FPL just filed their 2026 rate case here in Florida and the storm hardening surcharge is eye-watering - they want $2.1 billion over four years. I'm working through their Storm Protection Plan filing and some of these underground conversion costs seem inflated. Anyone have experience challenging storm hardening expenditures? The per-mile costs they're showing for underground conversion are 40% higher than what I've seen in other territories.
FPL 2026 rate case - storm hardening surcharge analysis
Leah, I've been following FPL's storm hardening program since 2019. Those underground conversion costs have been climbing every year. Have you looked at their contractor selection process? Sometimes they're not getting competitive bids, especially for specialized underground work. Also check if they're properly crediting insurance recoveries against the storm costs.
Here in Oregon, Portland General Electric tried a similar storm hardening surcharge in 2024. We challenged their cost-benefit analysis methodology - they were using inflated outage cost assumptions. Saved our clients $180K annually by getting the surcharge reduced 15%. The key was proving their reliability metrics were already improving from normal maintenance.
Wendy, that's exactly what I'm seeing! FPL's cost-benefit analysis assumes $25,000 per hour in outage costs for residential customers, which seems way high. Chris, good point about insurance recoveries - I need to dig into whether they're netting those out properly. Their FERC Account 228 entries show some insurance receivables but I can't tell if they're being credited to customers.
I've been tracking storm hardening programs across the Southeast. FPL's cost per mile is indeed high compared to Duke Energy in North Carolina and Georgia Power. Have you requested their contractor bid packages? Sometimes the scope specifications are gold-plated, driving up costs unnecessarily. Also look at their vegetation management allocation - some storm costs get buried there.
Holly raises a good point about vegetation management. We've seen utilities shift routine tree trimming costs into storm hardening programs to avoid base rate scrutiny. Make sure you're distinguishing between true hardening investments and normal maintenance that's been rebranded. The Florida PSC has been pretty receptive to these challenges in recent cases.
Randy, you're absolutely right about the rebranding issue. Looking at FPL's historical vegetation management spend versus their current 'enhanced' program, there's definitely some overlap. They're also including transmission line hardening that benefits wholesale customers in the retail storm surcharge, which seems improper.
Check their capitalization policies too. We found that PNM was capitalizing storm preparation costs that should have been expensed. If FPL is capitalizing these investments, make sure the depreciation schedules are appropriate. Some storm hardening assets might have shorter useful lives than standard distribution equipment.
Frank brings up a crucial point about capitalization. Also verify that FPL isn't earning a return on construction work in progress for these storm projects. Some utilities try to include CWIP in rate base before the assets are actually in service and providing customer benefits.
The CWIP issue is huge, especially with multi-year storm hardening programs. FPL's timeline shows some projects won't be completed until 2028, but they want cost recovery starting in 2026. That's a pretty aggressive approach to CWIP treatment.
This has been a great discussion everyone. Leah, if you're planning to intervene in the FPL case, focus on the cost-benefit methodology, contractor selection process, and CWIP treatment. Those are your strongest challenge points based on what you've found. The Florida PSC staff usually does a good job on storm hardening review, but they can't catch everything.