Proposed $10 billion electric rate hike in Florida faces backlash

Florida Power & Light (FPL) faces backlash after the utility company proposed what could become the largest electricity rate hike in American history. The company’s nearly $10 billion request goes before the Florida Public Service Commission starting on Monday, Aug. 11.

If approved, the rate increase would generate $1.545 billion in additional annual revenue starting in 2026, with an additional $927 million in annual revenue starting in 2027. The total could reach $10 billion when including costs for new solar and battery projects planned for 2028-29, according to an article in the Pensacola News Journal.

Florida’s electric rate increase comes as Americans nationwide grapple with surging power costs driven by rising electricity demand and costly upgrades to aging grid infrastructure.

FPL’s request has given Florida customers sticker shock. With utilities across the country filing requests for rate increases alongside Florida Power & Light, the $10 billion rate hike is testing the public’s tolerance of higher costs as well as regulators’ willingness to intervene.

What would customers pay under the new rates?

The rate increase would hit different regions of Florida unequally. Northwest Florida residential customers would see bills rise $3.50 monthly in 2026, climbing to $8.39 more per month by 2029. The rest of FPL’s territory faces steeper increases — $8.23 monthly in 2026, reaching $17.85 additional per month by 2029.

These increases would come on top of FPL’s current $25-30 monthly base bill, representing roughly a 20% increase, according to the Pensacola News Journal. Customers also pay separate charges for fuel surcharges, nuclear cost recovery, environmental costs and storm restoration that aren’t included in the base rate calculations.

Why is FPL seeking such a large increase?

FPL President and CEO Armando Pimentel stated that the rate increase is due to Florida’s rapid growth and rising infrastructure costs, according to a company interview transcript. Since 2021, the utility has added 275,000 new customers and expects another 335,000 by 2029. Inflation has driven up key equipment costs dramatically. Poles have risen nearly 50% and transformers have almost doubled in price since FPL’s last rate adjustment.

The company frames the request as a “balanced” four-year plan to maintain grid reliability while expanding solar generation and battery storage. FPL argues these investments will pay off long-term, with Pimentel pointing to $16 billion in customer savings from modernizing its power plant fleet over the past two decades.

A key component of FPL’s proposal is an 11.9% return on equity for investors — well above the national industry average of 9.6%. The Office of Public Counsel, which represents consumers in utility proceedings, argues this excessive profit margin means that “for every dollar paid by consumers in base rates, about 50 cents would go to shareholders and related federal income taxes,” said economist Daniel Lawton, according to a CBS News report.

What opposition does the rate hike face?

Major groups including the United States Air Force, Walmart and AARP Florida plan to testify against FPL’s proposal at the Florida Public Service Commission hearing, which is expected to last about 10 days.

AARP Florida has launched a campaign against the price hike, saying it will particularly hurt seniors on fixed incomes, according to the organization’s April statement.

“This excessive rate hike unfairly burdens households — especially low-income seniors or those on fixed incomes,” AARP Florida state director Jeff Johnson said. “People will pay higher monthly bills for the same amount of power.”

FPL defended the request by disputing characterizations of it as the largest in U.S. history. While acknowledging the roughly $9 billion figure, Pimentel argued in the company interview that the cumulative amount over four years serving 6 million customer accounts makes direct comparisons misleading. He said bills would remain below national averages and potentially even lower than rates 20 years ago when adjusted for inflation.

But for consumers already feeling the pinch of increasing costs, any rate increase is unwelcome news.

“People can’t afford higher light bills. Prices are already high,” Pensacola resident Brandy John told the News Journal. “You have elderly people now who are not using their air conditioning or are not able to afford food.”