both wind and solar power.