Without question, the cost of utilities is a major expense for most retailers. Historically FRF has monitored the activities of the Public Service Commission and intervened in rate cases and other rate issues when they occurred. Within the last couple of years we have been instrumental in protecting the expense line of commercial ratepayers and our efforts, along with some of our members, have resulted in hundreds of millions of dollars in rate relief. Most of this work has been done outside the view of our members and we have only communicated results after the fact.
On Wednesday of this week, the Public Service Commission approved a multi-year settlement agreement with Progress Energy Florida to refund customers $288 million the company had billed for purchasing power while it repaired the Crystal River nuclear plant. The Florida Retail Federation and other parties representing major power users had challenged the utility’s request for a rate increase and cost recovery, and FRF was one of the parties to the agreement on behalf of ratepayers. We believe the settlement is the largest refund ever given to ratepayers by an electric utility in Florida. This historic settlement was the result of months of negotiations with Progress Energy. In addition to the refund, PEF agreed to remove the Crystal River costs from its base rates, and limit customer costs for the proposed Levy County nuclear project through 2017. The agreement stipulates a $150 million rate increase beginning in 2013, which represents a fraction of the increase PEF sought and which the PSC could have potentially approved.